text:
    Williams v. Urmston and Hancock.
    1. A married woman, having a separate estate, may charge the same, in equity, hy the execution of a promissory note as surety for her husband or another.
    2. "Whore a married woman, having a separate estate, executes a promissory note as surety for the principal maker, a presumption arises that she thereby intends to charge her separate estate with its payment. And a court of equity will carry such intention into effect by subjecting such estate to the payment of the debt, in the mode prescribed by the statute. (Levi v. Earl, 30 Ohio St. 147, and Rice v. Railroad, 32 Ohio St. 380, in so far as they conflict with the decision in this case, are overruled.)
    Error to the District Court of Rutler county.
    The action below was brought by the defendants in error against James Williams and Mary, his wife, upon a promissory note, of which the following’is a copy :
    $503.88.] Millevii.le, Ohio, August 5, 1870.
    On or before the first day of January next, we, or either of us, promise to pay unto Urmston & Uancock, or their order, the sum of five hundred and three dollars and eighty-eight cents, value received, with ten per cent, interest till paid. James "Williams,
    [U. S. Eevenue Stamp, canceled, 30c.] Maky J. "Williams.

      The object of the action was to subject the separate estate of Mrs. "Williams to the payment of the note. She was the owner of a separate estate, consisting of real and personal property of the value of $10,000. It appears from the testimony of the defendant, Hancock, that the note was given for goods bought by Williams and wife at the store of the defendants; that during the year 1868 Williams, to the knowledge of the defendants, became financially embarrassed, and before the note was given in 1870 was wholly insolvent; that during the years 1868 and 1869, Mrs. Williams, when purchasing goods at the store of defendants, said to them, “ we will see you paid ;” on the faith of which statement goods were sold and charged to the account of Williams ; that in August, 1870, Hancock informed Williams that he wanted security for the debt, and gave him a note to have his wife sign, extending the time for its payment until January 1,1871, which Williams took to her, and procuring her signature thereto, returned the same to the defendants. This note is the one in suit.
    Mrs. Williams testified that she signed the note at the request of her husband, not knowing what it was, and denied that she ever agreed to pay for the goods bought at defendants’ store.
    Williams also testified that he asked his wife to sign the note, but did not tell her what it was. On rebuttal, it was shown, in contradiction of a statement of Mrs. Williams, that she testified on a former trial that Urmston was present when she signed the uote.
    The foregoing is the substance of the material evidence given at the trial. The district court found that Mrs. Williams intended to charge her separate estate with the payment of the note, and decreed accordingly.
    Mrs. Williams moved for a new trial, on the ground that the judgment of the court was against the law and the evidence; which motion was overruled, and an exception taken. This judgment, it is now sought to reverse.

      Butterworth § Vogeler, and J. E. Neal, for plaintiff in error:
    In order to charge the separate estate of a married woman—
    1. It is necessary that the debt with the payment of which it is sought to charge her separate estate should have been contracted for the benefit or use of such separate estate,-or for the sole use and benefit of the married woman whose estate is sought to be charged.
    2. Or that the money should have been loaned, or the goods delivered, or the credit given, in the first instance, on the promise, expressly made, by the married woman, that she would pay, and hence impliedly charging her separate estate.
    3. If neither of the conditions mentioned above are found to exist, but the fact yet appears, that a wife having a separate estate has signed a note merely as surety for, or at the request of, her husband, and because ho requested it, the consideration of said note being an antecedent debt of the husband, for the payment' of which the wife was in no wise liable, as in this case, the court will not hold her, by that act, to have charged her separate estate.
    In Hume v. Tenent, decided by Lord Thurlow, 1 Bro. C. R. 14; Peacock v. Monk, 2 Ves. 190; Allen v. Popworth, 1 Ves. 164; Crosby v. Church, 3 Beav. 489; Owens v. Dickinson, 1 Craig & Phil. 48; Ballpin v. Clarke, 17 Ves. 365 ; Murry v. Barlee, 3 My. & K. 220, decided by Lord Brougham; Fullet v. Armstrong, 4 Myl. & C. 377, decided by Lord Cottenham — as well as the cases cited by the lord chancellor, in each of those cases — the debt, whether evidenced b}'' note, bond, or otherwise, was contracted or incurred for the use and benefit of the married woman, or for the use and benefit of her separate estate. Or, if not for either of these, then the money was loaned or the goods sold, on the express promise (as in the case of Phillips v. Graves) of the married woman that she would pay the debt so ereated. And this was, in each case, distinctly understood, i. e., the credit was in the first instance given to her.
    In the case at bar, all the essential elements necessai'y to charge the separate estate of Mrs. Williams are wanting. Athal Machine Co. v. Butler, 107 Mass. 437; Williams v. Eastham, 13 Gray, 328; Kimm v. Weiper, 46 Mo. 532; Perkins v. Elliott, 23 N. J. Eq. 526; Miller v. Brown, 47 Mo. 504; Deering v. Boyle, 8 Kansas, 525; Yale v. Dederer, 22 N. Y. 450; Levi v. Earl, 30 Ohio St. 147; Rice v. Railroad, 32 Ohio St. 380.

      Thomas Millikin and Israel Williams, for defendants in error:
    At common law, the note of a manied woman was void, but, in equity, she could charge her separate estate with its payment. This might be done by a promissory note. Phillips v. Graves, 20 Ohio St. 386. The law of 1866 makes all the wife’s property her separate estate. S. & S. 391.
    The effect of the statute was to make a married woman personally liable for a certain class of debts, and to enlarge the jurisdiction of equity, to charge with payment of other debts all her property. 20 Ohio St. 383-390; 71 Ohio L. 47. And you may show by parol, that she intended to charge her separate estate. 20 Ohio St. 386.
    A manied woman cau charge her separate estate by signing an instrument as security for her husband, or even for a stranger. Corn Exchange Co. v. Babcock, 42 N. Y. 613 ; 17 Johns. 548; Yale v. Dederer, 18 N. Y. 265 ; 22 N. Y. 450; Owen v. Canly, 36, N. Y. 600; 37 N. Y. 35 ; 42 N. Y. 638; 20 Ohio St. 372; 2 Story’s Eq. § 1400, and note 1 (new ed.); Woolsey v. Brown, 74 N. Y. 83; Deering v. Boyle, 8 Kansas, 525; Wicks v. Mitchell, 9 Kansas, 80; 1 Bishop on Married Women, § 873; Keim v. Wippart, 46 Mo. 532; Miller v. Bvown, 47 Mo. 504; Todd v. Lee, 15 Wis. 365; 1 Am. L. R. 665; Maxwell v. Scott, 55 N. Y. 247.

      Levi v. Earl and Rice v. Railroad Co. are opposed to Phillips v. Graves, which last ease, we submit, lays down the more' consistent and px-acticable rule.
   Boynton, J.

The district court found, from the evidence that the plaintiff in error intended to charge her separate estate with the payment of the note sued on, and decreed accordingly. .The question now presented is, was there error in such finding ? It has long been the settled law of this court, that a finding of facts, from the evidence, by the court trying the cause, will not be disturbed by a reviewing court, unless it clearly appears that such finding was not sustained by the evidence given at the trial. Merrick v. Boury, 4 Ohio St. 60 ; Dean v. King, 22 Ohio St. 134. But we need not invoke the application of this rule to the present case, as we are of the opinion that the finding was fully warranted by the evidence.

The husband of the plaintiff in error, at the time the note was executed, was, to her knowledge, wholly insolvent. When the debt was contracted for which the note was given, as well as at the date of the note, she was possessed of a valuable separate estate, of which fact the defendant in error had knowledge; and, according to the testimony of one of them, she assured them that the goods for the payment of which the note in part was given should be paid for. The time for the payment of the note was extended for the period of nearly six months from its date. In view of these facts, the inference is, at least, a reasonable one, that, by executing the note as surety for her husband, she thereby intended to charge her separate estate with its payment. It is not claimed that she was deceived or imposed upon, or subjected to any improper or undue influence, or that she executed the note for any other purpose or object than the one naturally to be implied from the act itself, and the circumstances surrounding it.

The power of a married woman to bind her separate estate, in equity, for the payment of a promissory note, on which she becomes a surety, although denied in Perkins v. Elliott, 23 N. J. Eq. 526, is sustained by a great weight of authority. It rests on the principle, now well settled in courts of equity, that, as respects her separate estate, she is to be treated as a feme sole to the extent of her "power of disposition over the same, and as fully capable of binding it by engagements entered into in respect to it as if the common-law disability of coverture were removed. And, except in eases where she may bind herself at law, the principle applies to separate estates under the statute, as well as to estates settled to her sole and separate use, by deed or devise. Any engagement that she could enter into were she sui juris, and by which she could create a debt binding at law, she may in equity charge upon her separate estate, unless in so doing she exceed the limitation, if any there be, upon thej/ws disponendi. Pollock on Principles of Contracts, 73.

Where this charge is made, her estate, in equity, becomes the debtor, and as courts of law deal only with the legal rights and liabilities of parties, and are therefore incapable to give relief where no legal liability has been incurred, courts of equity carry the intention into effect by subjecting the estate to the payment of the debt intended to be charged upon it. In view of this power of a married woman having an estate to her sole and separate use, to bind it by her engagements, we think it justly follows that when she executes, or joins her husband or a stranger in executing, a promissory note upon a valid consideration moving to her or him, an inference arises, where no fraud or imposition is shown, that she thereby intended to charge her separate estate with its payment. That Levi v. Earl, 30 Ohio St. 147, is opposed to this view is undoubtedly true, but a careful examination of that case has satisfied us that the conclusion reached is not only against the weight of authority, but is founded on a misconception of the principle upon which some of the cases reviewed in the opinion proceed, particularly of the case of Johnson v. Gallager, 3 De Gex, F. & J. 494. The bill in that case sought to charge the separate estate of Mrs. Gallager with the payment of a bill of goods purchased by her while living apart from her husband. The opinion of Lord Justice Turner is an exhaustive examination of the nature and extent of the rights and remedies of the creditors of married women against their separate estates. The particular question involved was, whether, in the circumstances of that case, the separate estate of Mrs. Gallager Avas chargeable with the payment of the price of the goods purchased. The conclusion was reached, that, living apart from her husband, and having a separate estate, the court was bound to impute to her, when purchasing the goods, an intention to deal with her separate estate, unless the contrary Avas clearly proved. In reviewing the English cases bearing on the subject, for the purpose of ascertaining the circumstances from which an intention to charge the separate estate of a married woman Avith her engagements will be implied, the Lord Justice marks a clear distinction betAveen bonds, bills, and promissory notes, and what he denominates her general engagements. The learned judge delivering the opinion in Levi v. Earl seems to have overlooked this distinction, and to have applied the reasoning designed to show when and under what circumstances an intent upon the part of a married woman to charge her separate estate with her general engagements will be implied, to the question of the liability of her estate for the payment of her promissory notes.

This is apparent from the citation given on page 181, of language ascribed to Lord Justice Bruce, but which, evidently, is taken from the opinion of Lord Justice Turner (3 Be Gex, F. & J. 514). The citation is: “ Upon the whole, I have come to the conclusion that not only bonds, bills, and promissory notes of married women, but all their general engagements may affect their separate estate.” The language actually employed was that “ not only bonds, bills, and promissory notes, but also their general engagements may affect their separate estate.”

That the same presumption of an intention to charge the separate estate does not arise where the engagement is one from which, were the married woman sui juris, the laAA’’ would imply a promise to pay the debt contracted, as when the promise is express and in writing, is very clearly shown by that case. No question is made or doubt suggested, that where the engagement is by promissory note, the intention to charge is imputed without the aid of extrinsic proof, but when not in writing, it must be made to appear that the engagement was made with reference to or upon the faith or credit of the estate; a question of fact to be determined by the court upon all the circumstances of the case.

On page 510 of the report of Johnson v. Gallager the Lord Justice says : There are many eases which have established that bonds, bills of exchange, and promissory notes of married women are payable out of their separate estates. There has, indeed, been much question as to the mode in which these instruments take effect against the separate estate, a point to which I shall presently advert, but that in some mode or other they take effect against it can not upon the authorities be denied. It has been a more disputed and is a more doubtful question, whether the separate estates of married women are liable for their general engagements, such as trademen’s bills and claims of that description

He then proceeds to show,that such bills and claims are chargeable against the estate, where the debt was incurred on its faith or credit, and that the corpus of the estate is chargeable with their payment, if within the power of disposition given to the married woman by the instrument creating the estate. We are not now- dealing with the question whether the distinction taken in Johnson v. Gallager between a genei’al engagement, and one created by bond, bill of exchange, or promissory note, is well or ill-founded. It answers our present purpose to show that the distinction there exists, and, consequently, that the court, in Levi v. Bari, fell into an error in supposing that the reasoning in the former case lends any support to the judgment rendered in the latter. The doctrine, however, laid down by Lord Justice Turner has been distinctly approved in Picard v. Hine, 5 L. R. (Ch. Appeal) 274, and in The London Chartered Bank of Australia v. Lempriere, 4 L. R. (P. C.) 572. In the former case, Lord Chancellor Hatherley said it was very desirable that the position of a married woman, who contracts as if she were feme sole, should be placed on a well understood basis, and that that had been done by Lord Justice Turner in his judgment in Johnson v. Gallager.

Mr. Pollock, in his late work on the Principles of Contract, 68, in classifying the cases or instances in which, by the law of England, the intention of a married woman to charge her separate estate will be implied, says that such intention is presumed in the case of debts contracted by a married woman living apart from her husband, and adds, that “ the like intention is inferred where the transaction would be otherwise unmeaning, as where a married woman gives a guaranty for her husband’s debt, or joins him in making a promissory note.” This was the principle upon which the case of Davies v. Jenkins, 6 L. R. (Ch. D.) 728, decided in 1877, was determined.

In this country, the authorities on the subject of the power of a married woman to create a charge against her separate estate as surety, seem to be divided into four classes : 1st. Those that deny the power out and out. 2d. Those that admit the power, but require the instrument creating the debt to disclose the intent, to charge in express terms. 3d. Those that hold the intent to bind the estate, or to pay the debt out of it, will be presumed from the mere execution of a promissory note. And 4th. Those that deuy that such presumption or inference arises unaided by extrinsic proof. The first of these classes has no bearing on the point under discussion, and the rule adopted in the second has never been recognized as the law of this state. The question as between the other two, resolves itself into this :

What inference is to be drawn from the act of a married woman, having an estate to her sole and separate use, in signing the promissory note of another, as surety, as respects her intention or purpose in so doing. In view of the fact that in the act of signing she incurs no legal liability, the question admits of but one rational answer, and that is, in the absence of proof showing fraud or imposition, that she intended thereby to make the debt a charge upon her separate estate. Unless this inference is drawn, her act becomes wholly vain and frivolous, and entirely destitute of: a purpose or a meaning.

That such is the natural implication from the act of signing has been distinctly affirmed in numerous cases.

In Bell v. Kellar, 13 B. Mon. 381, the rule was stated as follows: “ If a feme covert, having a separate estate, make or indorse a note, the presumption is that it was the intention, and the effect is, to charge her separate estate.”

In Cowles v. Morgan, 31 Ala. 535, it was held that, “ a promissory note executed by the wife during coverture,, jointly with her husband, is a charge upon her sepai'ate estate created by contract.”

So, in Burnett v. Hawpe’s Ex’r., 25 Gratt. 481, it was held that, “ if a wife contracts a debt for herself, or for her husband, or jointly with him, the instrument executed by her is sufficient to charge her separate estate, without any proof of a positive intention to do so, or even a reference^ to such estate contained in the writing.”

In The Metropolitan Bank v. Taylor, 62 Mo. 338, it was-held that, “ in reference to her separate estate, a’ married woman is to be treated as a feme sole, and the giving of a. note, or making of a written contract, by her, raises the-presumption that she intends to bind her estate.”

This case was on a note executed by the wife as surety for her husband.

The same rule prevails in Kansas. Deering v. Boyle, 8 Kan. 523; Wicks v. Mitchell, 9 Kan. 80.

Judge Story, in commenting on the subject, says : “Indeed, it does seem difficult to make any sound or satisfactory distinction on the subject as to any particular class of debts, since the natural implication is, that if a married woman contracts a debt she means to' pay it, and if she-means to pay it and she has a separate estate, that seems to be the natural fund which both parties contemplated as-furnishing the means of payment.” 2 Story’s Eq. Jur., §, 1400. See also, to the same effect, 1 Bishop on Married 'Women, § 873.

In Avery v. Van Sickle, ante, 270, we held, that where a "married woman executed a promissory note for property acquired by her, an implication arises, in the absence of proof showing a different understanding, that she thereby intended to charge her separate estate with its p'ayment. If she executed the note upon the understanding that her separate estate was not to be bound for its payment, its enforcement against her would operate a fraud upon her. No one will pretend that this c’ould be done. But when she executes a note, either as principal maker or surety, and has not been deceived in so doing, nor subjected to any undue influence, we think a just inference arises that she thereby intended to deal on account of her estate, and to bind the same in equity for the payment of the note ; and that, as a necessary result, a court of equity will give effect to such intention, by subjecting the estate to the payment of the note in the mode prescribed by the statute for enforcing claims against the separate estate of a married woman. Her liability, or rather that of her estate, does not depend on whether or not the debt incurred on its account is beneficial to her or otherwise. If made, and no fraud or imposition is shown, the court can not refuse relief from the mere fact that the engagement entered into proves unprofitable or injurious. It follows from this result, that Levi v. Earl, supra, and Rice v. Railroad, 32 Ohio St. 380, in so far as they are in conflict with the principle •on which the present case is determined, must be overruled.

Judgment affirmed.


source: Caselaw Access Project

author: Okey, J.

license: Public Domain

text:
    Carpenter v. Canal Company.
    1. Where, after an order of sale is made in a foreclosure suit, the land is appropriated hy a railroad company, and the compensation agreed upon is paid to a receiver in the cause, and thereupon another mortgage creditor, hy answer and.cross-petition, seeks to impeach the appropriation proceeding for fraud, and to foreclose his mortgage, and the court dismisses such answer and cross-petition, as to the charge of fraud and the claim to foreclose, and remits the party to his lien on the money in the hands of the receiver, which money is distributed at a subsequent term, the order of dismissal is final, and a proceeding to reverse it is barred in three years.
    2. In an action to foreclose a mortgage, the lienholders were so numerous that it was impracticable to bring them all before the court, and some of them were allowed to .prosecute for the benefit of all; and a special master having been appointed, with instruction to report the names of the lienholders, and the amount due each, those who appeared before the master and proved their claims are as much bound by a judgment or order affecting the subject-matter of the suit as if they had been formally made parties.

      3. An action for wrongfully depriving a mortgagee of his security is barred in four years, whether such action is for a tort or for relief on the ground of fraud by charging the guilty party as a trustee. In the former case, the action is deemed to have accrued at the time of the injury; in the latter case, on the discovery of the fraud.
    Error to the District Court of Hamilton county.
    In 1856, Stephen S. L’Hommedieu, on behalf of himself •and others, filed a petition in the Court of Common Pleas ■of Hamilton county, against the Cincinnati and Whitewater Canal Company, a corporation under the laws of this state {35 Local Laws, 303), to foreclose the second of four mortgages given by the canal company, on the bed of the canal, ■etc., to secure all the claims of its numerous creditors. Divers persons were made defendants.
    After a judgment had been rendered in the court of common pleas, the cause was appealed to the district court, where, in 1861, a judgment in favor of the plaintiff and other creditors was rendered, an order for the sale of the property was made, and the cause was referred to M. E. Curwen, as a special master, to ascertain and report as to the liens on the property, showing in the report the names of the lienholders and the nature and amount of each lien. Subsequently, Henry C. Lord was appointed receiver in the case. The property was never sold under the order of sale.
    , In 1864, the special master filed a report, showing, among other things, that Alexis Burke had presented his claim under the third mortgage, amounting, October 7, 1861, to ¡$2,634, and that the master had allowed the same.
    In thq same year, the Cincinnati and Indiana Railroad Company, a corporation under the laws of this state, filed its answer and cross-petition, setting forth, among other things, that in 1862 and 1863, in pursuance of its lawful powers, it had located its railroad along the entire bed of the canal, and had agreed with and paid to the canal company $55,000, as the value of the property so appropriated; and the railroad company prayed that it might be quieted in the possession of the property thus acquired.
    Daniels Carpenter, one of the plaintiffs in error, also filed an answer and cross-petition, in 1864. He states, among other things, that he is the owner of a judgment for $2,-284.73, against the canal company, secured by the third mortgage above mentioned; that the alleged appropriation was fraudulent, and was effected by the railroad company buying the judgment of L’Hommedieu, so as to be enabled to control the case, and buying a controlling interest in the canal company ; and that the property which the railroad company pretended to have acquired was, in fact, worth more than $1,000,000. The prayer was that the alleged sale should be decreed void, and the property sold to satisfy the claims under the mortgages.
    Christopher Blackburn, and other creditors, by like answers and cross-petitions, asked for relief similar to that sought by Carpenter.
    At the June term (June 2), 1865, of the district court, the following decree was entered in the cause:
    “ This action came on to be further heard at this time upon the pleadings, former orders, proceedings thereon,, and proofs, and the arguments of counsel; and thereupon, after due consideration, the court find that the said premises ordered to be sold by the judgment of this court, entered in this action on the 2d day of November, 1861, have, in pursuance of the .statutes in such case made and provided, been appropriated by the Cincinnati and Indiana Railroad Company, a corporation duly organized under the laws of the State of Ohio; and that the said the Cincinnati and Indiana Railroad Company has made full compensation therefor to the said the Cincinnati and Whitewater Canal Company, by the payment of fifty-five thousand dollars, the sum agreed to be taken therefor by the said the Cincinnati and Whitewater Canal Company; and the said premises are now in the possession and under the control of the said the Cincinnati .and Indiana Railroad Company, for the uses and purposes for which the same were appropriated ; and the said sum of fifty-five thousand dollars has been paid into the hands of Henry C. Lord, the receiver of this court in this action, subject'to be distributed as this court may order; and that, by reason thereof, the said premises so ordered to be sold have been withdrawn from the control of this court, and vested in the Cincinnati and Indiana Railroad Company, according to law; and said sum of fifty-five thousand dollars substituted therefor for distribution.
    “And now also at this time came . • . . Daniels Carpenter . . . and Christopher Blackburn, and proposed to offer testimony conducing to establish that the said acts of appropriation of said premises, by the said the Cincinnati and Indiana Railroad Company, were fraudulent and collusive with the said the Cincinnati and Whitewater Canal Company, which, being objected to by the said the Cincinnati and Indiana Railroad Company and other parties in interest, the court refused to hear said testimony, upon the ground of want of jurisdiction; to which ruling of the court the said defendants, . . . Daniels Carpenter .. . and Christopher Blackburn, except.

      “And. the court further finds, upon the further motion in this action, that, on the matters and causes set up in the answers and cross-petitions of . . . Daniels Carpenter . . . and Christopher Blackburn, filed in this court in this action, that seek other relief than the distribution of the proceeds of the said sale of said premises, are matters and causes of original jurisdiction, and not within the appellate powers of this court as a court of appellate jurisdiction, and foreign to the causes of action brought into-this court by said appeal; and thereupon the court orders-all'such matters and causes of action to be stricken from said answers and cross-petitions, as constituting new causes of action of original jurisdiction, and not within the province of this court as a court of appeals; and thereupon the court orders the motion for distribution of said proceeds or funds under the control of the court to be continued to the next term of this court. To all which, the said defendants, . . . Daniels Carpenter . . . and Christopher Blackburn, except.”
    At the October term (October 2), 1870, of the district court, the cause was further heard, on motion of Carpenter and others, to ascertain the amount due various creditors, and the court found, among other things, as follows:
    “ The court further find that there is due the said Daniels-Carpenter the sum of $4,970.66, with interest from the first day of this term ; that said amount is secured by mortgage on the premises described in the pleadings, and is a lien upon the funds in the hands of the receiver of this court, found by the master’s report.
    “ The court further find that there is due the said Christopher Blackburn the sum of $2,455.31, with interest from the first day of this term, and that said amount is secured by mortgage, and is a lien upon the funds in the hands of the receiver of this court, found by report of the master; and that, as to the above named claims, the said master’s report is hereby approved and confirmed. . . .
    “ The court also confirms the report of said master in the finding $2,634 due to Alexis Burke, on the 7th day of October, in the year 1861, on the judgment in his favor against the said Whitewater Canal Company, rendered February, 1841, in the Court of Common Pleas of Hamilton county, Ohio; and the court further finds that said judgment was for $1,200, and that the interest thereon from the said 7th day of October, in the year 1861, to the first day of this term, is $1,647.20; and the court finds that Mary M. Burke, who is made a party hereto, is the administratrix of the said Alexis Burke, deceased, and that there was due her as administratrix on said judgment, on the first day of this term, the sum of $3,281.20; and the court further find that the sum is a lien on the funds in the hands of the receiver of this court.”
    Carpenter, Blackburn, the administratrix of Burke, and others, again excepted to the findings, except as to the time-from which interest was computed.
    At the May term of the district court (May 27), 1871, the cause was further heard as to the distribution of the said sum of $55,000, in the hands of the receiver, and the whole sum was distributed without reaching any creditor under the third mortgage, or paying to Carpenter, Blackburn, Burke’s administratrix, or any creditor standing in like relation, any part of the money. The concluding part of the order was as follows :
    “And as to all other matters in this cause contained, not by this or other orders in .this cause disposed of, or reserved for litigation elsewhere, that the parties hereto go-hence without day; and thereupon . . . Daniels Carpenter, Burke, Blackburn, and all other creditors named in the decrees of 1865, and also in the decree and findings of 1870, by this court, now move the court for a new trial, which motion, on due consideration, the court overrule, to which order the said parties except.”
    On March 3, 1874, Carpenter, Blackburn, the administratrix of Burke, and others, filed in this court, on leave, a petition in error to reverse these judgments and orders. But objection is made that the proceeding is barred by the statute which limits proceedings in error to the period of three years after rendition of the judgment or making the order sought to be reviewed.
    While the cause above mentioned was pending in the district court, Mary Burke, administratrix of Alexis Burke, Daniels Carpenter, Christopher Blackburn, and other creditors of the canal company, commenced, on December 31, 1870, an action in the Court of Common Pleas of Hamilton county, with respect to the same matters controverted or sought to be controverted in the other suit. The canal company, the railroad company, Henry C. Lord, and others, were made defendants.
    That petition was filed “ on behalf of the plaintiffs and such others as might come in and contribute to the expenses of the suit;” and sets forth the execution of the third mortgage, already mentioned, and the findings of the district court in the L’Hommedieu case of the amounts due the plaintiffs respectively. The charges made in the answer and cross-petition of Daniels Carpenter in that case as to the alleged fraudulent means resorted to by the railroad company to obtain possession of the canal are reiterated, and the facts claimed to show such fraud, and the •complicity of Henry C. Lord therein, are detailed at great length. The fact is stated that by the decree in the L’Hommedieu case, rendered in 1865, the district court refused to consider these alleged frauds for supposed want of jurisdiction, and it is alleged that the cause “ was continued that said questions of fraud might be determined in this court of common pleas.” The case of Goodin v. The Canal Co. and others, 18 Ohio St. 169, is mentioned, and it is stated that it was there “ held, in substance, that said agreement to fix the compensation to be paid for said canal property and privileges was fraudulent and void as to the creditors of said canal company; that the property, privileges, etc., aforesaid of said canal company might be subjected to the payment of the debts of said canal company; and that said railroad company was liable to the creditors of said canal company, to the full extent of the value, for any and all purposes, of the property, privileges, and franchises of said canal company.
    “ That it has been settled, by the judgments and records aforesaid, that their claims are valid; that said railroad company ought to pay the same, and in default thereof, that said canal property ought to be sold, and the proceeds thereof applied to satisfy said claims.
    “ But, inasmuch as the said Indianapolis and Cincinnati Railroad Company, after said case No. 26,285 had been decided by said supreme court, settled with the plaintiffs therein and procured their consent to have said last mentioned case dismissed, the plaintiffs herein, not having been parties thereto, say that said pretended appropriation of said canal property by said Cincinnati and Indiana Railroad Company, and said pretended agreement between said last mentioned railroad company and said canal company were fraudulent, as to the plaintiffs herein and others, creditors of said canal company.”
    With further reference to the proceedings in the L’Hommedieu case and the rights of the plaintiffs, the petition closes with a prayer for judgment against the defendants in the ease, in favor of the plaintiffs, for the amount of their respective claims and interest, and that if the money should not be promptly paid, the said canal property be sold, and the proceeds applied in satisfaction of the aforesaid claims of the plaintiff and other creditors ; “ and that the plaintiffs may have such other, further, and different relief as the nature of the case may require.”
    To this petition the defense was interposed, that the action was barred by the statute of limitations of four years, which defense the court of common pleas held to be sufficient, and thereupon dismissed the petition. The district court affirmed the judgment; and, on motion of plaintiffs below, leave was granted to file in this court a petition in error.

      Taft & Lloyd, J. T. Crapsey, L. French, and P. S. Hamilton, for plaintiffs in error.

      Hoadly, Johnson & Colston, and Matthews, Ramsey & Matthews, for defendants.
   Okey, J.

Was tbe order of June 2, 1865, final? A judgment rendered or final order made by the district court maybe reversed, vacated, or modified by the supreme court for errors appearing on the record. Civil Code of 1853, § 514; Rev. Stat. § 6710. The code also provides (§ 512) that “ an order affecting a substantial right in an action, when such order in effect determines the action and prevents a judgment,. ... is a final order which may be vacated, reversed, or modified.” And see Rev* Stat. § 6707.

The object of the suit was the foreclosure of a mortgage given by the canal company. An order of sale had been entered in the district court. The railroad company, which had been admitted as a defendant, claimed, by answer and cross-petition, that subsequently to the entry of the order of sale, it had, under authority of law, appropriated the property mortgaged for its track. Other creditors, by answers and cross-petitions, sought to foreclose another mortgage given by the canal company on the same property, and also to impeach the appropriation of the property for fraud.

The substance of the finding and order of 1865, in this posture of the case, was that the appropriation of the bed of the canal by the railroad company was complete; that all right to obtain a sale of the mortgaged property was barred by the appropriation; that the lien which remained to the creditors was not a lion upon the property described in the mortgages, but on the amount ($55,000) paid therefor by the railroad company, and then in the hands of the receiver; and that the appropriation proceeding could not be impeached in that suit, for the reason that this would be an exercise, by the district court, of original and not appellant jurisdiction. Accordingly, the answers and cross-petitions were dismissed, so far as the creditors sought therein to impeach the appropriation for fraud, and there was left to those creditors only the right to pursue any lien they might have on the above-mentioned fund in the hands of the receiver, and a further right to impeach, in an independent suit, the appropriation proceeding for fraud.

Other, and in some respects conflicting, views as to this order have been suggested. It has been thought that the order of dismissal was void. But the court had jurisdiction of the parties and subject-matter. It has been suggested that the sum in the hands of the receiver ($55,000) represented the equity of redemption. But if so, why did the court refuse to enter an order of foreclosure on the answers and cross-petitions ? And finally, it is suggested that the right of foreclosure in an independent suit was reserved by the order of 1865. But, in effect, this would nullify the order remitting those creditors to their lien on the fund. "We are satisfied that neither of these positions is tenable; and that the order was an extinguishment of all right in the parties before the court, in fact or by representation, to obtain a sale of the mortgaged property in that or any other suit. Of course, if there be creditors who can not be regarded as having been before the court, the order can not affect them.

This order effectually disposed of a material part of the case. That is rendered certain by reference to the orders of 1870 and 1871. Indeed, as was then apparent from the master’s report on file, the order of 1865 virtually denied, to the parties now complaining, all relief in the cause. Such an order was necessarily final and not interlocutory. Teaff v. Hewitt, 1 Ohio St. 520; Fuller v. Clafflin, 93 U. S. 14. And see Brigel v. Starbuck, 34 Ohio St. 280.

Nor is it different as to the claim of Mary Burke, administratrix of Alexis Burke. The parties were very numerous, and aside from the provision in the mortgages allowing one to prosecute for the others, the statute, which accords with the rule in equity, provides that “where the question is one of a common or general interest of many persons, or when the parties are very numerous, and it may be impracticable to bring them all before the court one or more may sue or defend for the benefit of all.” Civil Code, § 37; Rev. Stat. § 5008. And no doubt a judgment or order in such case is binding on all persons standing in the like predicament; but the court will take “ care that sufficient persons are before it honestly, fairly, and fully to ascertain and try the general right in contest.” Story’s Eq. PI. § 120. It appears, however, from the record, that Burke appeared before the master, in pursuance of the decree of 1861, and proved his claim; and, besides, his administratrix was made a party in the cause in 1870.

The civil code (§ 523) limited proceedings in error to three years after the rendition of the judgment or making the final order sought to be reversed. As three years had elapsed from the time the order of 1865 was made — indeed, from the making of the order of 1870 — before the petition in error was filed in this court, the proceeding in error must be dismissed for that cause.

We come, then, to the consideration of the question involved in the case of Mary Burke,administratrix, and others against the railroad company and others. The question there is, whether the action is barred by the limitation of four years. The civil code provided -(§§ 12, 15) as follows: “ Civil actions, other than for the recovery of real property, can only be brought within the following periods after the cause of action shall have accrued. . . . Within four-years : . . . (1.) An action for injury to the rights of the plaintiff, not arising on contract, and not hereinafter-enumerated. (2.) An action for relief on the ground of fraud. The cause of action in such case shall not be deemed to have accrued until the discovery of the fraud.” (R. S., § 4982). These sections extended to cases of an equitable as well as those of a legal nature. Howk v. Minnick, 19 Ohio St. 462; Combs v. Watson, 32 Ohio St. 228 ; Loffland v. Bush, 26 Ohio St. 559. And see Longworth v. Hunt, 11 Ohio St. 194.

On careful consideration of this anomalous petition, we are led to the conclusion that all it contains with respect to the mortgages is stated by way of inducement, and that the gravamen is the alleged fraud whereby it is said the plaintiffs were deprived of their interest in the property.

Doubtless a mortgagee could maintain an action at law for injury to his rights. Thus, in Allison v. McCune, 15 Ohio, 726, this court held that a special action on the case lies against one who lessens a mortgage security, and damages may be recovered to the extent of any actual injury sustained by such act, although the mortgagee was not in possession. There the injury was the destruction of a mill on the premises mortgaged. I am not prepared to say how far the principle of this class of cases extends; nor is it material. Plainly such an action would be barred in four years, and the statute would begin to run at the time of the injury.

But it is claimed that here is a trust which should be enforced in favor of the plaintiffs. If a trust, however, what is its character, and what will be the rights of the parties-if there is a trust? No doubt it is a well-settled rule in equity, as to continuing and subsisting trusts, that the statute of limitations does not apply to them. Kane v. Bloodgood, 7 Johns. Ch. 90. Our statute asserts the same rule. The code of 1853 provides (§ 6) that the title relating to the commencement of civil actions shall “ not apply in-the case of a continuing and subsisting trust.” 2 8. & C. 942 ; Rev. Stats., § 4974. But where the trustee denies the-right, lapse of time may constitute a bar. Other trusts, which might be the ground of an action at law, were not exempted from the operation of the statute.

The court will sometimes make use of the machinery of a trust to aid an injured party in obtaining property, the-title to which has been acquired by another by fraudulent means. The guilty party is sometimes called a trustee ex maleficio. Bispham’s Eq., § 91. Relief in such case is granted on the ground of fraud, and the statute of limitations will not be a bar where there is concealment. This is substantially in harmony with the provision of our statute, already quoted, that “ the cause of action in such case-shall not be deemed to have accrued until the discovery of the fraud.”

There is no express allegation in this petition that the fraud was unknown to the plaintiff until within four years before this suit was brought. A petition may be sufficient without such allegation. Combs v. Watson, supra. But the fraud was distinctly averred in the answer and cross-petition of Carpenter, filed in the L’Hommedieu case in 1864, six years before this suit was brought, and the action of the district court in 1865, with respect to the fraud' alleged in that answer and cross-petition, is stated in this petition. It plainly appears, therefore, on the face of this petition, that when it was filed the plaintiffs had known of the existence of the alleged fraud for more than four years.

As to the allegations concerning the Goodin case (18 Ohio Bt. 169), it is sufficient to say that it appears in the petition that the plaintiffs were never parties, and that the suit has been dismissed.

Upon other important questions — as, for instance, the power of the canal company to mortgage its property, and the right of the railroad company to appropriate the property without proceedings against, or agreement with, the mortgagees — we do not deem it necessary to express any opinion.

Other parties are betore us in each of these records, but their rights are not materially different from those expressly considered in this report.

We are thus brought to the conclusion that the statutes afford a bar as to each of these cases. We reach the conclusión reluctantly; for, without knowing what might be the result of a trial or hearing of the questions sought to be made, the fact is the plaintiffs have been deprived of such trial and hearing. But the misfortune is attributable to the laches of the plaintiffs themselves. When cases are clearly brought within the provisions of the statutes limiting the time within which actions and proceedings may be commenced, we have no more power to refuse the due enforcement of those provisions than we have to repeal them.

Judgment of dismissal and affirmance, as above.

Gilmore, C. J., and Boynton, J., dissented from the judgment.


author: Boynton, J.

text:
    Bolton v. The City of Cleveland et al.

      1. Where a party seeks to enjoin an assessment on the ground that the city council making the same did not comply with the provisions of the act of April 5, 1866 (S. & S. 834), he must aver in his petition that the city ordering such improvement belonged to the class embraced within the provisions of that act.
    2. "Where no damage resulted to abutting lots or lands from a street improvement made in 1866, under laws then in force, the publication of notice by the city of its determination to improve the street was not a precedent condition to the authority of the city to make an assessment on the abutting property, to defray the cost of the improvement.
    R. Where a party seeks, in equity, to enjoin the collection of an assessment by the city council, on the ground that the improvement was not recommended by the board of city improvements, he must show such fact by averment and proof.

      •4. By an assessing oz'dinanee, passed by the city council of the city of Cleveland, on the 31st day of July, 1866, under authority of the act of May 3, 1852 (2 S. & C. 1493), the abutting lot owners were required to pay the assessment on the 28th day of the same month: Held, That the defect in the ordinance was within the curative pi-ovisions of section 31 of said act.
    .Error to the District Court of Cuyahoga county.
    Action to enjoin the treasurer of Cuyahoga county from •collecting an assessment on lots Nos. 202 and 203 in the city of Cleveland, made by.the city council, in 1866, to pay the cost in part of repaving Union street therein. The petition alleged the plaintiff’s ownership of said lots, set but an ordinance, passed May 15, 1866, directing the repave.snent of said street; also an ordinance, passed July 31,1866, levying and assessing a special tax per foot front on lots and lands abutting on said street to pay the cost of repaving the same, and directing the lot owners respectively to pay the assessments severally made on or before July 28, 1866, or be subject to the penalty provided by law. It was further averred, that at no time was any resolution adopted, or ordinance passed, declaring the necessity of said repavement, and that no notice, either public or personal, was given that said improvement was contemplated. But it was nowhere averred that the city of Cleveland was a city of the first class, having at the preceding federal census a population of less than one hundred thousand inhabitants. Nor was it averred that said improvement was not made on the recommendation of the board of city improvements.
    The answer, not denying any of the allegations of the petition, alleged that the city caused said street to be repaved under said ordinance of May 15th, expending, in so doing, a large sum of money in the purchase of material and employment of labor, and that, had no irregularity existed in the proceedings of the council, the sum assessed on plaintiff’s said lots would have been properly and justly chargeable thereon. To this answer the plaintiff demurred. The district court overruled the demurrer, enjoined the collection of the penalty, but refused to enjoin the collection of the assessment, and in so far as the petition sought other relief than to restrain the collection of the penalty, the court gave judgment against the plaintiff.
    This judgment it is now sought to reverse.

      S. Williamson, for plaintiff in error.

      Heisley, Weh & Wallace, for defendant in error.
   Boynton, J.

The sufficiency of the facts stated in the petition of the plaintiff, under and by virtue of which he seeks relief by injunction, was involved in the question arising upon his demurrer to the answer of the city. Eor if, upon the whole record, the defendants were entitled to judgment, it was immaterial whether their right arose upon facts stated in the answer or upon the insufficiency of the-facts stated in the petition. In either case, the dismissal-of the petition was the proper judgment to render. The-question therefore is, which party was entitled to judgment on the undisputed facts contained in the pleadings? There are several grounds stated in argument for the plaintiff, on each of which he asserts the right to a judgment restraining the collection of the assessment upon his property.

The first is, that the city council did not declare, by resolution, the necessity of the improvement, as required by the act of April 5, 1866. S. & S. 834. If the case fell within the provisions of that act, there is no doubt that the failure or omission to adopt the declaratory resolution would be fatal to the validity of the assessment. Welker v. Potter, 18 Ohio St. 85. But the case is not within its provisions. The act was operative only in cities of the first, class having, at the preceding federal census, a population of less than one hundred thousand inhabitants. Whether or not the city of Cleveland belonged to this class, the pleadings do not advise us, and we think the fact is not one of which the court is bound to take judicial notice. There should have been some allegation bringing the case-within the operation of the statute, if the plaintiff claimed the benefit of its provisions, and if the allegation was denied it should have been established by proof.

It is next contended, that the city gave no notice of its. determination to improve the street, and, consequently, that the assessment was, for that reason, void for want of power in the city council to make it. This objection is also invalid. By the original act of May 3, 1852, to provide for the organization of cities and incorporated villages (2 8. & C. 1493), the publication of such notice does not seem to have been required; and, in Finnell v. Kates, 19 Ohio St. 405, it was held, that the publication of the notice of such determination, as required by the act of February 21, 1866-i(S. & S. 803), was not a condition precedent to the authority to make an assessment to meet the expenses incurred in •making the improvement, unless damages resulting from the improvement are included in the assessment.

In the present case, there were no such damages given or (claimed, and hence, if it he conceded that the case is gov•erned by the provisions of that act, the power to make the •assessment was in no wise affected by the failure to give the notice therein required.

It is next urged, as a ground upon which the assessment is illegal, that the improvement of Union street was not recommended by the board of city improvements. This fact, however, is nowhere made to appear. The pleadings, in respect to such recommendation, are entirely silent; .and, to give effect to the claim of the plaintiff, the court must assume, without any averment or proof, that no such recommendation was, in fact, made. This will not be done. Where a party seeks, in equity, to enjoin the collection of an assessment standing against him, or his property, on the duplicate of the county treasurer, on the ground that it was illegally made, but which it was within the power of the board or tribunal causing it to be placed there, to levy, he must show its invalidity by proper averment and proof. The assessment will be held valid until the contrary is made to appear. It, therefore, was not the duty of the defendants to show that the improvement was, in fact, recommended by the board of city improvements.

It is finally contended, that because, by the terms of the assessing ordinance, the assessment was required to be paid three days before the ordinance was passed, the assessment is void. If the statute then in force required the time for the payment of the assessment to be fixed, in all cases, by the ordinance, there would be more force in this objection. But no such requirement was made.

Power to order the improvement and to charge the abutting property with the expense of the same was conferred on the city council, by section 26, as amended April 12, 1858 (2 S. & C. 1501), of the act to provide for the organi•zation of cities and incorporated villages, passed May 3, 1852. 2 S. & G. 1493.

Section 30 authorized the council to prescribe the mode in which the charge on the respective lot owners and on-abutting lots or lands should be assessed and determined ; but it also provided, that such charge, when assessed, should be payable by the owner or owners at the time of the as•sessmont, personally, and should also be a lien upon the respective lots or parcels of land, in the possession of any •owner, from the time of the assessment. This section also gave authority to institute an action at once for the collection of the assessment. And, by the following section, it was declared that when, in any such action, the court trying the same should be satisfied that work had been done •or materials furnished, which, according to the true intent of that act, would be properly chargeable on the lot or land through or by which the street improved passed, a recovery should be permitted, or a charge enforced, to the extent of the proper proportion of the value of the work or material which would be chargeable on such lot or land, notwithstanding any informality, irregularity, or defect in any assessment on the part of such municipal corporation, or its officers. The defect complained of in the present case, is clearly covered by this "provision. Its manifest object was to remedy defects, and cure omissions, and irregularities in assessments, where, by so doing, no injury resulted to the substantial rights of the lot owner. The only 'injury that could have possibly resulted from the defect existing in the ordinance, consisted in exacting a penalty for not paying the assessment at the time required. But from this the plaintiff was fully relieved, and, showing no right to the further relief prayed for, the same, we think, was properly refused.

Judgment affirmed.


author: White, J. Okey, J.,

text:
    Ehrman v. The Union Central Life Insurance Co.
    1. Where property which a corporation, under certain circumstances, is authorized hy its charter to acquire, is purchased in a mode or for a purpose not authorized, the title of the corporation to the property can not be defeated by a party who is a stranger to the agreement by which the property was acquired, and who is not injured by the transfer.
    2. A life insurance company doing business under the act of April 16, 1867 (S. & S. 218), purchased the assets of another company doing business under the same act, and, in consideration thereof, agreed to assume its risks and to pay its debts. Among the assets was the promissory note of the defendant (plaintiff in error), which was indorsed by the selling to the purchasing company: Held, 1. That, in an action on the note by the purchasing company, it will be presumed, in the absence of any averment to the contrary, that the agreement between the companies has been performed, or at least that it has not been abandoned. 2. That, where the validity of the note is admitted, the fact that the agreement between the companies is unauthorized by their charters is not a defense to the maker of the note. 3. Where there appears to be no connection between the taking of stock by the defendant in the selling company and the giving of the note, the fact of his being such stockholder will not affect a recovery on the note, in the absence of any showing that the transfer of the note was to his injury or prejudice as a stockholder.
    , Error to the Superior Court of Cincinnati.
    The original action ivas brought by the defendant in error against the plaintiff in error, on a promissory note. The following, omitting the formal parts, is a copy of the petition:
    “ The plaintiff states that it is incorporated as a life insurance company, under the laws of Ohio; that it is the owner and holder of a certain promissory note, made by the defendant, of which the following is a copy, to wit:
    “ $800. Cincinnati, November 16, 1867.
    “ On demand, I promise to pay to the order of the Home Mutual Life Insurance Company, of Cincinnati, eight hundred dollars, at their office, with interest at six per cent, per annum, until paid (said interest to be paid annually).
    “ Value received. B. Ehrman.”

      The indorsements upon said note are as follows :
    “ Interest on this note paid to October 14, 1871.”
    “Interest on this note paid to January 1, 1871.”
    “ J. W. Iredell, Sec’y.” “ Home Mutual Life Insurance Company, John Cochnower, Pres’t.”
    “No part of the said principal sum has been paid, and no interest has been paid since October 14,1871, and the said sum of eight hundred dollars, with interest thereon from October 14, 1871, is now due to the plaintiff from thd defendant, payment having been demanded. "Wherefore, plaintiff prays judgment,” etc.
    The defendant answered:
    “ 1. The defendant, -for answer to plaintiff’s petition, says that he admits that plaintiff is incorporated as set out in its petition herein, and admits the execution of the note sued on in plaintiff’s petition, and admits the indorsements thereon to be as set out by plaintiff; but defendant denies that the plaintiff is the owner and holder of said note, and that defendant is indebted to the plaintiff in any sum. Defendant says that plaintiff came into possession of said note by virtue of a contract between the plaintiff herein and the Home Mutual Life Insurance Company, a copy of which contract, marked Exhibit ‘A,’ is hereto attached, .and made part of, and incorporated in, this answer. Defendant further says that, by this contract, plaintiff took all assets, of every description, of the Home Mutual Life Insurance Company, including securities, cash on hand, •and real estate not requisite for plaintiff’s immediate accommodation in the transaction of its business, nor mortr gaged to plaintiff in good faith, by way of security for loans previously contracted, or for moneys due, nor conveyed to plaintiff in satisfaction of debts previously contracted in the course of its dealings, nor purchased by plaintiff at sales upon judgment, decree, or mortgage, obtained or made for such debts, and obtained a majority of the stock of the Home Mutual Life Insurance Company. Defendant says this whole contract was illegal and void, and incapable in law of passing any title to the note sued-on herein.
    “ 2. Defendant denies that, at the time of the indorsement of said note by John Cochnower, as president of the Home-Mutual Life Insurance Company, he was legally president of said company, for the reason that, at the time of his pretended election, he was not a stockholder in said company. Defendant says that, at the time of making the-note sued on herein, and ever since, he himself has been,, and now is, a stockholder in said company.”

      Exhibit “A.”

      “ This agreement, made and entered into this 13th day of' October, 1871, by and between the Home Mutual Life Insurance Company, of Cincinnati, Ohio, party of the first, part, and the Union Central Life Insurance Company, of the same place, party of the second part, witnesseth—
    “ That the party of the first part hereby assigns, transfers,, and conveys to the party of the second part all the assets- and property, of every kind, nature, and description whatever, of said party of the first part, and agrees, upon demand, to make from time to time all such deeds, indorsements, and assurances as may be necessary completely and effectually to transfer the title to said assets and property to said party of the second part, but without warranty or-recourse in case of failure of title.
    “ That the party of the second part hereby assumes and agrees to provide for and discharge all the debts and liabilities of the party of the first part (except such as may be-hereinafter specially excepted), of every name, nature, and description whatsoever, due or to become due, and to rein-sure all the risks, and to indemnify and save harmless all the stockholders, of the party of the first .part, against all their individual liability upon or concerning said debts, liabilities, and risks.
    “ The party of the second part agrees, with all reasonable-diligence, to procure, so far as possible, the substitution of policies of its own for the outstanding policies of the party of the first part, and, to that end, to make all reasonable endeavors to procure the consent of the holders of the said policies thereto — said policies to be substantially in the-same form as those now outstanding, without any deviation as may deter policy holders from making such a change.

      “ The party of the second part shall allow all parties having bonds of the United States included in the deposit of one hundred thousand dollars of the party of the first part,, now in the hands of the auditor of the State of Ohio, to substitute legal tender notes of the amount of the face or principal of said bonds therefor.
    “ The party of the second part agrees to allow all the stockholders of the party of the first part who may have-given notes secured by mortgage, which are included in said deposit with the auditor of state, an extension of three-years from this date on the punctual payment of interest, as it may mature annually, by said stockholders on their said notes, at the rate of six per cent, per annum. Interest to this date to be credited as paid on said notes.
    “ The party of the first part guarantees that its debts and liabilities, exclusive of certain advances hereinafter specified, and of risks upon policies, where the party insured was living until October 1, 1871, do not exceed the sum of forty thousand dollars, and the party of the second part agrees forthwith to furnish satisfactory personal security that it will pay said debts and liabilities, not exceeding the said amount of forty thousand dollars.
    “ The party of the second part agrees forthwith to deposit in the Safe Deposit Company of Cincinnati, bonds of the United States of the market value of fifteen thousand eight hundred and eighty-nine dollars, which bonds shall be deposited in the name of a committee, consisting of Henry A. Towne, George M. Dixon, John M. Phillips, and John Cochnower; said committee shall be charged with the doty of retaining said bonds and the interest that may accumulate thereon on deposit in said company for six months from this date, for the purpose of security to the party of the second part, that the amount of debts and liabilities of said party of the first part, exclusive of said advances and of said risks upon, policies outstanding September 30,1871, does not exceed forty thousand dollars. At the end of six months from this date, after providing for and discharging all such debts and liabilities in excess of forty thousand dollars, the residue of said bonds and interest shall be converted into money, and paid to Henry A. Towne, George M. Dixon, C. A. Croninger, Andrew King, and George Spencer, or any three of them, to be by them distributed among those stockholders of the party of the first part, who, in the month of July, 1871, subsequently advanced moneys to the said party of the first part, under and by virtue of a resolution of the board of directors of said party, passed June 13, 1871, it being the intent and purpose of this contract not to provide for the assumption of said advances by the party of the second part, as liabilities of the party of the first part, but to provide for their payment out of said bonds, if any sum is left for that purpose after maintaining and securing the party of the second part in the guarantee that the said debts and liabilities, exclusive of outstanding risks on September 30, 1871, and of said advances, do not exceed forty thousand dollars.
    “ The party of the second part is to pay no claims against the party of the first part unless audited and approved by C. A. Croninger and Andrew King, and is to defend all suits now pending, or that may be brought upon debts, liabilities, or risks of the party of the first part.
    “ If, after payment of all present debts and liabilities of said party of the first part, exclusive of said advances and of said risks outstanding on September 30, 1871, but including all expenses of settling and adjusting the said ■debts and liabilities and of litigation, it shall appear that the cash value of the assets hereby transferred exceeds the amount of said debts and liabilities, exclusive of said advances, but including said expenses, and also including a .sum to be ascertained as the value of the risks hereby assumed upon said outstanding policies, by a computation according to the New York standard rate of four and one-half per cent., then the difference, less the said sum of fifteen thousand eight hundred and eighty-nine dollars, shall be paid to said Towne, Ring, Spencer, Croninger, and Dixon, or any three of them, in cash, for distribution pro rata, first among said stockholders making said advances as aforesaid, in proportion to the amount of their said advances; and after their advances shall have been fully paid and discharged, then the residue, pro rata, among all the present stockholders of said party of the first part, in proportion to the amount of stock by them severally owned.
    “ The party of the first part agrees forthwith to procure the transfer by regular legal transfers of the majority in amount of the stock of the party of the first part, so as to vest the title in said stock in John M. Phillips, John P. P. Peck, Norman W. Harris, John Coehnower, and John Davis, in trust for said party of the second part, and so as to constitute said trustees the owners of said majority of stock in trust as aforesaid.
    “It is understood that among the liabilities of the party of the first part, which are hereinbefore provided, to be secured by the deposit of bonds of the United States, in the Safe Deposit Company of Cincinnati, are not to be included any commissions' of -agents hereafter accruing on renewal premiums.
    “ This contract is made and entered into upon the confidence that the schedule of assets and liabilities of the party of the first part, hereto annexed, and thus made part hereof, is in substance correct.
    “ Witness the signatures of the presidents and secretaries, and the corporate seals of said companies, the day and date aforesaid.
    [seal.] Henry H. Towne, Pres’t,

    I. W. Iredell, Jr., Sec’y,

      Home Mut. Life Ins. Go.

    [duly stamped.] Home Mut. Life Ins. Co.
    [seal.] John P. P. Peck, V.. Pres’t,

      Onion Central.Life Ins. Co.

    N. W. Harris, Sec’y,

      Union Central Life Ins. Co.”

      The plaintiff filed a general demurrer to the answer. The cause being reserved to the superior court, in general term, that court sustained the demurrer, and gave judgment for the plaintiff. This judgment the defendant now seeks to reverse.

      Wilby & Wald, for plaintiff in error :

      We claim that the contract between the Union Central and the Home Mutual Company, in pursuance of which the plaintiff holds the note sued on, was incapable of passing such title to the note as would enable the plaintiff to 'sue on it. We base this claim on two distinct grounds. Eirst, that part of the consideration of the contract was the acquisition by the Union Central, and the conveyance by the Home Mutual, of certain real estate in the face of an express prohibition in the charters of both of them, forbidding them “ to purchase, hold, or convey ” such real estate ; and that this partial illegality makes the whole consideration, and therefore the whole contract ultra vires, illegal, and void. Second, that it was a contract for the amalgamation of the two companies, and therefore ultra vires, illegal, and void.
    As to the first ground, see Swan & Sayler, 220, § 338 Bank v. Swayne, 8 Ohio, 257 ; Widoe v. Webb, 20 Ohio St. 431; Raguet v. Roll, 7 Ohio, 77 ; 13 Ohio, 1; White v. Bass, 3 Cush. 494, 495 ; Leavitt v. Palmer, 3 Comst. 27; Aubert v. Maze, 2 B. & P. 374, 375 ; Benzley v. Bignold, 5 B. & A. 341; Collins v. Blantern, 2 Wils. 351; State v. Finlay, 10 Ohio, 51; McGregor v. Dover, etc., R’y, 18 Q. B. 618.
    As to the second ground, the amalgamation of the two companies, see Beaman v. Bufford, 1 Simon’s U. S. 550; Railway Co. v. Railway Co., 4 De G. McN. & G. 115; s. c., 6 H. L. Cases, 136, 137; Balfour v. Ernest, 5 C. B. N. S. 601; Mead v. St. Louis Mut. Ins. Co., 51 How. Prac. 5 ; N. Y. & Sharon Canal Co. v. Fulton Bank, 7 Wend. 412 ; Pearce v. Madison, etc., R’y, 21 How. (S. C. U. S.) 441; Winch v. Ray, 13 Eng. L. & Eq. 506 ; W. & M. L. R’y Co. v. Winans, 17 How. (S. C. U. S.). 39; Coe v. Col. & Piqua R. R., 10 Ohio-St. 372; State v. McDaniel, 22 Ohio St. 368; Pierce v. Emery, 32 N. H. 504, 508 ; State v. Consolid. Coal Co., 46 Md. 1; Meade v. Ins. Co., 51 How. Pr. 5, 6 ; Commonwealth v. Smith, 10 Allen, 455, 456 ; Smith v. Ins. Co., 2 Cooper, 736; Ward v. Sea Ins. Co., 7 Paige, 294; Abbott v. American Hard Rubber Co., 33 Barb. 578; Greene’s Brice’s Ultra Vires, § 308; Hays v. Railway Co., 61 Ill. 422; Richardson v. Sibley, 11 Allen, 65; 5 Am. L. R. N. S. 733.
    Having shown that the contract by which the plaintiff acquired possession of the note in suit was illegal, as prohibited by the charters of both companies, can we set this up to show that plaintiff could acquire no title through it ? Our opponents answer this question by saying that the state, alone, can raise this point. But we say that the question, whether or not the state is the only one to interfere depends, first, on the question of estoppel, where the-act complained of is merely in excess of corporate power expressly given, but not expressly or impliedly prohibited; and, second, where the act complained of is expressly or impliedly prohibited (that is, illegal, and therefore no question of estoppel can ever arise. See Meddil v. Collier, 16 Ohio St. 599) on the rule of par delictum. The state can always punish a corporation for an unauthorized act. Hence,, the state’s right to interfere can not in any way depend on the question, whether or not any one else has a right to interfere for the same act. Where the corporation’s contract is do a thing “ merely in excess of power ” (and by this we-mean one of those intermediate class of acts before described, acts not expressly or impliedly prohibited, though not expressly authorized), so long as it is executory on both sides,, either party can refuse to go on and set up the fact of excess of power. There is no estoppel, and hence the state is here not the only one to interfere. If such a contract is executed on either side, an estoppel arises against the-other side, preventing its setting up the excess of power, and hence here the state is the only one to interfere.
    This principle can be illustrated by taking a few of the cases cited by our opponents, as well as any others. Eor instance, Walsh v. Barton, 24 Ohio St. 24; 101 Mass. 400 ; 17 Wis. 372; 3 Nevada, 385 ; 22 Cal. 398; 6 S. & M. 179 ; 12 Wall. 358; 55 Mo. 218; 14 N. J. Eq. 13.
    For the proposition that the maker of a note, on being sued by the holder, can show, as a bar to a recovery, that the holder holds it simply by virtue of a contract void for statutory illegality, we cite: Sproule v. Merril, 29 Me. 260 ; Strong v. Tompkins, 8 Johns. 97; Benson v. Drake, 55 Me. 555; Story on Promissory Notes, § 193 ; Adams v. Rowan, 8 S. & M. 624; Holman v. Ringo, 36 Miss. 690; Green v. Seymour, 3 Sand. Ch. 291, 292; Johnson v. Bush, 3 Barb. Ch. 240; Dewitt v. Brisbane, 16 N. Y. 508; Sprobb v. U. S., 20 Wall. 459.
    Assuming that this court adopts that theory of ultra vires, which rests the doctrine on the mere want of capacity of a corporation to do an act unauthorized by its charter, saying that all attempts to do such act are a nullity, the case of Strauss v. Eagle Ins. Co., 5 Ohio St. 60, is in point; and see 7 Eng. & Ir. Appeals, 672; 23 Minn. 198; 8 Reporter, 499 ; 6 Central L. Jour. 56 ; 12 Ohio St. 601.

      R. A. Harrison, for Mr. Black, in a case decided with and by this one, in addition to the authorities cited by counsel for plaintiff in error on the subject of ultra vires,

    cited: Hood v. The N. Y. & N. H. R. R. Co., 22 Conn. 502; Smith v. The St. Louis Mutual Life Ins. Co., 2 Tenn. Ch. 742; Ashbury Railway and Carriage Co. v. Riche, 7 Eng. and Irish Appeal Cases (L. R.) 653 ; E. A. Railway Co. v. E. C. Railway Co., 73 Eng. Com. Law, 775, 813; Toomey v. L. B. & S. C. Railway Co., 91 Eng. Com. Law, 146, 149; The Madison Plank Road Co. v. Watertown Plank Road Co., 7 Wis. 59 ; The Board, etc., Tippecanoe Co. v. The Lafayette, etc., R. R. Co., 50 Ind. 85, 112; Learns v. Leaf, Henning & Miller, 681, 708, 709 ; Workman v. Wright, 33 Ohio St. 405. And, among other things, said :
    The Union had not only no power to purchase the capital stock of the Home, but it was prohibited, by necessary implication, from doing so.

      1. The statute from which it derives its powers provides and specifies the modes in which its whole capital, and its funds or accumulations, shall be invested. (S. & C. 219, 220, §§ 7, 8, 9, and 11.) The purchase of the capital stock of another corporation is not one of the authorized modes. The specification in the statute of the modes of investing the capital, as well as the corporate funds, precludes all other modes of investment. Smith v. Alabama Ins. Co., 4 Ala. 558; Scott v. DePeyster, 1 Edw. Ch. 513.
    (These authorities sustain our position — that neither of these corporations possess the power to either invest or dispose of their property and funds in the modes provided for in the contract.)
    2. In the United States, corporations can not purchase or hold, or deal in the stocks of other corporations, unless expressly authorized to do so by law.
    So held, upon the authorities cited, in the very recent case of Franklin Company v. Lewiston Institution for Savings, 68 Me. 43. Many American cases, to the same effect, are also cited in Green’s Brice’s Ultra Vires, 95, note.
    The words “illegally” and “ultra vires” represent totally different ideas. It is true that a contract may have both these defects, but it may also have one without the other. Green’s Brice’s Ultra Vires, 38.
    The defendant in error can not claim the privileges of a bona fide holder of commercial paper. Franklin Company v. Lewiston Institution for Savings, 68 Me. 43, and eases there cited.
    As to 'whether the rule is changed where the contract is a beneficent one, see Bissell v. Railroad Co., 22 N. Y. 258, 285.

      G. H. Collins, and Moore, Newman § Hutchins, and G. D. Robertson, also for plaintiffs in error,
    in cases decided with and by this one, filed briefs discussing the same question as those here reported.

      Mattheios, Ramsey &¡ Matthews, for defendant in error.

      1. The contract between the companies is executed, and is not involved in this action.
    The note appears to be properly indorsed, and has been •duly delivered. It will be observed that the contract provides for a transfer “ without recourse.” Thus the contract between the companies is fully executed, and this •contract of indorsement is fully executed. The indorsement of a promissory note is a distinct and independent •contract, and is not connected with the contract between maker and payee. The indorser maybe sued without joining the maker, and may be held in many instances in which the maker could not be held. So the maker may be ■sued without reference to the indorser. When, therefore, the Home Mutual Company indorsed and delivered this note to the Union Central, the contract between them was •executed, because that was all that the Home Mutual .agreed to do. It agreed to transfer the title. The contract of indorsement was also, at the same time, fully exe•cuted, and the Union Central Company was invested with the right to sue the maker upon Ms contract.

    The contract sued upon is the contract of Mr. Ehrman to pa.y a sum of money to a lawful person upon a valid -consideration. TMs consideration is not impeached by the answer in any way. This is the only contract in question in the cause. It is the contract sued upon. The. contracts between the two companies are not sued upon, neither that •of October, 1871, or the subsequent contract of indorsement of the note.
    The plaintiff in error, therefore, must make good his proposition that the maker of a valid promissory note may •escape payment at the suit of an indorsee on the ground that the consideration of the contract between indorser and indorsee was illegal. No authority can be found to support such a proposition. The maker has no interest what, •ever in the question.
    As opposed to the above proposition, see Knights v. Putnam, 3 Pick. 184; Armstrong v. Gibson, 31 Wis. 61; Shum v. Lowry, 48 Ind. 206; Brown v. Donnell, 49 Me. 421;
      Burnop v. Cook, 32 Ill. 168; 2 Hilliard Con. 415; Streit v. Waugh, 48 Vt. 298; 25 La. Ann. 477; 7 Wend. 562.
    2. There is nothing illegal in the contract, unless it be the provision as to transfer of real estate. This does not affect the note in question in any way. Its transfer could Lave been enforced. Morris v. Way, 16 Ohio, 469.
    Suppose that the real estate has been conveyed by deed to the Union Central, is there any ground for the claim that the title did not pass to the latter 1 That title did pass, subject only to the right of the state to question it, is well settled. Walsh v. Barton, 24 Ohio St. 24; Farmers’ Bank v. R. R. Co., 17 Wis. 372; Whitman Co. v. Baker, 3 Nev. 386; Cal. Co. v. Alta Co., 22 Cal. 398; Smith v. R. R. Co., 6 Sm. & M. 179 ; Smith v. Sheely, 12 Wall. 358 ; Shewalter v. Pirner, 55 Mo. 218; Amerman v. Wiles, 24 N. J. Eq. 13; Rutland Co. v. Proctor, 29 Vt. 93; Bradley v. Ballard, 55 Ill. 418 ; Parish v. Wheeler, 22 N. Y. 494; Bissell v. R. R., 22 N. Y. 259.
    If, therefore, the Union Central Company got a good title as against all but the state, even to the real estate, a fortiori, it had a good title to the notes, which were such as it-had the right to take and hold.
    It is to be borne in mind throughout that the only defect in the plaintiff’s title to the note is contained in the allegation that it acquired, at the same time, and upon the same consideration, other property, which it had no right to acquire.
    So far as this aspect of the case presents a question of corporate power, as distinguished from a question of illegality, we say:
    1. The defendant had no power to raise the question. He does not represent the state. He is not a creditor of either company. He is not a stockholder of plaintiff. It is the plaintiff alone who is alleged to have transcended the charter power. The defense under consideration does not show that he was a stockholder of the Home Mutual Company. At all events, no right of his as a stockholder is involved in this action. He is not a party to the alleged
      ultra vires contract. If it affected his rights as a stockholder,he was bound to object to it, and institute proceedings in equity to enjoin it. Otherwise, he would be estopped in equity, and the transaction would stand, leaving him only a remedy in damages. Goodin v. Railroad Co., 18 Ohio St. 169.
    He appears to have acquiesced. If the allegation in another count, to the effect that he is a Home Mutual stockholder, shall be considered in this connection, he must be held to have acquiesced, as he does not allege that the transaction was without his knowledge or consent, or that ne even now seeks to have it avoided. The absence of such allegations creates an estoppel. Bat we are only concerned to show that his rights as a stockholder are not involved in this action, and that he stands in no relation to the contract of October 13, 1871, which will enable him to raise the question of corporate power. Only parties, or persons whose rights are adversely affected, can raise the question. Vermont Railroad v. Vermont Railroad, 34 Vt. 2; Eno v. Crooks, 10 N. Y. 60; Farmers’ Bank v. Railroad Co., 17 Wis. 372; Donnell v. Brown, 49 Me. 421.
    The courts of this country have generally adopted the doctrine of the case, of Bissell v. Michigan Railroad Co., 22 N. Y. 259, as embodied in the opinion of Judge Comstock, which is, in substance, that where either party has received the benefit of a contract, the plea of ultra vires can furnish no defense to the other. This court cites that case with approval, in Allen v. Bank, 23 Ohio St. 97; the Supreme Court of Illinois follows it in Bradley v. Ballard, 55 Ill.; the Supreme Court of Indiana follows it in Board of Agriculture v. Citizens’ Railway Co., 47 Ind. 407. And see the case of Weare v. Petroleum Co., 27 Ohio St. 343.
    In the case of Whitney Arms Co. v. Barlow, 63 N. Y. 62, the court fully examined the question, and decided that “ the plea of ultra vires, as a general rule, will not prevail, whether interposed for or against a corporation, when it will not advance-justice, but, on the .contrary, will accomplish a legal wrong.”

      Towner & Farnham were with Messrs. Matthews, Ramsey & Matthews in two of the cases determined by this case.
   White, J.

The ground of error relied on in this case is, that the agreement of October 13, 1871, entered into between the Home Mutual Life Insurance Company and the plaintiff, is unauthorized by the charters of the respective companies, and is therefore void; and that, as the plaintiff’s title to the note in controversy is derived through this agreement, the transfer of the note by the Home Mutual to the plaintiff is inoperative.

In applying the doctrine of ultra vires, in a particular case, regard must not only be had to the unauthorized agreement or transaction, but also to the relation which the litigating parties sustain to it.

Where there is an absolute or total want of power in a corporation to deal in respect to a given subject, it may be that acts done in the name of the corporation, in regard to such subject, would, as corporate acts, be void for all purposes and as against all persons.

But there is an obvious distinction between such a case and one where the corporation deals with a subject within the scope of its granted powers, but for a purpose, or in a mode not authorized by its charter. Thus, where property which the corporation, under certain circumstances, is authorized by its charter to acquire, is purchased, in a mode or for a purpose not authorized, it seems clear to us that the title of the corporation to the property can not be defeated by a party who is a stranger to the agreement by which the property was acquired, and who is not injured by the transfer.

A stranger to the agreement or transaction has no right to question its validity, whether it was entered into between corporations or natural persons. To obtain a standing in a court of justice to make such inquiry, a party must show that he is interested in the question, and that the execution of the agreement operates to his injury or prejudice.

The plaintiff' and the Home Mutual Company, at the date of the agreement of October 13,1871, were carrying on the business of life insurance under the act of April 16,1867, entitled “ an act for the incorporation and regulation of life insurance companies.” S. & S. 218.

The substance of the agreement between the companies was that the plaintiff purchased all the assets of the Home Mutual, an.d in consideration thereof agreed to assume its risks and to pay its debts. Among the assets was the promissory note of the plaintiff' in error, in controversy in this case, which was indorsed and delivered by the Home Mutual to the defendant in error, in pursuance of the agreement.

The agreement is set forth in full as part of the answer; but there is no averment that it has not been performed by the respective parties. In the absence of such averment, it will be presumed, in a case like the present, that the agreement has been performed, or at least that it has not been abandoned.

The validity of the note sued on is admitted. The only defense relied on is that the plaintiff, the purchasing company, has not.such a title to the note as will enable it to maintain the action.

According to the principles already stated, the fact that the agreement between the companies is unauthorized by their charters does not constitute a defense by the maker of the note. As a debtor, he is interested in paying the note only to a parky who is authorized to receive payment and to discharge him from liability. But while the validity of the transfer is insisted upon or adhered to by the parties to it, he has no interest in questioning the title of the purchaser, as payment to the latter will discharge his liability on the note.

The answer likewise states that the defendant, at the time of the making of the note, was, and that he still continues to be, a stockholder in the selling company. There appears, however, to be-no connection between the taking of the stock and the giving of the note ; and where such is the case, the fact'of Ms being such stockholder can not affect a recovery on the note, in the absence of any showing that the transfer of the note was to his injury or prejudice as a stockholder.

Having stated the principles upon which we rest our decision in this case, we deem it unnecessary to analyze and review the numerous authorities cited by counsel in this case, and in several others argued in connection with it. In regard, however, to the case of Straus v. Eagle Ins. Co., 5 Ohio St. 59, relied upon by the plaintiff in error, it is proper to say that, while we do not question the correctness of the decision in that case, there are expressions in the opinion apparently in conflict with the view we have taken. These expressions were subsequently qualified in the opinion in the case of White’s Bank of Buffalo v. Ins. Co., 12 Ohio St. 610 ; and of this qualification we approve.

In regard to the averment in the answer, that Cochnower was not the legal president of the company, for the reason that at the time of his election he was not a stockholder in the compauy, it is only necessary to say, without inquiry whether the objection, in a proper proceeding, would be valid or not, that being a de facto officer, his title can not be questioned in a collateral proceeding.

Judgment affirmed.

Okey, J.,

dissenting. In Massachusetts, “ it is the estabtablished law that the holder of a negotiable note may bring suit upon it, whether in law or in fact he be orbe not the real owner of it.” National Bank v. Porter, 125 Mass. 333, 339. In Minnesota, the suit must be brought by the real party in interest. There are exceptions to the rule, but a case like this would not be within them. Farmers’ and M. Bank v. Baldwin, 23 Minn. 198; First National Bank v. Pierson (Minn.), 16 Albany L. Jour. 319; s. c., Thompson’s Nat. Bank Cas. 637. This difference in the practice in those states was supposed, as will be seen in the eases cited, to be a sufficient explanation of a difference in holding upon the question whether a national bank purchasing a promissory note may maintain an action thereon, assuming the purchase to be one which it was not authorized by law to make. The statute of this state is like that of Minnesota. It is a sufficient defense in Ohio that the plaintiff is not the real party in interest. The answer in this case embraces that defense, and therefore it was error to sustain a demurrer to it.

But I do not place this dissent alone or principally upon such narrow ground. It appears from the answer that the contract between the insurance companies was entered into, not merely without authority of law, but in direct violation of statutes prohibiting it. The Home Company undertook to transfer all its property and business to the Central Company by a single and entire contract. The contract embraced real estate. The statute specifies the circumstances under, and purposes for which, such corporations may hold real estate, and it appears from the answer that the real estate attempted to be purchased was not within that provision. The same statute provides that “ it shall not be lawful for any company to purchase, hold, or convey real estate in any other ease or for any other purpose.” 69 Ohio L. 153, § 12.

In a larger sense, however, the statutes prohibited the contract. They provide that such company may “ make insurance on the lives of individuals,” show what business may be done in connection therewith, how policy holders shall be secured, how the funds of the company shall be invested, how the company may reinsure, and how it may be wound up. The whole act negatives the claim that the self-destruction attempted in this case was authorized. Indeed, the opinion has not been expressed by any member of this court that the contract was lawful, in the sense that either company could have enforced its execution as against the other. At the same time, it is asserted, in the opinion of the majority, that it does not appear that the contract has been rescinded. That, however, is not material, for it does not appear that the contract has been executed. There can be no presumption that an illegal contract has been performed. If the company wished to rely upon the fact that the contract had been executed, a reply instead of a demurrer to the answer would have been proper.

There is a well-known distinction between a mere abuse of the power delegated to directors and the absence of power in the corporation itself. The directors of a corporation may be authorized to receive the indorsement of a promissory note in a particular way, or on a particular consideration, and this authority may be abused. Or a corporation, authorized to receive the indorsement of a promissory note, may enter into a single and entire agreement, expressly prohibited by its charter, by which agreement a promissory note, among other things, is received. The distinction between these eases is important, but it is disregarded in the decision of this case. According to many authorities, the corporation receiving the note, in the instance first mentioned, may recover upon it. But I humbly submit that no case other than this can be found, in England or America, where a recovery has been permitted in the latter case. The title acquired by such an agreement is no better than if the company had been, in terms, prohibited from receiving the note. The transfer was “ void for all purposes and as against all persons.”

The principles I have stated are so distinctly asserted and ably vindicated in Straus v. Eagle Ins. Co., 5 Ohio St. 59, that the citation of other authorities seems almost a work of supererogation. As being in entire harmony with that decision, I will refer, however, to the following cases, most of which have been decided since it was announced : Farmers’ and M. Bank v. Baldwin, supra; First National Bank v. Pierson, supra; Smith v. St. Louis M. L. Ins. Co., 2 Tenn. Ch. 742; Hood v. N. Y. & N. H. R. Co., 22 Conn. 502; Hays v. Ottawa, etc., R. Co., 61 Ill. 422; Madison Plank R. Co. v. Watertown Plank Road Co., 7 Wis. 59; Board, etc. v. Lafayette, etc., R. Co., 50 Ind. 85 ; Pearce v. Madison, etc., R. Co., 21 How. 442; E. A. Railways v. E. C. Railway, 73 Eng. Com. L. 775; Toomey v. L. B. &. S. C. Railway, 91 Eng. Com. L. 146; Ashbury Railway, etc. v. Riche, L. R., 7 Eng. & Ir. Appeal, 653. And see Richardson v. Sibley, 11 Allen, 72; Widoe v. Webb, 20 Ohio St. 431.

There is a remark of the judge delivering the opinion in White's Bank v. Ins. Co., 12 Ohio St. 601, 610, wholly unnecessary to the decision of that case, which is claimed to qualify something said by Ranney, J., in Straus v. Ins. Co.. Precisely what the supposed qualification is, or why it was suggested, is not very apparent. But I am satisfied that Straus v. Ins. Co., being founded on correct principles, will withstand all the assaults made upon it.

The rule that the charter of a corporation must be strictly construed, has been enforced in this state for many years. The statute now provides that “ corporations may be formed . . . for any purpose for which individuals may lawfully associate themselves, except for dealing in real estate, or carrying on professional business ” (Rev. Stats., § 3235), or banking (Const., art. 13, § 7). It is probable that the number of corporations organized in any year hereafter will greatly exceed that of any preceding year. In my opinion this is not a time when we should relax the strict rule upon this subject, which has operated so well in this state in the past. As this decision is in direct conflict with that rule, I dissent from it.

This case was considered in connection with others involving supposed rights under the same or a similar contract. Without entering a formal dissent in any of them, this dissent applies to every case where the same infirmity was set up and the judgment or modification is in favor of the company. In some of them additional reasons for the view I have taken will be found to exist.