text:
    Railroad Co. v. Ralston.
    1. An agreement for tlie location of the route of a railroad at a particular intermediate place is not^er se void as against public policy.
    2. To estop a defendant by judgment in foreclosure to assert that be, as against the debtor, was the owner of tlie subjected premises, it must appear that the point was at issue and material, or was necessarily determined therein.
    3. The equitable owner being impleaded in foreclosure by the mortgagee of the holder of the naked legal title (in trust to convey) made default; and the premises were sold and proceeds distributed. He had been in actual possession prior to the giving of the mortgage and continuously to the sale; and had not assented to the mortgage otherwise than by his default. Held: He thus became entitled to reimbursement from the mortgagor.
    Error to the Common Pleas of Defiance Count}*. Reserved in the District Court.
    In February, 1880, The Baltimore & Ohio & Chicago Railroad Company brought suit in the common pleas of Defiance County against Joseph Ralston and others. The defendants were James Cheney and others, the survivors and representatives of fifty-two persons, parties of the one part, to a contract with the company which is set out in the petition. In the common pleas a demurrer was sustained to the petition. The company instituted a proceeding in error in the district court, where it was reserved to this court. The petition sets forth that .the company was about to. construct a railroad from Chicago Junction, Ohio, to- the city of Chicago, Illinois, and that, on the 27th day of March, 1872, the parties to the agreement with the company agreed, in writing, between themselves, in substance, as follows: That, in consideration that the village of Defiance, Ohio, should be made a point on the line of the proposed road, they would donate to the company two thousand acres of timbered land and depot ground, and secure a specified portion of the right of way'; and they thereon authorized five of their number, one of whom was Wm. C. Holgate, to pledge such donations to the company, and they agreed that they would for those purposes pay $100 each within twenty days to the Defiance Bank, and would pay such other sums as the committee should deem necessary, and would reimburse the committee any advances they should make. It was stipulated that all subscriptions, donations and lands should be under the control of the committee, and be paid over to and held or conveyed by them, or such party as they should appoint, for the purposes named.
    The petition further recites that, upon the execution of the agreement, the committee made known its contents to the company, which accepted the proposition, and, relying, in good faith, on the agreement, constructed the railroad, making Defiance a point on the line. The defendants secured to the company portions of the right of way, depot grounds, and one thousand acres of the land. The remaining one thousand acres was selected, purchased, and fully paid for by the defendants, with the aid of outside subscriptions, and the legal title was taken in the name of Holgate, but was held in trust for the company. The company accepted the lands, and entered upon possession and enjoyment. Holgate afterwards claimed there was due him from his associates the sum of $4,760.48, and, with the assent of the committee gave a mortgage on the la'ud to Cheney, conditioned to pay him the sum of $4,760.48 in one year, with interest, and to repay any disbursement Cheney might make on account of taxes or in liquidating any indebtedness to the bank on account of its advancements in procuring rights of way for the company.
    In August, 1877, Cheney brought suit on the mortgage, which resulted in a judgment in his favor for $6,011.11 and a judicial sale of the land to Cheney, which was confirmed and deed made. The committeemen were parties to the suit, and answered consenting to the judgment. The railroad company was a partjr, and made default. The petition charges that the acts of the committee were in bad faith; that they were bound to convey the land unincumbered, and had no right to incumber it; that the execution of the mortgage was contrived by Holgate to wrongfully deprive the company of the land, and that, by some secret understanding between him and Cheney, entered into since the judgment was taken, Cheney holds the legal title in trust for Holgate. The prayer of the petition is that Cheney be required to convey to the company, that the company may be quieted in its title and possession; or, if Cheney does not hold iu trust for Holgate, and without knowledge of the company’s rights, that an account be taken of the value of the land when sold to him, and that the defendants (except Cheney) be adjudged to pay the same, &e.

      C. H. Scribner, for plaintiff in error:
    1. Are the defendants bound by the acts of Holgate, Hilton, Squire, Phelps and Ralston, in entering into the agreement with the railway company in the petition set forth?
    As a matter of course, the parties here named are bound; and the writing set out in the petition, conferring authority upon them to act, is so clear and explicit in its terms that we see no escape from liability on the part of any of the persons who subscribed it.
    See, in this connection, the following authorities: Thayer v. Luce, 22 Ohio St., 62; Himrod Furnace Co. v. Cleveland & Mahoning R. R. Co., 22 Ohio St., 451, 456, 458-461.
    II. As to the effect of the oral acceptance by the company of the proposition of the defendants, and performance in pursuance thereof, see the cases above cited; also Pomeroy on the Specific Performance of Contracts, 98, § 66; 1 Addison on Contracts, § 17; 1 Story on Contracts, 5th edit., § 572; Chase v. Lowell, 7 Gray, 33; Taft v. Mining Co., 14 Allen, 407; Ives v. Hazard, 4 R. I., 14; Sanborn v. Flagler, 9 Allen, 470 ; Reuss v. Picksley, 1 Ex., 342.
    III. But no question can well arise under the statute of frauds, as the petition not only avers full performance on the part of the railway company, but also that the lands were selected by the parties, and purchased and secured under and in pursuance of the contract, and that the company, with notice to the defendants, accepted said lands under the contract, and entered upon the possession and enjoyment thereof.
    IY. As to the validity of the contract, the court of common pleas sustained the demurrer and dismissed the petition upon the sole ground that the contract sought to be enforced is against public policy, and therefore void.
    The authorities cited in support of this view, and which we rely upon, are: C. B. R. R. Co. v. Baab, 9 Watts, 458; New Albany, &c., R. R. Co. v. McCormick, 10 Ind. 499; Jewett v. Lawrenceburg, &c., R. R. Co., 10 Ind., 539; First National Bank of Cedar Rapids v. Hendril, 49 Iowa, 402. We also refer to the recent case of Stowell v. Stowell, 45 Mich., 364.
    We submit, also, that the question is res adjudicata in Ohio. The cases of Chamberlain v. Painesville & Hudson R. R. Co., 15 Ohio St., 225; Ashtabula & New Lisbon R. R. Co. v. Smith, Id., 328; The M. C. & Lake Mich. R. R. Co. v. Brown, 26 Ohio St., 223; M. C. & L. M. R. R. Co. v. Stout, Id., 241, appear to be conclusive upon this point. It is true that in all these cases the contract was to take stock on condition that a particular line was adopted; but this can make no difference in the application of the principle involved. If public policy forbids that a railroad company shall undertake to construct its line of railway, or establish its depots, in a particular locality, in consideration of money to be paid, or property to be conveyed to it, it is clear that the matter is not helped any by a further undertaking on the part of the company to also issue its stock to the party with whom it makes the alleged objectionable contract.
    Our statute regulating railroad companies contains the following provision: “Such company may acquire, by purchase or gift, any lands in the vicinity of the line of its road, or throug’h which the same passes, so far as may be deemed convenient or necessary by the company to secure the right of way, or such as may be granted to aid in the construction of the road, and hold or convey the same in such manner as the directors may prescribe.” 1 Rev. Sts., § 3282. Evidently this legislation was intended as a recognition of the validity of contracts of the character now in question. Indeed, in the well-known' case of Chapman v. Railroad Co., 6 Ohio St., 119, it was held that when “ a railroad company has received from private parties donations of land, subscriptions of stock, and payments of money, in consideration that it should locate its road at a particular place, and allow private side-tracks and warehouse privileges in connection therewith, the company will not be permitted to effectuate a change in fact (though not in name) of the line of its road away from such place, by getting up a new corporation and constructing a new road parallel with its old one under a different charter, and permitting its old line to go to decay, without compensating the parties with whom it contracted.” It is absolutely impossible to reconcile the doctrine of the foregoing case with the grounds of the decision of the court below in the present ease. Again, the question presented seems to be fairly-met by the decision of this court in the case of Railway Co. v. Rose, 24 Ohio St., 219; see also Walsh v. Barton, 24 Id., 28, syllabus paragraph 4; also p. 42.'
    It may be proper to call attention to the fact, also, that under our statute a railroad company, after locating its line of road, can not, except under certain circumstances, change the location; and if a change is made, especially if the line is taken into another county, the company is liable in damages to property-holders, and stock subscribers are released: 1 Rev. Stats., §§ 3272-3276. Where, therefore, a railroad company is induced by considerations held out to it to locate its line, it is bound to such location, and can not, except at the risk of considerable pecuniary loss, change its line. This, it appears to us, furnishes a strong ground for holding the defendants to their contract.
    On the general subject of voluntary subscriptions in aid of public enterprises, we refer to the following authorities: Canal Com. v. Perry, 5 Ohio St., 56; Ohio Wesleyan Female College v. Louis’ Ex’rs, 16 Id., 20; 1 Addison on Contracts,, by Morgan, p. 37, note; Green’s Brice’s Ultra Vires, 2 Amer. edit., 129, note (a).

    V. It was argued in the common pleas ‘that we are es-topped by the proceeding in foreclosure from asserting our claim for relief.
    The Baltimore & Ohio & Chicago Railroad Company (plaintiff herein), the Baltimore & Ohio Railroad Company, and William Keyser, were made parties defendants to the proceeding, but neither of them answered or made any defense. There was a simple finding of the amount due, and order of sale.
    It should be remembered that the mortgage in question was given for the debt of the defendants. May a person sell lands, retaining the legal title, receive the consideration, mortgage the lands to a third person, permit a foreclosure, and then be permitted to avail himself of the foreclosure as a defense to an action brought against him by his vendee ? The lands were contracted to the railway company. They have been sold to pay the debt of the vendors.
    See Grottschalk v. Witter, 25 Ohio St., 76 and 80, where a vendee has paid for the land, and has lost it through the fault or misconduct of the vendor, he may recover the purchase money from the latter. By mortgaging the land the defendants sought to disable themselves from conveying it in accordance with the terms of their contract; by permitting the foreclosure, they, in fact, disabled themselves from conveying. If they had made an absolute conveyance direct ,to Cheney, an'd he was informed at the time of the contract with the company, the latter would have had a right to elect whether to demand a specific performance or proceed for the recovery of the purchase price paid. See Howard v. Babcock, 7 Ohio St., part 2, pp. 73, 81. The transfer of the title by a sale in foreclosure places the company in no worse position. Under the allegations of the petition, the execution of the trust deed and the foreclosure were brought about by the contrivance of the defendant, Holgate, for the purpose of depriving the company of the land; and, by a secret agreement between Holgate and Cheney, entered into since the rendition of the decree, the latter holds the legal title in trust for Holgate.
    Clearly, Mr. Holgate, who was one of the parties to the agreement set out in the petition, and one of the agents who stipulated with the company for the grant'of the land, can not escape the trust which attached to it in his hands, nor can he, being bound to the company to furnish the land, insist on retaining it until his associates reimburse him for advances made in their behalf. He has no claim upon the company for any part of the consideration paid by him; the company has his obligation to provide the land ; it has paid the consideration agreed upon between the company and the defendants.
    VI. As to the relief to which the plaintiff is entitled.
    Taking the statement of facts contained in the petition to be true, as admitted by the demurrer, there can be but little difficulty on this point. The trust mortgage and foreclosure were contrived by the defendant, Holgate, to defeat the just claim of the company to the land. By agreement with Cheney, entered into since the decree, the latter holds the legal title in trust for Holgate. Under these circumstances, the right of the company to a decree for the legal title seems clear.
    But if, on a trial of issues of fact, it should appear that the land is lost to the company, what then is the relief to which the plaintiff is entitled ?
    As we have already stated, the company has fully performed the contract on its part; it has paid in full the agreed consideration for the land.
    It is alleged in the petition that at the time of the foreclosure the land was of the value of ten thousand dollars. From the nature of the contract we are compelled to take the value of the land as a basis for estimating the value of the consideration paid for it by the company: Perkins’s note, 1 Sugden on Vendors, 8th Am. ed., p. 231; 1 Leading Cases in Eq., pt. 2, p. 1062 (4th Am. ed.) ; Dustin v. Newcomer, 8 Ohio St., 49; Longworth v. Mitchell, 26 Id., 334; Pomeroy on Specific Perf., §§ 464, 469, 478-480; Rees v. Smith, 1 Ohio St., 124; 3 Id., 335; 56 N. Y., 12, 366.

      William C. Holgate, for defendants in error:
    1. The pretended contracts sued upon by the plaintiff are insufficient to save him from the operation of the statute of frauds: §§ 4198, 4199 Rev. Stats.
    In order to withdraw a parol, contract from the statute of frauds, and render it capable of being enforced:
    “1st. The acts of part performance must be such as are not only referable to an agreement such as that alleged, but such as are referable to no other title.
    “2d. They must be such as render it,a fraud in the defendant to take advantage of the contract not being in writing.
    3d. “ The agreement must be such as in its own nature is enforceable by the court......”
    See Fry on Specific Performance, § 384, pp. 251, 252.
    The performance on the part of the plaintiff as set up in the petition is that plaintiff did, in pursuance to their pretended contract with defendants, locate and construct and operate a line of railway from Chicago Junction to Chicago, that passed through the county and village of Defiance.
    Now, though these acts of performance may be referred to the alleged agreement with defendants, they must in addition be such as “ cannot be referred to any other title, nor have been done with any other view or design than to perform such agreement.....they must appear unequivocally to have been done in pursuance of the contract.” Fry on Specific Perform., p. 253, § 387; also p. 254, note, 27.
    The petition indicates that plaintiff contemplated the “ construction and operation ” of this line of road before they ever saw or heard of these defendants. The Baltimore & Ohio Railroad Company had numerous lines of railroad, and vast interests that required the construction of this road to connect them with Chicago. The proposed new road itself, with its rolling stock, would cost over six millions, and this was but a small part of the value and consequence of this new road to that company. It had millions on millions at stake in its construction. And the attempt by plaintiff in its petition to make a case by attributing the “ construction and operation of this line of road, with diligence and dispatch,” too, to this alleged agreement with the defendants, is almost ridiculous.
    But the line passed through Defiance? Yes; but this was a mere incident, unavoidable, probably. Defiance was standing on an air line on the shortest and best route. This made it the interest and duty of the railroad company to take this line through Defiance, and so this averred act of plaintiff’s performance of the alleged parol contract is also referable to another “ title.”
    2. But there is another legal touchstone which plaintiff must circumvent if he succeeds in immolating these defendants on their partly-performed parol contract, all saturated with misrepresentation. I refer to the “ fraud ” that must exist, even if the acts of part performance are not “ referable to 'another title.”
    “ The principle upon which courts of equity exercise their jurisdiction in decreeing specific performance of parol agreemeiits accompanied by part performance is the fraud and injustice which would result from allowing one party to refuse to perform his part after perfprmance by the other on the faith of the contract.” Fry on Specific Perform., 254, 256, 260, §§ 388, 390, 391, 403.
    There are no averments or showings in this petition of any hardships, .injustice or fraud resulting to plaintiff from building this road through Defiance to Chicago, on account of defendants’ alleged parol agreement.
    3. As to the withdrawal of parol contracts from the statute of frauds, the agreement must be such as in its own nature is enforceable by the court......”

      Sec. 8282 of our statute in relation to railroad companies reads as follows: “ Such company may acquire, by purchase or gift, any lands in the vicinity of its line of road, or through which the same passes, so far as may be convenient or necessary by the company to secure the right of way, or such as may be granted to aid in the construction of the road, and hold or convey the same in such manner as the directors may prescribe.”
    In the case of Walsh v. Barton et al., 24 Ohio St., 24, the court, in passing upon §14 of the act of February 11, 1848, which has the same provisions as above in effect, say that, if necessary to secure the right of way, a railroad company may purchase more land in the vicinity of their road than is needed for such right of way; but that if not necessary for the securing of such right of way, it would be an abuse of their powers to make such purchase. This decision relates entirely to the restriction on the powers of railroad companies to purchase lands not needed for their actual use, and not to their right to acquire such lands by gift. It may be that by virtue of the words, “ or such as may be granted to aid in the construction of the road,” in this § 8282, which were also in § 14 -of the act of 1848, railroad companies can acquire lands by gift lying somewhat away from their line of road, which they can dispose of at their convenience, so they are not too long about it, for the purpose of raising money to aid them in building their road, l?ut these words do not authorize their purchase of such lands. There is quite a distinction in the effect of a provision allowing railroad companies to acquire such lands by gift to aid them in the construction of their road, instead of by purchase. In the case of gift, it is their then present value that is needed, and can be had very shortly, while in the case of purchase the railroad company pays out their present value from resources that should be applied to the building of their road, and so are embarrassed in its immediate construction, instead of being aided. If a railroad company, then, acquire by purchase thousand acre tracts of land remote from its road-bed, unnecessary for its business uses or the securing of its rights of way, it becomes a land speculator, with no-rights, so far as relates to such transactions, that a court of equity can respect. Plaintiff’s claim, then, whether it be founded on a written or a parol contract to purchase or to give these lands, is not of such a “ nature as is enforceable by a court.”

      James Pillars, also for defendants in error:
    I. The promise of the defendants is without any consideration, and, therefore, cannot be enforced.
    This thousand acres of land is called in the petition and the alleged agreement a donation; and it surely is one, for it is to cost the company nothing. It is to be secured to them without cost and free from any incumbrance.
    But it is essential to a donation or gift that it be made completely and at once. If it is to be made in the future, if it rests in an agreement, it is but a promise, and being without any consideration, the promise cannot be enforced. If the donation is not actually and completely made, the law cannot enforce the making of it. 1 Parsons on Contracts, 23-1, 235, star paging.
    II. The promise of the defendants is contrary to public policy, and therefore cannot be enforced.
    When a number of men associate themselves together for the purpose of making and operating a railroad, and get their association incorporated, they become, by force of the statute, delegated to exercise the sovereign right of eminent domain, by which they take our land from us against our will, and appropriate it to themselves for their railroad and depot grounds.
    But the location of their road and depot grounds must be “ subservient to the public welfare,” that is, must be where the public necessity and convenience require it or will be best subserved.
    For, if it is because the land on which a railroad and depot grounds are located is needed for the public welfare that it can be taken from us and made the property of the stockholders of the company (and nothing is surer), it must be that, in the judgment of those whose duty it was to make such location, they made it where the public necessity and convenience would be best subserved. Of course, I mean the public necessity and convenience of the locus.
    In the location of a railroad and depot grounds another interest must be attended to along with that of the public, and that is the interest of the stockholders of the company. For the property, and, of course, the income and revenue of a railroad company, belong to the stockholders.
    But when a railroad and depot grounds are located in the interest of the public necessity and convenience, they are located just where the interest of the stockholders of the company requires they should be. The two interests, that of the.public and that of the' stockholders, go hand-in-hand. What subserves the public welfare exactly subserves the interest of the stockholders.
    Now, is there anything to show that when the directory of the plaintiffs located their railroad and depot grounds in and through the town of Defiance, but what they did so in the interest, solely and alone, of the public necessity and advantage, and of the stockholders of the company, whose agents they were, and for both of which interests they were acting.
    Where, then, was there auy consideration for the promise of the defendants to contribute by donation to the pecuniary wealth of the stockholders of the plaintiff? Their road and depot grounds in and through Defiance were located where the public welfare and their pecuniary welfare both required they should be, in the judgment and opinion of those whose duty it was to make the location. So the stockholders lost nothing, and the defendants gained nothing; for the road and depot would have been where they are now anyhow.
    That a railroad company is a quasi public corporation or agency, created by the public for their convenience and accommodation; that, in locating their road and depots, the officers of the company act as agents both for the public and for the stockholders; that a confidence is reposed in them that they will make such locations for the best interests of the public and the stockholders, and which are identical ; that an agreement with private individuals, in pursuance of which, for promised money or property, the road is located on a certain line, or a depot is established at a certain place, is calculated to prejudice the mind and judgment of those whose duty it is to make such location, or has a tendency to do so, in favor of the interest of such private individuals ; and that, therefore, any such agreement or promise is contrary to public policy, and cannot be enforced, is abundantly sustained by Fuller v. Dame, 18 Pick., 472, 479, 481, &c.; Pacific R. R. Co. v. Seeley, 45 Missouri, 212, 215, &c.; St. Jos., &c., R. R. Co. v. Ryan, 11 Kans., 602; S. C., 15 Amer. Reps., 357, 359, &c.; Beston v. Wathen, 60 Ill., 138; Marsh v. The Fairbury, &c., R. W. Co., 64 Ill., 414; S. C., 16 Amer. Reps., 564; St. Louis, &c., R. R. Co. v. Mathers, 71 Ill., 592; S. C., 22 Amer. Reps., 122, 123, 125, &c.; Holliday v. Patterson, 5 Oregon, 177; Williamson v. Chicago, &c., R. W. Co., Iowa Reps., 1880: (22 Alb. Law Jour., 29).
   Martin, J.

The only question presented is, was the petition good in law. The facts stated are admitted by the demurrer.

The company had fully performed its engagement by constructing the road through' Defiance. The defendants had partially performed their stipulations. And, as no complaint is made except of the failure to convey the legal title to the part of the land in controversy, we may assume that their performance in every other respect was complete. This land was selected by the committee, and fully paid for with funds furnished by the defendants and outside parties. It was selected in pursuance of the contract, and the company accepted it accordingly, and entered upon possession. In this situation the company was manifestly the full equitable owner in possession, and entitled to all the rights pertaining to that relation. Holgate held the legal title only, and held it in trust for the company. The defendants would have been liable for any default of his whereby the company, without fault or consent on its part, should fail to receive the property. The mortgage given to Cheney created no lien as against the company in possession, and conveyed nothing but the bare legal title. But in the foreclosure suit the company was a party and made no objection to the judgment subjecting the premises, and is concluded thereby. Its default was equivalent to an express assent, validly given, to the incumbrance. 'The property thus subjected sustained to the mortgage debt a relation in the nature of a surety-ship ; and it follows that when it was sold, and the proceeds applied to the payment of the judgment, the company became entitled to reimbursement from the principal debtor, Holgate. Hence, a good cause of action is stated against him, and it was error to sustain the demurrer as to him. His co-committeemen incurred no liability by their assent to the mortgage, for their assent was ineffective, and so was the mortgage, until affirmed by the significant default-.of the company. To hold the other defendants liable would be to make them, without their consent or fault, the company’s principals in an engagement which it alone assumed. It is sought to reach the land on an averment that Cheney holds it in trust for Holgate by some secret understanding entered into since the 'judgment in foreclosure was taken. The necessary implication, is that by the sale he took the title free from trust. It is not perceived on what principle this averment is of any value, at least in the present posture of the case. The title passed free from any right or claim of the compañy, or of any of the proponents, and an equity in favor of Holgate, subsequently acquired, stands on the same footing in respect to this case as does any other item of his property. It is claimed in addition that the default of the company goes further and estops it from asserting that it was at the time of the judgment and sale the real owner. All parties were charged with notice of the company’s possession and ownership. It was a party to the suit, and its interest in the premises was subjected. The condition of the title and ownership as between it and Holgate was unimportant and not in any way in issue. Holgate personally and the company’s land became both bound for the debt, and its reduction to judgment did not preclude inquiry as to whether either was surety for the other. To estop the real owner under such circumstances, to assert as a co-defendant the fact of his ownership, it must appear that the point was at issue, material, and necessarily determined in the action.

What has been said renders irrelevant to the decision of the demurrer a consideration of other questions that have been discussed before us. But as the case goes down for further proceedings, it is proper to notice them briefly as affected by the facts stated in the petition.

There having been full performance on both sides, except to pass the legal title to the company in possession, we think that objections grounded on the statute of frauds are not sustainable. We also think that the acts of alleged performance on both sides are referable to the contract, and to it alone. They were done in compliance with, and are strictly responsive to, the térms of the contract. The company was not required by its charter to run its line through Defiance, nor can it be said that it must or would have done so irrespective of its engagement with the defendants. A route slightly or materially variant might have been equally politic. The proponents contracted for the advantages of the location, and received the full benefit. The company, as it avers, relied on the contract, and we must hold that a default would be a fraud on it.

It is also objected that the agreement is without consideration and against public policy. Stress is laid on the fact that in the agreement the word donations is used in designating the lands and moneys to be provided for the company. The case is one of mutual promises. By acceptance of the proposition the company agreed to make Defiance a point on its line, and in consideration thereof the proponents agreed to secure the right of way as named, and procure for the company depot grounds and certain lands without further cost to it. That public policy forbids the enforcement of contracts to induce the location of railroad lines at particular places in disregard of the rights of stockholders and the public is very true. Contracts for location, providing private emolument for the officials who sanction them, are of course void. And even if the stipulated location turn out to be the best that could have been made, and entail no detriment to stockholders or the public, yet such contracts are held in well-considered cases, and, we think, correctly, to be against public policy as a dangerous exercise of official power for private gain.

In the case at bar these objectionable features are not present. The stipulated compensation was for the company alone. And it may well be that it was'a matter of indifference to the stockholders and public whether the route was through Defiance or not. The propriety of the location in respect to particular points when the charter is silent is of necessity left to the managing officers of the company, and we fail to see any illegality or immorality in their stipulating for the benefit of the company in awarding the advantages of location as between contesting localities. The general doctrine that such an agreement is not void per se as against public policy is laid down in the leading case of Cumberland Valley R. R. Co. v. Baab, 9 Watts, 458, and has been frequently recognized in analogous cases in our supreme court, notably in the decisions sustaining contracts to take stock conditioned on a particular location.

Judgment reversed.


source: Caselaw Access Project

author: Nash, J.

license: Public Domain

text:
    Campbell v. Johnson.
    In an action upon an administrator’s bond by the widow, who was the sole owner of the deceased husband’s estate, one of the sureties in his answer averred that the administrator at the time of his appointment was wholly insolvent, and has ever since remained so; that the decedent’s estate consisted solely of a note for $3,000, due from the administrator; that there were no debts due from the estate; that the widow was the only person interested in the estate; that he was induced to become surety upon the bond by the fraudulent representations and acts of the administrator and the widow, and that the purpose of such representations, and acts, and such appointment, was to make him responsible for the administrator’s otherwise worthless debt. Held, that the answer stated a good defense.
    Error to the District Court of Lawrence County.
    In May, 1878, Phoebe B. Johnson, the widow of Samuel C. Johnson, Sr., and at that time the sole owner of the estate of her late husband, brought an action in the court of common pleas of Lawrence county against Samuel C. Johnson, Jr., Frank F. Johnson and John Campbell. From the petition it appears that Johnson, Sr., died in March, 1876, that in April, 1876, his heirs duly assigned their respective interests in his estate to Mrs. Phoebe B. Johnson; that on the 16th day of June, 1876, Samuel C. Johnson, Jr. was appointed administrator of decedent’s estate, and gave bond with Frank F. Johnson and John Campbell as his sureties; that in April, 1878, the administrator filed his first and final account with the probate court; and that in May of the same year, upon the hearing of the account there was found to be due from the administrator the sum of $3,079. This sum the plaintiff sought to recover from the defendants upon the administrator’s bond.
    John Campbell filed a separate answer, and as bis first defense averred among other things, that Samuel C. Johnson, Jr. was a son of the decedent; that S. C. Johnson, Sr., at the time of his death, and for some time prior thereto, was a resident of Hamilton county, Ohio; that the legal right to administer the decedent’s estate was in his widow, who was also a resident of Hamilton county; that the whole estate consisted of a promissory note for the sum of $3,000, dated March 26th, 1873, due in one year from date, and given by Samuel C. Johnson, Jr.; that on the 16th day of June, 1876, and for some time prior thereto, Samuel C. Johnson, Jr. was wholly insolvent, and was unable to pay his indebtedness to the estate or to other persons, and was not possessed of any property or effects from which his debts could be collected by any process of law or equity; that Phoebe B. Johnson, the sole owner, as heir and by assignment of the estate, then knew that her husband, Samuel C. Johnson, Sr., was not in his lifetime indebted to any person, and that no administrator was necessary; that at that time-she was advised by her son, S. C. Johnson, Jr., that if she would have him appointed administrator, he would procure his son, Frank F. Johnson, an irresponsible person, and John Campbell, as his sureties, and thus enable her to collect the claim from Campbell; that thereupon the widow requested the appointment of Samuel C. Johnson, Jr. as administrator; that Samuel C. Johnson, Jr. when he requested Campbell to become a surety upon his bond, represented to him that no liability would be incurred; that administering upon the estate was a formal matter, rendered necessary to avoid possible trouble in the future, and did not make known to Campbell the indebtedness of himself to the estate; that Johnson, Jr. has ever since his appointment remained wholly insolvent, and has not paid any part of his note, and that the administering upon this estate in the county of Lawrence, the waiver of the right of Phoebe B. Johnson, the recommendation of the appointment of Samuel C. Johnson, Jr., and all the proceedings in and about the administration were devised by Phoebe B. Johnson and Samuel C. Johnson, Jr. to place some legal liability upon Campbell, whereby he might become responsible for the indebtedness of Samuel C. Johnson, Jr., the plaintiff well knowing that in no other way could she secure the payment of the same.
    To this defense a demurrer was filed and sustained by the court of common pleas. This judgment was affirmed by the district court.

      O. F. Moore and Neal & Cherrington, for plaintiffs in error.

      John Hamilton, for defendant in error.
   Nash, J.

In this state it has been settled that the debt of an administrator is not released by his appointment and acceptance of the trust, but that his debt becomes assets in his hands and covered by the administration bond. Tracy v. Card, 2 Ohio St., 431. But the case presented by the first defense of Campbell’s answer and the demurrer thereto, is not controlled by this rule. The allegations of this defense, which are admitted to be true by the demurrer, show a cunningly devised scheme, amounting to a fraud on the part of the sole beneficiary of the estate and the administrator to make Campbell responsible for a worthless claim. This scheme cannot be made effective by the courts, and the dem.urrer should have been overruled.

Judgment reversed.


author: McCauley, J.

text:
    Greer v. Howard.
    A sheriff levied an execution upon the property of a debtor, who afterwards assigned for the benefit of creditors, and his assignee replevied the property levied upon from the sheriff, and gave bond in replevin with sureties as required yb law. Before the trial of the action of replevin the plaintiff therein, the assignee, died, and the action was revived in the name of his successor as assignee. Upon a trial of the action the sheriff recovered a judgment against the successor of the assignee for the value of the property taken in replevin.
    In an action by the plaintiffs in the execution under which the levy was made, against the sureties on the replevin bond, Held:

    1. That the action was properly revived in the name of the successor in the trust as assignee.
    2. That the sureties in the replevin bond are liable for the judgment recovered by the sheriff against the successor of the assignee.
    3. Where there has been no assignment of the bond or of the judgment in replevin, nor refusal or neglect by the sheriff to enforce the bond, an . action thereon can only be maintained by the sheriff.
    Error to the District Court of Montgomery County.
    The plaintiffs in error, Greer & King, on March 29th, 1878, recovered a judgment against D. Carroll & Son, in the superior court of Montgomery county, for the sum of $832, and $28 costs. They caused execution to be immediately issued on this judgment to the sheriff of the county, who levied upon the property of Carroll & Son. While the sheriff held the property under his levy, George M. Young, as assignee of Carroll & Son, under an assignment for the benefit of creditors, replevied the property from him and gave a bond in replevin as required by law, with John Howard and O. M. Gottschall as sureties thereon.
    Before the action in replevin came to trial, the plaintiff, George M. Young, the assignee, died, and the action was revived in the name of Thomas C. Roseberry, who was duly appointed as the successor of Young, the assignee. On the trial of the action of replevin the plaintiff, the assignee, failed, and'the sheriff recovered a judgment against him for the value of the property taken in replevin. The plaintiffs, Greer & King, in the judgment upon which the execution issued under which the property was taken by the sheriff, were not substituted for the sheriff in the suit in replevin. Nor did the sheriff assign to them the replevin bond or the judgment recovered in the action. Upon this state of fact, Greer & King brought their action upon the replevin bond against Howard and Gottschall and recovered judgment in-the common pleas, which judgment was reversed by the district court.
    The proceeding here is to reverse this judgment of the district court.

      Iddings & Iddings, for plaintiffs in error.
    I. By the proceeding in replevin, completed by the proper bond, the title passed absolutely to the property replevied, subject to no conditions. The bond took the place of the property. Smith v. McGregor, 10 Ohio St., 461.
    II. The doctrine of strict construction does not apply in the ascertainment of the contract of the surety. The bond, being statutory, must receive a reasonable construction, having in view the object to be attained, and the course of legal proceedings. Brandt on Suretyship, § 80; King v. Nichols, 16 Ohio St., 80; Helt v. Whittier, 31 Id., 475; Alber v. Froehlich, 39 Id., 245.
    III. Upon the death of George M. Young, the law required a successor in his trust. This successor was entitled to all the property in the hands of Young; and was a proper person to succeed to the suit upon a proper showing made. Revised Statutes of Ohio, §§ 5148, 6341; Phillips v. Ross, 36 Ohio St., 458.
    IY. If the sureties became sureties for the person who was the assignee, in his official capacity, they continue sureties for the person who, in the usual and regular course of proceedings, steps into his shoes, by act of law. And death, removal, etc., should be contemplated as probable occurrences, which will not change their responsibility. King v. Nichols, 16 Ohio St., 80; Hanna v. Petroleum Co., 23 Id., 622; State v. Rucker, 59 Missouri, 17; Boyd v. Gault, 3 Bush (Ky.), 644; Reusch v. Demas, 34 Mich., 95.
    This doctrine should apply more peculiarly to a replevin bond. After twenty-four hours from its date, it becomes the only security to the defendant. There is no provision for a new bond through all the varying accidents that may occur. In simple language, it stands for the property; the title to which has been permanently vested in the plaintiff.
    Suppose the bond to be one for George M. Young individually. There are two distinct provisions in the replevin bond — the first of which is that “ George M. Young, assignee of D. Carroll & Son, shall duly prosecute his action aforesaid.” This is an important provision. The plaintiff, securing possession and absolute title by the proceedings and bond, need never bring the case to trial. The trial is for the benefit of the defendant. Hence the clause. As to its importance and meaning see Job v. Harlan, 13 Ohio St., 486.
    The duties imposed are not merely negative duties, but active ones. If the obligation upon George M. Young was an individual obligation only, neither he nor his personal representative ever prosecuted the action; but let the matter die with him. It does not appear that his representative ever made an application to court to be installed as plaintiff, or performed any duty whatever, or attempted to perform any duty designated in the bond. The sureties are responsible for the failure of the representative of their principal to perform his duty. Peabody v. Ohio, 4 Ohio St., 387.
    It seems to us that even applying the strictest rules to the second clause of the bond, nevertheless the defendants are liable upon the whole bond.

      Young & Young, for defendants in error.
    I. The liability of sureties is limited to the exact letter or terms of their contract. They stand upon .the words of their bond, and if the words will not make them liable nothing can; their liability cannot be extended by implication —must receive a strict interpretation — and can not be extended beyond the fair scope of the terms. Wells on Replevin, §§ 429 and 430; Miller v. Stewart, 9 Wheat., 680; Lang v. Pike, 27 Ohio St., 498; McGovney v. State, 20 Ohio Rep., 93; State v. Medary, 17 Id., 565; State v. Corey, 16 Ohio St., 17; Myers v. Parker, 6 Id., 501; Hall v. Williamson, 9 Id., 17-23; Smith v. Huesman, 30 Id., 662; 2 Id., 2; 11 Maine, 69; 1 Cal., 390; 49 Cal., 304; 26 Mo., 150; 36 Ill., 306 ; 33 Pa. St., 183; 6 Heisk., 546.
    Now the defendants in error undertook and bound themselves only that said George M. Young should (1) duly prosecute said action and (2) pay all costs and damages which should be awarded against him.
    It is not claimed in plaintiff’s petition that he did not duly prosecute said action; indeed, it is averred that he -died during its pendency, in which case there can be no -breach of this condition. Wells on Replevin, § 418.
    Plaintiffs rest their whole case upon the second condition above stated, and claim that the failure to pay the judgment against Roseberry, referred to in their petition, is a breach of this condition.
    The sufficient answer is that defendants in error did not undertake that said Young should pay costs and damages which might be awarded against said Roseberry, or any successor of said Young in said assignment, but only such costs and damages as might be awarded against him (said Young) personally. It was neither in the letter nor scope of their obligation that they should be liable for the default of any other party, whether a successor in said trust or otherwise.
    They were securities for him; not for the trust, or his successor.
    It was the trust and confidence they had in him, and not in the assignment, which induced them to sign the bond. Richards v. Storer, 114 Mass., 101; Jackson v. White, 5 Allen, 322; Andre v. Fitzhugh, 18 Mich., 93; 7 Blackf., 238; 2 Sneed, 154; 2 Pa. St., 345.
    The obligation for which the defendants in error became security was a personal one — that said Young (personally) should pay — and that he should pay such costs and damages as should be awarded against him personally.
    Now, if sureties are bound only by the letter of their contract, and the same can not be extended by implication, it is impossible to see how this language can be so construed as to bind said sureties for anything except the personal default of said Young, or the default of his personal representatives. There is nothing in the letter of the bond to bind them for the default of his successor in the trust; and to extend their liability thus far, by implication even, seems to us not warranted by any rule of construction.
    The words, “ assignee of D. Carroll & Son,” were only descriptive of the person. The bond does not recite that George M. Young, “as assignee of D. Carroll & Son,” caused an order to issue, &c., but that George M. Young (assignee of D. Carroll & Son) caused such order to issue.
    If said Young had lived and failed in the action, the judgment would have been against him personally, and the execution would have issued against his goods and chattels, lands and tenements, and not against the trust estate in his hands. Lowe v. Lowry, 4 Ohio Rep., 77.
    The obligations resting upon him with respect to the replevied property, or its proceeds, in Ms hands at the time of his death, were, by law, cast upon his personal representative. Peabody Potter v. Ohio, 4 Ohio St., 387-393.
    By § 6341, Revised Statutes, such legal representative is required to settle his account as such assignee, and pay over to his successor all moneys due from him to the trust.
    II. There was no privity of contract between defendants and plaintiffs, and Beebe was the only party who could sue on the bond.
    When as sheriff, Beebe levied on sufficient goods, that was a satisfaction of plaintiffs’ judgment. By virtue of the levy he acquired a qualified title to or ownership in the goods, and was responsible to plaintiffs to make the money on their execution; and when the goods were replevied, it was his business to defend, unless upon his application or that of said Greer & King, they were substituted as defendants, which was not done in this case.
    No assignment of this replevin bond to said plaintiffs in error is averred, and we know of no statute which authorizes them to sue upon it. They must look to the sheriff, who alone can sue upon ^ the bond, or follow the property when taken from him.
   McCauley, J.

If the revivor of the action in the name of Roseberry, the successor of Young as assignee of Carroll & Son, was proper, the sureties in the replevin bond became liable for the amount of the judgment recovered therein against the plaintiff.

It is argued, however, that the action should have been revived in the name of the legal representative of Young, the first assignee, and that the revivor in the name of Rose-berry beingi wrong, a judgment against him does not bind the sureties of Young, the original plaintiff.

The principal argument in support of this claim, is that section 6341, of the Revised Statutes, requires,' on the death of an assignee or trustee, that Ms legal representative sh'all file and settle his accounts, and immediately after such settlement shall pay over to his successor all moneys found due from him to the trust. This provision does not, however, require the legal representative to take the place of the assignee in pending actions. Who shall take his place in such actions, is to be determined by the statutes providing for the revivor of actions, rather than by the statutes defining the duties of legal representatives. Where a person is a party to an action in a representative capacity, in case of his death or where his powers as a personal representative cease, the action should be revived in the name of his successor. Revised Statute, section 5148. Upon the death of an administrator the' duty is enjoined upon his legal representative to settle his account and turn over all assets of the estate in his hands to his successor, as in the case of an assignee or trustee. But it would not be claimed that on the death of an administrator a pending action by or against him should be revived in the name of his legal representative — his administrator. There is nothing peculiar to an action of replevin requiring the revivor to be different from that of actions generally. The revivor was therefore properly made. It results from this that the judgment was one for which the sureties on the replevin bond were liable.

The action on the bond, however, was brought by the plaintiffs in the execution under which the sheriff levied on the property, without alleging an assignment of the bond to them by the sheriff, or an assignment to them of the judgment in replevin, and without alleging any reason why they should bring the action, such as the refusal or neglect of the sheriff to enforce the bond or to assign it or the judgment to them. They might clearly maintain the action if the bond had been assigned to them or if the judgment had been assigned, which would have effected an assignment of the bond as an incident to it. Or if the sheriff had refused or neglected to assign either the judgment or the bond, or to enforce the bond, in the latter case making the sheriff a party. This would not be their only remedy, but this one they would clearly have under the circumstances supposed. The plaintiffs in the common pleas failed to set forth a state of fact sufficient to entitle them to a judgment on the bond. Their petition was demurred to and the demurrer overruled. The district court reversed the judgment of the common pleas for the error of that court in overruling the demurrer. The district court in this reversal was clearly right.

Judgment affirmed.


text:
    Aultman & Co. v. Guy.
    A chattel mortgage, executed by two or more persons, joint owners of the mortgaged property, in order to be kept alive as against creditors, subsequent purchasers or mortgagees in good faith must be refiled in all the townships in which the mortgagors reside.
    Error to the District Court of Montgomery County.

      O. M. Grottschall, for plaintiff in error.

      A. A. Winters, for defendants in error.
   Nash, J.

The statutes providing for the filing and refiling of chattel mortgages are as follows:

■ “ Section 4150. A mortgage or conveyance intended to operate as a mortgage of goods and chattels which is not accompanied by an immediate delivery, and followed by an actual and continued change of possession of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, subsequent purchasers and mortgagees in good faith, unless the mortgage or a true copy thereof be forthwith deposited as directed in the next section.
“Section 4151. The instruments mentioned in the last section shall be deposited with the clerk of the township where the mortgagor resides at the time of the execution thereof, if a resident of the state, and if not such resident then with the clerk of the township in which the property so mortgaged is situated at the time of the execution of the instrument; but when the mortgagor is a resident of a township in which, the office of county recorder is kept, or when he is a non-resident of the state and the property is within such township, the mortgage shall be filed with the county recorder.
“ Section 4155. Every mortgage so filed shall be void as against the creditors of the person making the same or against subsequent purchasers or mortgagees in good faitli after the expiration of one year from the filing thereof, unless within thirty days next preceding the expiration of the said term of one year, a true copy of such mortgage, together with a statement verified as provided in the last section, together with a statement exhibiting the interest of the mortgagee in the property at the time last aforesaid claimed by virtue of such mortgage, is again filed in the office where the original was filed.”

The question now presented is in a case where the mortgage was executed by two joint owners of the mortgaged property, who lived in two townships. When first filed it was with the clerk of each township. When the refiling required by section 4155 took place it yras deposited with the clerk of the township in which one of the makers resided, but not with the clerk of the township where the other maker lived. This omission rendered the mortgage void as against the creditors of the mortgagors, subsequent purchasers and mortgagees in good faith, as the mortgagors retained possession of the things mortgaged.

This conclusion follows from the construction which we think should be given to certain words of sections 4151 and 4155.

Section 4151 provides that chattel mortgages “ shall be deposited with the clerk of the township where the mortgagor resides at the time of the execution thereof.” Section 23 R. S., authorizes us, in the interpretation of this section, to hold that words in the plural number include the singular, and words in the singular include the plural, unless the context shows that another sense was intended. Applying this rule to the words quoted from sections 4151 in a case where the chattel mortgage is executed by two or more makers, they provide that such a mortgage or a true copy thereof must be deposited with the clerks of the townships where the mortgagors reside. Applying the same rule to the closing words of section 4155, they provide that in the re-filing of a like chattel mortgage it must be again filed in the ofiices where the original or true copies thereof were filed. _

There is nothing in the context showing that another sense was intended, but the end sought by the legislature to be attained by these sections requires that this construction should be adopted.

Section 4155 expressly declares that a chattel mortgage not re-filed in accordance with its provisions within thirty days next preceding the expiration of one year from its first filing, is void as against creditors or subsequent purchasers or mortgagees in good faith, and it follows that we cannot give life to the mortgage involved in this controversy.

In the cases, Rich v. Roberts, 48 Me., 548; Morrill v. Sanford, 49 Id., 566, and Stewart v. Platt, 101 U. S., 731, the supreme judicial court of Maine and the supreme court of the United States in considering statutes like the statutes of Ohio relating to chattel mortgages, gave to them the same interpretation that we have given to our statutes in this case.

Judgment affirmed.


author: By the Court.

text:
    City of Cleveland v. Cuyahoga Agricultural Society.
    Error to the District Court of Cuyahoga County.

      Kain, Sherwood & Bunts, for plaintiff in error.

      Robinson & White, for defendant in error.
   By the Court.

On July 6, A. D. 1875, in a proceeding at the suit of a city to condemn land, for a street, the jury assessed the damages in favor of the parties interested in one tract at the sum of $12,412 of which $530 was to be paid to a lessee and the remainder to the landlord. On the same day the court made an order that within six months from that day, ‘■'■upon the full payment of the awards and costs herein said city is authorized to take possession of the premises * * * for the uses and purposes for which it is appropriated.” The city paid all the awards except the $530 and took possession of the land. The lease had expired on February 1, 1877, before the city took possession of the premises covered by the lease. The lessee sued for the $530.

Held: The city was bound to pay $12,412 for the land. The order of ‘the probate court gave to the lessee a right to the award in its favor, contingent onlv upon the city’s election to take the land under the order

Judgment affirmed


text:
    Wilder v. Commissioners of Hamilton County.
    Error to the District Court of Hamilton County.

      H. C. Whitman, for plaintiff in error.

      Charles Evans, for defendant in error.
   By the Court.

The county commissioners were authorized to build a permanent bridge across Mill Creek, and to straighten the creek for that purpose (69 Ohio Law, 380). It was necessary to obtain a fee-simple title to some of Wilder’s land. His other land would be damaged by the proposed change in the creek. The commissioners and Wilder agreed that he should give to the county the land required by it, for which the county should pay him $10,125, and protect Ms adjoining land from washing and abrasion. It was also agreed that a proceeding should be had in the probate court under the act of April 30, 1852 (S. & C., 311) ; that said agreement should be stated to the jury, a verdict for Wilder, for $10,125, returned and judgfiient of condemnation rendered thereon. All this was done. The county commissioners took the land, built the bridge, changed the creek and materially damaged Wilder’s other land. No entry of said contract was ever made by the auditor upon the minutes of the commissioners as required by the act of April 8, 1856 (53 Ohio Law, 155; S. & C., 250).

Held: The county, having accepted and enjoyed the benefits contracted for, must pay for them as it agreed to do. It is estopped from setting up its omission to make the entry.

Athens v. R. R. Co., 37 Ohio St., 205, approved and followed.

Judgment of the district court reversed, and that of the superior court affirmed.


text:
    The City of Columbus v. William H. Dunnick.
    Error to the'District Court of Franklin County.

      Alexander Krumm and C. T. Clark, City Solicitor, for plaintiff in error.

      Marriott & Hughes and W. H. Dunnick, for defendant in error.
   By the Court.

On March 11, 1878, S. was lawfully arrested and brought before the Majmr of Columbus, charged with a violation of a city ordinance. The case was continued by agreement, and she was required to give bail for her appearance on the trial day, or go to prison. At her own request, the mayor accepted a deposit of $75 cash, in lieu of bail. She made default; the mayor declared the bail forfeited, and placed the money (less the costs) in the city treasury. S. never claimed any right in or to the money in any way. In June 1880, D. sued out an attachment against S. and served the city as garnishee. In May, 1881, after judgment against S., D. sued the city as a garnishee whose answer did not make a satisfactory disclosure. Issue was joined and tried upon an agreed statement of facts. D. recovered judgment and the district court affirmed it.

Reid: 1. The mayor was not authorized to accept money in lieu of bail.

2. The city having received the money as forfeited bail, at the voluntary request of S. and disbursed it in due course, was not her debtor.

3. D., having failed to show that S. was his debtor at the time of tbe deposit, and that it was made in fraud of any creditor, the trial court should have rendered judgment for the city.

Judgments below reversed ané judgment for the city.


text:
    Slagle v. Pow.
    Where the payee of a promissory note for $1,500 held another note of the makers for $1,000, given as collateral to the first note, with sureties, and payable at a time to which the payment of the principal note had been extended, and the payee after the maturity of the collateral note again extended the time of payment of the principal note for a definite time, by a valid agreement and without the consent of the sureties on the collateral note, he thereby discharged them.
    Ekkoe to the District Court of Mahoning County.
    On the 31st day of March, 1875, Robert A. Barnes and Avarilla A. Barnes, his wife, made and gave to the plaintiff in error, Slagle, their promissory note for $1,500, payable in one year with eight per cent, interest, and at the same time said Barnes and his wife executed and delivered to Slagle their mortgage deed of certain lands in Mahoning county to secure the payment of this note. On the 10th day of January, 1877, to further secure the payment of the note, and for the purpose of obtaining an extension of the time of payment, Barnes and his wife, with Pow and Hawkins as sureties, made and gave to Slagle the following contract:
    “ January 10th, 1877.
    “For value received we or either of us promise to pay to Jonas Slagle or order the sum of one thousand dollars against first day of February 1878, eighteen hundred and seventy eight. N. B. This n— is given as collateral security to secure the payment of a note that said Slagle holds against R. A. Barnes and Avarilla A. Barnes for which said Slagle has a mortgage. Said note dated March 31, 1875. Now be it remembered when the said Slagle shall have received the fifteen hundred dollars and eight per cent, interest then this note is void and to be returned to said Barnes. Interest eight per cent, from date.
    “ Witness our hand and seal.
    “ R. A. Barnes, [Seal.]
    A varilla A. Barnes, [Seal.]
    Wm. Hawkins, [Seal.]
    John Pow.” [L. S.]
    Slagle brought his action upon this contract and the sureties, Pow and Hawkins, for defense alleged that after the contract above stated became due, Slagle, for a valuable consideration, extended the time of payment of the noté for $1,500 from February 1, 1878 to February 1, 1879. Upon the trial in the common pleas the court instructed the jury that an extension of the time of payment of the note for $1,500, if made for a consideration, for a definite time, aud without the consent of the sureties on the contract above set forth, would release them. The verdict was for the defendants, and judgment was rendered on the verdict. This judgment was affirmed by the district court. It is now sought to reverse both judgments.

      J. R. Johnson, for plaintiff in error.

      Jared Huxley, for defendant in error
   McCauley, J.

The makers of the note for fifteen hundred dollars were liable also on the contract which was held as collateral to it. The collateral contract did not rest on a distinct consideration, but the consideration of the principal note and of the collateral were the same. In the ordinary case of holding one note or contract as collateral to another, each note or contract rests upon a distinct consideration. The extension of time on a principal note or contract, which would release sureties upon it, would not affect a note or contract belonging to the principal debtor upon a distinct and different consideration held as collateral to it. When the principal and collateral contracts are upon separate and different considerations, if the collateral matures after the principal, it survives and may be enforced after the principal has become barred by limitation. In such cases also where the collateral matures before the principal it may be enforced before the principal debt is due. The right of action on the collateral is in no way dependent upon the principal debt, except that the principal must remain unpaid to give the right to enforce the collateral. The consideration to Barnes for the principal and the collateral being the same, and Pow and Hawkins being sureties only, their relation to the principal debt was the same as if they had been sureties on the original note, limited only by the amount for which they undertook. While the payment of the principal might have been extended without affecting the collateral, if the agreement for the extension had reserved the right to proceed on the collateral notwithstanding the extension, where no such right was reserved the extension of time for the payment of the debt extended the time on all notes or contracts held by the creditor for it, which were not supported by a consideration different from the one for which the principal note was given.

Judgment affirmed.