author: Spear, J.

text:
    Ravenna v. Pennsylvania Company.

      Municipal corporations — Power to compel railroad company to maintain, watchman at street crossing.

    1. Municipal corporations, in their public capacity, possess such powers and suck only, as are expressly granted by statute, and suck as may be implied as essential to carry into effect tkose which are expressly granted.
    2. A municipal corporation has not the power, by ordinance, to compel a railroad company to maintain, at a street crossing within the corporate limits, a.watchman, for the purpose of giving warning to passers-by of the approach of trains.
    (Decided April 26, 1887.)
    Error to the Circuit Court of Portage County.
    An ordinance was. passed by the council of the village of Ravenna, providing that on any street of the village crossed by the track of any railroad company, when the council shall deem it necessary to require the company to provide protection against injuries to persons and property by the keeping of a watchman, whose duty it shall be to stop all teams and foot passengers by the continuous exhibition of a flag by day and a light by night, whenever a train in motion shall have approached within five hundred feet of such crossing, the council may, by resolution, so declare, and may direct the company, within a time specified in the resolution, to erect and maintain a sufficient safeguard at such crossing, specifying the kind; and that any company neglecting to comply with the resolution shall suffer a penalty of fifty dollars, etc. Subsequently, the council passed a resolution requiring the defendant company to place a watchman at the point where its tracks cross Main street in the village. The company refused to comply. Action was commenced by the village before the mayor to recover a penalty of fifty dollars. This was appealed to the common pleas, where a demurrer to the petition was sustained. On error, this holding was affirmed by the circuit court.

      P. B. Conant, for plaintiff in error.
    The power of council to pass the ordinance in question is either expressly granted or clearly inferred. Without such express grant or clear inference, I concede council to be without such power. It has no inherent right of legislation. Collins v. Hatch, 18 Ohio, 523; Bloom v. Xenia, 32 Ohio St. 465; Minturn v. Larue, 23 How. (U. S.) 435.
    Such power is conferred by section 1692, subdivisions one and three, of the Revised Statutes.
    The police power of the state is vested in the legislature, and that power can be delegated to municipal corporations. Cin. H. & D. R. v. Sullivan, 32 Ohio St. 158.
    The power to protect, by ordinance, the property of the corporation and the property and lives of its inhabitants, is expressly granted. Revised Statutes, section 1692, sub. 1; and to prevent injury from any thing dangerous, sub. 3.
    It will not do to say that a railroad company is exempt from the power of police regulation because it is a corporation and has been authorized to run dangerous machinery through the town. It stands on no higher plane than any other citizen. It becomes a citizen of Ravenna (B. & O. R. Co. v. Cary, 28 Ohio St. 208), and like all other citizens must be subject to the general laws of the municipality. Cin. H. & D. R. Co. v. Sullivan, supra.

    Railroad companies cannot have faculties conferred on them for their own convenience which they may wield to deprive others of acknowledged rights. Marshall v. B. & O. R. Co., 16 How. (U. S.) 327; Cleveland, Col. & C. R. Co. v. Keary, 3 Ohio St. 204.
    The fact that the legislature has expressly authorized municipal corporations to limit the speed of trains and to compel railroad companies to light their tracks (Rev. Stats., sections 2494, 2500) does not operate to exclude the exercise of the broader and more general grant of power conferred by section 1692 of the Revised Statutes. The ordinance in question was a reasonable exercise, of the power granted by the latter section.

      Ranney & Ranney, for defendant in error.
    The council had no authority to pass the ordinance, and it is, for that reason, absolutely void.
    The authority to pass an ordinance must be expressly granted, or necessarily implied from express grants of authority. Boone on Corp., sec. 287; 3 Wall. 330; Minturn v. Larue, 23 How. (U. S.) 435; Collins v. Hatch, 18 Ohio, 523; Ottawa v. Carey, 108 U. S. 110.
    The powers of a municipal corporation are strictly limited. It has powers which are expressly granted or clearly implied, and no others; and doubtful claims to power are resolved against it. Minturn v. Larue, supra; Collins v. Hatch, supra.

    If the claim that full authority to pass the ordinance, contained in subdivision 1 of section 1692 of the Revised Statutes, is well founded, clearly thei'e was no need for the passage of the numerous subsequent subdivisions of section 1692. These subsequent subdivisions, and sections 2494 and 2500 are express provisions from which we may legitimately infer a legislative declaration that these subdivisions one and three do not grant the power sought to be invoked here. Properly construed, subdivision one relates to the power of council to protect property against riots; and subdivision three clearly relates to nuisances.
    It is urged that the defendant does not stand on any higher plane than any other citizen; and as other citizens can be regulated as to speed upon the streets, the defendant can be regulated under the same authority. This can not be true, for in the nature of things the defendant stands upon a different plane. The petition admits — alleges—that the defendant exists, and operates its road under state authority. Even though it employs dangerous means in the legitimate operation of its road, municipal authority cannot abate them. Boone on Corp., sec. 297.
    Nor can municipal authority regulate defendant, or any other citizen, unless the power to do so has been expressly granted. The state has reserved to itself the right to enact police laws, necessary to secure the lives and property of its citizens. Among the powers reserved, and which must inhere in the state, is that of prescribing rules for regulating the running of trains. Lake Shore & M. S. R. Co. v. C. S. & C. R. Co., 30 Ohio St. 604.

    The powers claimed by plaintiff are not expressly granted, nor are they clearly implied. From sections 2494 and 2500 of the Revised Statutes, we get the legislative understanding that they have never granted the power sought to be exercised by plaintiff.
   Spear, J.

The question in the case is as to the power of a municipal corporation, by ordinance, to compel a railroad company to station and keep a watchman at points where the tracks cross a street, and impose penalties for neglect to do so.

That the power to compel railroad companies to maintain watchmen at dangerous crossings is in the nature of police power, and that such power exists in the general assembly, may be conceded. But it does not follow that because the legislature has such power it may be exercised by municipal corporations. Such corporations, being created for convenience and economy in government, and to aid the state in legislation and administration of local affairs, arc always subject, in their public capacity, to the control of the state. As a result of this limitation, this corporation cannot possess the power referred to unless the same has been conferred by statute. Indeed, it is conceded by the learned counsel for plaintiff, that the power to pass the ordinance does not exist unless it has. been expressly granted by the legislature, or is clearly implied, and there is no doubt that this is the law. Power to enact such an ordinance would not be inherent in the council. Except as to incidental powers, such as are essential to the very life of the corporation, the presumption is that the state has granted in clear and unmistakable terms all it has designed to grant at all. Doubtful claims to power are resolved against the corporation. Cooley on Constitutional Limitations, 233, 234; Minturn v. Larue, 23 Howard (U. S.) 435; Bloom v. Xenia, 32 Ohio St. 465.

It is contended that subdivisions one and three of section 1692 of the Revised Statutes, grant the power in question. The section referred to grants many general powers to cities and villages. We quote:. 1. To prevent riots, gambling, noise and disturbance, indecent or disorderly conduct or assemblages, and preserve the peace and good order, and protect the property of the municipal corporation and its inhabitants.” “3. To prevent injury or annoyance from anything dangerous, offensive or unwholesome, and to cause any nuisance to be abated.” It seems to us that it is immaterial whether the last clause of subdivision one be treated as confining protection to property, or, as urged by plaintiff’s counsel, it should be construed to read, protect the property of municipal corporations, and the property and lives of its inhabitants,” for it is difficult to see that the plaintiff’s claim would be advanced by the latter construction. The property of the inhabitant is just as much subject to risk when he attempts to drive across a railroad track as his person. However, the point is not whether the village has the right itself to take steps to protect its inhabitants, or their property, but whether it has the power to compel the railroad company to do it. The propositions are essentially different. We may concede the former without being at all aided in the solution of the latter. The same comment applies with equal pertinency to the language of the other subdivision wherein power is given to prevent injury from anything dangerous. It is not enough to show that municipal corporations have been given the power to protect property and life. To maintain this ordinance, it must be shown that they have been given the power to employ the agency here invoked to accomplish the object. If another agency, for instance, the employment of such watchmen by the village itself, would as well reach the same end, it cannot reasonably be said that the power to put in motion the agency here ordered, is clearly implied from the power to accomplish the purpose itself. The stationing of watchmen or policemen at street crossings to protect those driving across, is a familiar sight in cities. No lack of authority to do the same is believed to exist in villages. Municipal corporations are capable of exercising police powers; but when tbe question is whether such an organization has authority to enact a particular ordinance, it must be shown that the power to do the particular thing in the way marked out, has been given, either expressly, or by clear implication. In this connection, it should not be forgotten, that the company, in the crossing of the street, is on an equality with any citizen. The streets are for public use, and the propelling of locomotives and cars across them, as has been held again and again, is a public use.- The company is, therefore, not a wrongdoer in crossing the street. While it can claim no exemption from police regulations to which natural persons are rightfully subjected, it nevertheless, in using the street-crossing, is not in the attitude of asking a privilege of the village, to the granting of which the latter would have the right to attach conditions. It is not claimed that power to compel the company to maintain a watchman is expressly granted by the subdivisions quoted. The authority, if it exists, must therefore, rest on implication. We think it has not been shown that the power in question is essential to carry into effect the general powers which are granted, and that the implication does not arise.

The power sought in this case to be exercised is similar to the power given t-o councils by sections 2494 and 2495 of the Revised Statutes, to compel railroad companies to light tracks running through municipalities. Each is a requirement which compels the company, not simply to use with care the dangerous engines which it propels over its tracks, but to provide and maintain new and separate safeguards for the protection of life and property; in each case the requirement is that the company adopt means outside of those ordinarily in use by it, to provide additional security'. It will hardly be claimed that power to compel lighting would exist in a council but for the express grant contained in the sections referred to. And if this be so, it would, we think, be difficult to demonstrate, that power to compel a watchman exists in the absence of an express grant. The power as to a watchman, as well as that as to lighting, is essentially dissimilar from that to regulate speed, which is instanced by plaintiff’s counsel. The object in the latter case is to be attained by the use by the company of its machinery, and such regulation relates to how the company shall manage its own property when crossing a street of a village, while the requirement of a watchman relates to how it shall compel or induce others to regulate themselves and their property when approaching its track. The object of all three is the same, viz.: security for life and property; but the means to that end are not the same. So, if we should agree with the argument that power to. regulate speed exists by force of section 1692, and independent of the express grant given by section 2500 — and we are not disposed to dispute it— it would not, we think, follow that a like inference would be warranted as to the power to compel a watchman. Indeed, subdivision 13, of section 1692, (which gives authority to prevent fast driving and propelling of vehicles), would seem to authorize councils to regulate sj>eed of trains, and it may be that, but for the limit of the power of regulation in section 2500, its enactment would have been entirely unnecessary.

The case of Bergman v. Cleveland, 39 Ohio St. 651, is cited. This court in that ease held that the legislature, by granting to cities and villages power to regulate ale, beer and porter houses and shops, thereby conferred power to make it an offense to employ females - to wait upon customers with such liquors. With due deference, we must express our inability to see that this holding advances the plaintiff’s claim. The cases are not analagous. If there can be found a statute which indicates that the legislature intended to give to cities and villages general power to regulate railroads within their midst, then the case cited would be in point. The contrary ‘ appears. Power generally to regulate railroads seems to have been reserved by the state to itself, its exercise to be under the discretion of the general assembly. Thus general laws have been passed requiring railroad companies to maintain a signboard at each road crossing; to fence their tracks; to construct cattle-guards; to provide bridge between cars; to provide certain heating and lighting apparatus, etc., etc. Regarding signals, section 3336, Rev. Stats., 83 Ohio L. 153, provides that every company shall attach to each locomotive a bell and a steam whistle, and requires the engineer in charge, on ajtproaching a road crossing or other travelled place, to sound the whistle at a distance of at least eighty and not further than one hundred rods, and ring the bell continuously until the engine passes; these provisions not to interfere with the proper observance of any ordinance passed by any city or village council regulating the management of railroad locomotives and steam whistles thereon within the city or village limits. Having in mind the test hereinbefore indicated, viz.: that grants of power to municipal corporations must be either in express terms, or by clear implication as necessary to carry into effect those expressly granted, and that questionable claims are resolved against the corporation, it may be doubted whether any grant of power is given to councils by this section. But if any is granted, it could have relation only to*the subject-matter of the section, and its extent could not exceed what is necessary to give full effect to the whole section. The purpose of the law is to require the use of steam whistle and bell upon locomotives approaching a road-crossing or other travelled place, and the utmost that can reasonably be claimed for the language used is to give municipal corporations authority to regulate the management of locomotives and steam whistles in those respects within corporate limits. There would be no warrant whatever for the conclusion that the section in any way confers power to require a watchman at such crossings. The other statutory requirements above mentioned control the company when operating its road through municipalities, as in the open country, although' more stringent regulations as to» some of them may be needed within the limits of cities and villages than without. We may perceive no reason why, as to the general regulation of the operation of locomotives and trains through cities and villages, power might not have been safely committed to municipal councils. It is enough to say that, for reasons known to the general assembly, which we are not called upon to inquire into or question, that body has thus far seen fit not to confer that power.

But we are not discussing the question whether the legislature, in the exercise of its broad police power over railroad corporations, which are its creatures, should require watchmen at crossings, or whether power to so provide can be properly delegated to municipal corporations. As stated at the outset, the only question is whether under existing legislation they possess such power. We think they do not, and that the demurrer was properly sustained.

Judgment affirrried.


source: Caselaw Access Project

author: Minshall, J.

license: Public Domain

text:
    Chappelear v. Martin.

      Promissory note — Payment to bearer — Notice.
    1. Payment by the maker to the bearer of a note will not avail as against the owner, where upon the facts of which the maker had notice, the bearer had no right to receive payment, although the note was drawn payable to bearer.
    2. Whore a note was taken by a wife payable to herself or bearer, with the design that, in case of her death, it might be collected by her husband without the expense of administration, the fact that after her death it was presented by him to the maker, who paid it, supposing that the husband, by reason of the intention of the wife at the time the note was executed, was entitled to receive payment, will not constitute a defense as against the administrator of the wife's estate.
    (Decided April 26, 1887.)
    Error to the District Court of Muskingum County.

      J. Buehingham and John O’Neill, for plaintiff in error.
    The evidence would have not only tended to prove, but have proven the issue, had it not been shown also that Huldah J. Turner, when the notes were made, was the wife of P. F. Turner, and that she died before the payments were made, and that Chappelear knew those facts.

      It is to be noticed, however, that there was no evidence tending to show that Mrs. Turner owned the notes when she died, or that Chappelear knew it, if she did own them; nor any evidence tending to show fraud or bad faith in Chappelear.

      Prima facie, possession of mercantile paper is honest possession. 1 Par. Bills & N. 255; 2 Par. Bills & N. 280.
    The holder of a note, payable to one or bearer, is presumed to be the owner, and, on producing the note, is not required further to show title. Starling v. Kious, 7 Ohio, 2 pt. 237.
    Possession is also prima facie proof that the holder obtained the note before maturity, and paid value. 1 Par. Bills & N. 255.
    It is well settled that one who takes a note that is transferable by delivery acquires an absolute property in it, although it may have been stolen or fraudulently put in circulation, if he took it in good faith and for value, even if he was guilty of gross negligence in taking it. If the burthen of proving good faith is on him, it is implied from his possession and must be overcome by proof of fraud. 2 Par. Bills & N. 42; Mottram v. Mills, 1 Sandf. 37; 1 Greenl. Ev., sec. 34.
    If a note be payable to one or bearer, or indorsed in blank, any person having it in possession may be presumed to be entitled to receive payment, unless the payer have notice to the contrary; and a payment to such person will be valid, although he may be a thief, finder or fraudulent holder. 2 Dan. Neg. Inst., sec. 1230; Story Prom. Notes, secs. 381, 382, 454.
    It is not sufficient to defeat a recovery on a note taken by plaintiff before it matured and for value, to show that he took it under circumstances which ought to have excited suspicion; but to do so it must be shown that he took it under circumstances proving bad faith or dishonesty. Johnson v. Way, 27 Ohio St. 374; Rooker v. Rooker, 29 Ohio St. 1.
    In an action brought by a person who is the general agent of a corporation in his own name as plaintiff on a note payable to that corporation or bearer, the production of the note on the trial by the plaintiff, is sufficient proof of his title. Notwithstanding he is such general agent, his possession raises a presumption that he is the owner, and it requires other evidence to overcome it. Pettee v. Prout, 3 Gray, 502.
    The same principle was applied in Ohio to the possession oí a note by the maker, who was administrator of the payee. Larimore v. Wells, 29 Ohio St. 13, 19.
    The husband could acquire title to the notes by reducing them into his possession with the consent of his wife, by purchase from her, or merely by her gift. Lewis v. Baldwin, 11 Ohio, 352.
    If the fact of payment deprives a true owner of his money, so also does the acquisition of title by a careless purchaser.
    In truth, whoever causes a note to be made payable to himself or bearer, intends to make the mere possession of it evidence of ownership, and he authorizes and invites the maker of it to pay accordingly. If a loss occurs, and there be no fraud, it must fall upon the person who granted the authority and gave the invitation.

      A. W. Train, for defendants in error.
    Payment of a note must be made to the owner or to some person by him authorized to receive it.
    Under the pleadings, the burden was on Chappelear to prove that the payments were made to the lawful holder or owner of the notes. In the court below, he undertook to prove that the payments were made to the lawful owner or holder, by proving that the notes, being made payable to bearer, were paid to a holder of them and. claimed that this raised a conclusive presumption that he was also the owner of them. We do- not deny that persons in the ordinary course of business, for a valuable consideration before maturity, may acquire a good title to commercial paper, payable to bearer or indorsed in blank, although it be from a person not the owner; but this exception to the rule of the transfer of choses in action only applies to negotiable paper, and we do not deny that payment may be made of commercial paper indorsed in blank or payable to bearer, to a person holding the same, where there are no circumstances throwing suspicion upon the title, but the payments must be made at maturity and in full. AVe think the rule is correctly stated in Wheeler v. Guild, 20 Pickering, 545 (32 Am. Dec. 235) by Chief Justice Shaw. “ If a bill be paid at maturity, in full, by the acceptor, or other party liable, to a person having a legal title in himself by indorsement, and having the custody and possession of the bill, ready to surrender, and the party paying has no notice of any defect of title or authority to receive, the payment will be good.”
    But in this case, the notes were executed and delivered to Huldah J. Turner, the wife of P. E. Turner,'and at the time of payment Huldah J. Turner was dead, and these facts were known to Chappelear. P. F. Turner, to whom payment was made, was the surviving husband, and no administrator having been appointed, was the person in whose custody the property of the deceased wife would be, and, as we insist, without the presumption of ownership.
    To hold that the possession of the husband under these circumstances, raises the presumption of ownership rather than that of custodian, is sticking in the bark; he could not release the mortgage, and he could not assign it. The mortgage has not the characteristics of negotiable paper, and is not subject to its rules.
   Minshall, J.

The original suit was brought in the court of common pleas, and appealed to the district court of the county, where it was tried upon the pleadings and the evidence offered by the defendants below.

The suit was brought to foreclose a mortgage executed by Chappelear and wife, securing certain notes executed by Chappelear to the plaintiff’s intestate, Huldah J. Turner, on February 10, 1871. The notes amounted to $3,500— the first maturing April 1, 1871, and the last April 1, 1874.- They had been made to secure a portion of the purchase-money due upon the mortgage premises; and each was made payable to “ Huldah J. Turner or bearer.”

Neither the title nor ownership of the plaintiff was denied by the answer. The defense was that he, the defendant, had, at different times, paid on said notes to P. F. Turner, “the then lawful holder and bearer thereof,” certain sums of money, giving the dates and amounts; the first sum, $1,500, having been paid on April 1, 1877, and the last $200, on June 26, 1874; and that on February 3, 1880, he tendered the amount of $1,289.10 remaining due, to the administrator, who had been appointed December 10, 1879. No administrator had been appointed previous to this time. The cause having been submitted to the court, judgment was rendered in favor of the plaintiff for .the full amount of the notes secured by the mortgage, less the amount tendered, which had been paid into coui’t and received by the plaixxtiff, and an order of sale xnade; a motion for a new trial was xnade and overruled, and a bill of exceptions taken.

It appears froxxx the bill of exceptions that the defexxdants offered the deposition of Peter F. Turner, who testified that the payments on the notes had been made to him, the first oxxe having been made on April 1, 1871; and that he had the notes “in his hands” at the time each of the payxxxents was xxxade. But he was not asked, nor did he testify, that he was the ownex', or claimed to be the owner of them. He also testified that Mrs. Turner died on March 3, 1871. The bill of exceptioxxs also states, that Chappelpar admitted oix the trial that at the time the notes and xxxortgage. were made to Huldah J. Turner, she was the wife of Peter F. Turner, which fact was known to hixxx, as also the fact that she was dead at the time h,e made the payments claimed by him.

The plaintiff below dexnurred to the evidence; the court sustained the demurrer and rendered judgment as before stated. Without determining whether, in any case, oix a trial to the coux't it is proper practice to demur to the evidence, we think there was no error in the court rendering judgment for the plaintiff upon the evidence offered by the defeixdant. The denxurx-er having been submitted to the court trying the case, px’csented not merely the question whether there was any evidence tending to support the defendant’s claim, it was, in effect, a submission of the case upon the evidence that had been offered by the defendants.

Jit will be observed that there was neither averment nor evidence that P. E. Turner, to whom the defendant made his payments, was the owner of the notes and mortgage; the averment is that he paid to “the then lawful holder and bearer” of them. That is, he claims to have made payment to a person authorized to receive payment; this person not being the owner of the notes, could only have been authorized to receive payment upon them by being the agent of the owncr.js

That we have given the correct construction both to the pleadings and the evidence in the case, more fully appears from the averments of a cross-petition that was filed by the defendants. It is there averred that the notes and mortgage were made as above stated by the direction of Mrs. Turner, who, by reason of her ill health, did not expect to live long, that the same might, in the event of her death, be collected by her husband, without the trouble and expense of administration. That this fact was known to the defendant, and that he made the payments to P. E. Turner in pursuance of that understanding.

; Now, who was the owner of the notes and mortgage at the time the defendant made the payment claimed by him? Not Mrs. Turner, for she had died on March 3, 1871, and the first payment was made after that time, April 1, 1871. The title had passed to the administrator of the deceased,' and any agency she may have conferred on her husband in her life-time to collect the notes, had been revoked by her death. The defendant had knowledge of the death of Mrs. Turner at the time he made the payments, and, therefore, had knowledge that the husband had no right to receive payment under any authority that may have been conferred on him by her before her death. It is true that such power might have been conferred on him by will, but she conferred no such power in that way; she died intestate.

No question as to the weight of evidence is presented upon the record. The title of the administrator is not disputed, and no authority from him to make the collection is set up or claimed: The fact that the payment was made to a person who had the notes in his possession at the time, must be taken in connection with the admitted fact that his possession was referable to an authority that had been conferred on him by the deceased, and was revoked by her death. Hence as no authority derived from the administrator was asserted, and as the evidence showed that any authority derived from a mei'e possession of the notes had been revoked, there was a total failure of proof upon the only issue of fact in the case —that he had paid to the lawful holder and bearer of the notes.

The defendant makes no other claim as to the right of the husband to receive payment. The circumstances show that he had no such authority, and as- he was fully acquainted with the facts, he must be held to have known the law applicable to them.

A number of cases have been cited in support of the claim of the plaintiff in error; but none of them go to the extent of holding that payment to the holder of a note payable to bearer will constitute a defense against the owner, where the holder had no authority to receive payment and the maker had notice of the facts. The principal case relied on is that of Pettee v. Prout, 3 Gray, 502. It was a suit upon a note payable to a person named, or bearer. The title of the plaintiff was denied. He relied upon the production of the note. Shaw, C. J., delivering the opinion, said: “ Where a plaintiff brings the note declared upon in his hand, and offers it in evidence, this is not only evidence that ho is the beai’er, but also raises a presumption of fact that he is the owner; and this will stand as proof of title, until other evidence is produced to control it.” Such is the general rule as to the payment of a note payable to bearer; any person having it in possession may be presumed to be entitled to receive payment, unless the payer has notice to the contrary. 2 Dan. Neg. Inst., § 1230. “If a note is paid, not in the usual course of business, or to a person having the custody, but not authorized to receive paymentj and that fact is known to the party paying, though the note be given up, it is no discharge against the true owner.” Per Shaw, C. J., in Wheeler v. Guild, 20 Pick. 545, 552, citing Kingman v. Pierce, 17 Mass. 247. “If payment be made to a person who assumes to bo duly authorized, but in fact is not so, as if made to a person acting as agent, but not in fact an agent, or to a person purporting to be the personal representative of a party supposed to be dead, but who is in reality still living, the payment is invalid and a mere nullity.” Story Prom. Notes, 7th ed., § 375. And the same is true of payment to an agent after the revocation of his authority by the death of the principal. Id. § 378.

In the case before us the maker is shown to have known that the payee was dead, and that the person who presented the notes for payment was simply acting under an authority that had been terminated by her death.

It is suggested that the husband might have become the owner of the notes by reducing them into possession with the consent of his wife before her death; or by purchase from her, or merely by her gift. This is quite true; but what does it avail here, since no such claim is made ? The ownership of the notes and mortgage was not in question; hence inferences as to ownership were wholly immaterial — could not, in fact, arise in favor of a party who did not claim to be owner.

Judgment affirmed.


author: Owen, C. J.

text:
    Barbour v. National Exchange Bank.

      Principal and surety — Receiver—Appointment of- — Rev. Stats., secs. 5587, 5845— Interest — Recovery from national bank.

    1. S. was surety of an insolvent manufacturing corporation for the payment of a large amount of overdue indebtedness. The corporation was making no effort to pay its debts. Its business could not be continued without loss and wasting of its assets. The sale of its property and collection of its accounts were necessary to the payment of its debts. S. brought his action under section 5845 of the Revised Statutes, to compel it to pay the indebtedness upon which he was surety, by subjecting its property to such payment. Held: The appointment of a receiver of the property of thecorporation was authorized by section 5587 of the Revised Statutes.
    2. For the purpose of recovering back interest, paid by such corporation to a national bank, under section 5198, Rev. Stats, of U. S., providing for such recovery by “ the person to whom it has been paid, or his legal representative,” a receiver is a “ legal representative ” of such corporation, and authorized to prosecute an action for such recovery. National Bank v. Trimble, 40 Ohio St., 629, approved and followed.
    (Decided April 26, 1887.)
    Error, to the District Court of Seneca County.
    The plaintiff in error, Anson C. Barbour, commenced the action below in the court of common pleas of Seneca county, as receiver of the Ohio Shoe Company, an Ohio corporation, against the defendant, to recover twice the amount of interest greater than that allowed to be taken by a national bank, and alleged to have been paid by the Ohio Shoe Company for money borrowed by it from the bank.
    The defendant answered, among other things, that the appointment of the receiver was without authority and void.
    The answer set forth the substance of the petition filed in the action in which the receiver was appointed. The averments of that petition, so far as they reflect upon the power of the coux-t in that proceeding to appoint a receiver, are:
    That the Ohio Shoe Company was a corporation, duly incorporated under the statutes of Ohio.
    That for the purpose of conducting and carrying on its business, at the city of Tiffin, the Shoe Company had purchased and then owned, a large amount of machinery, steam engine, boiler, sewing machines, tools and implements, and had also erected its factory or building, wherein to operate said machinery upon certain real estate which it had purchased and then owned for such purpose, to-wit: (Describing it.)
    That the Shoe Company then owned and held a large amount of accounts, claims, and assets against various persons and corporations, in the city of Tiffin, Ohio, and elswhere, due to it for shoes, manufactured, sold and delivered.
    That there was also then due to the Shoe Company, unpaid subscriptions to its capital stock from various persons.
    That in the transaction of the business of the company, and for the purpose of raising the means necessary to conduct and operate its machinery and business, the plaintiff in that case, Alfred F. Sneath, became, and then was, the surety for the company, in a large amount, and' which was then due and payable, to-wit: (Describing indebtedness amounting to more than $20,000).
    That he, Sneath, had no security whatever for his liability, and that he was the surety of the company without any consideration whatever.
    That the company was then indebted to other creditors in considerable amounts.
    That the company was not making any effort to pay off or discharge the debts upon which he, Sneath, Avas surety as before stated.
    That the assets and property of the company, above mentioned, and of Avhatever kind and description, would be entirely insufficient to pay off and discharge its debts and liabilities; that the company Avas insolvent; and that its business could not be continued without loss and the wasting of its assets.
    That it AAras necessary to sell all the property, of whatever consisting, real, personal, and mixed, of the company, and to collect all its accounts, claims and demands, and its unpaid stock-subscriptions, in order to meet its liabilities and pay off and discharge its debts.
    That the petition contained no other or further averments or allegations Avhatever.
    The petition prayed: —
    That the company be compelled to pay off and discharge the notes upon Avhich Sneath was surety as above set forth, and save him from the payment thereof.
    That a receiver be appointed to take charge and control of the property, real and personal, and of all the assets of the company, and convert the same into money, as speedily as possible, to collect all the claims and demands due to it, and to collect the unpaid subscriptions to the capital stock.
    That the real estate, factory, fixtures, and all personal property belonging to the company, be sold by the order of the court, and according to law.
    That the money so collected, and the proceeds of the sale of the real estate, and personal property, be paid to all the creditors of the company, in proportion to their debts and claims against it;
    And for such other or further relief as might be proper in the premises.
    The answer proceeds, after alleging the appointment of the receiver (which Was in due form), with averments reflecting upon the motives and purposes of Sneath in procuring the receiver to be appointed, but not affecting the question of jurisdiction to make the appointment. It is conceded that this question depends upon the case made in the petition, and whether it was one in which a receiver was proper.
    The cause was tried upon the issues, and a judgment rendered against the bank in the court of common pleas, which was reversed on error in the district court. To reverse this judgment the present proceeding is prosecuted. Aside from a question of pleading which is not material, three questions are presented :
    1. Can usury be recovered back by any one except the company itself?
    2. Was the receiver, if legally appointed, authorized to bring the action below?
    3. Was there jurisdiction in the court, in Sneath’s case, to appoint a receiver ?

      George E. Seney and Lutes & Lutes for plaintiff in error.

      Nelson L. Brewer and Pillars & Pillars, for defendant in error.
   Owen, C. J.

I and II. The action below was prosecuted under section 5198 of the Revised Statutes of the United States, which provides:

“The taking, receiving, reserving or charging a rate of interest greater than is allowed by the preceding section, when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or wüich has been agreed to be paid thereon. In case flhe greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back, in an action in the nature of an action of debt, twice the amount of the interest thus paid, from the association taking or receiving the same; provided such action is commenced within two years from the time the usurious transaction occurred.”.

It is maintained by counsel for the defendant that the receiver was not the “legal representative” of the shoe company, and he also maintains that: “It is common learning that usury is a personal matter, and can be set up or claimed only by the person himself who saw fit or chose to pay it.”

The principles involved in these two propositions are settled by National Bank v. Trimble, 40 Ohio St. 629, where it is held: “ If the payor of such interest, before action brought, was adjudged a bankrupt, his assignee in bankruptcy became his ‘ legal representative/ and as such was entitled to bring the action.” The court was construing the section involved in this case. We are content with the disposition there made, and are of opinion that the principle of that case reaches the case of an action by a receiver.

III. The question, however, which has chiefly engaged the consideration of this court, is: Was the plaintiff legally appointed receiver of the shoe company ? The distinguished counsel for the defendant simplifies the discussion of this question by the statement that: “I would not undertake to call in question, here, the legality of the appointment of this receiver, if enough appeared in the case in which he was appointed, to give jurisdiction to make the appointment. But an examination of the answer contained in the record, will show that there was no such jurisdiction.”

This places the inquiry upon the true ground. It will be conceded that if there was jurisdiction to make the appointment, no mere errors or irregularities can avail to expose the appointment to collateral attack. Did the facts stated in Sneath’s petition authorize the appointment of a receiver of the property of the shoe company ?

Section 5845 (Rev. Stats.) provides that: “a surety may maintain an action against his principal, to compel him to discharge the debt or liability for which the surety is bound after the same becomes due.” This provision was a clear legislative recognition of a familiar remedy which equity afforded a surety at the time of its enactment.

It was alleged in Sneath’s petition that he was surety of the shoe company for the payment of more than $20,000— all past due. That the company was insolvent. That it was making no effort to pay off the debts for which >Sneath was surety. That the business of the company could not be continued without loss and wasting of its assets. That it was necessary to sell all the property and collect all the demands of the company to pay off its debts. The right of a surety to invoke the aid of a court of equity to compel the principal to pay off the debt was well recognized. ' It will be observed that this was not a-mere right to recover a judgment and have an execution go out against the property of the principal. Indeed, it was because there was no such remedy at law that a court of chancery would lend its aid. It was necessarily a proceeding to subject the property of the principal to the payment of the debt for which the surety had become collaterally liable. Adams Eq. 270; Polk v Gallant, 2 Dev. & Bat. Eq. 397; Pride v. Boyce, Rice Eq. 287; Washington v. Tait, 3 Humph. 543; 1 Story Eq. sec. 327; 2 Story Eq. 849; Bishop v. Day, 13 Vt. 81; Taylor v. Heriot, 4 Desaus. Eq. 227. This principle was recognized and enforced at an early day by this court. In Stump v. Rogers, 1 Ohio, 533, it was said: A surety may ask a 'court of chancery to aid in subjecting the estate of the principal to the payment of the debt, without first advancing or paying the money, as he must do before he could sue in an action at law.” This case was approved and followed in McConnell v. Scott, 15 Ohio, 401, where the court say: “ There is a great variety of circumstances, where equity steps in, for .the reason that the law affords no adequate redress, and prevents impending and threatened injury. * * * In 1 Ohio, 533, the precise question now raised received the sanction of this court, and, in our view, the authority of that case should not be shaken.” After stating that there is no remedy at law without the surety first pay the debtj, the court say: “ And such payment may be attended with great inconvenience and severe sacrifices of property — burdens which surely ought not to be imposed if they can, with propriety and justice, be avoided. In 6 Ves. 734, it is said: ‘that equity will compel the principal to pay the debt, after due, at the instance of the surety. In 4 Def. 47, ‘that it would be hard on sureties, if they were compelled to wait till judgment against them, or they had paid the debt, before they could have recourse to their principals, who might waste their effects before their eyes.’ Other cases might be cited to the same import.”

The right, then, to subject the property of the shoe company to the payment of the debts for which Sneath was surety, being clear, and the only fund out of which they could be discharged being in danger, would it have been a case for the appointment of a receiver under the chancery practice, or is it expressly provided for by our statutes ?

Section 5587 (Rev. Stats.) provides for the appointment of a receiver:

“1. In an action by a vendor to vacate a fraudulent purchase of property, or by a creditor to subject any property or fund to his claim, or between partners or others jointly owning or interested in any property or fund, on the application of the plaintiff, or of any party whose right to or interest in the property or fund, or the proceeds thereof, is probable, and where it is shown that the property or fund is in danger of being lost, removed, or materially injured.

sic*********;!;

6. In all other cases'where receivers have heretofore been appointed by the usages of courts of equity.”

The jurisdiction of the court of chancery to appoint a receiver has been assumed for the advancement of justice and is founded on the inadequacy of the remedies to be obtained in courts of ordinary jurisdiction. Kerr on Rec. 1. It was said by the Lord Chancellor in Bainbridge v. Baddeley, 3 Mac. & Gor. 419 : “ There are few cases that can be stated in which the court has not jurisdiction, when it is essential to the justice of the case to interfere to preserve the property for the party entitled, by the appointment of a receiver.”

If the remedy afforded by the courts of ordinary jurisdiction is inadequate for the purposes of justice, the court of chancery will, on a proper case being made out, ex debito justitioe, appoint a receiver.” Kerr on Rec. 2. In Skip v. Harwood, 3 Atk. 564, Lord Chancellor Hardwieke spoke of the power to appoint a receiver as a discretionary power exercised by courts, of chancery with as great utility to the subject as any sort of authority that belongs to them.” No positive or unvarying fule can be laid down as to whether the court will or will not interfere by this kind of interim protection of the property.” Kerr on Rec. 4.

Sneath certainly had an interest in the preservation of the property of the company, for the purpose of applying it to the discharge of the. debts, and it clearly appears that that property was “ in danger of being lost, removed, or materially injured.” It also seems clear that it would have been a proper case for the interposition of a court of equity to preserve the only fund out of which the surety could compel the discharge of the debt. In either case it came within the express provisions of our statute.

It must be borne in mind that here was an acting receiver. There was at least the form of a legal appointment, and that in a case which certainly invoked the discretion and consideration of the court in the determination of the question whether an appointment could or ought to be made. This was jurisdiction. The court acted. The appointment was made. The receiver proceeded to the discharge of the duties of the trust. This is not a direct proceeding to test the validity or regularity of the appointment. It is not a proceeding in error to review the order of appointment. It is a collateral inquiry. It is not enough that the court erred in its action. Unless it appear manifestly clear to us that the order of appointment was an absolute nullity by reason of the entire absence of jurisdiction in the court that made it, it cannot be assailed in this proceeding. Tyler v. Whitney, 12 Abb. Pr. 465; s. c., sub. nom. Tyler v. Willis, 33 Barb. 327; Cadle v. Baker, 20 Wall. 650; Howard v. Whitman, 29 Ind. 557; Vermont & Canada R. Co. v. Vermont Central R. Co., 46 Vt. 792; Jay v. De Groat, 17 Abb. Pr. 36, n.; High on Receivers, secs. 203, 225.

Citing and approving the decision in ease of Cadle v. Baker, supra, the supreme court of the United States in the case of Sanger v. Upton, 91 U. S. 56, applied the same rule to the case of an assignee in bankruptcy, and held that, an order of court that an assignee in bankruptcy should proceed to collect a demand, was conclusive as to the right of the assignee to .bring suit thereon; and that the defendant in the" suit could not draw into question the validity of the order.

Our conclusion is, however, that the appointment was authorized and valid. There was no error in the j udgment of the common pleas, and in reversing it there was error for which the judgment of the district court is reversed, and that of the court of common is affirmed.


author: Williams, J.

text:
    Sayler v. Simpson.

      Assignment for benefit of creditors — Sale of mortgaged property — -Jurisdiction of probate court.

    1. Where, after chattel mortgages given to secure separate indebtedness duo each of several creditors had been filed with the proper officer, the mortgagor assigned all his property for the benefit of creditors, and the assignee, having possession thereof, sold the mortgaged property under the order of the probate court in the administration of such assignment, and has the proceeds for distribution, the liens of the several mortgages are transferred from the property to the fund, and attach thereto in the order of their priority on the property ; and the rights of such mortgages to the fund must be worked out through the probate court.
    2. On application to that court by the morgagees, for the payment of their mortgages out of such fund, the unsecured creditors of the assignor may intervene,and contest their right to such payment.
    3. In such proceeding, the probate court has jurisdiction to order the payment of such liens by the assignee, out of such fund, according to their priority; and may, in the exercise of such jurisdiction, decide upon the validity of the mortgages, and determine to what extent, and in what order of priority, they are entitled to be so paid.
    4. From such order, decision and judgment of the probate court, appeals may be taken to the court of common pleas, and the cause so appealed, must therein be tried, heard and determined as though that court had original jurisdiction thereof.
    (Decided May 10, 1887.
    Ebbob to the Circuit Court of Hamiltou County.
    The Simpson <fe Gault Manufacturing Company, a corporation doing business in Cincinnati, on the 23d day of May, 1885, executed separate chattel mortgages to Mary S. J. McGroarty, Mary T. Eitch, Litcy D. Gault, Robert Simpson and Richard B. Charles, to secure certain indebtedness due them respectively.
    These mortgages were on the same day deposited and filed in the proper office, in the order named. On the 25th day of the same month the company made an assignment of all its property to John R. Sayler for the benefit of its creditors.
    The deed of assignment was on that day filed in the probate court of Hamilton County, and the assignee thereafter gave bond and entered upon the execution of the trust. In due time he filed in that court an inventory of the property, and schedule o,f the liabilities, and under the orders of the court caused the property to be appraised, and sold the same. The property included in the chattel mortgages was so sold, and the proceeds thereof being in the hands of the assignee, the several mortgagees filed with the court their applications for an order directing the assignee, out of the proceeds, to pay the amounts due them on their respective mortgages. The applications stated the amounts, -dates, and times of maturity of the claims secured by the several mortgages ; the due execution and filing of the mortgages, and the dates thereof; the sale by the assignee of the mortgaged property, and that the proceeds were then in his hands ready for distribution. To these applications the assignee answered denying their allegations; and’ W. & E. Livingston, unsecured creditors of the assignor, being admitted to defend against the applications, filed a pleading styled an answer and cross-petition, alleging, in substance, that the probate court had no jurisdiction to hear the applications, and that the mortgages were made after the company had become insolvent, and had determined to make its assignment, with the fraudulent intent to prefer the mortgagees, which they knew; and that their execution was part of the assignment, and should be held to inure to the benefit of all creditors. They pray that upon the hearing the mortgages may be found and adjudged to be part of the same transaction with the deed of assignment, and to inure to the benefit of the general creditors, and for all other proper relief.
    Munson Bros., also general creditors, filed a similar pleading.
    The averments of these pleadings were denied by the mortgagees, and thereafter, on the 22d day of December, 1885, the cause was submitted to the probate court upon the pleadings and evidence. The court found the amounts due on the mortgages; that they were valid liens upon the property at the time of the assignment, and were entitled to priority in the order of their filing; and adjudged them valid liens on the fund arising from the sale, and held by the assignee, in the order mentioned, but ordered the costs to be first paid out of the fund before any of the mortgages. The assignee and Livingstons excepted, and in due time a bill of exceptions in behalf of the latter was allowed and filed, from which it appears that the Livingstons objected to the jurisdiction of the court at the hearing; that the mortgagees gave evidence to support their several applications, and the Livingstons offered no testimony. They and Munson Bros, entered notice of their intention to appeal to tbe court of common pleas, and in proper time gave tbe necessary appeal bond. Tbe assignee also appealed. After tbe appeals were perfected, the court of common pleas, on tbe motion of Munson Bros., adjudged tbe. order of tbe probate court void for want of jurisdiction, and dismissed tbe appeals on that ground, at tbe cost of tbe assignee. To tbis the mortgagees excepted, and prosecuted a petition in error to tbe circuit court, where tbe judgment of .the court of common pleas was reversed.
    Tbe assignee and Munson Bros, unite in a petition in error here to reverse tbe circuit court.

      J. JR. Sayler; Bateman, Harper & Bailey, and Kittredge & Wilby, for plaintiffs in error.

      Thomas MaDougall, and Avery & Holmes, for defendants in error.
   Williams, J.

Tbe mortgagees having appeared and filed tbeir applications in tbe probate court for tbe payment of tbeir mortgages, tbe assignee answered; and tbe unsecured creditors named also intervened to contest them, and for that purpose filed appropriate pleadings. These admitted tbe execution and deposit of tbe mortgages as required by statute, before the filing of tbe deed of assignment, whereby they became and were at that time prima facie statutory liens on tbe property. Tbe real ground of attack upon them was, that notwithstanding their apparent priority over tbe assignment, they were, under tbe circumstances of tbeir execution, a part of it; and did not, for that reason, constitute incumbrances. After a decision adverse to tbe assignee and unsecured creditors, appeals were perfected by them to tbe court of common pleas.

There was no want of jurisdiction in either court over the persons of tbe parties thus voluntarily invoking and submitting themselves to such jurisdiction. Tbis is conceded. And, tbe assignee having, under tbe orders of tbe probate court, sold tbe mortgaged property, and. being in possession of tbe proceeds, it cannot be doubted that whatever liens existed, by virtue of tbe mortgages on tbe property, were transferred to the fund, and attached thereto in the order of their priority on the property. But the claim is, that the probate court was without power to adjudicate upon the validity, and adjust the priority of those liens. It is not disputed that the probate court is one of limited and special jurisdiction, possessing only such as is conferred by statute, with such auxiliary and incidental powers as are necessary and proper to carry into effect those expressly granted. Davis v. Davis, 11 Ohio St. 386. Nor is it claimed that there is any constitutional impediment to conferring on that court, by appropriate ligislation, the jurisdiction in question. The important inquiry is, has it been done ? "We are of opinion it has. The several provisions of the'statutes relating to assignments by insolvent debtors, 'and proceedings thereunder/adequately endow probate courts with jurisdiction to order the sale of the assigned property, and the payment of all incumbrances and liens thereon, by the assignee out of the proceeds', according to their priority; and they may, in the exercise of such jurisdiction, decide upon the validity of such liens, and determine to what extent, and in what order, they are entitled to be so paid.

Section 6351, Rev. Stats., as amended January 30, 1885 (82 Ohio L. 14), provides that: The probate court shall order the payment of all incumbrances and liens upon any of the property sold, or rights and credits collected, out of the proceeds thereof according to priority; provided, that the assignee may, in all cases where the real estate to be sold is incumbered with liens, or where any questions in regard to the title require a decree to settle the same, commence a civil action, for the sale of such real estate, in the court of common pleas of the proper county, making all persons in interest, including the wife of the assignor, parties to such proceedings; and, upon hearing, such court shall order a sale of the premises, the payment of incumbrances, and the contingent dower interest of said wife. * * * all the provisions of said section 6350 in relation to the wife of the assignor as a party to proceedings thereunder, and her rights by virtue thereof; also, the provisions of said section as to ordering proprety sold at private sale, and upon terms of credit, shall apply to proceedings under this section.” Section 6350, as amended April 13, 1880 (77 Ohio L., 189), provides that the assignee shall proceed to sell the real and personal property assigned upon such terms as the court may order, and shall make due return thereof, and “when any real estate is to be sold under the provisions of this section, the wife of the assignor may be made a party, and she may file her answer, and ask the court to have said real estate sold fr.ce of her contingent right of dower, and to allow her, in lieu thereof, such sum of money, out of the proceeds of the sale, as the court deems the just and reasonable value of her contingent dower interest therein; and such answer of the wife of the assignor shall have the same force and effect, and shall be taken and held to be, in all respects, as a deed of release to the purchaser of such real estate of the contingent dower interest therein of such wife. It is further provided, that where said wife has executed a mortgage jointly with her husband on any of the real estate aforesaid, or where the husband alone has executed a mortgage as security for the payment of the purchase price, or part thereof, on any of the said real estate, such court shall order the sale of the same free from the contingent right of dower of such wife, and shall find and determine the just and reasonable value of such wife’s contingent dower interest in the balance of the proceeds of such sale of real estate after the payment of such incumbrances as preclude her right of dower therein.”

The part of section 6350, quoted 'above, was added by the amendment of April 13, 18$0. Before it was so amended, it was contended that where a mortgagor, whose wife had joined in the execution of the mortgage on his real estate, subsequently assigned for the benefit of creditors, the probate court had exclusive jurisdiction to order . the sale of the land, and the mortgagee could not in any other tribunal enforce such sale; upon the principle that where a court of competent jurisdiction acquires possession of the subject-matter of litigation, and the right of a party to prosecute his action once attaches, the right of the court to retain the case, and of the party to prosecute it, can not be defeated by the institution of proceedings in another court, although of concurrent and co-ordinate jurisdiction. This principle was fully recognized in Dwyer v. Garlough, 31 Ohio St. 158, but was denied application in the case solely on the ground that under the statute then in force, no authority was given the probate court to cause the wife’s dower interest in the land to be sold, but only the property assigned, which did not include her interest; while by the terms of the mortgage the mortgagee was entitled to have it, as well as the husband’s estate, sold; and the remedy then afforded by a sale in the probate court was therefore inadequate. It is apparent that the amendment referred to was made to supply the defect in the power of probate courts, and to remove the objection to their exclusive jurisdiction in such cases. "Whether the object is fully accomplished is not a question now before us; but certainly the amendment is indicative of a legislative intent to repose in probate courts ample power to effectuate a speedy and complete administration of such trusts. The powers, thereby conferred, to ascertain and determine the value of a wife’s contingent dower interest in the lands sold, where she has not united in a mortgage of them; adjudicate upon the rights of parties under the mortgages in which she has united, and in the surplus remaining after providing for their payment; and settle the just and reasonable value of her dower interest in such surplus, are such as pertain to courts of equity quite as much as the determination of the amounts and priorities of incumbrances and liens on chattel property sold by the assignee. It is to be observed that both sections relate entirely to proceedings in the probate court, except that section 6351 authorizes, but does not require, the assignee, in certain cases, to commence an action in the court of common pleas for the sale of real estate incumbered by liens, or of unsettled title; while it is noteworthy that he is neither authorized nor required to do so for the sale of chattel property. The inference that in all respects, not so specially excepted, the jurisdiction of probate courts was intended to be exclusive, derives support from the circumstance that their concurrent jurisdiction is preserved in the excepted cases; and the like import in the terms employed to define the powers of the common pleas, and probate courts, confirms the conclusion that the jurisdiction of the latter is as comprehensive as stated. The common pleas is empowered to “ order' the sale of the premises, the payment of incumbrances and the contingent dower interest of the wife;” the probate court to .“order the payment of all incumbrances and liens upon any of the property sold, or rights and credits collected, according to priority,” and “determine the just and reasonable value of the wife’s contingent dower interest.”

Not all asserted liens are necessarily entitled to share in the fund. There may be disability of parties, defect in execution, partial or total discharge, or other infirmity excluding, or limiting their participation; nor do their relations in time always fix the order of their legal precedence. The duty of the court in the execution of its powers, is to order the' payment only of incumbrances and liens entitled to be paid; and those in the order of their rightful priority; which necessarily implies the power to decide what asserted liens are so entitled, and to determine the'order of payment. And neither court exhausts its powers, or performs its duty, by entering an order in general terms to pay the incumbrances and contingent dower interest of the wife; thus casting upon the assignee the hazards of making a distribution that will conform thereto. This power is'neither limited by the nature of the incumbrances, nor the character of the questions involved; and while it is in the first instance conferred upon the probate court, the means of correcting its abuse are carefully provided. By section 6407, of the Revised Statutes, an appeal to the court of common pleas is authorized, from any order, decision or judgment of the probate court, in the administration of insolvent estates, and the “ cause so appealed shall bo tried, heard and decided in the court of common pleas in the same manner as though that court had original jurisdiction thereof.”

It is urged by the plaintiffs in error that the intention to deny probate courts the jurisdiction contended for, is to be found in the fact that no .pleadings and process are provided for in such cases. This is not a conclusive test.

The act of March 14, 1853, “defining the jurisdiction and regulating the practice of probate courts,” provided that court should have “jurisdiction to enforce the payment of the debts and legacies of deceased persons and the distribution of the estates of intestates.” In McLaughlin v. McLaughlin, 4 Ohio St. 508, it was held, that under this statute probate courts had jurisdiction to determine every disputed question of fact which might become necessary to ascertain the amount justly due to each legatee or distributee,. and order the payment thereof; and yet no more adequate provision was then made for pleadings or process, by that act or otherwise, than is to be now found in Chap. 7, Title II, part Third, of the Eevised Statutes.

The insolvent debtors’ statute contemplates that the creditors who desire to share in the estate assigned, shall authenticate, and file their claims with the assignee. These are reported to the court by him. Mortgagees whose mortgages include any of the assigned property sold by the assignee, must work out their rights in the fund through the probate court. They all thus become parties to the proceeding. “The unsecured creditors are parties in interest adverse to such mortgage claimants, and although the assignee may defend in their behalf, there is no good reason why they may not themselves do so. If pleadings and process were necessary, it is by no means certain they are not afforded by sections 6406 and 6411 of the Eevised Statutes. However this may be, the claims of creditors so authenticated and presented to the assignee, and by him allowed, or legally established if disputed, constitute the basis for declaring the dividends and distributing the same, after the payment of the incumbrances. Lahm v. Johnston, 32 Ohio St. 590.

Section 6356 requires the assignee to file his accounts “ containing a full exhibit of his doings as such,” and when, on the settlement, there is a balance remaining in his hands subject to distribution among the general creditors, a dividend shall be declared by the probate court. Of course, there can be no balance remaining in the hands of the assignee subject to such distribution, until all liens and incumbrances are paid. Whether there is such balance, and what it is, must be determined by the' court before declaring the dividends. In this way the assignee may proceed with safety in the administration of his trust under the orders and directions of the court having control of the whole subject.

In Lindemann v. Ingham, 36 Ohio St. 1, this statute was considered at length, and with care. The questions there, presented and disposed of were not essentially different from those under discussion. The property had been mortgaged before the assignment was executed. The assignee sold it, and held the fund for distribution. The mortgagee brought his action against the assignee in a court of general jurisdiction. It was held that the action could not be maintained; that the lien was transferred to the fund, and the rights of the mortgagee must be worked out through the probate court. It was not denied that, the condition of the mortgage being broken, the legal title to the property was in the mortgagee, and all that was left in the mortgagor, and therefore all that passed to his assignee, was ah equity. of redemption, or an equitable interest to the extent of what remained after the payment of the mortgage. The question naturally arises, how could the rights of the mortgagee be worked out through the probate court, otherwise than upon application to that court, for so much of the proceeds of the sale, as was necessary to satisfy the mortgage; the balance was the equitable interest of the assignee subject to distribution among the general creditors. Upon.such application the court must determine the amount due on the mortgage, and order it paid- This necessarily involves the inquiry whether anything is due, whether the mortgage is a lien, and to what extent it is such. To work out his rights through the probate court, these questions must be determined by that court, and substantially the same questions are involved in the case now under consideration. It might have been said in that case with as much pro- ' priety and force as in this, that no pleadings and process are provided for in the probate court, and no jurisdiction is conferred on that court to determine the amount or extent of the equitable interest remaining in the assignee, for that involves the validity of the mortgage, and the amount due on it, which can only be determined by a court of general jurisdiction. If the position taken by the plaintiff in error here be the true one, it vras the duty of the court in that case to have sustained the plaintiff’s action, but limited his recovery to the amount due on the mortgage, thus leaving the assignee in possession of the surplus.

The conclusion of the court, announced by the learned judge in Lindemann v. Ingham, supra, that the provisions of the statute, show, very clearly that the legislature intended to vest in the probate court full and complete jurisdiction over the whole subject of assignments of this character,” was not hastily reached, or incautiously stated; but was the result of careful consideration and deliberate judgment. It has been accepted and followed .in practice since. Blandy v. Benedict, 42 Ohio St. 295; Kemper v. Campbell, 44 Ohio St. 210.

Gilliland v. Sellers, 2 Ohio St. 223, is cited by counsel, as establishing, by analogy, the absence of such jurisdiction.

That was a proceeding by an administrator, to sell lands incumbered by mortgage, for the payment of debts, to which the mortgagee was a party. The court of common pleas (then a court of probate) assigned dower to the widow, found the amount due on the mortgage, and ordered it paid out of the proceeds of the sale.; and further decreed that the mortgage be cancelled. The decree of cancellation was held to be without authority and void. ¥e do not question the correctness 'of that holding, or perceive 'wherein it is in conflict with Lindemann v. Ingham, supra.

It was, when the court went beyond the distribution of the fund under its control, and adjudicated upon rights not involved in, or necessary to such distribution, that it exceeded the measure of its jurisdiction.

Judgment affirmed.