author: Davis, J.

text:
    The State of Ohio v. Davis.

      Indictment under Section 30 of Free Banking Act — Section 3821-85, Revised Statutes — Relating to embezzlement by bank officers— Bank officer charged with abstracting, without authority, of certificates of said bank — Not an offense under laws of Ohio — ■ Such certificates not shares of stock, funds or moneys — But merely receipts of payment for shares — Banking laws.

    Where an indictment under Section 30 of the Free Banking Act (Revised Statutes, 3821-85) charges the defendant as an officer of a bank with abstracting, misapplying and embezzling property of the bank, to-wit, certificates of the stock of such bank of the value of fifty dollars per share on which only sixty per cent, thereof had been paid, which certificates of stock had theretofore been pledged to such bank as security for moneys theretofore received by him, which abstraction was without authority from the other officers or directors of such bank, with intent to injure and defraud the bank, and that he did so injure and defraud the bank, such indictment does not charge an offense under the laws of Ohio, because
    1st. Such certificates are not shares, but only receipts or acknowledgments that defendant had paid sixty per cent, on each share; and by virtue of Section 11 of the Free Banking Act (Revised Statutes, 3821-70) the bank had a lien on the shares allotted to the defendant and had complete control over the assignment and transfer of the same, and therefore the possession of such certificates gave to the bank no additional rights or benefits.
    2nd. Such certificates are not moneys, funds or credits of such bank, within the meaning of Section 30 of the Free Banking Act (Rev. Stat., Sec. 3821-85).
    (No. 12751 —
    Decided October 31, 1911.)
    Error to the Circuit Court of Columbiana county.
    The defendant in error was indicted jointly with Corwin D. Bachtel, by the grand jury of Stark county, Ohio, for abstracting, misapplying and embezzling personal property of the Canton State Bank. The defendants demurred to the indictment on the ground that it did not state an offense under the laws of Ohio, which demurrer was overruled. Subsequently, on motion of the defendants, the venue was changed to the adjoining county of Columbiana, and thereafter the proceedings occurred in that county. The defendant, Bachtel, having died before the trial, the court directed the jury, on the trial of the defendant in error, to return a verdict of not guilty on the second and third counts of the indictment. The first count of the indictment charges the defendant in error as follows, to-wit:
    “That William L. Davis and Corwin D. Bachtel, late of said county, on or about the 13th day of December in the year of our Lord one thousand nine hundred and four, at the county of Stark aforesaid, said William L. Davis being then and there an officer, to-wit: vice-president and a director of The Canton State Bank, a corporation, incorporated and organized as a banking company under the law of the State of Ohio known as the free banking act passed 1851, by the legislature of Ohio, and which banking company, on or about the 13th day of December, 1904, and at the time of the abstraction of the personal property of said banking company, to-wit: the certificates of stocks as hereinafter described, was doing a banking business in the city of Canton, Stark county, Ohio, as a free banking company, and said Corwin D. Bachtel being then and there and at the time an officer, to-wit: the cashier and a director of The Canton State Banking Company, certain property, to-wit: certain certificátes for 350 shares of the capital stock of said banking company, to-wit: certificate No. 20 for 100 shares, certificate No. 181 for 100 shares, certificate No. 223 for 100 shares, certificate No. 244 for 40 shares and certificate No. 256 for ten shares, which said certificates of stock had theretofore been issued by the said The Canton State Bank to the said William L. Davis, and which said certificate of stock had theretofore been hypothecated by the said William L. Davis with the said The Canton State Bank, as security for moneys theretofore received by the said William L. Davis from the said The Canton State Bank, and which said certificates were of the face value of fifty dollars per share, and upon which had been paid in thereon the sum of thirty dollars per share, and which said certificates were then and there of the value of one hundred and' five thousand dollars, of the personal property of and belonging to the said The Canton State Bank. They, the said William L. Davis and Corwin D. Bachtel, officers of the said The Canton State Bank, as aforesaid, did, at the time and date aforesaid, and at the county aforesaid, with the intent on their part to injure and defraud the said The Canton State Bank, unlawfully and fraudulently abstract from the possession of the said The Canton State Bank said certificates of stock heretofore described without the authority of any of the other officers and directors of the said The Canton State Bank, and thereby did defraud and injure the said The Canton State Bank as aforesaid.”
    On the trial, the defendant in error admitted that he had pledged the said certificates to The Canton State Bank as a security for the payment of an antecedent debt, and that, as vice-president of said bank, he and the said Bachtel as cashier had access to and custody of the said certificates, and that he, the defendant in error, directed the said cashier to pledge the said certificates at another bank as collateral to a loan made in the name of the defendant in error, and he denied that he took said certificates from the possession of The Canton State Bank and pledged them as aforesaid with any criminal intent, but claimed on the contrary that although the transaction was without the authority of the board of directors it was not without the knowledge of at least some of the directors, and that it was done in perfect good faith, believing as he had been advised by counsel, that‘he had the legal right to the possession of said certificates and the right to pledge them as he did do, and that said pledge was made as he believed for the benefit both of said Canton State Bank and himself.
    At the close of the evidence on behalf of the state, the defendant in error moved the court to instruct the jury to return a verdict in favor of the defendant for the following reasons: 1. That the indictment does not charge an offense under the laws of the state of Ohio; 2. That all of the evidence introduced by the state does not show the commission of any offense by this defendant under the laws of the state; and that the evidence offered by the state has failed to make out a case against the defendant under the indictment; which motion was overruled, to which the defendant excepted. And at the close of all the evidence, and when the state and defendant had both rested their case, and before argument, the defendant renewed his motion that the court direct-a verdict of not guilty in this case for the reasons originally stated at the close of the state’s case; which motion was overruled and the defendant excepted. The jury returned a verdict of guilty as charged in the first count of the indictment. The defendant in error moved for a new trial, which motion was overruled, and the defendant excepted, and judgment was pronounced upon the defendant in error. A bill of exceptions was taken to errors of the court in the admission and rejection of testimony and to the charge of the court as given and to the refusal of the court to charge as requested by the defendant in error. Also to the overruling of the motions of the defendant to direct a verdict in his favor and to the overruling of his motion for a new trial.' All of these exceptions were made the basis of a petition in error in the circuit court. The circuit court reversed the judgment of the court of common pleas and discharged the defendant; and to reverse the judgment of the circuit court this proceeding in error is prosecuted.

      Mr. W. H. Miller, assistant attorney general; Mr. Charles Krichbaum, prosecuting attorney, and Mr. Atlee Pomerene, for plaintiff in error.
    The alleged insufficiency ' of the indictment' is predicated upon the provisions of Sections 11 and 12 of the Free Banking Act, Sections 3821-70 and 3821-71, Revised Statutes.
    The court will remember that the National Banking Act was framed after the Free Banking Act. Section 3821-85 of the Free Banking Act is substantially the same in its provisions as Section 5209, U. S. Comp. Statutes (1901), prescribing penalties for abstraction and embezzlement under the National Banking Act.
    In the trial below much stress was laid on the fact that our supreme court held in the case of
      Bank v. Bank, 36 Ohio St., 350, that one bank cannot compel transfer of stock in another bank to it, in view of Sections 11 and 12 of the Free Banking Act, but it will be noted that the supreme court expressly said “that the stock in the present case was pledged or received to secure a precedent loan is not claimed,” and again, “that the plaintiff may have acquired rights by the pledge received from Foote, to such interest in the bank as said certificate of stock presented, is quite true.”
    While the Free Banking Act provides that no company shall take as security for any loan or discount, a lien upon any part of its capital stock, and' no banking company shall be the holder or purchaser of any portion of its capital stock unless such purchase shall be necessary to prevent loss upon a debt previously contracted in good faith, etc., it does not say that if the bank did take this stock, it could not hold it as against the pledgor. Neither does it say that its rights so acquired may not be retained for security for debts or that they may not be enforced. There is no direct authority upon this exact question in Ohio. National Bank v. Stewart, 107 U. S., 676; National Bank v. Matthews, 98 U. S., 621; National Bank v. Whitney, 103 U. S., 99; Thompson v. National Bank, 146 U. S., 248.
    The fact that the taking of security by which a loan of the bank is secured, is prohibited by law neither invalidates the loan or the security. 3 Ency. U. S. Sup. Ct. Rep., 62, and authorities cited.

      Where the provisions of the National Banking Act prohibited certain acts by banks or their officers, without imposing any penalty or forfeiture applicable to particular transactions which have been executed, their validity can be questioned only by the United States and not by private parties. Thompson v. National Bank, 146 U. S., 248; Weber v. National Bank, 64 Fed. Rep., 211; 1 Gould & Tucker’s Notes, pp. 492, 493; 2 Gould & Tucker’s Notes, p. 602; National Bank v. Whitney, 103 U. S., 99.
    We conclude, therefore, that under the National Banking Act, as well as under the Free Banking Act of Ohio, while these organizations may not take their own stock as collateral security for concurrent loans, yet if they do take them, and the acts are executed, it does not lie in the mouth of the pledgor who has done the illegal act, to complain and ask the courts to set aside this act and thereby deprive the bank of the security which he has so given, and if he cannot appeal to the civil courts to return his property, how can he like a thief in the night steal this stock from the bank’s vaults and claim that he is immune. Will this court say that he can do, without punishment, what the civil courts will not permit him to do?
    Congress intended to make criminal the conversion and misapplication of the funds, whether the party misapplying received any advantage or not. 2 Morse on Banking, p. 1403; United States v. Lee, 12 Fed. Rep., 816.
    Assuming that the certificates of stock were valid certificates of stock and not prohibited by statute, was the hypothecation or assignment of the certificate of stock by Davis to secure a precedent debt due the Canton State Bank invalid and nugatory because of the fact that the statute says the same shall only be assignable on the books of the company, etc.? Cook on Corporations (4 ed.), Secs. 378, 465.
    It follows also that the certificates of stock were a pledge for the security of a debt due the bank and was not forbidden by the statute. National Bank v. National Bank, 37 Ohio St., 215; National Bank v. Case, 99 U. S., 628; Cochran & Fulton v. Ripy, Hardie & Co., 13 Bush (Ky.), 495; 22 Am. & Eng. Ency. Law (2 ed.), 845; 2 Cook on Corporations (4 ed.), Section 465; Hunt v. Bode, Assignee, 66 Ohio St., 270; Dueber, etc., Mfg. Co. v. Dougherty, 62 Ohio St., 589.

      Messrs. Webber & Turner and Messrs. Welty & Albaugh, for defendant in error.
    The alleged certificates were not legal or valid certificates of stock. Clearly, therefore, certificates of stock issued by a banking company organized under the act in question, would possess none of the attributes of certificates of stock as commonly issued by corporations; they would not be negotiable; title to the shares could not be transferred by assignment of the certificate by the owner, and such certificates would, in short, be nothing more than a mere receipt for the money paid in thereon.
    The Canton State Bank was not only prohibited by express statutory provision from holding shares of its own stock, but was given a statutory lien upon all its shares, the owners of which were indebted to the bank.
    It will be observed that by the provision of Section 11 of the Free Banking Act, the only manner in which title to shares of stock of such company can pass is by assignment “on the books of the company.” The indictment does not allege that any such assignment was made, nor does it allege any fact showing that the bank had any right to own or hold said shares — or if it was the owner thereof, or of any interest therein — that it has been deprived of its said ownership or interest by any act of defendant in error.
    If we understand the force of counsels’ argument, it is claimed that a transaction although otherwise irregular and in fact prohibited by express statutory provision, will, if consummated, be held to be legal.
    In the case of Vanatta v. Bank, 9 Ohio St., 27, the supreme court has construed the provisions of Section 3821-82 of the Free Banking Act.
    Intent to defraud or injure the bank, is an essential ingredient of the offense, and as no fraud or injury could possibly result to the bank from the commission of any or all of the acts charged, such acts do not constitute an offense.
    As has already been pointed out the penal section of the National Banking Law, known as Section 5209, U. S. Comp. Statutes (1901), is identical in its provisions with Section 30 of the Free Banking Act (Section 3821, Bates’ Revised Statutes). The case of United States v. Corbett, 162 Fed. Rep., 687, is especially in point.
    In answer to the inquiry propounded by counsel we reply that defendant in error did not “steal this stock from the bank’s vaults,” nor does the indictment charge him with such offense. Counsel for the state persist in using the terms “stock” and “certificates of stock” interchangeably, as if there is no distinction between the terms. The case of Ball et al. v. Manufacturing Co., 67 Ohio St., 306, points out very clearly this distinction.
    The certificates of stock were neither “moneys, funds or credits of the company” within the meaning of Section 3821-85, Revised Statutes. United States v. Smith, 152 Fed. Rep., 542.
   Davis, J.

The most serious question raised in this case, and the only one which we find it necessary to decide, is whether the indictment charges an offense under the laws of this state. The indictment charges the defendant in error as vice-president and director of The Canton State Bank with abstracting, misapplying and embezzling, on or about December 13, 1904, certain property, to-wit: certificates of the capital stock of said bank of the face value of fifty dollars per share and upon which had been paid thereon thirty dollars per share, which certificates had theretofore been hypothecated by defendant with such bank as security for moneys theretofore received by him, without the authority of any of the other officers and directors of said bank and with the intent to injure and defraud the bank, and that he, with his co-defendant, the cashier of the bank, did defraud and injure the bank.

The question as to the sufficiency of the indictment was urged in the trial court upon demurrer to the indictment, and during the trial upon motions to direct a verdict for the .defendant and requests to charge the jury, and after the trial upon a motion for a new trial. Upon a petition in error in the circuit court it was held that the judgment of conviction was contrary to law, because the indictment fails to charge any offense under the laws of Ohio. Is the judgment of the circuit court correct?

In considering this question it will be necessary to look to the act of the general assembly known as the Free Banking Act, and particularly to Sections 11 and 12, (Revised Statutes, Sections 3821-70 and 3821-71) and Section 30 (Revised Statutes, 3821-85). The last named section is the one under which this indictment was drawn, and it reads as follows: “Every president, director, cashier, teller, clerk, or agent of any banking company, who shall embezzle, abstract, or willfully misapply any of the moneys, funds, or credits of such company, or shall, without authority from the directors, issue or put forth any certificate of deposit, draw any order or bill of exchange, make any acceptance, assign any notes, bonds, drafts, or bills of exchange, mortgage, judgment or decree, or shall make any false entry in any book, report, or statement of the company, with intent in either case to injure or defraud the company, or any other company, body politic or corporate, or any individual person, or to deceive any officer of the company, or any agent appointed to inspect the affairs of any banking company in this state, shall be guilty of an offense, and, upon conviction thereof, shall be confined in the penitentiary, at hard labor, not less than one year, nor more than ten years.”

The defendant in error in his contention that the indictment does not state an offense relies upon the other two sections mentioned above, which are as follows: “The capital stock of every company shall be divided into shares of fifty dollars each, which shall be deemed personal property, and shall only be assignable on the books of the company, in such a manner as its by-laws shall prescribe; each bank shall have a lien upon all stock owned by its debtors, and no stock shall be transferred without the consent of a majority of the directors, while the holder thereof is indebted to the company,” and “no company shall take, as security for any loan or discount, a lien upon any part of its capital stock; but the same security, both in kind and amount, shall be required of shareholders as of persons not shareholders; and no banking company shall be the holder or purchaser of any portion of its capital stock, or of thé capital stock of any other incorporated company, unless such purchase shall be necessary to prevent loss upon a debt previously contracted in good faith, on security which, at the time, was deemed adequate to insure the payment of such debt, independent of any lien upon such stock; and stock so purchased shall in no case be held by the company so purchasing, for a longer period of time than six months, if the same can be sold for what the stock cost, at par.”

As we advance in the consideration of this matter it is necessary to keep in view the well marked distinction between shares in the capital stock in a corporation and the certificates issued therefor. The shares are the substance. The certificates are the evidence of things not seen. The shares are actual property of the stockholder. The certificates are the mere attestation of the stockholder’s ownership of the shares. The certificates are no more actual property than a man’s deed is his farm. They are no more than an admission on the part of the corporation that the person to whom they were issued has, pro tanto, performed his part of the contract in becoming a stockholder. They are not negotiable; and even a bona fide purchaser of certificates of stock acquires no title as against equities existing against the vendor.

Substantially this view of the relation .of certificates to shares of capital stock was adopted by the court in Ball et al. v. The Towle Mfg. Co., 67 Ohio St., 306. In that case one Ball was the owner of ten shares of the capital stock of the American Exchange National Bank. The manufacturing company, as a creditor of Ball, began proceedings in aid of execution and served process therein on the bank. Subsequently Ball pledged the certificate for his ten shares of stock in the bank to one Crowell to secure an antecedent debt and for an additional loan. Crowell received the certificate in good faith and without any actual knowledge of the equities of the manufacturing company. The court held that, by the notice served on the corporation in proceedings in aid of execution, the manufacturing company acquired a lien on the shares of stock prior to the rights of Crowell by the pledge of the certificate.

The pertinence of these observations will be apparent when we recur to the statutes. Our general statute as to corporations (Revised Statutes, Section 3254) seems to require that certificates may be issued only when the stock is fully paid up. The certificates in question here, however, declare upon their face that only sixty per cent, of the face 'value of the stock represented by them had been paid. Hence, whether they were lawfully issued or not, or whether they had never been issued, the bank had a lien upon the shares owned by its debtors as provided by Section 11 (Rev. Stat., Sec. 3821-70) of the Free Banking Act, cited and quoted above, and, as provided, no stock should be transferred while the holder thereof was indebted to the bank, without the consent of a majority of the directors. And it was further provided therein that shares of stock should only be assignable on the books of the company. Although Section 12 of the Free Banking Act, heretofore quoted, was made the basis of considerable comment in the argument of this case and entered into the opinion of the circuit court, we do not think that it necessarily concerns the contention of the defendant in error, and we therefore dismiss it from our consideration. We may assume for the purposes of this case that, under Section 12, the bank could obtain a lien on the defendant in error’s stock for a loan or discount; and we may assume that the bank might become the holder or purchaser of these shares of. its capital stock to prevent loss upon a precedent debt, still the position of the state is made no stronger thereby, because that which was abstracted, misapplied or embezzled, was not the shares of the capital stock. That which was taken from the bank’s possession was the certificate or statement that the defendant in error had paid sixty per cent, on the shares.

The mere delivery of those certificates could not be construed as a symbolical surrender of the sixty per cent, already paid on the stock, because by the express provision of Section 11, the shares of capital stock, not the certificates of payment therefor, in whole or in part, “shall be deemed personal property and shall only be assignable on the books of the company.” And further, “each bank shall have a lien upon all stock owned by its debtors, and no stock shall be transferred without the consent of a majority of the directors, while the holder thereof is indebted to the company.” The certificates, therefore, were not personal property belonging to the bank, as charged in the indictment, nor were they assignable unless at the option of the banking company, nor were they in fact assigned or transferred on the books of the company. The bank had the same rights respecting the shares of stock standing in the name of the defendant in error, after it obtained possession of the certificates, and after they were abstracted, as before, no more and no less. So that the abstraction of the certificates did not and could not “defraud or injure” the bank as charged in the indictment. Under all the circumstances of this case, these certificates were no more in law than receipts for money paid on the shares of stock allotted to the defendant in error; and as an officer of the bank, having access to its vaults, he had the same right to make reprisal as if he had found his own umbrella in the vault and had taken it. If any question is made as to the moral right of the accused to take possession of the papers, as of no value to. anybody but himself, and to pledge them to another bank as collateral to a loan, knowing that the Canton State Bank had a lien on the shares, that is a question outside of our jurisdiction.

Another contention is made over this indictment, and we notice it although it does not seem to be important after the conclusions already expressed. The indictment was drawn under Section 30 of the Free Banking Act (Revised Statutes,-Sec. 3821-85) which provided that: “Every president, director, cashier, teller, clerk or agent of any banking company who shall abstract or willfully misapply any of the moneys, funds or credits of such company,” etc. The indictment charges that the defendant in error abstracted personal property of the bank, to-wit: the certificates of stock, etc.

We have already shown that it is not certificates of stock but the actual shares of stock which are declared to be personal property; but it is said that the certificates are included within the descriptive terms “moneys, funds or credits” in Section 30 above. That the certificates are not “moneys” or “credits” seems to be too obvious for argument, United States v. Smith, 152 Fed. Rep., 542, but still apparently confounding the shares with the certificates the counsel for the state say: “It is absurd to say that they may not issue to the stockholder some evidence of his holdings, and if it is issued what is there under the law to prevent this evidence (or personal property as it is called in the statute) from being either sold or transferred, subject only to such rights as the bank issuing the same may have against the stockholder for indebtedness to the bank. And if it has been issued or transferred by way of collateral to some other bank, who will say that it would not be funds of the bank which might be abstracted within the meaning of the statute?” This argument begs the whole question, first because it assumes that certificates are the same as shares, and, second, because it assumes, what is not true in this case, that the shares evidenced by the certificates may be assigned or transferred without consent of the banking company, and third, it assumes that these certificates were “transferred” although the statute says that no stock shall be transferred without consent of a majority of the directors, while the holder thereof is indebted to the company. Whether the argument of counsel might not be sound when certificates of a corporation, without such statutory restrictions as are to be reckoned with here, are indorsed or assigned thereon when pledged, we do not decide. But to return to the words of the statute, lexicographers define the word “funds” as meaning permanent investment for income, “stock of convertible wealth,” or perhaps, giving it the broadest meaning that can be given in this connection, it is nearly synonymous with “assets”; but to contend that the mere certificate is an asset when the real thing, of which the certificate is only an evidence of title, is already within the complete control of the creditor company, seems to us to be not only a confusion of reasoning but of the facts also. It follows that since the abstraction of the certificates was neither an abstraction of moneys, credits or funds, the indictment was fatally defective in that respect also.

The judgment of the circuit court is

Affirmed.

Spear, C. J., Shauck, Johnson and Donahue, JJ., concur.


source: Caselaw Access Project

author: Spear, C. J.

license: Public Domain

text:
    The Cincinnati Traction Co. v. Ruthman.

      Filing bill of exceptions — Duty of trial judge — Sections 5301 and 5301a, Revised Statutes — Law will not permit a party to suffer by neglect of duty of public officer, when — Signing by judge of bill of exceptions — Ministerial and not judicial act — Bill of exceptions allowed by judge and transmitted to clerk — But through neglect, not signed by him — May be signed subsequently by judge as nunc pro tunc — Duty and rights of counsel as to such judicial neglect — Court procedure.

    1. The general rule that the law will not permit a party to suffer detriment by reason of the neglect or misconduct of an officer charged with a public duty where such party, in the prosecution of a right, has done everything that the law requires him to do, and fails to attain his right wholly by such neglect or misconduct, the duty of the officer being one pertaining to such right, has application to a case coming within the purview of sections 5301 and 5301n, Revised Statutes, providing for the filing, allowance and signing of bills of exceptions.
    2. The signing by the judge of a bill of exceptions taken in the court of common pleas, after the same has been settled and allowed, is a ministerial, and not a judicial act. Such act, when omitted to be done at the time prescribed by statute by oversight of the judge, may be done by him in a proper case nunc pro tunc.

    3. Where it is shown that in a cause tried in the court of common pleas the counsel for the excepting party has done all acts with respect to the preparation, filing and perfection of a bill of exceptions enjoined by statute, and the judge, within proper time, has considered, corrected, settled, and, having found the bill thus perfected to be correct, allowed the same, but, through oversight and inadvertence, has failed to sign the certificate attesting its correctness, and has in due time transmitted the bill to the clerk without such signature, a proper case is made for asking and obtaining from the reviewing court in which a proceeding in error is pending, authority to obtain the signature of such judge nunc pro tunc.

      4. When the bill is perfected by the addition of such signature, it is as effectual in law to all intents and purposes as though the same had been signed by the judge within the time allowed for such signing by the section of the statute cited, and it is error for the reviewing court to strike off and refuse to consider such bill when perfected by the signature of such judge.
    The failure of the counsel for the excepting party to notice the absence of such signature at or before filing the same in the reviewing court, or before the expiration of six months thereafter, is not negligence affecting the right of their client to insist on a correction of the bill by the addition of the signature of such judge.
    (No. 11919 —
    Decided October 31, 1911.)
    Error to the Circuit Court of Hamilton county.
    The question involved in the case relates to the refusal of the circuit court to consider a bill of exceptions, and the sustaining of a motion to strike the same from the files.
    It appears by the record that in a suit pending in the court of common pleas of Hamilton county, wherein John Ruthman (here defendant in error) was plaintiff, and The Cincinnati Traction Company (here plaintiff in error) was defendant, a verdict was rendered in favor of the plaintiff and against the defendant at the January Term, 1908, to-wit, January IS, 1908. Motion for new trial was thereupon filed by the Company, which on March 11, 1908, was overruled and judgment rendered for plaintiff and against the Company. On March 28 a bill of exceptions on the part of the Company was filed with the clerk, notice of which was on March 31, 1908, served on the attorneys of record for plaintiff. April 2, following, objections to the bill were filed by the plaintiff. April 8, affidavits were filed on the part of the plaintiff. On the same day the bill, with the exceptions and objections thereto, were transmitted to Honorable John G. O’Connell, the trial judge. April 11, affidavits on the part of defendant were filed. April 13, the bill of exceptions and the objections and affidavits were received by the clerk from the judge, the bill endorsed “Allowed,” but the bill did not then have attached, certifying to its allowance, the signature of the judge.
    On June 25, following, a petition in error, with transcript of original papers including bill of exceptions were filed in the circuit court; also entry of appearance of defendant in error. On December 5, following, a motion by the Company for leave to present bill of exceptions to the trial judge, and affidavit in support of motion filed. December 10, motion by Ruthman to strike bill of exceptions from the files and to dismiss the cause on the ground that the bill had not been allowed and signed according to law, filed. December 23, a motion was made by the Company suggesting diminution of record, and an order on the clerk of the court of common pleas entered, directing him to certify up a complete and perfect transcript of the record and proceedings below. April 3, 1909, an entry was made in the circuit court ordering the bill of exceptions stricken from the files on the ground that the signature of the trial judge was not affixed to the bill within the time required by law, and entering judgment affirming the judgment of the court of common pleas, the circuit court finding that there is no error apparent on the record further than what might be shown by the bill of exceptions, which is not considered. A full bill of exceptions to this action of the circuit court was taken by the Company, and is part of the record herein. It is shown by this bill that on the - day of -, 1909, the bill taken in thé common pleas was duly presented by the clerk to the trial judge, and said judge affixed his signature to the bill as of April 13, 1908, as appears thereon, and the clerk certified up to the circuit court the record as thus completed and perfected and the bill thus corrected and completed is the said bill and filed in the circuit court after the signature of the trial judge, certifying to its correctness, had been affixed. The bill of exceptions is certified by the trial judge as follows: “Witness the hand and seal of this court this 13th day of April, 1908, which signature is affixed this 26th day of December, 1908, as of April 13, 1908.
    “John G. O’Connell,

      “Judge of the Court of Common Pleas “of PIamilton County, Ohio.”

    It is to this order and judgment, and especially the striking off of the bill, that the plaintiff in error excepts and asks to have reversed. Further facts appear in the opinion.

      Messrs. Kinkead, Rogers & Ellis, for plaintiff in error.
    We believe the rule applies that where an individual in the prosecution of a right does everything which the law required him to do, he will not be prejudiced by the neglect or delay of the clerk of the court or of the judge. Lytle v. Arkansas, 22 How., 193; 3 Ency. Pl. & Pr., 474;
      Denver v. Capelli, 3 Col., 236; Williams v. People, 25 Col., 251; Olds v. Railway Co., 165 Ill., 472; Ferris v. Bank, 158 Ill., 237; Parker v. Kuhn, 19 Neb., 394; McGee v. Beall, 63 Miss., 455; Hake v. Strubel, 121 Ill., 321; Weber v. Ins. Co., 80 Ill. App., 390; Chaplin v. Railroad Co., 227 Ill., 166; Mayo v. Hynote, 16 Fla., 673; Railroad Co. v. Morrison, etc., Co., 160 Ill., 288; Coal Co. v. Strunk, 89 S. W. Rep., 145; Pollock v. Aikins, 4 S. Dak., 374.
    In each of the following cases the principle is followed that the signature of the judge may as a ministerial act be performed after the time limited therefor, provided that the appellant has performed all the steps incumbent upon him by law. Swem v. Green, 9 Col., 358; Cochrane v. Little, 71 Md., 323; People v. Judge, 41 Mich., 725; Fechheimer v. Trounstiene, 12 Col., 282; Dyson v. Railway Co., 113 Ga., 327; Davies v. Railway Co., 71 Ohio St., 325; Pullman Co. v. Washington, 10 C. C., N. S., 105.

      Mr. Frank Seinsheimer and Mr. Thomas L. Michie, for defendant in error.
    First. Can a bill of exceptions which is unsigned be noticed? Second. Has the trial court a continuing jurisdiction to sign a bill of exceptions after the statutory time?
    The method of perfecting a bill of exceptions is purely statutory, and the bill of exceptions must be perfected in substantial compliance with the statute.

      No matter what may be the form of the bill of exceptions, the essential requisite of the bill must always be the signature of the trial judge.
    The present statute (section 5301) as construed in Davies v. Railway Co., 71 Ohio St., 325, was framed for the purpose of avoiding some of the more stringent provisions of former statutes in this state, but this case affords no warrant for-the contention that all of the conditions and limitations governing the perfecting of the bill of exceptions have been destroyed.
    This .court has further construed sections 5301a and 5302 in the case of Buck v. State, 80 Ohio St., 395. Shilito v. Thacker, 43 Ohio St., 63; Origet v. United States, 125 U. S., 240; Kerley v. Vann, 52 Ala., 7; Gifford v. Hess, 15 Ind. App., 450; Busby v. Finn, 1 Ohio St., 409; Regan, Admx., v. McHugh, 78 Ohio St., 326; Britton v. Leslie, 14 C. C., 532; Hollister v. Judges, 8 Ohio St., 202; Wagner v. Ziegler, 44 Ohio St., 59; Jones v. Burch, 71 Tenn. (3 Lea), 747; Sewell v. Edmonston, 66 Ga., 353; Samuel v. Railway Co., 135 Ala., 501; State v. Hamilton, 214 Mo., 315; Lindquist v. Bank, 138 Ill. App., 446.
   Spear, C. J.

It was shown to the circuit court by the affidavit of the trial judge, no evidence being offered to contradict it, that he received from the clerk of the common pleas, a bill of exceptions in said case, April 8, 1908, and endorsed that he had so received it. Also with it certain objections and certain affidavits; that on April 11 there were filed and received certain other affidavits; that on April 13, there appeared before him in his consultation room counsel of record for both parties, and that he then and there considered the affidavits and heard the objections to the bill, and after such hearing and in the presence of counsel made certain corrections in the bill found necessary by reason of the said objections. He thereupon settled the bill and announced to counsel present that he allowed the bill as settled; and he did settle and allow the bill, and, thereafter, believing -that he had signed a certificate of allowance of the bill, transmitted it to the clerk on April 13, 1908. Finding his signature not attached to the certificate and bill he now states that his omission to sign the same was an inadvertence on his part. Said bill of exceptions is a correct bill and contains all the evidence and exceptions in the cause, and affiant is willing to sign the same as of April 13, 1908, if permitted by the court to do so.'

The manner of taking and perfecting bills of exceptions was, at the dates above given, regulated by sections 5301 and 5301a, of the Revised Statutes. These sections, as has been held by this court in numerous cases, are remedial, and therefore should receive a liberal construction. They were enacted for the purpose of obviating many vexatious difficulties which had grown up in practice under older statutes and decisions of this and other courts giving construction to them. No mere technicality, therefore, it would seem, ought to stand in the way of the careful practitioner who seeks, by the aid of a bill of exceptions, to obtain for his client a review of an adverse judgment standing against him, but he should be accorded a hearing on his alleged errors in the reviewing court provided he has been diligent in his compliance with the requirements imposed on the complaining party by the sections of the statute above referred to. It is not necessary to here repeat the successive steps taken by counsel for the Company to comply with the provisions of the statute, but it is enough to say that an examination of the record fails to disclose any duty which the sections cited impose upon counsel which were not complied with by counsel for the excepting party in this case.

No question of jurisdiction of the court is involved in our inquiry. It is simply a question as to the right of the trial judge to attach his signature to the bill nunc pro tunc, and the effect of such act of signing upon the rights of the parties. If that act were a judicial act there might possibly be some ground for denying that power. But it is not. The settling and allowance, that is determining the correctness of the bill, is judicial, but the mere act of signing is purely ministerial and follows as matter of duty upon the ascertainment by the judge that the bill presented is a true bill. It was held by this court in The State v. Chapman, 67 Ohio St., 1, that the duty enjoined upon a clerk of the common pleas to certify a case ordered to be transferred to another county is purely ministerial, it calling for no exercise of discretion, and, in a later case involving the right of a party plaintiff in error in this court to have supplied by a clerk of the court below a certificate showing that the transcript of the record filed here was a true copy thereof, the order was made by this court allowing the plaintiff in error, on a suggestion of diminution of record, leave to procure and file a perfect transcript, and the record thus perfected was recognized and acted upon in the further consideration of the case in this court. It is difficult to see any difference in principle in the two situations. That the act of signing is a mere ministerial act is held in Hake v. Strubel, 121 Ill., 321; Chaplin v. R. R. Co., 227 Ill., 166; Weber v. German Ins. Co., 80 Ill., 390, and in many other cases.

Now it is a rule of general application, if not of universal application, that where a party in the prosecution of a right does everything which the law requires him to do, and fails to attain his right wholly by the neglect or misconduct of an officer charged with a public duty with respect thereto, the law will not permit the diligent party to suffer detriment by reason of such neglect; a condensed expression of the rule being that the wrongful act of the judge shall not, in law, prejudice the well-intended acts of the party. This rule is promulgated and held to apply to the signing of bills of exceptions in 3 Cyc, 44, in 3 Ency. of Pl. & Pr, 474, and in the following as well as other cases: Ferris v. Com. Nat. Bank, 158 Ill., 237; Olds v. N. C. St. Rd. Co., 165 Ill., 472; Parker v. Kuhn, 19 Neb., 394; Denver v. Capelli, 3 Col., 236; Williams v. The People, 25 Col., 251. See, also, Noble v. Houk, 16 S. & R., 421.

But it is insisted by counsel for defendant in error that, whatever may be' the general rule applicable to cases of this character, under the circumstances shown by the record, such rule can have no application to the case at bar because of the laches and negligence of the complaining party, and attention is called to the fact that the counsel failed to discover that the bill lacked the judge’s signature at the time they filed it in the circuit court (June 25, 1908), and allowed over seven months to elapse after the reception by the clerk of the bill from the hands of the judge before calling attention to the defect and asking an order for its correction. Such neglect and delay, they claim, ought to and does in law, defeat any effort to correct the bill at such a late day. But why should it? As a significant fact, it is to be noted that no harm or prejudice of any kind has ensued to the other party by reason of the delay. And next, why had not the counsel the right to assume that the trial judge had done what the statute makes it his duty to do on the allowance of the bill, to-wit: attach his signature to the certificate attesting its correctness? Is the lawyer bound to keep watch, at the peril of his client’s rights, of the action of the judge in a ministerial matter in a situation where the counsel has done all that the statutes require of him? Nay, has he not the right in law to assume that the judge has done his statutory duty in the premises? We think it was not negligence on the part of counsel to fail to observe earlier the absence of the judge’s signature. True it is that judges may be quite as likely to fall into lapses of memory as other people, and we would not desire to discourage extra vigilance on the part of counsel out of abundant caution in order to avert injurious consequences arising from such lapses, but it doesn’t at all follow that a failure to observe such vigilance and caution should result in wrecking their client’s case. It appears that the attention of the circuit court was called to the defect as soon as it came to the notice of the counsel, and that we hold was sufficient.

As conclusion we are of opinion that, under the circumstances of this case, the rule hereinbefore fully stated to the effect that the negligent omission of the judge in a purely ministerial matter should not prejudice the well-intended acts of the party has application to this case, and that, the signing of the bill by the judge nunc pro tunc was a legitimate and proper performance of duty. We are further of opinion that the failure of counsel for the complaining party to earlier seek a correction of the defect in the bill was not negligence, and cannot be regarded as in any way prejudicing their client’s case.

It follows from these conclusions that the circuit court was in error in sustaining the motion to strike off the bill of exceptions and thereupon rendering judgment. The judgment will be vacated and the cause remanded to the circuit court of Hamilton county with direction to overrule the motion to strike off, to then consider the bill of exceptions, and for further proceedings..

Judgment vacated.

Davis, Shauck, Price, Johnson and Donahue, JJ., concur.


author: Donahue, J.

text:
    The Village of Rockport v. The Cleveland, Cincinnati, Chicago & St. Louis Railway Company.

      Right to occitpy road, street or alley — By railroad companies — Section 3283, Revised Statutes — Railroad company has not absolute right — To appropriate public streets, when — Power to appropriate does not cover — Appropriations for railroad yard — Evidence as to necessity for such appropriations.

    1. Under the provision of Section 3283, Revised Statutes, a railroad company, in the location of its railroad, has not the absolute right to appropriate public streets of a municipality for an unlimited number of tracks over and across the same, but the court in which such proceedings to appropriate are commenced is required to determine the reasonableness of the appropriation sought to be made.
    2. The power conferred upon a railroad company by Section 3283, Revised Statutes, does not authorize the appropriation of public streets of a municipality for the purposes of a railroad yard.
    3. Evidence that the tracts proposed to be located over and across the streets sought to be appropriated are necessary in the use and operation of the switching yards of the railroad, company, does not authorize a trial court to find that such tracks are necessary within the meaning of Section 3283, Revised Statutes.
    (No. 12745 —
    Decided November 21, 1911.)
    Error to the Circuit Court of Cuyahoga county.
    On the second day of July, 1909, the defendant in error The Cleveland, Cincinnati, Chicago & St. Louis Railway Company filed its amended petition in the Court of Insolvency of Cuyahoga county against the village of Rockport averring that plaintiff is a railway corporation organized under the laws of Ohio, and that the defendant is a municipal corporation duly organized and existing under and by virtue of the laws of said state. It further avers that by the terms of its charter and articles of incorporation it is authorized and empowered to locate, construct, maintain and operate a steam railroad with such main tracks, sidetracks, turnouts, switches, branch connection and other appurtenances thereto through the state of Ohio, and especially through the county of Cuyahoga in said state; that its railroad then was constructed and in operation through the village of Rockport in said county and state; that it was necessary for the purposes of its railroad to appropriate the right or easement to locate, construct, maintain and operate in addition to the two main tracks now constructed and maintained thereover, five additional sidetracks or turnouts along and upon and across the highways within the corporate limits of said village of Rockport known as Settlement Road and Linndale Road at the place where said roads intersect and where Settlement Road crosses the right of way of plaintiff company; said tracks to be laid within the limits of the right of way of said company and approximately parallel with and at the grade of said two existing main tracks. It averred that the village of Rockport claims some right or easement in said highways and that said village further claims that the construction and maintenance of the additional tracks would destroy or impair such easement. It further averred its inability to agree with the village of Rockport as to the sum of money to be paid it as compensation for the right or easement to locate, construct, maintain and operate said tracks on and across said highway, and prayed that said court should hear and determine the questions as to the existence of the plaintiff corporation, its right to make the appropriation sought, its inability to agree with the defendant and the necessity for such an appropriation, and that when said court should so adjudicate these questions in its favor that a jury be impaneled for the purpose of determining and assessing the amount of compensation to be paid.
    To this amended petition the plaintiff in error filed a demurrer, which demurrer was overruled by the court. The village thereupon filed its answer admitting the corporate capacity of plaintiff, but denying the necessity of the appropriation, and averring that the railroad company was not in good faith in attempting to appropriate the right to construct the five additional tracks across said streets and highways, and denied that such tracks were necessary for its use, and averred it was the company’s intention to use these tracks, not as sidetracks or turnouts, but as a railroad yard for the storage of cars, for the switching of cars from one track to another, and for making up and separating trains of cars. It also averred that the railroad company had, without any authority whatever, constructed the tracks and had been enjoined by the judgment of the court of common pleas from operating and maintaining the same, but that execution of this judgment had been suspended for a period of three months; that both streets are important and much traveled streets in the village and are necessary for the use of the inhabitants of the village and the public generally, but that by reason of the construction of the additional tracks and the use made, and intended to be made of them by the company, that the use by the public of these streets, where crossed by these tracks, would be materially interfered with and impaired, and that the necessary consequences of such construction and use of said tracks by the railway company would substantially exclude persons traveling on foot or in ordinary vehicles from the use of these portions of said streets.
    On October 4, 1909, the cause came on to be heard on the preliminary questions to be determined by the court before the impaneling of a jury, and that court held that the appropriation sought to be made by the plaintiff would be an unreasonable interference with the rights of the public in the use of the highways described in the petition, and would be destructive of the public use of said highways, and that such appropriation is not necessary for the purpose of the plaintiff’s railroad, and thereupon dismissed the plaintiff’s petition. The common pleas court affirmed the judgment of the court of insolvency and the defendant in error then filed a petition in error in the circuit court, which court reversed the judgment of the court of insolvency and the judgment of the court of common pleas affirming the same, and remanded the cause to the court of common pleas for trial and final judgment, and this proceeding in error is prosecuted in this court to reverse that judgment of the circuit court.
    Upon the trial of the preliminary questions the following plat was submitted, which shows the locations of the street, the two main tracks and the five additional tracks proposed to be constructed.

      Mr. Albert Lawrence and Mr. James Lawrence, for plaintiff in error.
    The right of crossing given by Section 3284, Revised Statutes, exists without the consent of the local authorities, but it can only be exercised at the time of the original construction of the road and is not a continuing power. Railway Co. v. South, 78 Ohio St., 10.
    Under Section 3283 it is provided that such company may appropriate so much of a road, street, alley, way or ground-as may be necessary for the purposes of its road. That structures of the kind mentioned in Section 3281 can not be constructed in public grounds, either by agreement or appropriation, was expressly held under a similar statute, in the case of St. Paul v. Railway Co., 63 Minn., 330, which was referred to with approval by this court.in Railroad Co. v. Cincinnati, 76 Ohio St., 481, and the same thing is substantially held in Railroad Co. v. Defiance, 52 Ohio St., 262, and Railway Co. v. Elyria, 69 Ohio St., 414.
    The statutes of Illinois give to a railroad company the right to construct its railway across, along or upon any street, but with the consent of the corporation of such city, town or village. Hurd's Rev. Stats, of Illinois (1908), Sec. 20, page 1664; Railway Co. v. People, 120 Ill. App., 306; Railway Co. v. People, 222 Ill., 427; Pepper v. Railroad Co., 113 Tenn., 53; Stephenson v. Railway Co., 68 Mo. App., 642; Railroad Co. v. Sutton, 13 S. W. Rep., 1086; Newark v. Railroad Co., 71 Atl. Rep., 620; Railway Co. v. Montezuma, 122 Ga., 1; Glick v. Railroad Co., 19 D. C., 412, 21 D. C., 363; Railway Co. v. Portland, 9 Ore., 231; Branahan v. Hotel Co., 39 Ohio St., 333.
    The general rule is that property already appropriated to one public use cannot be appropriated for another public use which will defeat or supersede the former use, unless the power to make such second appropriation is given expressly or by necessary implication. Railroad Co. v. Belle Centre, 48 Ohio St., 273; Railroad Co. v. Dayton, 23 Ohio St., 510; Railway Co. v. Fostoria, 7 C. C., 293; 26 Am. & Eng. Ency. Law (2 ed.), 679; Railroad Co. v. Defiance, 52 Ohio St., 262; Railway Co. v. Detroit, etc., Ry. Co., 171 U. S., 48.
    While a corporation has primary discretion in determining what land is necessary for the purposes for which it is authorized to make appropriations, the probate judge may, under the jurisdiction vested in him by Section 6420, Revised Statutes, hear and determine the question of the right of the corporation to make the appropriation and the necessity for the appropriation. Railroad Co. v. Railroad Co., 72 Ohio St., 368; Railway Co. v. Greenville, 69 Ohio St., 487; Railroad Co. v. Traction Co., 1 N. P., N. S., 296.
    The well settled doctrine is that the supervision and control of the public highways is a public trust, and while additional uses may be imposed, not subversive of or impairing the original use, yet the rights of the public to use a street for ordinary travel cannot be . materially impaired. Railroad Co. v. Defiance, 52 Ohio St., 262; Zanes

      ville v. Fannan, 53 Ohio St., 605; Railway Co. v. Elyria, 69 Ohio St., 414; Sherlock v. Railway Co., 142 Mo., 172; Corby v. Railway Co., 150 Mo., 457; Newark v. Railroad Co., 42 N. J. Eq., 196; Ligare v. Chicago, 139 Ill., 46; Stack v. East St. Louis, 85 Ill., 377; Dubach v. Railroad Co., 89 Mo., 483; Railroad Co. v. Buffalo, 158 N. Y., 266; Jones v. Railroad Co., 169 Pa. St., 333; Osborne v. Railway Co., 27 Hun, 589; Grant v. Hyde Park, 67 Ohio St., 166.

      Messrs. Cook, McGowan & Foote, for defendant in error.
    We concur with counsel that under the recent decision of this court a railway company, under former Section 3283, Revised Statutes, cannot acquire the exclusive right to use a highway for the purposes of its railroad, and that it cannot make any use thereof which would destroy the primary public uses. But this court clearly recognizes in the case of Zanesville v. Fannan, 53 Ohio St., 605, the right of a railroad company to cross highways with its tracks so long as the use of the highway is preserved and protected; that the railway company is itself a means of public use, and that it cannot be assumed in a proceeding to acquire the .right to construct tracks by appropriation, that the company will destroy the highway or create nuisances in it.
   Donahue, J.

There is no conflict of evidence in this record. Linndale Road intersects Settlement Road at right angles, and both of these roads are now streets within the village of Rockport much used for public travel. The railroad company originally constructed two main tracks across these streets at the point of intersection, and it is now proposed to locate five additional tracks, making in all seven tracks diagonally across these streets at this point. Mr. Costin, the superintendent of the plaintiff company, testified as follows: “Q. I wish you would state what necessity exists for the construction of these tracks over the crossing? A. Well, we could not operate the Linndale yard without those tracks; that is the necessity for it.” And upon cross-examination as follows: “Q. It is a question of the size of the yards then? A. Yes.” It, therefore, clearly appears from the evidence offered on behalf of the plaintiff in the court of insolvency that these tracks are to be used in connection with the Linndale yard, and not in the operation of the main line. This yard appears to have grown from a small beginning to large proportions extending now practically two miles to the east of Settlement Road, and containing a great many separate tracks and switches. In determining the right of the company to make this appropriation it is proper for a court to consider the purposes of railroad yards; the nature, character and use to which they are put, and whether such use is consistent with the present rights and easements of the public in the streets. The right of the railroad company to make this appropriation does not depend alone upon its authority to appropriate public streets to the uses .of its road, but it also depends upon the nature of the property sought to be appropriated and the uses to which the railroad company seeks to subject that property. It must also be borne in mind that the state has already appropriated this land to public purposes, and it could not without first vacating these streets appropriate the same land to any use inconsistent with or destructive of the present rights of the public therein, and if the state itself could not, without first vacating and abandoning these streets, appropriate this property to a use that would be destructive of or a substantial interference with the public easement therein, then neither could it delegate to a railroad company any such right. The property having been devoted to a public purpose, the principle obtains that the public use is the dominant interest in the street, and the village authorities could not grant any right to the railroad company under the provision of Section 3283, Revised Statutes, that would be destructive of these rights or amount to a material or substantial interference with the same or have the effect of excluding the public therefrom. This proposition seems to be well settled in this state. The Lake Shore & Michigan Southern Railway Co. v. City of Elyria, 69 Ohio St., 414; Ravenna v. Pennsylvania Co., 45 Ohio St., 118; The Little Miami Railroad Co. v. Commissioners of Greene County, 31 Ohio St., 338; City of Zanesville v. Fannan, 53 Ohio St., 605; Railroad Co. v. Defiance, 52 Ohio St., 262. It necessarily follows that the railway company can acquire no further rights by appropriation than the village council could grant it by ordinance or contract.

Section 3283, Revised Statutes, contemplates that a railroad track may be laid over or across a public highway, or a street in a municipal corporation without destroying or materially interfering with the easement of the public therein, but it certainly does not contemplate the multiplication of these tracks at the will and pleasure of the railroad company without reference to the condition of the road or street proposed to be crossed and the uses the railroad company intends to make of these tracks. An examination of the plat or diagram copied into the statement of facts herein shows a somewhat peculiar and extraordinary condition of affairs. This is not a question of crossing a single street at right angles, or even two streets at right angles, but the proposed appropriation contemplates the crossing of two streets diagonally at the point of their intersection.

Past experience with grade crossings in this state has shown the wisdom of the legislation declaring against grade crossings of any kind or character. True in this case the main tracks are already at grade and the statute that now prohibits grade crossings does not' apply to this case further than to permit under these circumstances additional tracks at grade. Section 6 of that act does not grant to railroad companies any new rights or authority whatever, but merely exempts from the operation of this act the right and authority a railroad company then had to lay additional tracks at grade.

If under the provision of Section 3283, Revised Statutes, the railroad company has the absolute right to appropriate the public easement in these streets for these additional tracks, it would follow that it would have the right to appropriate for an unlimited number of tracks, if it desired to place the same there, without regard to the effect such appropriation would have upon the streets, or the rights of the public therein. This consideration alone demonstrates the unreasonableness of such construction, and leads us to the conclusion that the rights of the railroad company under this section are not absolute and at the will of the company but must be exercised with reasonableness and with due regard to the rights of the public therein, and it therefore follows that it is not only the province, but the duty, of a court in which such appropriation proceedings have been commenced to determine from all the evidence whether the number of tracks proposed to be constructed would be destructive of the public easement in the streets, or an unreasonable interference therewith. This was one of the questions submitted to the trial court. The evidence offered was not conflicting. That court found against the reasonableness of the appropriation and against the authority of the company to appropriate the right to lay these further tracks across these streets, and the finding and judgment of the trial court in these particulars is fully sustained by the evidence and is not contrary to law.

The court also found that the appropriation sought to be made is not necessary for the purpose of the plaintiff’s railroad. Section 3283, Revised Statutes, under favor of which these proceedings were brought does not authorize the appropriation of streets for any and all purposes incident to the operation of a railroad, but only for the location of any part of the railroad itself. In this respect it differs materially from Section 3281 authorizing the appropriation of private property for depots, workshops, roundhouses and water stations. In the construction and location of the main line of road a railroad company cannot but meet with conditions that are beyond its control, as for instance the crossing of streets and highways and therefore, notwithstanding that the crossing of these streets and highways may interfere somewhat with the public travel by foot passengers and ordinary road vehicles, yet the legislature has recognized the fact that of necessity the railroad company must be given the right to cross the same, not merely because it also furnishes a mode of public travel, but because it would be impossible to construct railroads if such rights were not granted. But in the location and establishment of its yards, depots, workshops, roundhouses and water stations, the railroad company can largely guard against these contingencies and it is very evident that Section 3283, Revised Statutes, intends to require that it should do so, otherwise the language of that section would not be different from the language found in Section 3281, Revised Statutes. Section 3283 does not in terms authorize a railroad company to condemn or appropriate public streets or roads for these purposes, and all statutes granting to corporations the right of eminent domain, which is an attribute of sovereignty, must be strictly construed. Currier v. M. & C. Railroad Company, 11 Ohio St., 228; Atkinson v. M. & C. Railroad Company, 15 Ohio St., 21; Platt v. Pennsylvania Company, 43 Ohio St., 228; Ravenna v. Pennslyvania Company, 45 Ohio St., 118. Without recourse to this rule of construction it clearly appears that Section 3283 applies only to the railroad itself if it should be found necessary in the location of the same or any part thereof. All these other things that are incident to and undoubtedly absolutely necessary to be maintained by a railroad company for the purposes of operating its road are not included in the term railroad as used in this section, for if depots, workshops, roundhouses and water stations could be constructed upon public streets, it would amount to an absolute abandonment and destruction of the public rights therein. It is equally clear that railroad yards are not within the contemplation of this statute, and that it is not intended thereby to authorize a railroad company to construct its yards over and across or along streets and highways, either with the consent of the municipal authorities or by appropriation of the same. Such a use by the railroad company would be not only inconsistent with the right of the public therein, but absolutely destructive of its rights. It ought to require no argument to sustain the proposition that a railroad yard is no place for public travel, either by pedestrians or ordinary road vehicles. If an attempt were made by the village authorities to establish a street over and across Linndale yards the absurdity would become at once apparent. It would be not only a serious interference with the railroad's right in this property but practically destructive thereof, and the danger to the traveler would be so imminent and obstructions so frequent as to make it useless to the public. The evidence in this record does not admit of any other conclusion but that these tracks now proposed to be located across these streets are for yard purposes. The trial court found that the proposed tracks were not necessary to the operation of the road. The burden of proof upon this proposition was upon the railroad company. The proof offered was that these tracks were necessary to the operation of its yards. Of course it must be conceded that yards are a necessary incident to the operation of the road itself, but no more necessary than are depots, workshops, roundhouses and water stations. It is clear that the railroad company cannot appropriate streets for these purposes and it is equally clear that it cannot appropriate streets and public highways for yard purposes. Therefore, the proof offered that these tracks were necessary for yard purposes does not sustain the claim that the tracks are necessary, in the location of the road or any part thereof. It is of course unfortunate that this condition should arise. The company, perhaps, could not foresee the development of its yards to such an extent as would require the use of these streets for yard purposes, and all this valuable property ought not to be sacrificed for any mere technical right of the public, but the right of the public in these streets is not technical, but substantial. It is conceded in the record that these streets are “much used for public travel.” Therefore, the only way the public can be divested of these rights is by vacation of the streets, and until that is done the courts must protect the easement of the public therein.

There is another question presented by this record, that in view of our construction of Section 3283, it is not now material, yet it is one of the preliminary questions to be determined before submitting the question of damages to a jury, and that is whether the railroad company has been unable to agree with the authorities of the village with reference to the occupation of these streets. The trial court made no finding upon this question and there was no competent evidence offered to the court upon which it might find this fact to be true. There is some evidence that Judge Lawrence, who is now an attorney of record in this cause, represented to counsel for the railroad company that the village of Rockport would not agree to any grade crossings. The conclusion of the witness that Mr. Lawrence was the authorized representative of the council of the village is not evidence tending to prove that fact. The council of the village of Rockport was the proper authority to declare its position. The proposition should be made to the council of the village and rejected by it, or there should be some showing in this record that the council by proper action on its part directed Mr. Lawrence to communicate to the railroad company its final rejection of any .proposition made by the company to lay these tracks over and upon these streets. In this respect the evidence of the railroad company failed to establish the fact that it had been unable to agree with the village authorities. There is considerable controversy in the record as to this proposition, but none is now made in this court and we-would probably not reverse for this reason. ' But the fact remains that there was no finding by the court upon this preliminary question and no evidence offered upon which the court would be authorized to find the averment of the plaintiff’s petition in that behalf to be true.

For the reasons, however, first above stated the judgment of the circuit court is reversed and the judgment of the common pleas court affirming the judgment of the Court of Insolvency of Cuyahoga county is affirmed.

Judgment reversed.

Spear, C. J., Price, and Johnson, JJ., concur.


author: Johnson, J.

text:
    Taylor, Administrator, v. The Protestant Hospital Association.

      Public charitable hospital — Conducted under private management— Not liable for injuries to patient — Resulting from negligence of nurse, when.

    1. The fact that a public charitable hospital receives pay from a patient for lodging and care does not affect its character as a charitable institution, nor its rights or liabilities as such in relation to such a patient.
    2. A public charitable hospital organized as such and open to all persons although conducted under private management is not liable for injuries to a patient of the hospital resulting from the ' negligence of a nurse employed by it.
    (No. 11940 —
    Decided November 21, 1911.)
    Error to the Circuit Court of Franklin county.
    Plaintiff in error brought suit in the common pleas court of Franklin county. His petition alleges in substance his appointment and qualification as administrator, the incorporation of defendant under the laws of Ohio, and that it maintains and operates a hospital at the city of Columbus, Ohio, for hire and reward. That defendant received said Nancy M. Taylor at its hospital as a pay patient and agreed for a valuable consideration to furnish her with board, lodging and nursing, provide an operating room and table and assist in and about an operation to be performed on her by a certain named surgeon. That defendant provided for said operation certain gauze sponges necessary to be used in said operation, which consisted of two abdominal incisions, and that defendant provided one of its employes to assist in said operation, to-wit: a nurse whose duty it was to keep account of the sponges so provided for use of the surgeon. That the nurse negligently failed to keep a proper count of the sponges which had been used in the operation and that by reason of - her negligence one of the sponges which had been used was left in the body of the decedent and caused her death to the damage of plaintiff and the next of kin of decedent;, for which judgment is prayed. The first defense of the answer of defendant admits appointment of plaintiff as administrator, the incorporation of defendant, that deceased was received at the hospital as a pay patient, and that defendant agreed for ten dollars a week to furnish her with board, lodging and nursing; that an operation was performed on her by the surgeon named; that it provided certain gauze sponges for the operation and one of its employes, a nurse, to assist in said operation, and denied the other allegations in the petition.
    The material portion of the second defense is as follows:
    “Defendant says that it is now, and has been ever since it was organized, a public and charitable corporation; that it was incorporated and organized, and has been operated, exclusively for the purpose of providing hospital accommodations for the sick and injured; and that it never has had, has not now, and cannot have, any capital stock; that it never has declared, and cannot declare dividends; and that it never made, and cannot make, any profits, either for the corporation or its members; that its funds and income have always been, and will continue to be, derived from the rents, donations, devises and bequeaths, moneys and supplies from, and by, benevolent persons; that such funds and income have been heretofore used for the erection, support and maintenance of a public and charitable hospital for the sick and injured, and they will have to be used in the future for the improvement of said hospital, and the support and maintenance of the sick and injured therein lodged; that the persons who have heretofore made such donations, grants, devises, bequests and subscriptions, are so numerous that they could not be stated in this pleading.
    “Defendant further says that said hospital has always been, and is now, open to all persons who apply for its benefits and accommodations, as long as it has rooms to accommodate them.
    “That it has had, and now has six wards which will accommodate forty-five patients and which are for the occupation of patients who are gratuitously lodged and cared for, and it has had, and now has 45 rooms for those who are able to and willing to pay for lodging and care a reasonable compensation, and the income so received from pay patients has always been used to support and maintain the said hospital.
    “Defendant further says that the said Nancy M. Taylor engaged and agreed to pay this defendant ten ($10.00) dollars per week for her boarding and nursing during the time she was at the hospital. She occupied a room, and was furnished board and nursing from the 25th day of May, until the 30th day of June, 1899, for which she paid the hospital the sum of $51.40. That such sum so paid to this defendant was wholly inadequate as compensation for the board and nursing so furnished to the said Nancy M. Taylor.”
    Plaintiff in error filed a general demurrer to the second defense which was overruled by the trial court, and plaintiff not desiring to plead further judgment was entered for defendant. This judgment was affirmed by the circuit court and error is prosecuted to this court by the plaintiff to reverse the judgments of the courts below.

      Mr. Ulric Sloane, for plaintiff in error.
    It may be conceded at the outset that the greater weight of authority, outside of Ohio, falls upon defendant's side of this question. Powers v. Homeopathic Hospital, 109 Fed. Rep., 294, 101 Fed. Rep., 896.
    The fact that the hospital does not make any money or seek to make any profit, does not release from liability. Newcomb v. Boston Protective Dept., 151 Mass., 215; Chapin v. Y. M. C. A., 165 Mass., 280.
    It was ruled, however, in McDonald v. Hospital, 120 Mass., 432, that a corporation endowed by funds from the state and required to minister to a certain number of indigent patients and subject to visitation from the state, and maintaining a hospital, was not liable for the torts of its servants in and about administering said hospital.
    This case relies upon Holliday v. St. Leonard's, 11 C. B., N. S., 192, which was overruled by the Flouse of Lords in Mersey Docks, etc., v. Gibbs, L. R., 1 H. L., 94, and repudiated as an authority by the court in Queen's Bench in Foreman v. Canterbury, L. R., 6 Q. B., 214, decided in 1871.
    For the purpose of our argument it is sufficient to discuss the narrow question as to whether an eleemosynary corporation is amenable to process; whether it can be sued at all. It would certainly seem in Ohio that any corporation could be sued. By incorporation it acquires the right and power “to sue and be sued, to contract and to be contracted with.''
    But is it exempt from liability arising ex delicto? Goodloe v. Cincinnati, 4 Ohio, 500; Dayton v. Pease, 4 Ohio St., 80; Dunn v. Agricultural Society, 46 Ohio St., 96.
    Is the defendant exempt from the doctrine of respondeat superior? The exemption from liability upon this ground is maintained in Hearns v. Hospital, 66 Conn., 98, and distinctly disapproved in Powers v. Hospital, 109 Fed. Rep., 294.
    If such an exemption can be claimed, it must rely for support upon some of the English cases, and indeed the ruling in the Connecticut case is predicated upon Holliday v. St. Leonard’s, 11 C. B., N. S., 192, and Hall v. Smith, 2 Bing., 156.

      Hall v. Smith, supra, might well have been decided upon the same principle as ruled our supreme court in deciding Commissioners v. Mighels, 7 Ohio St., 110; but the judgment was placed upon another ground, to-wit, that the maxim of respondeat superior could not be applied where a master gained no profit or advantage from the acts of the servant.
    To a similar effect is the decision of Duncan v. Findlater, 6 Clark & F., 894.

      These latter cases are both overruled by the House of Lords in Mersey Docks, etc., v. Gibbs et al., L. R., 1 H. L., 93.
    In Heriot’s Hospital v. Ross, 12 Clark & F., 507, no question arose concerning the application of the. doctrine of respondeat superior.

    In Foreman v. Canterbury, L. R., 6 Q. B., 214, the doctrine of Holliday v. St. Leonard’s, 11 C. B., N. S., 192, to the effect that there is an exception to the rule of respondeat superior when the servant is employed by a corporation for public or charitable purposes, is distinctly repudiated.
    Very late English cases leave us absolutely no discretion about deciding that in England there is no exception to the rule of respondeat superior, notwithstanding the earlier cases now relied upon by American courts. Donaldson v. Commissioners, 30 N. B., 279; Gilbert v. Trinity House, 17 Q. B. Div., 795.
    All the later English cases now follow the doctrine of Mersey Docks, etc., v. Gibbs, L. R., 1 H. L., 93.

      Messrs. Pugh & Pugh, for defendant in error.
    At first, the basis of the doctrine of respondeat superior was either the command or consent of the master. Subsequently it was located on another foundation, and this was defined by Lord Broughman in Duncan v. Findlater, 6 Clark & F., 498.
    The four essential elements of a case subject to the application of the doctrine of respondeat superior are these: (1) The master must have employed the servant, and thereby have set the whole thing in motion; (2) the act of the servant must have been done for his benefit; (3) the servant must have acted under the master’s direction; and (4) the act of the servant must have been done in the course of his employment.
    In the case at bar the missing elements are the second and third. The hospital is conducted by trustees, as the law requires. All the property belonging to the defendant in error is held by them as trustees; the legal title to it is in them as trustees; the real owner of the property is the public; the hospital is conducted for the benefit of the public; the real owner has no part in the selection of the employes.
    The defendant in error, being a charitable corporation and operating a charitable hospital, at the time, was not answerable for the negligence of its employes; its only liability was for the selection of its employes with reasonable care. McDonald v. Hospital, 120 Mass., 432; Hearns v. Hospital, 66 Conn., 98, 33 Atl. Rep., 595, 31 L. R. A., 224; Conner v. Sisters of the Poor, 7 N. P., 514; Stewart’s Legal Medicine, Section 96.
    The decedent’s acceptance of the bounty of the defendant in error raised an implied agreement on her part that the defendant in error should not be liable for the acts of its employes. Downes v. Hospital, 101 Mich., 555, 25 L. R. A., 602, 45 Am. St. Rep., 427.
    The defendant in error cannot be liable under the doctrine of respondeat superior because two necessary and fundamental elements of that doctrine are lacking, namely, (1) that defendant in error derived a benefit or advantage from the acts, the service of its employe, the nurse, and (2) that the defendant in error alone set the thing in motion in connection with which the injury occurred. Hall v. Smith, 2 Bing., 156.
    The leading English case, Holliday v. St. Leonard’s, 11 C. B., N. S., 192, sustains our proposition.
    The defendant in error is not liable because it carried on the hospital, without any profit, either to itself or its members, and solely for the benefit of the public. Farrigan v. Pevear, 193 Mass., 147, 78 N. E. Rep., 855, 7 L. R. A., N. S., 481.
   Johnson, J.

The question presented by the demurrer to the second defense of the answer is, whether under the facts set out in that defense, the defendant is liable for the negligence of the nurse in leaving the sponge in the body of the deceased. More definitely: Do the averments that the defendant is a public and charitable corporation engaged in operating, maintaining and supporting a public charitable hospital in the manner and for the purposes set forth, exempt defendant from liability for the negligence of the nurse in connection with the operation on the decedent at the time she was a pay patient of the hospital?

This question has been decided in some other jurisdictions, and counsel have rendered valuable assistance by able and exhaustive briefs.

Defendant contends that the judgments of the courts below may be sustained on all or any of several grounds, the first of which is, that being a charitable corporation operating a charitable hospital it was not liable for the negligence of its employes if such employes were selected with reasonable care. The position of plaintiff is that the doctrine of respondeat superior applies, and should be enforced notwithstanding the character of the corporation or the nature of its undertakings, and that having accepted deceased as a pay-patient, a contractual relation existed between the parties which imposed obligations on the defendant different from those to one who did not sustain such relation. Section 3240, Revised Statutes, provides for the election of trustees of a corporation such as defendant and Section 3261, Revised Statutes, provides that the trustees of a corporation created other than for profit shall be personally liable for all debts of the corporation contracted by them.

There is a direct allegation in the answer in this case that defendant is a public and charitable corporation maintaining a public and charitable hospital. We think this hospital owned and operated in the manner set out is a public charity and this without reference to whether some of the patients are what are termed pay patients or not.

In Gerke v. Purcell, 25 Ohio St., 229, the court declare: “The fact that the use of property is free is not a necessary element in determining whether the use is public or not. If the use is of such a nature as concerns the public, and the right to its enjoyment is open to the public upon equal terms, the use will be public, whether a compensation be exacted or not.”

In McDonald v. Massachusetts General Hospital, 120 Mass., 432, the corporation, from the description of its objects and the manner of its creation and operation, was similar to the defendant in this case. The court say in deciding the case: “The fact that its funds are supplemented by such amounts as it may receive, from those who are able to pay wholly or entirely for the accommodation they receive, does not render it the less a public charity. All sums thus obtained are held upon the same trust as those which are the gifts of pure benevolence. * * * If, however, any contract can be inferred from the relation of the parties, it can be only on the part of the corporation that it shall use due and reasonable care in the selection of its agents. * * * The liability of the defendant corporation can extend no further than this; if there has been no neglect on the part of those who administered the trust and control its management, and if due care has been used by them in the selection of their inferior agents, even if injury has occurred by the negligence of such agents, it can not be made responsible. The funds entrusted to it are not to be diminished -by such casualties, if those immediately controlling them have done their true duty, in reference to those who have sought to obtain the benefit of them.”

In Hearns v. Waterbury Hospital, 66 Conn., 98, the court state that the only question, was the liability of the defendant for the negligent conduct of physicians and nurses employed by it, and in the selection of whom it has exercised due care. In this case there is a very full discussion of English and American cases touching the question and the conclusion arrived at was that the hospital corporation was not liable, on grounds of public policy, for injuries caused by personal neglect of duty by a servant whom it has selected with due care.

The plaintiff in Powers v. Mass. Homeopathic Hospital, 109 Fed. Rep., 294, was a pay patient and was injured by the negligence of a nurse in placing a rubber bag full of hot water against her side, burning her. Her counsel contended as counsel for plaintiff in this case contend, that she being a pay patient, the hospital was liable because she was not the recipient of its charity, but the court denied the relief and say: “In our opinion

a paying patient in the defendant hospital, as well as a non-paying patient seeks and receives the services of a public charity.”

Liability to a pay patient was denied in Downes v. Harper Hospital, 101 Mich., 555, and one of the grounds on which the court put its decision was that decedent having accepted the benefit of the charity did so on the understanding that the fund could not be diverted by the torts of the managers of the fund or their employe. The court say: “The fact that patients who are able to pay are required to do so does not deprive the defendant of its eleemosynary character nor permit a recovery on account of the existence of the contract relations.”

Other cases in which the same conclusion was arrived at, some of the courts adopting a somewhat different line of reasoning, are: Farrigan v. Pevear, 193 Mass., 147; Fire Ins. Patrol v. Boyd, 120 Pa. St., 624; Union Pac. Ry. Co. v. Artist, 60 Fed. Rep., 365.

Judge Stewart in his excellent work on legal medicine, Section 96, after an examination of the cases on the subject says: “The doctrine of the Massachusetts cases may be said to be the law followed by other states and is the proper legal view to take of this question, the reasoning of the court being so sound as to seem irrefutable.”

Counsel for plaintiff suggests that some of the American cases are predicated on the English case Holliday v. Vestry of St. Leonard’s, 11 C. B., (N. S.), 192, and some other cases which he insists have been impliedly repudiated by the later case of Mersey Docks v. Gibbs, L. R., 1 H. L., 93, which enforced the doctrine of respondeat superior.

We think this contention is not sound because the company in the latter case was a trading company and not a public charity in the sense that defendant here and similar corporations are. Mr. Justice Blackburn who gave opinions in the cases referred to, said in Mersey Docks v. Cameron, 11 H. L., 465: “Whatever may be the law as to exemption of property occupied for charitable purposes it is clear that the docks in question can come within no such exemption.”

But even if it appears that the greater weight of authority outside of Ohio falls against his view, counsel for plaintiff insists that such authority is not in harmony with the established doctrine in this state, and refers to the cases of Smith v. Cincinnati, 4 Ohio, 500-514; Dayton v. Pease, 4 Ohio St., 80; Dunn v. Agricultural Society, 46 Ohio St., 96; Toledo v. Cone, 41 Ohio St., 149; Murphy, Admr., v. Holbrook, 20 Ohio St., 137. We do not think these cases sustain plaintiff’s view of the question made by this answer. Smith v. Cincinnati, Dayton v. Pease, and Toledo v. Cone, were cases in which the injury was done by employes of the cities, in the performance of public works, undertaken for the benefit of the. cities and in the exercise of powers and duties granted and imposed on them as municipal corporations.

Of course under familiar rules they were liable for the wrongful acts of their servants.

In Dunn v. Agricultural Society the fair grounds were kept and the fair conducted not as a thing free to the public; Judge Williams in declaring the judgment of the court says as to the rule of exemption from liability that “it has no application to corporations called into being by the voluntary action of the individuals forming them for their own advantage, convenience or pleasure.”

In Murphy v. Holbrook the receivers of a railroad company were held liable for injuries to plaintiff’s intestate, and it was held to be “no defense in such action that the receiver was a public officer or that he was an agent or trustee.”

But the receivers of a railroad company or other corporation hold the property in trust for the benefit of the company and its creditors, and when operated by the receivers under order of court, the object is to preserve the property and if possible earn something for the benefit of the company and its creditors.

It is not an enterprise to serve and benefit the public solely. There is disclosed in some of the cases and in the argument for defendant a singular disposition to question the fundamental soundness of the doctrine of respondeat superior. We are not disposed to lend support to such tendency.

Experience has shown that the ends of justice are best secured by holding the master responsible for injuries caused by the wrongful acts of his servant done in the prosecution of his private ends and for his benefit.

Doubtless the rule will be extended to meet the requirements of manifold new conditions brought about by growth and advance. Courts are constantly confronted with the necessity of extending established principles to new conditions. But in this case it is sought to extend the rule to masters different from others and who do not come within its reason, and to hold a public charity involving no private profit responsible for the negligence of servants employed solely for a public use and a public benefit. We think such extension is not justified. Public policy should and does encourage enterprises with the aims and purposes of defendant and requires that they should be exempted from the operation of the rule.

We think there is no error in the record and the judgments of the courts below are affirmed.

Judgment affirmed.

Spear, C. J., Davis, Shauck, Price and Donahue, JJ., concur.