author: Summers, J.

text:
    The Royal Insurance Company v. Ries.

      Condition in insurance policy — That disagreement as to loss be-determined by appraisers — Insured may sue on disagreement as to appraisement — Cannot recover 'larger amount than appraisenfent, when — Difference between appraisement and arbitration— Effect of appraisers refusing to hear evidence.

    1. Where in a policy of insurance it is made a condition precedent that in case of .disagreement as to the amount of loss it shall be determined by appraisement, the insured may bring suit upon the policy, averring' in his petition the performance of all conditions on his part, and when the insurer pleads in 'its. answer the disagreement and the determination of the amount by appraisement, and the provisions of the policy as to concurrent insurance, the amount the plaintiff may recover is limited to a proportionate amount of the loss so determined, and he cannot recover a larger amount unless the appraisement is void or is set aside. • If it is void, he may plead its invalidity in his reply, but if it is only voidable he should in his petition unite a cause of action to set it aside.
    2. The provision in a standard fire insurance policy that “In the event of disagreement as to the amount of loss the same shall, as above provided, be ascertained by two competent and disinterested appraisers, the insured and this company each selecting one, and the two so chosen shall first select a competent and disinterested rtmpire; the appraisers together shall then estimate and appraise the loss, stating, separately sound value- and damage, and, failing to agree, shall submit their differences to the umpire; and the award in writing of any two shall determine the amount of such loss; the parties thereto shall pay the appraiser respectively selected by them and shall beat equally all expenses of the appraiser and umpire,” is a pro.vision for an appraisement and not for an arbitration, and such submission is not to be judged by the strict rules applicable to arbitration and award, and where the appraisers and umpire have before them a list of the property destroyed, and the insured’s statement in detail in respect to his loss, it is not ground for setting aside the appraisement that they refuse to hear evidence.
    (No. 11173
    Decided April 27, 1909.)
    Error to the Circuit Court of Wood county.
    The plaintiff in error insured one Henry Ries for the term of one year, against loss or damage by fire, in the sum of two thousand dollars on agricultural implements and other personal property, while contained in a frame storage building in Bowling Green, ■ Ohio. The building and property were destroyed by fire, and at' the time of the fire there was concurrent insurance in the sum of four thousand dollars. In January, 1905, he commenced this action upon the policy issued by the plaintiff ill error to recover the full amount of the insurance therein specified, averring that he had complied with and performed all of the conditions in the policy of insurance to be by him performed; that immediately after the fire he hád given notice in writing to the plaintiff in error of the loss, and that he had furnished plaintiff in error with due proofs of loss.' The answer, in addition to other matters of defense, averred that the policy provided that in the event of disagreement as to the amount of loss and damage to the property, the same should be determined by three competent and disinterested appraisers, the insured and the insurer each to select one, and that the two’ so chosen should first select a competent and disinterested umpire; that the appraisers should then estimate and appraise the loss, stating separately sound value and damage, and failing to agree should submit their differences to the umpire; and that the award in writing of any two should determine the amount of the loss. It is then averred that the parties disagreed and that they entered into a written agreement for the submission to appraisers of the amount of the loss and damage; that each selected an appraiser and that the two, so selected, selected an umpire, and that the appraisers and the umpire, acting under the agreement, made an award in writing, by which they determined the sound value to be $1312 and the loss and damage to be one thousand dollars. It is also averred that at the time of the loss, Henry Ries had other concurrent insurance in the sum of four thousand dollars; that it was provided by the policy that the plaintiff in error should not be liable for a greater proportion of any loss on the property insured than the amount thereby insured should bear to the whole insurance, and that the plaintiff in error had tendered to Henry Ries the sum of $333.34 in payment and full settlement of all liability under the policy of insurance and the award
    Plaintiff by reply admitted these averments of the answer and averred that the award was unfair to plaintiff, was made improperly, was not in accordance with the terms and provisions of the policy, nor of the submission, and was, therefore, illegal, void and of no effect; that the appraiser selected by the defendant was neither competent nor disinterested, but was partial, biased and prejudiced in favor of the defendant, and that he exercised undue influence and control over the umpire and the other appraiser; that the appraisers did not permit the plaintiff to offer evidence or to be heard, although he had requested of them that he be permitted to do so before said appraisers began the appraisement; that neither of the appraisers had seen the property destroyed, that the property was wholly destroyed and that they never had before them any proper evidence of its value; that neither of said appraisers, nor said umpire, ever viewed the property, nor were they disinterested or competent, and that immediately upon the return of said award, plaintiff notified defendant that the award was void. The plaintiff further avers that if he had been permitted to offer proof of the amount of his loss to the parties making said award that he would have proven his loss and damage in the sum of ten thousand dollars.
    At the close of the evidence the trial judge said:
    “After the close of all the evidence and before argument, the court holds that the defense to the appraisement and award set up in the answer is invalid on account of the incompetency of one appraiser, C. H. Draper, and the umpire, and misconduct of the company in submitting to the appraisers and umpire the sworn statement of the plaintiff made upon the application of the company after the alleged loss. Also for the reason that the umpire never viewed the remains of the loss, but inquired of newspaper men as to the amount of the loss, whom he said he supposed knew everything, and had no special knowledge as to the fire or the matters in controversy. Also the award is not based upon proper evidence, and that the umpire and appraisers were dominated by the company’s appraiser, Fred Storm. This award being invalid for the reasons stated, I decline to submit the question to the jury.”

      The defendant requested the court to submit this issue to the jury and objected and excepted to the ruling of the court. The court then instructed the jury that the proofs of loss were sufficient, and the sole question submitted to the jury was the amount of plaintiff’s loss. The jury found the cash value of the property before the fire to be $5015.98, and its value after the fire to be $312, and assessed the amount due plaintiff from the defendant at $1567.66 with $185.77 interest on the same.'
    The court found the amount of the verdict • ever and above $1336 excessive, and the plaintiff having remitted all in excess of that amount, the court overruled the motion for a new trial and entered judgment for $1336 with interest thereon from September 26, 1906. On error the judgment was affirmed in the circuit court, the defendant in error having remitted all in excess of $1010 with interest

      Mr. J. W. Mooney and Mr. Guy C. Nearing, for plaintiff in error.
    Having sought to avoid the award on the grounds of fraud it became á question for the jury. If the award was voidable and riot void, then the award would have to be set aside by a court of chancery before a recovery could be had in excess of the award. These propositions have been settled by this court in the recent case of Perry v. O’Neil & Co., 78 Ohio St., 200.
    Under the provisions of the policy of insurance providing for an appraisal and under which the award was rendered in this case, the appraisers may examine witnesses under oath, or they may not examine witnesses at all. They may seek information from any source which commends itself to their judgment. They may inspect books. They may examine 'the premises and remains of' the property, and they may base their judgment on the physical appearance of the prop7 erty, or oral statement, or both.
    The appraisers may pursue any method which. their judgment approve, and the court, in the absence of fraud, can not set aside the award. The appraisers are the tribunal which the parties have chosen and under whose findings they are concluded. Th~ appraisers may over or under . estimate the loss and the court can not control their judgment, nor, in the absence of fraud, change 'or annul what they have done. Clement on Fire Insurance, 177; Paper Co. v. Assurance Co., 12 App. Div., 218, 43 N. Y. Supp., 431; Stenvmer v. Insurance Co., 33 Ore., 65, 53 Pac. Rep., 498, 27 Ins. Law Journal, 972; Insurance Co. v. Traub, 80 Md„ 214, 30 Atl. Rep., 904; Brush v. Fisher, 70 Mich., 469; Insurance Co. v. Drackett, 63 Ohio St., 41; Kerr on Fraud and Mistake, 446; Sweet v. Morrison, 116 N. -Y., 19; Tucker v. Allen, 47 Mo., 490; 2 Pomeroy Eq. Jur., 349; Thornton v. McCormick, 75 la., 285; Masury v. 'Whiton, 111 N. Y-, 679; Joyce on Insurance, Section 3247; Dun v: Insurance Co., 10 O. D., 667, 52 Ohio St., 639; Ostrander on Fire Insurance, Section 282; De Groot v. Insurance Co., 4 Rob. (N. Y.), 504; Hall v. Insurance Co., 57 Cor-n 105, 17 Atl. Rep., 356, 18 Ins. Law Tournal. 518; Fleming v.' Insurance Co., 75 Hun, 530; Goddard v. King, 40 Minn., 164.
    If their award must 'be made comformable to what would have been the iudgment of this court in the case, it would render arbitration useless and vexatious and a source of great litigation. They (the courts) have only looked to see if the proceedings were honestly and fairly conducted, and, if that appears to be the case, they uniformly and universally refused to interfere with the judgment of the arbitrators. 4 Joyce on Insurance, Section 3247; Brink v. Insurance Co., 5 Rob. (N. Y.), 104; Vincent v. Insurance Co., 120 la., 272, 94 N. W. Rep., 458; Insurance Co. v. Goehring, 99 Pa. St., 13; Goddard v. King, 40 Minn., 164; Bates v. Assurance Co., 100 Ga., 249, 28 S. E. Rep.,. 155; Insurance Co. v. Landeau, 62 N. J. Eq., 73; Insurance Co. v. Brehm, 88 Ind., 578; Insurance Co. v. Mercantile Co., 56 Fed. Rep., 378; Robertson v. Insurance Co., 73 Fed. Rep., 928; Barnard v. Insurance Co., 101 Fed. Rep., 36; Thornton v. McCormick, 75 la., 285; 4 Cooley’s Briefs on .Insurance, 3631, 3650, 3651.

      Messrs. lames & Kelly, for defendant in error.
    If the award was invalid because of fraud, incompetency or otherwise it was not the duty of the plaintiff to set forth in his petition two causes of action, one an equitable cause of action setting forth this fraud, and a second cause of action to recover the amount due on the policy. Insurance Co. v. Romeis, 15 C. C., 679; Davis v. Assurance Co., 16 Wash., 232; Kahnweiler v. Insurance Co., 67 Fed. Rep., 483; Soars v. Insurance Co., 5 N. E. Rep., 149, 140 Mass., 343.
    If the arbitration covers only the amount of the loss, and not the liability of the company under the policy, such objection is not available. Insurance Co. v. Badger, 53 Wis., 283, 10 N. W. Rep., 504; Insurance Co. v. Hull, 51 Ohio St., 270.
    In an action upon a policy of insurance to which a plea of release or settlement has been interposed by the defendant, the plaintiff may, under the code system set up in his reply that the release or settlement was procured by fraud, and is not required first to obtain a decree in equity cancelling the release before instituting an action upon the policy. Sanford v. Insurance Co., 11 Wash., 652, 40 Pac. Rep., 609; O’Brien v. Railway Co., 57 N. W. Rep., 425; Pipe & Steel Co. v. Copple, 22 S. W. Rep., 323; Butler v. Railroad Co., 88 Ga., 594; Sheanon v. Insurance Co., 83 Wis., 507, 53 N. W. Rep., 878; Bean v. Railroad Co., 107 N. Car., 731; Railway Co. v. Higgins, 44 Ark., 293; Lusted v. Railway Co., 71 Wis., 391; Railway Co. v. Lewis, 109 111., 120; Railroad Co. v. Doyle, 18 Kans., 58; Packet Co. v. Defries, 94 111., 598, 34 Am. Rep., 245; Bussian v. Railway Co., 56 Wis., 325, 14 N. W. Rep., 452; O’Neil v. Iron Co., 63 Mich., 690, 30 N. W. Rep., 688; Clough v. Holden, 115 Mo., 336, 37 Am. St. Rep., 393; Girard v. Wheel Co., 27 S. W. Rep., 648; Davis v. Assiirance Co., 16 Wash., 232.
    Two arbitrators, after hearing the evidence and arguments, being unable to agree, chose an umpire to act as third arbitrator, and the three met without notifying the parties of the appointment of the third arbitrator, or of the time and place of meeting, giving no opportunity to the parties to be heard, held, that their action, though believed by themselves to be lawful and proper, was misconduct in the sense of the law and fatal to the- validity of the award. Thomas v. Railroad Co., 24 N. J. Eq., 567; 6 C. E. Green, 205; 8 C. E. Green, 431.
    In the determination of the dispute and differences between parties by arbitration, while it is a sort of quasi judicial proceeding, the rules governing proceedings before a judicial tribune must be recognized so far as an opportunity and the • right to be heard by the parties beiore such arbitrators are concerned.
    The submission of the differences and disputes to arbitration takes the place of a hearing before a court, but the parties are entitled to submit their proofs and to be heard upon such differences and disputes. And the proceedings before arbitrators without notice to the parties and without production of evidence would be a libel upon justice and the determination would be without any force or effect, so far as to bind the parties interested in any such award. 6 Waite’s Actions and Defenses, 522; Wood & Co. v. Helme, 14 R. L, 325.
    Whether it be a statutory or a common law arbitration, the exclusion of proper testimony is fatal to the award. Van Courtland v. Under-hill, 17 John. (N. Y.), 405; Ostrander on Fire Insurance, 462; Vessell Owners Co. v. Taylor, 126 111., 250.
    When the prevailing party in an arbitration proceeding after announcing his case as closed, and after the arbitrators have stated that no further testimony will be heard, produces evidence which is received without notice to, or any opportunity afforded to the losing party to hear ■ or reply to such evidence, this is sufficient ground for setting aside the award without any charge or evidence by the unsuccessful party that he is injured thereby. Jackson v. Roane, 90 Ga., 669, 35 Am. St. Rep., 238; Day v. Hammond, 57 N. Y., 479; Luts v. ■ Linthicum, 8 Pet., 178.
    The duties of an umpire are the same as the duties of an arbitrator, and when the arbitrators and umpire meet to determine upon the reward, the parties are entitled to a notice and' to a rehearing of the entire matter, the same as in proceedings before arbitrators alone. Day v. Hammond, 57 N. Y., 479; Elmendorf v. Elarris, 23 Wend., 628; Russell on Power and Duty of Arbitrators, 228; Coons v. Coons, 95 Va., 434.
    The refusal of an arbitrator to hear testimony which is pertinent and material, is sufficient misconduct to authorize the setting aside of his award, although he may think he has sufficient other evidence. Halstead v. Seaman, 82 N. Y., 27.
    It was necessary for the arbitrators and umpire to fix a time of hearing and give notice to both parties and that the parties should give evidence before them. It was also necessary that the arbitrators and umpire should make a personal examination of the premises and get all the light that they could in reference to the loss and damage sustained by the insured; and if they make up their award without hearing evidence and using other reasonable means to ascertain the extent and amount of the loss, they are guilty of misconduct which renders the award invalid and void. Insurance Co. v. Mercantile Co., 44 Fed. Rep., 131; Insurance Co. v. Romies, 15 C. C, 697; Adams v. Insurance Co., 85 la., 6:

   Summers, J.

In Phoenix Insurance Company v. Carnahan, 63 Ohio St., 258, it is held that, “A condition in a policy of insurance against fire, that in case of loss and a disagreement or difference between the parties as to the amount of the loss, that amount shall be ascertained by arbitration or appraisal, is a proper and valid condition; and where it is also provided that the condition as to arbitration or appraisal must be complied with before a suit can be brought against the insurer, the condition is thereby made a condition precedent, and to entitle the insured to maintain an action to recover under the policy, he must show that he has either performed the condition or has a legal excuse for non-performance thereof.” To the same effect is Graham v. The German American Insurance Company, 75 Ohio St., 374.

The provision in the policy in the present case is identical. It does not appear by the petition that the parties disagreed as to the amount of the loss, but the plaintiff, as he may do under the code, Section 5091, Revised Statutes, averred , that he had performed all the conditions on his part, and when the defendant pleaded the disagreement as to the amount of the loss, the submission to and the determination of that question by the appraisers, and the provision of the policy as to concurrent insurance, in the absence of a reply, the amount that plaintiff might recover was limited to a proportionate amount of the loss so determined by the' appraisers, and he could not recover a larger amount until he got rid of the appraisement. This he might do, if it was void, by a reply pleading its invalidity; but if the plaintiff could not -aver facts that made the appraisement void, but only facts that made it voidable, he should in his petition have united a cause of action to set aside the appraisement. Perry v. The M. O’Neil & Co., 78 Ohio St., 200.

The plaintiff in his reply avers that the appraisal- is illegal, void and of no effect, but as this is not based upon a statement of facts it is merely a legal conclusion, and the many facts thereafter averred would, if proven, only make the appraisement voidable.

The reply tendered a new issue and was a departure. No objection, however, was made and, after the evidence was in, the trial judge properly held that this issue was not for the jury but for the court.

The remaining contention is, that the policy of insurance does not provide for an arbitration, but only for an appraisal of the property to determine the amount of the -loss, and that it was not the duty of the appraisers to hear evidence, but that they might each for himself and in his own way, ascertain the value of the property destroyed, and that the court erred in setting aside the award.

Since the decision in the leading case Scott v. Avery, 5 H. L. Cases, 811, followed in Hamilton v. The Liverpool and London and Globe Insurance Company, 136 U. S., 242, and Hamilton v. Home Insurance Company, 137 U. S., 370, it has been settled that a provision in a policy of insurance that the amount of damage or loss- shall be submitted to arbitration or appraisement and that suit shall not be brought until after an award has been made is valid.

The distinction between an agreement for appraisement and an agreement to submit to arbi- i t'ration may not always be plain. But when the question of the liability of the company under the policy, and every other question is reserved, and the only submission provided for is an appraisal of the property at and after the time of the fire to determine the single question of the amount of the loss, it would seem to be an agreement for an appraisement and not an arbitration. In Fleming v. Phoenix Assurance Company of London, 75 Hun, 530, where the policy contained an identical provision, Dykman, J., says: “They are appraisers and not arbitrators. Their function is to estimate and appraise the loss by personal examination and observation. They have no power or authority to take testimony, and their doing so is not contemplated.” We' think this must have been what the parties contemplated, and if ■ it was intended that the single question of the amount of the loss should be determined by an arbitration, and not by appraisal by appraisers, that the agreement should have so provided.

In Wadsworth v. Smith, L. R., 6 Q. B., 332, where the question was, whether a stipulation, that the certificate of an architect as to a particular matter should be final was an agreement for a submission to arbitration, Blackburn, J., says: “Where by an agreement the right of one of the parties to have or do a particular thing' is made to depend on the determination of a third person, that is not a submission to arbitration, nor is the determination an award; but where there is an agreement that any dispute about a particular thing shall be inquired of and determined by a person named, that may amount to a submission to arbitration, and the determination, though in the form of a certificate, be an award.” In Kelly v. Crawford, 5 Wall., 785, where some^ thing was owing from an agent to his principal, it was agreed that an accountant, named, should ascertain from the books of- the agent the exact amount, and that the amount so ascertained should be final, it is said by. Mr. Justice Field: “The principal objections urged for a reversal of the judgment rest upon the idea that the agreement of September 13, 1861, was a submission to arbitration and the report or statement of Quigg was the award of an arbitrator; and that both are to be judged by the strict rhles applicable to arbitrators and awards. This is, however, a mistaken view of the agreement and report, As observed by counsel, there was no dispute or controversy between the parties to be submitted to arbitration; nor was anything to be submitted to the judgment or discretion of Quigg. The books of .account of the defendants were to determine the amount due; about these there was no controversy. The only duty of Quigg was to examine them as an accountant and to state what they exhibited.” The mere fact of a difference between the parties as to the amount of the loss we do not think makes the submission an arbitration, if an agreement to submit that question to appraisers in the absence of a difference between the parties as to the amount of the loss would not have amounted to an agreement for a submission to arbitration.

In DeGroot v. Fulton Fire Insurance Company, 4 Rob. (N. Y.), 504, where there was an agreement that two persons named, with a third person to be appointed by them, should appraise and estimate at the true cash value, the damage by fire and water to the property insured and that the appraisement and estimate of any two of them in writing as to the amount of such damage should be binding on both parties, without reference to any other matters of difference between them, it is held that, “The value of articles insured may be determined by appraisers appointed under a policy of insurance merely to estimate the damage by a peril insured against in such mode as they think proper. They are not bound by the same rules of strict judicial investigation as arbitrators.”

This case and Fleming v. Phoenix Assurance Company of London, 75 Hun, 530, supra, are cited with approval in Strome v. London Assurance Corp., 20 App. Div. (N. Y.), 571, which is affirmed without report in 162 N. Y., 627.

The above cases are cited with approval in Kaiser v. Hamburg-Bremen Fire Insurance Company, 59 App. Div. (N. Y.), 525, and in the opinion by Laughlin, J., it is said: “Notwithstanding the observation of the court in Fleming v. Phoenix Assurance Co. (supra), to the effect that insurance appraisers are not authorized to take evidence, it would seem that as to items of property wholly destroyed or otherwise not visible or open to inspection, the appraisers must act upon information or evidence, for otherwise they could not make a just estimate of the loss. We think it is a fact that may be taken judicial notice of that it is usual and customary for the owner or his representative to make statements to the appraisers, and their failure in this instance to listen to such statements is some evidence in support of the contention that Vanderwerf was not an unprejudiced, unbiased and disinterested appraiser.” In Liverpool and London and Globe Insurance Company v. Goehring, 99 Pa. St., 13, where an appraisal was made under a somewhat similar agreement, it is said in-the opinion: “These arbitrators or appraisers were chosen by the parties under an agreement in writing duly and deliberately executed, and by the terms of that agreement they were to appraise and estimate the true cash value of the loss. They were chosen because they were practical builders, and were expected to make their own estimates, and from these estimates form their judgment.

“Therefore, that they went to a planing mill to ascertain the price of lumber, and to a tinsmith to learn the price of roofing tin, so far from being evidence of misconduct, was proof of care and consideration- — -of a disposition to inform themselves of the ruling prices of the materials that had composed the building. They examined the ruins, took what measurements were necessary, listened to what information Goehring had to give them, received from him a plan of the building, and, if he is to be believed, he put into their possession an estimate made for him by Greenawalt, an act that looks more like an attempt to improperly influence the arbitrators than'any other in the case. Then, after they got all the information they thought necessary, and they were the sole and exclusive judges of what was necessary, they retired to a room in the hotel, and there by themselves, both parties being excluded, they made their estimate and award,” and it was held that the appraisers were not guilty of the slightest misconduct.

In Zallee v. The Laclede Mutual Fire and Marine Insurance Company, 44 Mo., 530, it is held that “Where the stipulations of a fire insurance policy have actually been complied with, and appraisal of losses had in conformity thereto, the insurance company and the insured should be bound by the result, notwithstanding that the appraisers were not sworn. They acted as appraisers, and not as arbitrators. The reference to them was not a submission to arbitration, in a legal sense, for the purpose of settling and extinguishing a cause of action, but a just and reasonable mode of fixing values — the value of the injured goods before and after the fire, the difference representing the amount of loss or damage.”

The court erred, therefore, in setting aside the appraisement on the ground that the insured was not given a hearing.

The agreement does not provide that the appraisers and the umpire shall be experts, and there is no evidence warranting the finding that they were incompetent. They were to be competent and disinterested and the evidence fails to show that they were not. There is room for suspicion that the appraiser selected by the insurer was partisan and conceived it to be his duty to obtain a low estimate, but the proof does not show either misconduct or interest. The insured interviewed several persons with a view to the selection of one of them as umpire, and the appraiser learning this may have, merely from a sense of duty, urged the selection of the umpire from Toledo, and the other appraiser after proper inquiry joined in the selection. The appraisers together ■ inspected what was left of the property, old junk or salvage they termed it, and agreed as to its value. The umpire was only required to appraise what they could not agree upon, and as what they did not agree upon was not in existence, his failure to inspect the place of the fire did not warrant the court in setting aside the appraisement.

The insured had submitted to an' examination, as provided in the policy, and this examination was read by the appraiser appointed by the company, and by him submitted to the other appraiser and to the umpire, and it is contended that this was misconduct warranting the setting aside of the appraisement. This examination went at length and in detail into the character and value of the property destroyed, and to that extent at least must be presumed to have been in the interest of the insured, but it is said that it also related to the origin of the fire and tended to cast suspicion upon the insured, and it is said that it was brought to the attention of the umpire for that purpose by the appraiser. This, however, is denied by the appraiser, and under the circumstances the burden being upon the insured, we do not think the evidence warranted the setting aside of the appraisement.

The parties agreed upon this manner of determining the loss. The burden was on the plaintiff to prove grounds for setting it aside, and having failed in this it must stand, and there being corn-current insurance as stated, the plaintiff can recover only the amount tendered, and the judgments will be reversed.

Reversed.

Crew, C. J., Spear, Davis and Shauck, JJ., concur.


source: Caselaw Access Project

author: Crew, C. J.

license: Public Domain

text:
    The Cincinnati, Hamilton & Dayton Railway Company v. Frye.

      Action by employe against employer — Jury instructions that employer owes employe — Duty to provide him reasonably safe place to work, is erroneous — Employer not insurer of absolute safety of place of work — Province of piry as to burden of proof — Law of evidence.

    T. In an action by an employe against his employer to recover dam-, ages for personal injuries, an instruction that the employer owed to his employe the duty to provide him a reasonably safe place in which to work, is erroneous, in that it imposes upon the employer a higher degree of care than the law requires or exacts of him. The employer is not an insurer or guarantor, of the absolute safety of the place of work, but the limit of his obligation and duty in that behalf is to exercise reasonable and ordinary care, having due regard to the hazards of the service, to provide his employe with a safe place in which to perform his work. ■
    2. In civil cases the jury deals only with probabilities, and the burden of proof is ordinarily carried by a preponderance of the evidence; hence, an instruction that the jury must be satisfied by a preponderance of the evidence, of the truth of a fact in issue, is misleading and erroneous.
    (No. 10911
    Decided April 27, 1909.)

      Error to the Circuit Court of Allen county.
    The defendant in error, Harry Frye, brought suit in the court of common pleas of Allen county, ' Ohio, against the plaintiff in error, The Cincinnati, Hamilton & Dayton Railway Company, to • recover damages for personal injuries sustained by him while in the employ of said company, as a result of the derailing and overturning of a locomotive engine on which he was employed and of which he was then in charge in the capacity of a locomotive engineer, by his running it into, or through an open derail, the location and existence of w'hich derail was, as he claimed, at the time unknown to him. Several grounds of negligence on the part of the defendant railway company were alleged by plaintiff in his petition only one of which, however, is material or pertinent to the questions raised and presented by the record now before us, and that is the claim that defendant railway company was guilty of negligence in that it did not furnish the plaintiff, Harry Frye, a safe place in which to work. Plaintiff, by way of statement of his charge or claim in this behalf alleges in his petition that the derail which caused the accident “was located in a sharp curve of the track, and. the defendant company negligently permitted weeds to grow and accumulate between the rails of the track and along the rails of the track about and in the near vicinity of such derail, to such an extent as to obscure plaintiff’s view of such derail and to make it. impossible for him to see the derail as he approached it, as aforesaid, with his engine, and because of such accumulation of weeds plaintiff was unable to and did not discover or know of the existence of such derail, * * * and plaintiff had no warning or knowledge whatever of the location or the existence of such derail until after such accident had occurred.” For answer to the foregoing averments of plaintiff’s petition the railway company interposed a general denial; and by way of further and affirmative defense it pleaded “that whatever injury was occasioned to plaintiff in derailing, overturning and wrecking said locomotive and the acts leading up thereto, resulted entirely and wholly from the carelessness and negligence of the plaintiff and not from any carelessness, negligence or wrong on the part of this defendant or any of its servants.” To this answer the plaintiff replied denying all allegations therein contained of negligence on his part. On the issues thus made up the case was, without objection, and as though the defense of contributory negligence had been sufficiently pleaded, tried and submitted to a jury which returned a verdict in favor of the plaintiff for $10,966.67. Thereafter the plaintiff having entered a remittitur in the sum of $4,966.67 on the amount of said verdict, judgment was entered thereon by the court of common pleas in favor of the plaintiff and against the railway company for $6,000. This judgment was affirmed by the circuit court, and the railway company now prosecutes error, alleging as grounds of error that the court of common pleas erred in its charge to the jury.

      Mr. Edward Colston; Mr. F. W. Stevens; Mr. W. D. Corn; Mr. I. R. Longsworth and Messrs. Seiders & Cunningham, for plaintiff in error.
    Where inconsistent or contradictory charges are given, some correct and some incorrect, error is not cured, for it is impossible to say which instruction the jury followed. Armour & Co. v. Russell, 144 Fed. Rep., 614, 75 C. C. A., 416; Conway v.
      Railway Co., 50 la., 465; Hughley v. Wabasha, 69 Minn., 245; Barr v. State, 45 Neb., 459.
    The legal presumption is that an erroneous charge produces prejudicial error. 'Baldwin v. Bank, 1 Ohio St., 141; Meek v. Pennsylvania Co., 38 Ohio St., 632;. Jones v. Bangs, 40 Ohio St., 139; Lowe v. Lehman, 15 Ohio St., 179; Insurance Co. v. Sherlock, 25 Ohio St., 50.
    This court in a number of cases has declared that all that is required of a master is that he shall use ordinary and reasonable care and diligence to furnish a reasonably safe place for his servants to work in. Railroad Co. v. Barber, 5 Ohio St., 541; School v. Heck, 17 C. C., 38; Railway Co. v. Beard, Admr., 20 C. C., 681; Speller v. Brezving Co., 16 Dec., 520; 26 Cyc., 1102, 1498; Railroad Co. v. McDade, 135 U. S., 554; Railway Co. v. Barrett, 166 U. S., 617; Hough v. Railway Co., 100 U. S., 213; Railway Co. v. O’Brien, 161 U. S., 451.
    It is reversible error for courts to instruct juries that a master is obliged to furnish his servant with a reasonably safe place in which to work. Armour & Co. v. Russell, 75 C. C. A., 416, 144 Fed. Rep., 614; Railroad Co. v. Gloyd, 70 C. C. A., 528, 138 Fed. Rep., 388; Railroad Co. v. Holloway, 52 C. C. A., 260, 114 Fed. Rep., 458; Manufacturing Co. v. Johnson, 32 C. C. A., 309, 89 Fed. Rep., 677; Railroad Co. v. Myers, 63 Fed. Rep., 793.
    The Supreme Court of Illinois in the case of Manufacturing Co. v. Ballou, 71 111., 417, announced that the law imposes upon the employer only the obligation to use ordinary and reasonable care and diligence in providing suitable and safe machinery. On the aufhority of that case the ■ Illinois Appellate Court has consistently held it to be reversible error to instruct a jury that the master is obliged to furnish his servant a reasonably safe place in which to work. Railroad Co. v. Merckes, 36 111. App., 195; Railway Co. v, Hardwick, 48 111. App., 562; Pump & Skein Works v. Bender, 69 111. App., 189; Railroad Co. v. Garner, 78 111. App., 281; Railroad Co. v. Farrell, 79 111. App., 508.
    It was the duty of the company to use ordinary care in providing for the use of the servant premises in safe condition, but it was not, however, an insurer. There are a number of other states in which such instructions as we are complaining of here have been held to be erroneous and prejudicial. Railroad Co. v. Mounce's Admr., 24 Ky. L. Rep., 1378; Fearon v. Mullins, 35 Mont., 232; Hughley v. Wabasha, 69 Minn., 245; Anderson v. Railroad Co., 107 Mich., 591; Railroad Co. v. Oyster, 58 Neb., 1; Conway v. Railway Co., 50 la., 465; Cooperage Works v. Steadman, 78 Ark., 381; Lumber Co. v. Dickerson, 94 S. W. Rep., 153; Railway Co. v. Cox, 48 Neb., 807; Railway Co. v. Bell, 75 Tex., 50; Oil Co. v. White, 32 Tex.Civ. App., 608; Railway Co. v. Beall, 43 S. W. Rep., 605; Railway Co. v. Trump, 94 S. W. Rep., 903; 97 S. W. Rep., 464; Richards v. Hayes, 12 N. Y. Misc., 44; McDonald v. Railway Co., 95 Va., 98; Railway Co. v. Gormley, 91 Tex., 393; Railway Co. v. Lyde, 57 Tex., 505; Packing Co. ■v. Roy, 71 Neb., 600.
    The following cases state the general proposi- , tion that all the care required of a master in furnishing his- servant with a safe place in which to work, or with safe appliances, is .the. use of ordinary care in view of the circumstances of each particular case. Railway Co. v. Mills, 108 S. W. Rep., 480; Railway Co. v. Smith, 108 S. W. Rep., 988; Cooperage Co. v. Headrick, 159 Fed.- Rep., 680; Millen v. Bridge Co., 95 Pac. Rep., 196; Cavanaugh v. Stone Corporation, 69 Atl. Rep., 345; Swiercz v. Steel Co., 231 111., 456; Anderson v. Railway Co., 34 Mont., 181; Railway Co. v. Wells, 81-Tex., 685; Manufacturing Co. v. Kent, 105 S. W. Rep., 525.
    It is well settled that, in weighing evidence in civil cases, a jury is not required to find that the person who asserts a claim or sets up a defense has made out the truth of the facts on which the claim or defense is based in order that they may render a verdict for the one on whom the burden of proof rests. Juries deal with probabilities and not necessarily with the truth. In a contest submitted to a jury for determination as to the facts a jury may not be convinced that the truth lies with one party or the other, but it would be its duty, nevertheless, to weigh the evidence and render a verdict for the party who makes his contention appear more probable than that of the other party. Supreme Conclave v. Wood, 120 Ga., 328; Rowe v. Baber, 8 So. Rep., 865.
    It was prejudicial error on the part of the trial court to instruct the jury that the burden was on the defendant to satisfy them by a preponderance of the evidence that the plaintiff was guilty of contributory negligence. Railway Co. v. Linn, 77 Ohio St., 615; Lawrence v. Land Co., 144 Ala., 524; Ruff v. Jarrett, 94 111., 475; Sonnemann v. Mertz, 221 111., 362; Ball v. Marquis, 92 N. W. Rep., 691; Gooch v. Tobias, 29 111. App., 268; Brent v. Brent, 14,111. App., 256; Jordan v. State, 13 C. C., 471.

      Mr. W. H. Leete and Mr. D. C. Henderson, for defendant in error.
    It was unquestionably the duty of the railway company to exercise reasonable care to see that its tracks were maintained in safe condition, and we think that the trial court fairly charged on that proposition. To the lay mind at least the expression, “must use ordinary care to keep the track in safe condition” is equivalent in meaning to the expression, “must maintain the track in reasonably safe condition.” Indeed, this court has frequently stated the law in the form stated by- the trial court. Coal Co. v. Smith, 65 Ohio St., 70;. Davis v. Turner, 69 Ohio St., 101.
    As to the charge of the trial court on the question of the quantum of the proof the defendant was required to adduce to maintain its affirmative defense of contributory negligence, this court has held that an instruction such as is complained of in the case at bar is not prejudicial error even in a criminal case. Kelch v. State, 55 Ohio St, 151.
    A charge that the jury must be satisfied by the “preponderance of evidence” to a reasonable certainty that a fact exists before they can find such fact, is not erroneous. Hart v. Insurance Co., 9 Wash., 620; Pelitier v. Railway Co., 88 Wis., 521; 60 N. W. Rep., 250; Callan v. Hanson, 86 la., 420; 53 N. W. Rep., 282; Railway Co. v. Wren, 78 Ohio St, 137; Car Coupler Co. v. League, 25 Col., 129; 54 Pac. Rep., 642; Surber v. Mayñeld, 60 N. E. Rep., 7; Stewart v. 0%ith~ waite, 141 Mo., 562; 44 S. W. Rep., 326; Kenyon v. City of Mondovi, 98 Wis., 50; 73 N. W. Rep., 314.
    The charge of the court should be considered and construed as a whole, and when thus considered and construed, if it appears that the law has been correctly stated to the jury, it will not .be adjudged erroneous, though certain parts do not state the law accurately, if the inaccuracy was not calculated to mislead the jury. Torpedo Co. v. Fishburn, 61 Ohio St., 608.
   Crew, C. J.

The grounds of error assigned and relied upon by plaintiff in error in this case are: 1. That the court of common pleas erred in its instructions to the jury respecting the duty of the defendant railway company in the matter of furnishing the plaintiff a safe place to work, by placing upon said company a greater obligation and higher degree of care in that behalf than the law requires. 2. That the trial court erred in the instruction given’ as to the quantum and degree of proof necessary to sustain the defense of contributory negligence. Under the first of the above assignments of error the following portions or paragraphs of the charge of the trial court are, among others, objected to by plaintiff in error and claimed to be erroneous, as incorrectly stating the rule as to the degree of care required of the master in providing the employe with a safe place in which to work, namely:

“The defendant, having the control of said track, owed it as a duty to the plaintiff to keep the same in reasonably safe condition for its use for the purpose that such a track was intended, and in the manner it was intended to be used; and if the defendant did or omitted to do anything which would result in making that track unsafe-for such use and the plaintiff, without fault on his part directly and proximately by reason of such unsafe condition of said track, was injured, the defendant would be liable,' unless such condition grew out of or was directly the result of the negligence of some fellow-servant of the plaintiff.”
“In the event you find the defendant was negligent * * * in failing to provide a reasonably safe place for the plaintiff to work * * * and that the plaintiff himself at the time of the injury was' not guilty of any negligence on his part which directly and proximately contributed to the injury, then the plaintiff may recover, and the burden is upon the plaintiff, as I have before indicated, to make out these acts of negligence on the part of the defendant and the fact that they proximately resulted in his injury.”
“In short, the rule is this: the defendant company owed the plaintiff the duty of keeping that track at that point in a reasonably safe condition for use for the purposes it was intended for; and if it failed to do this it was negligent; and if the plaintiff’s injury was directly and proximately caused by this negligence he can recover, unless he himself was not in the exercise of ordinary care for his own safety which directly and proximately contributed to his own injury.”

In our judgment the rule thus given to the jury for its guidance in determining the nature and extent of the duty which the defendant rail»way company owed to the plaintiff is, under all the authorities, clearly a misleading and incorrect statement of the legal measure of the master’s duty in this case, and therefore was both erroneous and prejudicial. And the vice of this instruction was not extracted, or its prejudicial effect in this case cured, by reason of the court having at one time earlier in the charge stated the rule to be that: “The defendant owed to the plaintiff the duty of using ordinary care in providing him a reasonably safe place to work,” which statement was immediately followed by and coupled with, the further statement that: “The plaintiff had a . right to rely upon the performance by the defendant of its duty to furnish him a reasonably safe place to work.” The most that can be claimed for the first paragraph of the instruction last above quoted, is that the same is a substantially correct statement of the rule so far as it goes, and is impliedly contradictory of the particular instructions herein complained of on the same subject. Which of these instructions the jury followed in this case it is impossible to say, and this court cannot assume that the jury selected the one statement of the rule which was -substantially correct, and rejected and disregarded the other statements of it which were clearly erroneous. Hence, the instructions challenged being manifestly erroneous as to a material matter, prejudice will be presumed, and the rule that error without prejudice is not ground for reversal, can have no application in the present, case. The jury in this case, by the instructions complained of, was in effect told, that the duty of the railway company to keep its track in reasonably safe condition was an absolute duty which the company owed to the plaintiff. Under such instructions, notwithstanding the company may have exercised due and reasonable care to have its' track, at the point of accident, in reasonably safe condition 'for the purpose for which it was then being used, yet, if the accident occurred by reason of said track being then in unsafe condition at that point, the company would still be liable, nothwithstanding its vigilance, and its exercise of reasonable care. Such we think is not the correct rule of law, as it places upon the company a different obligation, and imposes upon it a higher degree of care, than that which the law exacts or requires. The extent of the master’s duty is to exercise reasonable and ordinary care, having due regard to the hazards of the service, to provide his employe a safe place in which to work. He is not an insurer or guarantor of the safety of such place, and the limit of his duty and obligation in this behalf is to exercise reasonable and ordinary care to see that his employe is provided with a safe place in which to perform his work, and whether the master is guilty of negligence in a particular case, must be determined, not from the condition of the place of work, but from the care used by him in providing and maintaining such place. The distinction or difference between the duty to furnish a reasonably safe place, and the duty to use reasonable and ordinary care to furnish such place, is too obvious to require discussion, and while in judicial opinions, of this and other courts, this distinction may not at all times have been kept in view and clearly expressed, yet, after careful examination of the authorities upon this subject we are led to conclude, and we believe, that nowhere has it been intended to hold that the law imposes upon the master the absolute duty to furnish to his employe a safe place to work. It follows that the instructions as given by the court of common pleas in this case, touching the duty of the railway company in this respect, were misleading, erroneous and prejudicial. Instructions of the character of those now under review were considered and held to be erroneous in C. B. & Q. R. R. Co. v. Merckes, 36 Ill. App., 195; Fearon v. Mullins, 35 Mont., 232; Hughley v. City of Wabasha, 69 Minn., 245; Armour & Co. v. Russell, 144 Fed. Rep., 614; Conway v. The Ill. Cent. R. R. Co., 50 Ia., 465; Wabash R. R. Co. v. Farrell, 79 Ill. App., 508; L. & N. R. R. Co. v. Mounce's Admr., 24 Ky. Law Reporter, 1378.

2. It is also urged by plaintiff in error, as ground of reversal in this case, that the trial court erred in its instruction as to the quantum of evidence necessary to sustain the defense of contributory negligence. Upon this subject the court instructed the jury as follows: “So far as this affirmative defense by the defendant is concerned, the burden of proof to establish it by a preponderance of the evidence, is upon the defendant; and, in the event you find the plaintiff has made out the truth of his charge of negligence against the defendant, he would be entitled to recover a verdict at your hands, unless the defendant has so made out the truth of its affirmative defense wherein it charges the plaintiff with negligence by reason of which he was injured and his injuries were aggravated, and, if the defendant has satisfied your minds by a preponderance of the evidence, that notwithstanding the alleged negligence of the defendant the plaintiff was guilty of negligence which contributed directly and proximately, together with the alleged negligence of the defendant to produce this injury, the plaintiff cannot recover.” Attention and obedience to the language of this instruction would not permit the jury to determine the issue of contributory negligence in this case, upon a mere preponderance of the evidence, yet this measure of proof, in this character of case, is all the law demands or requires. By this instruction the jury was told, not only that the burden of proof was on the defendant to establish its affirmative defense of contributory negligence by a preponderance of the' evidence, but that if the defendant was negligent as charged, then plaintiff was entitled to a verdict “unless the defendant has so.made out the truth of its affirmative defense.” And the jury was thereby further told and instructed that such affirmative defense, was so made out, “If the defendant has satisfied your minds by a preponderance of the evidence * * * that the plaintiff was guilty of negligence which contributed directly and proximately, together with the alleged negligence of the defendant, to produce this injury.” This instruction, therefore, in effect, imposed'upon defendant the requirement- — if it would make available the defense of contributory negligence— that it establish by a preponderance of the evidence the truth of such defense to the satisfaction of the jury. This was to place upon the defendant the obligation and burden of producing or furnishing a higher degree of proof than the law demands or exacts, and was therefore erroneous. In Davis v. Guarnieri, 45 Ohio St., 471, this court, in the eighth paragraph of the syllabus, declares the law to be that: “In the trial of a civil action where the preponderance of the proof is to determine the issues, the court or jury deals s-imply with the probabilities in the case.” And in the opinion, at page 490, Owen, C. J., says: “It is not necessary to the determination of the issues in a civil Case (with very few exceptions, of which the present is not one), that the triers should believe the existence of any material fact, but that the probabilities, when weighed by them, preponderate in favor of the fact which they find to be established by the proof.” While in the present case the instruction given by the court of common pleas touching the issue of contributory negligence is admitted by counsel for defendant in error to be objectionable, it is claimed on authority of Kelch v. State, 55 Ohio St., 146 that such instruction is not erroneous, this claim of counsel being predicated wholly upon certain language or statements found in the opinion. The third paragraph of the syllabus in that case is as follows: “An instruction given to the jury in such case to the effect that the evidence introduced to establish insanity is not 'sufficient if it merely show it to have been probable. The proof must be such as to overcome the legal presumption of sanity; it must satisfy you he is insane/ requires of the defendant more than a preponderance of the evidence to maintain this' defense, and is therefore erroneous.” Without here quoting what was said by the learned judge who wrote the opinion in that case in discussing the charge then under consideration, we think it enough to say, that if the opinion in that case can properly be said to countenance the correctness of the instruction here under review, then such opinion was impliedly overruled by this court in the case of The Baltimore & Ohio R. R. Co. v. Linn, Admr., 77 Ohio St., 615, in which latter case this court reversed the judgment of the circuit court of Holmes county, stating as one of the grounds of reversal that: “Said circuit court erred in not reversing the judgment of the court of common pleas xor- error in instructing the jury that the defense of contributory negligence must be proven by defendant to the satisfaction of the jury by a preponderance of the evidence.”

In the case of The Toledo & Ohio Central Railway Co. v. Wren, 78 Ohio St., 137, cited by counsel for defendant in error, the question here presented was neither called to nor urged upon the attention of the court. In that case no objection whatever was made to the form of the instruction requested, and the only question considered and determined by the court in connection with said instruction, was whether under the issues and evidence, the matter contained in said requested instruction was relevant and pertinent and should have been submitted to the jury. That it is error in a civil case, of the character of the one at bar, to instruct the jury that the party having the burden of proof must furnish evidence which will satisfy the jury has been so often held, and such instructions have been so frequently condemned, that there is longer little, if any, excuse, for the giving of such an instruction. The judgment of the circuit court will be reversed, and this case will be remanded to the court of common pleas for a new trial.

Judgment reversed and cause remanded.

Summers, Spear, Davis and Shauck, JJ., concur.


author: Shauck, J.

text:
    The William Edwards Company v. Goldstein.

      Motion to discharge attachment — May be made any time before judgment, when — Sections 6513 and 6322, Revised Statutes.

    A. defendant may at any time before judgment, under Section 6522, Revised Statutes, move for the discharge of an attachment under which his property has been taken, although he has previously given a bond for its discharge under Section 6513, Revised Statutes.
    (No. 10895
    Decided May 18, 1909.)
    Error to the Circuit Court of Cuyahoga county.
    The Edwards Company brought suit against Goldstein before a justice of the peace upon an account for goods sold and delivered, and cáused an attachment to be issued and property of the defendant to be seized. The defendant, in order to obtain the discharge of his property, gave a bond to the effect that he would perform the judgment of the justice and also filed a motion to discharge the attachment upon the grounds that the allegations of the affidavit upon which the same was issued were untrue, .and because he was, as the head of a family, entitled to hold the property which had been taken as exempt from execution. The case having been determined by the justice of the peace, an appeal was taken to the court of common pleas where the motion to discharge came on for hearing. The plaintiff then insisted that all irregularities and defects in the attachment proceedings had been waived because of the fact that the defendant had given the bond referred to. The common pleas court overruled this objection of the plaintiff and sustained the motion to discharge the attachment. This judgment was affirmed in the circuit court.

      Messrs. Klein & Harris, for plaintiff in error.
    The question raised in this proceeding seems to us to have been fairly decided by this court in the cases of Meyers v. Smith, 29 Ohio St., 120; Jayne’s Exr. v. Platt, 47 Ohio St., 262; Cigar Co. v. Mayer, 68 Ohio St., 623.
    The one class has been commonly known as. “forthcoming or redelivery bond” and has been held not to take the place of the attachment and not to be a waiver of defects in the attachment; and the other class has been known as “bail bonds,” “bonds in discharge of attachment” and “bonds to perform judgment,” and the giving of them has been held to bring about the complete release of the attachment and to be a waiver of all right to attack it. These principles are set forth in the leading text-books on attachments as follows: Shinn on Attachment (1896 ed.), Sections 286, 302, 304 and page 592; Drake on Attachment (5 ed.), Section 317; 1 Wade on Attachment (1886 ed.), Sections 1, 3; 4 Cyc., 485-687; 3 Am. & Eng. Ency. Law (2 ed.), 231; Johnson v. Oliver, 51 Ohio St., 13; Hill v. Harding, 93 111., 77; 1 Bates Pleading & Practice, 701; Sharpe v. Morgan & Co., 44 111. App., 346; Belly. Improvement & Wrecking Co., 60 Ky., 558; McCormack v. Henderson, 10 Ky. Law Rep., 541; O’Hare v. Dozvning, 130 Mass., 16; Bunneman v. Wagner, 16 Ore., 433; Drake v. Szvorts, 24 Ore., 198; Dierolf y. Winterñeld, 24 Wis., 143; Rache'lman v. Skinner, 46 Minn., 196.
    Giving bond providing that defendant will pay any judgment recovered' operates to discharge the attachment, and thereafter a motion to dissolve the attachment will not be-entertained. Fox y. Mackenzie, 1 N. Dak., 298; McLaughlin v. Wheeler, 1 S. Dak., 497; Wyman v. Hallock, 4 S. Dak., 469; Vanderhoof y. Prendergast, 94 Mich., 18; Kohn S’ Co. v. Hinshazv, 17 Ore., 308; Drake y. Szvorts, 24 Ore., 198; Lumber Co. y. Raymond, 76 la., 225; Paddock v. Matthezvs, 3 Mich., 18; Payne v. Snell, 3 Mo., 409.
    For a good discussion of the entire question we refer the court to the case of McCartney y. Williams, 4 O. L. R., 692.

      Messrs. Peskind & Perris, for defendant in error.
    The law and practice in Ohio is well settled that the giving of a discharge bond by a defendant in an attachment proceeding does not operate as a waiver of prior defects in said proceeding, nor deprive him of the right at any time before judgment, to move to vacate such attachment. Railroad Co. v. Goodman, 57 Ohio St., 641, 38 W. L. B., 237; Jayne’s Exr. v. Platt, 47 Ohio St., 262; Egan v. Lumsden & McGovern, 2 Disney, 168; Saxton v. Plymire, 3 C. C., 209; Ross v. Tailoring Co., 7 C. C., 51; 2 Michie’s Ohio Ency. Digest, 228; Kerr’s Ohio Practice in Attachment, Section 263; Winch & Hinman’s Journal Entries, page 60, note 1; Wild’s Journal Entries (3 ed.), page 186; 1 Kinkead’s Code Pleading (2 ed.), Section 255.
    The execution b}^ the defendant in attachment of a redelivery bond, cannot be regarded as an admission of record that the order of attachment was rightfully obtained. Alexander v. Jacoby, 23 Ohio St, 358.
    While the decisions in other states, depending as they do on their own policy and practice, are not the criterion of Ohio law and practice, yet many are in accord with the Ohio rule and uphold the right to move to vacate the attachment. Garbutt v. Hanff, 15 Abb. Pr. (N. Y.), 189; Cadzvell v. Colgate, 7 Barb. (N. Y.), 253; Fernau v. Butcher, 113 Pa. St, 292; Clañin v. Baere, 57 How. Pr. (N. Y.), 78; Lehman v. Bcrdin, 5 Dillon (U. S.), 340; Shevlin v. Whelen, 41 Wis., 88; Love & Savage v. Voorhies, 13 La. An., 549; Bates v. Killian, 17 S. Car., 553; Ward v. Carlton, 26 Ark., 662.
    To say that such a motion may not be made after the giving of a bond of this character and before judgment, is to add a condition not found in the statute. Saxton v. Plymire, 3 C. C., 211.

      By proviso appended, to Section 6494, Revised Statutes, by 93. O. L., 141, it is further provided “that in any case the defendant may make a motion before the justice of the peace to dissolve the attachment, or release the property, money, or credits attached or garnisheed, either or both.” Gar-butt v. Hantf, 15 Abb. Pr. (N. Y.), 189; Bates v. Killian, 17 S. Car., 553. '
   Shauck, J.

The provisions of the statute brought into view by this proceeding in error relate to proceedings in attachment before justices of the peace. They are Section 6494, which provides for the release of attached property upon the giving of a bond in double its appraised value conditioned that the property, or its appraised value, shall be forthcoming to answer the judgment, and Section 6513, which provides for a release and discharge of the property and the attachment upon the giving of a bond by the defendant in double the amount of the plaintiff’s claim conditioned that the defendant shall perform the judgment of the justice. The adjudications in the state generally relate to Sections 5529 and 5545 which make like provisions as to proceedings in attachment in the court of common pleas, and the adjudications with respect to them are helpful by analogy at least in the present inquiry. The difference between these modes of obtaining the release of property taken in attachment proceedings without the delay and injury to the defendant’s property, which might be required to test the validity of the proceedings in the attachment, is obvious, and to a realization of its importance it is necessary only to consider how far the value of the property attached may exceed, or fall short of, the amount of the plaintiff’s claim. The importance of the right thus conferred upon the defendant to secure in one of the modes the immediate release of his property is obviously very great. It has been pointed out in Fortman v. Rottier and Hoenig, 8 Ohio St., 548, and Alexander et al. v. Jacoby et al., 23 Ohio St., 358, and in numerous cases there cited. In Alexander et al. v. Jacoby et al. the defendant, after giving bond under Section 5529 to secure the release of his property, brought suit upon the undertaking given to secure the issuance of the attachment because it had been wrongfully obtained. It was there objected, as it is here, that .the prosecution of that suit was barred by the giving of the bond to secure the release of the property, because it appeared as a waiver of the. defendants’ right to contest further the validity of the attachment, but the point was expressly overruled, the court saying in the syllabus,. “The execution of a redelivery bond, under Section 5529, Revised Statutes, by the defendant in attachment cannot be set up as a bar to his right of action on the attachment undertaking.” The four sections of the statute above referred to contain no provision which would authorize the conclusion that with respect to the right of the defendant to contest the validity of the attachment after giving the bond there is any difference whatever between their objects.

It is said that a bond given under either section takes the place of the attached property. The proposition is justified by the reasons involved, as well as by the language of the court in the well considered cases. But what is its significance in the present inquiry? If the bond had not been given the property would have been held under the attachment but subject to be discharged and released on motion, because the affidavit upon which the attachment was issued was untrue. If the bond merely takes its place, it must be liable to be defeated for the same reason. It seems quite clear that in sustaining the motion to discharge the attachment, notwithstanding the giving of the bond, the court of common pleas regarded the bond as substituted for the attached property and as accomplishing no purpose whatever beyond such substitution.

Certainly the statute does not in terms express the legislative intention that the validity of the attachment may or may not be contested after the giving of the bond by the defendant. But the legislature was providing for the seizure of property in certain cases before judgment. The cases in contemplation were exceptional, and the proceeding authorized was conditioned upon a substantial compliance with the statute. An essential requirement was an affidavit with respect to which it was required, not only that its allegations should bring the case within one of the contemplated exceptions, but also that they should be true. In the absence of terms requiring it there appears to be no propriety in imputing to the general assembly an intention to encourage the filing of false affidavits. Not only is the judgment under review consistent with the general character of the legislation considered, but it was required by the express terms of Section 5522, Revised Statutes. By that section, following the provisions with respect to bonds to be given by the defendant, and in view of all the effect which it was intended that such bonds should have, it is provided as applicable, to all cases, whether bonds have been given by the defendants or not: “The defendant may at any time before judgment, upon reasonable notice to the plaintiff, move to discharge an attachment as to the whole or any part of the property attached.” No reason is presented which would justify a court in placing a limit upon the right which the statute has thus conferred upon the defendant without limit. Although this precise question does not appear to have been presented to this court in any former case, it has in the cases cited in the briefs of counsel expressed views respecting bonds executed by defendants in attachment proceedings which strongly support the judgment below. It would be very difficult, if not quite impossible, to reconcile the contrary conclusion with the doctrine of Alexander et al. v. Jacoby et al. A question not distinguishable from this was presented to the superior court of Cincinnati in Egan v. Lumsden & McGovern, 2 Disney, 168, decided in 1858, where upon careful reasoning by Judge Storer, the court reached a conclusion in harmony with the judgment under review, and in several other cases decided by courts of inferior jurisdiction the same conclusion was reached. It is true that in one case reported by a Nisi Prius court of this state, there was a conscious departure from this view, but although an erroneous conclusion was reached in that case it presents nothing which should be regarded as seriously disturbing the prevailing harmony upon the subject. The bond was given for the obvious purpose of securing a release of the attached property. What consideration there may be for a bond of that character if the attachment is invalid, the case does not call upon us to determine. But whatever consequences may follow it seems safe to hold, in the light of the legislation and adjudication, that a plaintiff in an attachment proceeding cannot better his condition by filing a false affidavit.

Judgment affirmed. '

Crew, C. J., Summers, Spear and Davis, JJ., concur.


author: Davis, J.

text:
    The Cincinnati, Hamilton & Dayton Railway Company v. Kleybolte et al., Partners.

      Securities sold to directors of issuing company under par, void— Directors of guaranteeing company not inhibited, when — Interpretation of Section 3313, Revised Statutes.

    1. Section 3313, Revised Statutes, applies only to the capital stock, bonds, notes, or other securities issued by a company of which the purchaser of such stock, bonds, notes, or other securities is a director.
    2. Stock, bonds, notes, or other securities issued by a company and guaranteed by another company of which the purchaser is a director, are not within the inhibition of the said section.
    (Nos. 10900-10901
    Decided May 18, 1909.)
    Error to the Superior Court of Cincinnati in General Term.
    The facts are stated in the opinion.

      Messrs. Harmon, Colston, Goldsmith & Hoadly, for plaintiff in error.
    The decision of this case depends upon the effect which shall be given to Section 3313, Revised Statutes. The anterior legislation from which this section is derived has an import bearing upon its meaning. Act of December 15, 1852 (51 O. L., 286).
    On the 27th of April, 1872 (69 O. L., 173), Section 2 of this act was amended
    The present section of the statute covers as well dioses in action executed by a railroad company as those belonging to one. The bonds named in the cross-petition in this case fall under designation of either of above classes. They are bonds “of” The Cincinnati, Hamilton & Dayton Railway Company, because they are the property of that company. They are also bonds “of” that company because they are bonds whose payment is guaranteed by that company; which fact makes them as much the obligation of The Cincinnati, Hamilton & Dayton Railway Company as they are the obligation of The Toledo Railway & Terminal Company, the primary obligor. The Cincinnati, Hamilton & Dayton Railway Company’s guaranty of payment of those bonds is an absolute and unconditional undertaking; and a breach thereof occurs by nonpayment of the bonds without more. The same act or omission that would give rise to an action on the bonds against the primary obligor gives rise to an action against The Cincinnati, Hamilton & Dayton Railway Co., the guarantor. Neil v. Board of Trustees, 31 Ohio St., 22; Clay v. Edperton, 19 Ohio St, 554.
    When the firm of Rudolph Kleybolte & Co. bought the bonds from the company, one member of the firm being then a director of the company, it was “either directly or indirectly” a purchase “of the company by a director thereof.” Aberdeen

      Railway Co. v. Blakie Bros., 1 Macqueen, 461; Bent v. Priest, 86 Mo., 475.
    Null and void in the statute means voidable at the option of the railway company. There are many instances in our law where the words “null and void” in the statute are construed to mean voidable. Webbv.Roff-, 9 Ohio St, 430.
    The plain and obvious object of the state was to protect such corporations from improvident or fraudulent sales of such securities by directors to directors by requiring that such sales shall be for not less than par. Railroad Co. v. Trust Co., 95 Fed. Rep., 497.
    The words “null and void” in Section 3313, Revised Statutes, should be interpreted as used in the sense of voidable. The reasons for this construction are found in the object of the statute.
    Where the enactment is not based upon some declared or evident ground of public policy, but has for its object the protection of persons sui juris, the word “void” will generally be construed as “voidable” only at the election of the persons for whose benefit the enactment was passed. Railroad Co. v. Trust Co., 95 Fed. Rep., 497; Terrill v. Auchauer, 14 Ohio St., 80.
    The latter case has been followed and approved in Henry v. Trustees, 48 Ohio St., 676, and National Bank v. Wheelock, 52 Ohio St., 534.
    Other authorities recognizing and approving the principle that “void” will be read “voidable” in contracts not involving a matter of public policy, are the following: Johnson v. Jouchert, 124 Ind., 105;-2 Lewis’ Sutherland Statutory Construction, Section 400; Endlich on Interpretation of Statutes, Sections 269, 270; Hume v. Eagon, 73 Mo. App., 271.

      ■ Messrs. Peck, Shaffer & Peck, for defendants in error.
    Section 2 of the above act was amended by an act of April 27, 1872 (69 O. L., 174). In the general revision of the statutes as now in force, Section 1 of the act of December 15, 1852, appears as Section 3290. And Section 2 of the act of December 15, 1852, appears as Section 3313, Revised Statutes, upon which the claim of the cross-petition is said to be based.
    The statute applies only to securities issued by the company of which .the purchaser is a director. Our first suggestion concerning the construction of this section is that it does not apply to the bonds sold as alleged in-this case, because they were not the bonds of The Cincinnati, Hamilton & Dayton Railway Co., but were the bonds of The Toledo Railway & Terminal Co. The language of the section leads to that conclusion. When the stock or bonds “of a company” are mentioned, the ordinary understanding of that phrase is that the securities referred to are issued by the company mentioned.
    The ordinary and natural import of words consistent with the common sense of the community, is to be adopted in arriving at the legislative intent. Allen v. Little, 5 Ohio, 66; State v. Peck, 25 Ohio St., 28; Norris v. State, 25 Ohio St., 224.
    To give them a construction which would include all securities that the company might own, would be equivalent to striking them from the statute, for if it be read without them, it would have just that meaning. Or, to put it in another way, the construction contended for by opposing counsel, in effect renders meaningless the words “of a company” as they first appear in the section, for without them it would have the meaning which they say it now has. All the words of a statute are presumed to mean something, and to have been placed in it for a purpose. Lessee of Allen v. Parish, 3 Ohio, 193; Patton v. Sheriff, 2 Ohio, 398; Pancoast v. Ruffin, 1 Ohio, 385; State v. Turnpike Co., 16 Ohio St., 308.
    The case of State v. Commissioners, 37 Ohio St., 526, illustrates the mode in which similar words have been construed by this court.
    It is a well-established rule that in putting a construction upon a revised statute, the mere change of the phraseology does not work a change in the established interpretation of the former statute, unless it evidently appears that such a change was intended by the legislature. Collins v. Millen, 57 Ohio St., 294; Dutoit v. Doyle, 16 Ohio St., 405; Tyler’s Exrs. v. Winslow, Í5 Ohio St., 364; Efamilton v. Steamboat, 16 Ohio St., 428; Conger v. Baker, 11 Ohio St., 1; Boley v. Trust Co., 12 Ohio St., 139.
   Davis, J.

The defendants in error sued the plaintiff in error in two separate actions in the superior court of Cincinnati, to recover judgments on two promissory notes, given by the plaintiff in error, for $20,355.52 and' $20,000, respectively. The railway company did not deny its liability on the notes but filed a cross-petition in each case setting forth that on or about July 7, 1904, it was the owner of thirtv-five hundred bonds, each of the amount of $1,000, payable to bearer July 1, 1954, bearing four and one-half per cent, interest, secured by mortgage to The Commonwealth Trust Company of St. Louis, one of the obligors in said, bonds being The Toledo Railway & Terminal Company, an Ohio corporation; that on said date The Cincinnati, Hamilton & Dayton Railway Company and another corporation, The Pere Marquette Railroad Company, jointly and severally guaranteed the payment of the principal and interest of all of said bonds as the same should become due according to the tenor thereof; that thereafter Rudolph Kleybolte & Co., defendants in error here, purchased from The Cincinnati, Hamilton & Dayton Railway Company, the plaintiff in error here, twenty-five hundred of said bonds for $970 and accrued interest for each of said bonds, and eight hundred' of said bonds for $975 and accrued interest for each of said bonds, being less than the par value thereof; and that said Rudolph Kleybolte & Co. .thereafter sold all of said bonds with said guaranty indorsed upon each of them, for value to innocent purchasers thereof.

The Cincinnati, Hamilton & Dayton Railway Company also averred in its cross-petition, that at the time of such purchase and sale of said bonds Rudolph Kleybolte was a member of the firm of Rudolph Kleybolte & Co. and also a director of The Cincinnati, Hamilton & Dayton Railway Company; and that by reason of the foregoing facts Rudolph Kleybolte & Co. became indebted to The Cincinnati, Hamilton & Dayton Railway Company for the difference between the par value of said bonds and the price paid for the same, to-wit, $95,-000, with interest thereon. The railway company pleads this amount as a set-off to the actions of Rudolph Kleybolte & Co. against it and asks judgment for the difference between the said $95,000 and interest and the amount for which Kleybolte & Co. sue upon the notes.

Kleybolte & Co. demurred to the cross-petition in each case upon the grounds that the facts stated in the cross-petition do not entitle the railway company to any relief, and that the facts stated in the cross-petition do not constitute either a set-off or a counter-claim to the claim on the notes. The superior court in special term sustained the demurrers to the cross-petitions and gave judgment for the plaintiffs below; and these judgments- were afterwards affirmed by the superior court in general term.

The contention of the plaintiff in error rests upon a construction of Section 3313, Revised Statutes. The section is as follows:

“All capital stock, bonds, notes, or other securities of a company, purchased of a company by a director thereof, either directly or indirectly, for less than the par value thereof, shall be null and void.”

That the phrase, “securities- of a company,” is ambiguous is not disputed by either party; but the plaintiff in error strenuously insists that whether it be construed as stock, bonds, notes or other securities belonging to a company, or as stock, bonds, notes or other securities issued by a company, in either case, the purchase, directly or indirectly, by a director of the company owning or issuing the securities is illegal; because, it is argued, the guaranty by one company of the bonds of another company makes the bonds of the latter company a security issued by the former. And to make effective the remedy sought by the cross-petitions upon this theory, it is also ingeniously argued that the phrase, “null and void,” may be and should be construed as voidable only.

Notwithstanding the able and elaborate presentation of this view, we have not been persuaded to accept it as correct. When we compare Section 3313 with the prior statutes from which it is condensed in the revision, it seems to us that the manifest purpose of this enactment was to prevent the creation and sale to its directors of the capital stock or other obligations of the company for less than the par value thereof; and to enforce such purpose it was provided that all such transactions should be null and void. This would seem to be the scope of Section 2 of the act of December 15, 1852 (51 O. L., 286); and in the amendment to this section, passed April 27, 1872 (69 O. L., 173-174), the prohibited act is still confined to “any of the capital stock or any of the bonds, notes or other securities of such company of ivhich he is or may be a director,” using the word “securities,” as we take it, as the synonym of “evidence of indebtedness.” See Century Dictionary and Webster’s Dictionary. Thus the legislation on that subject stood, when in the codification of our statutes it became the present Section 3313, Revised Statutes. We see no evidence of an intention to enlarge the purview of the statute; but we think we find conclusive evidence of a purpose to limit its operation to the obligations of the company whose directors might otherwise defraud it. If it were intended to enlarge the scope of the prohibition so as to include not only the stock and securities, that is, evidences of indebtedness, issued by the company, but also all stocks and securities issued by other companies and of which it might become possessed, that purpose would have been exactly and unambiguously expressed by omitting the words “of a company” which appear after the word “securities.”

Our construction is reinforced by considering the highly penal character of the section. The clear, unmistakable. language is, that all capital stock, bonds, notes or other securities, purchased by a director of the company for less than the par value thereof shall be null and void. It does not provide that the purchase .shall be void or that the transaction shall be voidable at the election of the wronged company, but it declares that the securities thus created and dealt with shall be nullities in the hands of the purchaser. It is easy to understand the severity of the penalty when we regard the purpose of preventing the creation of unwarrantable obligations upon the ■ corporation by its directors and the perpetration of constructive, if not actual, fraud in dealing with them; but it can hardly be believed that securities of other companies for which value has been paid, would be declared void because improperly dealt with by the company’s trustees. In the latter case it is more reasonable that the sale and purchase should be declared void and not the securities themselves, as in this statute.

But the plaintiff in error meets this construction of the statute with this argument: “The present section of the statute covers as well dioses in action executed by a railroad company as those belonging to one. The bonds named in the cross-petition in this case fall under designation of either óf above classes. They are bonds ‘of’ The Cincinnati, Hamilton & Dayton Railway Company, because they are the property of that company. They are also bonds 'of’ that company because they are bonds whose payment, is guaranteed by that company; which fact makes them as much the obligation of The Cincinnati, Hamilton & Dayton Railway Company as they are the obligation of The Toledo Railway & Terminal Company, the primary obligor. The Cincinnati, Hamilton & Dayton Railway Company’s guaranty of payment of those bonds is an absolute and unconditional undertaking; and a breach thereof occurs by non-payment of the bonds without more. The same act or omission that would give rise to an action on the bonds against the primary obligor gives rise to an action against The Cincinnati, Hamilton & Dayton Railway Company, the guarantor.”

This reasoning is plausible but unsound. It is true that the payment of these bonds is absolutely and unconditionally guaranteed by the plaintiff in error; but it is not true that, before default by the primary obligor, such guaranty makes them as much the obligation of the guarantor as the obligation of the primary obligor. The contract of the guarantor is that he will pay if the obligor does not. The contract of guaranty in these cases is “absolute and unconditional” to this extent only, that-the guarantor will pay when the obligor does not pay at maturity; and the guarantor is not entitled to demand and notice or the exercise of diligence to collect from the principal obligor before suit brought upon the guaranty. This is precisely what was decided in the two cases cited for the plaintiff in error, Clay v. Edgerton, 19 Ohio St., 549, and Neil v. Board of Trustees, 31 Ohio St., 15, 22. So that whatever may be the nature of the guaranty, and whatever may be necessary to make effective the remedy against the guarantor, the bonds are not primarily the guarantor’s debt. Indeed by its very terms it does not become the guarantor’s debt until the principal debtor makes default in payment. Therefore in ordinary business language guaranteed bonds are not spoken of as bonds of the guarantor, but as the bonds of the principal or original obligor, just as indorsed promissory notes are always spoken of as notes of the maker and not of the indorser. It is in this sense and according to such customary speech that we understand the legislature to have intended 'to be understood in enacting section 3313, Revised Statutes. The judgment below is

Affirmed.

Crew, C. J., Summers, Spear and Siiauck, JJ., concur. Price, J., did not participate.