text:
    Railway Co. v. Iron Co.

      Pleading, indefiniteness in — Corporations; subscription by one, to capital stock of another — Action by, to recover money voluntarily paid.

    1. Indefiniteness in pleading should be taken advantage of by motion and not by demurrer; so that, where the language of a pleading will fairly admit of a construction that will sustain it as against a demurrer, it should, in the absence of a motion to make definite and certain, be so construed.
    2. An incorporated company cannot, unless authorized by statute, subscribe' to the capital stock of another; a subscription so made is ultra vires and void.
    3. The rule, that a payment voluntarily made under a mistake of law, but with a full knowledge of the facts, cannot be recovered back, rests upon general principles of public convenience, and applies to a corporation as well ás to a natural person.
    (Decided October 16, 1888.)
    Error to the Circuit Court of Cuyahoga County.
    The original suit was brought into the court of common pleas in the county where instituted on appeal from a justice of the peace.
    From the petition filed in the common pleas, it appears that The Lake Erie Iron Company, plaintiff, and The Valley Railway Company, defendant, below, are each incorporated companies under the laws of this state; and that the plaintiff asked to recover of tbe defendant on an account for goods sold and delivered, tbe sum of $253.30. The account consisted of iron and iron forgings, amounting to the sum claimed.
    The defendant answered, denying, first, any indebtedness upon the account; and added, as a second defense, and by way of counter-claim, — “that the plaintiff is now and has been for the last twelve years and over, a large manufacturer of such iron goods as are named in the account attached to the petition and of other iron goods used in the construction and the operation of the railroads, and consumes in the manufacturing of such goods daily, a large amount of coal; that said Iron Company is now, and has been for the last ten years and over, largely interested in the matter of reducing the price of coal in the city of Cleveland.
    “ That the construction of railroads from the said city of Cleveland to the coal fields in said state, south of said city, tends to reduce the price of coal in said city. That the said plaintiff, to bring about and aid in the construction of the railroad of the defendant, from said city to said coal fields, and in order to effect a sale of iron goods by it manufactured, entered into a written contract with the defendant on or about the 1st day of February, 1873, a copy of which contract, marked “ Exhibit A,” is hereto attached and made a part of this answer. That in said contract the said plaintiff agreed to manufacture for and deliver to the defendant, iron and forgings of the value of two thousand dollars ($2,000), and to take in pay therefor forty shares of the capital stock of the defendant at its par value : to the entering into and making said contract by the plaintiff, each and every one of its members and stockholders at the time thereof assented to and requested. That under said contract, and in accordance therewith, the defendant did on or about the 1st day of January, 1881, apply to the plaintiff for the articles described and charged in the account, a copy of which is attached to the petition, and received from the plaintiff, on or about the date last mentioned, said goods under and in pursuance of said contract. That all the provisions of said contract that were to be performed and carried out by the defendant have been by it performed and carried out, excepting only the delivery by it of the certificate of said forty shares to the plaintiff, which has not been done for the reason that the plaintiff wholly refuses to manufacture for and deliver to the defendant any more iron and forgings. That the defendant is, and has been ever ready to receive, from the plaintiff, iron and forgings in payment for the balance due for said forty shares of stock from the plaintiff, and has so repeatedly notified and duly demanded the same of the plaintiff, but the plaintiff did, prior to, and has ever since the commencement of this action, utterly refused and still refuses to carry out its said contract;” — and asked judgment for the balance, $1,746.70, due on the subscription.
    The plaintiff demurred to the pleading on the ground that it is insufficient as a defense, or counter-claim. The court sustained the demurrer, to which the defendant excepted; and,, proceeding “to take the account, hear the proofs, and assess the damages,” found for the plaintiff in the sum of $295.04, and rendered judgment accordingly.
    The defendant, The Valley Railway Company, prosecuted error to the district court, claiming that the court erred in sustaining the demurrer of the plaintiff to its answer. The judgment was affirmed by the circuit court, and this proceeding is prosecuted to reverse the judgment in both of the lower courts.
    The principal questions arising upon the record are (1) whether the facts pleaded in the answer constitute a defense, and (2) whether they constitute a counter-claim in favor of the defendant against the plaintiff.

      W. J. Poardman, for plaintiff in error.
    There is a distinction made between contracts executed, or partly executed, and those that are not either in whole or in part executed. Field on Corporations, secs. 259, 260, 263; Green’s Brice’s Ultra Vires, p. 729, note a; Hitchcock v. Galveston, 96 U. S. 341; Hays v. G. G. L. & C. Co., 29 Ohio St. 330; Dimpfel v. O. & M. Ry. Co., 9 Bissell, 127; A. U. T. Co. v. U. P. Ry. Co., 1 McCray’s Rep. 188, syllabus 4; also page 201.

      I do not assent to the proposition that one corporation can not take the stock of another corporation.
    Suppose the defendant in error had in fact delivered two thousand dollars worth o'f iron and forgings in pursuance of the contract, and had received a certificate for the forty shares of stock, could it then have repudiated the contract on such grounds? Or suppose it had, as is not unfrequently done by corporations, taken the stock in the name of a trustee, would it not have been liable as the real owner of the stock ?

      Henderson, Kline & Tolies, for defendant in error.
    We contend that the contract set forth in the answer is one which neither the plaintiff or defendant had power to make.

      First — The railway company was not authorized to accept subscriptions to its capital stock payable otherwise than in money. The rule which prevails in this state for the determination of corporate powers, is that corporations have those powers, and only those, which are expressly granted to them, or are necessary or incident to the exercise of those expressly granted.

      Strauss v. Insurance Co., 5 Ohio St. 59; Franklin Bank v. Commercial Bank, 36 Ohio St. 350; Coppin v. Greenless & Ransom Co., 38 Ohio St. 275.
    The same rule prevails in England and most of the United States. Ashbury Railway Carriage and Iron Co. v. Richie, 7 L. R. Eng. & Irish Appeal Cases, 653; Davis v. Old Colony R. R. Co., 131 Mass. 258; Thomas v. R. R. Co., 101 U S. 71; National Trust Co. v. Miller, 33 N. J. Eq. 155; Franklin Co. v. Bank, 68 Me. 43 ; Revised Statutes of Ohio, sections 3242, 3243, 3244, 3245 and 3282. Sims v. R. R. Co., 37 Ohio St. 556.

      Second — Whether the contract was ultra vires as to plaintiff in error or not is of little consequence, if, as seems to us clear, the Lake Erie Iron Company had no authority to subscribe to the capital stock of any other corporation.
    In determining this question, it should be noted that things necessary or incident to the purpose of corporate existence do not include things merely advantageous or convenient. Davis v. Old Colony R. R., supra; Thomas v. R. R. Co., supra.

      The rule is laid down, that a corporation organized for one purpose has no power to subscribe for the stock of a company organized for another, in. Mechanics Savings Bank and Building Association v. Meridian Agency Company, 24 Conn. 159 ; Franklin Company v. Savings Bank, 68 Me. 43; Railroad Company v. Collins et al., 40 Ga. 582; Hazelhurst v. Railroad Company, 43 Ga. 13; Berry v. Yates, 24 Barb. 199; Railroad Co. v. Railroad Co., 31 N. J. Eq. 475; Talmage v. Pell, 3 Selden (N. Y.) 328; Milbank v. Railroad Co., 64 How. Pr. 20. Franklin Bank v. Commercial Bank, 36 Ohio St. 350; Coppin v. Greenlees, 38 Ohio St. 275.
    Everyone dealing with a corporation, is bound to know, at least, its apparent powers. Davis v. Ry. Co., supra; N. T. Co. v. Miller, 33 N. J. Eq. 155; Franklin Co. v. Bank, supra; Towsley v. Moore, 30 Ohio St. 184.
    The contract being ultra vires, it is entirely immaterial whether any or all the stockholders assented to or attempted to ratify it or not. Ashbury Co. v. Richie, supra; Davis v. Ry. Co., supra; Thomas v. Ry. Co., supra; Nat. Trust Co. v. Miller, supra; Chitty on Cont., p. 553; Towsley v. Moore, supra.

   Minshall, J.

A question arises in limine as to the proper construction of the pleading demurred to, the answer and cross-petition of the defendant below. It is claimed that there is no averment that the goods were delivered by the plaintiff as in performance of the contract of subscription to the capital stock of the defendant. The averment is, that under said contract the defendant “applied” for the goods charged in the account sued on, “and received from the plaintiff said goods under and in performance of said contract.” This must, as we think, be held to mean that theyj were delivered by the plaintiff as claimed by the defendant. They could not otherwise have been received from the plaintiff in pursuance of the contract. The most that can be claimed as to the averment is, that it is indefinite. If so, then it should have been raised by motion and not by demurrer. The Trustees of School Section 16 v. Odlin, 8 Ohio St. 293, 297.

If, then, the subscription of the Iron Company to the capital stock of the Railway Company is a valid one, the plaintiff, on the averments of the answer, has no right to recover, unless upon the facts stated, it has the right to sue as for goods sold and delivered, and recover as for goods that had been delivered upon a contract it had no power as a company to make. So that the determination of the questions, (1) whether the plaintiff below could make a valid subscription to the capital stock of the Railway Company, and, if not, (2) whether it could recover back what it had delivered in performance thereof, will dispose of the right of the plaintiff to recover for the goods claimed to have been sold and delivered, and, of the claim of the defendant to recover the balance alleged to be due upon the subscription.

We think it well settled as a result of the decisions in this state, as well as elsewhere, that an incorporated company cannot, unless authorized by statute, make a valid subscription to the capital stock of another; that such subscription is ultra vires and void. Mr. Morawitz, in stating this to be the law, observes : The right of forming a corporation is conferred by the incorporation laws only upon persons acting individually, and not upon associations; moreover, it would, under ordinary circumstances, be a violation of the charter of an existing company to subscribe for shares in a new company and assume the resulting liabilities.” (Priv. Corp. § 433.)

There has been no direct decision upon the question by this court, but such has been the uniform holding elsewhere. Railroad Company v. Railroad Company, 31 N. J. Eq. 475; Franklin Co. v. Lewiston Savings Bank, 68 Maine, 43; Railroad Company v. Collins, 48 Ga. 582. These cases all proceed upon the principle that the powers of corporations organized under legislative statutes are such, and such only, as those statutes confer, or that may fairly be implied therefrom. This doctrine was clearly announced and applied in Straus v. Eagle Ins. Co., 5 Ohio St. 59, and has been firmly adhered to in this court. Railroad Co. v. Hinsdale, 45 Ohio St. 556, 573.

No claim is made by tbe defendant that the Iron Company had any express statutory authority to use its capital or assets, in aid of the construction of a railroad by subscription to its capital stock or otherwise. The only averment, as to this, is, that it, the Iron Company, conceived that it would be benefited by the reduction of the price of coal at Cleveland, its place-of business, and the market which the construction of the road would afford for its manufactures, and by these considerations was induced to make the subscription. But all this can be of no avail in the face, at least, of the prohibition contained in § 3266 of the Revised Statutes, that, “No corporation shall* employ its stock, means, assets or other property, directly or indirectly, for any other purpose whatever, than to accomplish the legitimate objects of its creation.” There was then, as we-think, no authority whatever in the Iron Company to make a valid subscription to the capital stock of the Railway Company, and no recovery can be had upon it.

The next question then is, whether the plaintiff, the Iron Company, can recover the value of the goods delivered by it in. part performance of the contract on which the subscription, was made? We shall treat the question as if the action had been in plain terms for such a recovery, without embarrassing-it with a doubt as to whether such a recovery could be had in-the form of a suit for goods sold and delivered.

It is quite certain that the simple fact that the plaintiff was under no legal obligation to deliver the goods, the contract of subscription being void, is no ground for a recovery of their value against the defendant, although the plaintiff may have-. been ignorant of the law affecting the contract. Bish. Cont. § 615 and § 81. To warrant a recovery in such case, it must, further appear that the delivery was made in ignorance of the-facts, or else that it was an involuntary one. Clark v. Dutcher, 9 Cowan, 674, 684; Lamborn v. County Commissioners, 97 U. S. 181; Babcock v. Fond du Lac, 58 Wis. 230; Savings Institution v. Linder, 74 Pa. St. 371; Inhabitants of Livermore v. Inhabitants of Peru, 55 Maine, 469; Bish. Cont. § 631;. Pol. Cont. 409, and notes. But there is no ground for either of these claims. The delivery was a voluntary one, with full knowledge of the facts, which forbids a recovery of the value of the goods so delivered, unless some reason exists why corporations should be assisted against the consequences of their voluntary acts, in cases where private persons would not.

The fact that corporations are generally not liable for the unauthorized acts of their agents, and may repudiate the same, does not seem to furnish a solution of this question. The principle which denies a recovery in this class of cases will be found to rest upon considerations of general convenience, to which corporations as well as natural persons are required to conform. Remedial justice is established to aid those who cannot aid themselves without the use of violence, in obtaining what as a matter of right is their due. It does not invite litigation, and declines its assistance to those who voluntarily place themselves in the situation of becoming suitors. The Iron Company was at-liberty by its agents to accede to the demand of the railroad company for the delivery of the goods on the subscription, or to decline to do so. It chose, with a full knowledge of the facts, to deliver the goods; and there is no sound reason why it should be aided in a law-suit made necessary by its own voluntary act, that would not apply with equal force to a natural person. "Where there is no ignorance of the facts, or coercion, it is said, in Glass Co. v. City of Boston, 4 Met. 181: “If the party would resist an unjust demand, he must do so at the threshold. The parties treat with each other upon equal terms, and if litigation is intended by the party of whom the money is demanded, it should precede payment. If it were not so, the effect would be to leave the party who pays the money, the privilege of selecting his own time and convenience for litigation ; delaying it, as the case may be, until the evidence, which the other party would have relied upon to sustain his claim, may be lost by lapse of time and the various casualties to which human affairs are exposed.” In some cases stress is laid upon the inconvenience it would be to the other party, who may receive the money as his own, and, acting upon that belief, so dispose of it as to make it exceedingly inconvenient, if not impossible, to repay it. Brisbane v. Dacres, 5 Taunt. 144, Gibbs J. 152; Clark v. Dutcher, 9 Cowan, 674, 684. In any view, however, the reason of the rule applies with like force to a corporation as to a natural person.

Judgment reversed and eause remanded to the court of common pleas, with direction to overrule the demurrer to the answer of the defendant, and for further proceedings.


source: Caselaw Access Project

author: Williams, J.

license: Public Domain

text:
    Seville v. Wagner.

      Attachment proceedings before justices of the peace — When may be reviewed on error.

    1. An order of a justice of the peace discharging or refusing to discharge au attachment, may be reviewed by petition in error in the court of common pleas, and for that purpose a bill of exceptions may be taken, embodying all the evidence upon the hearing of the motion to discharge, together with the ruling of the justice, and the exceptions thereto.
    2. Where the weight of the evidence is the only question presented by such bill of exceptions, this court will not enter upon its review, or disturb the judgment of the court below thereon; but when the party against whom an order of attachment is obtained, in support of his motion to discharge the same, by his affidavit denies the ground of the attachment stated in the affidavit therefor, it devolves upon the party procuring the attachment, to establish such ground by proper ■evidence ; and whether there is any evidence tending to sustain it, is a ■question of law, which the parties may have determined by this court.
    (Decided October 16, 1888.)
    Error, to the District Court of Cuyahoga County.
    On the 8th day of February, 1883, Philip Vagner commenced an action against Joseph Seville, before a justice of the peace, on an account for goods sold and delivered, and obtained therein an order of attachment, which the defendant, upon due notice and before the trial, moved to discharge; and in support of the motion, filed his affidavit denying the charge made in the plaintiff’s affidavit, on which the attachment was procured. The motion was heard upon testimony, and overruled, and a bill of exceptions embodying all the evidence, the ruling of the .justice, and the defendant’s exceptions, was taken and entered of record. Judgment having been rendered in favor of the plaintiff for the amount of his claim, and directing the application of the attached property to its payment, the defendant filed his petition in error in the court of common pleas, and obtained a reversal of the order of the justice refusing to discharge the attachment.
    The judgment of the common pleas was reversed by the district court, and this proceeding in error is now prosecuted to reverse the district court.

      George A. Groot, for plaintiff in error.
    If the common pleas has power, under the statute, to review attachment proceedings upon error from a justice of the peace upon the evidence, then the action of the district court is erroneous, and should be reversed.
    Counsel for the defendant in error relies upon the decision of the supreme court made in the.case of Baer, Horkeimer & Co. v. Otto, 34 Ohio St. 11.
    Since the decision of the court in that case, the legislature has come to the relief of those who are unfortunate enough to be dragged into a justice court upon attachment proceedings, and has provided a remedy against the great abuse of power lodged in the hands of justices in respect to such cases. Sections 6522-6525 Revised Statutes, 1880.
    If attachment proceedings could be reviewed on error from the common pleas under the code before the revision, such proceedings are certainly reviewable on error from a justice court under the statutes, as they now exist. Section 6524 specifically authorizes a bill of exceptions to be prepared, signed and sealed, to reverse, vacate or modify an order of attachment made by a justice of the peace, and any party to a suit affected by an order made by a justice in discharging or refusing to discharge an order of attachment, shall have the right to file in the eommon pleas court a petition in error to reverse, vacate or modify the same.

    How is the court to modify an order in such proceedings, or any proceedings, unless it has the facts before it for that purpose ?

      The decision of this court, in Young v. Gerdes, 42 Ohio St. 102, is confirmatory of my position, and it substantially decides the real question made in this case.

      Wilson & Syhora, for defendant in error.
    We concede that the common pleas may look at the bill of exceptions and say there is no evidence whatever. That is a question of law. They cannot reverse on a question of the weight of the evidence before a justice. Baer v. Otto, 34 Ohio St. 11.
    An order of the justice of the peace, made on a motion to discharge an order of attachment, cannot be reviewed on proceedings in error, where the error alleged is that the order was against the weight of the evidence.

    Section 6524 does not militate against the argument. That section must be construed in -harmony with section 594, subdivision 8. So construed in harmony it will read that a bill of exceptions on a question of law may be signed for that purpose. Any other construction will render the two statutes inharmonious, overrule the 34 Ohio St. and lead to the absurdity of making a poor oppressed justice of the peace record the evidence without ány law to warrant him in taxing costs therefor. State ex rel. v. Franklin Co., 20 Ohio St. 421, 424.
    Statutes in pari materia should be so construed as to give effect to all their provisions, and if they can be construed so as to stand well together, there is no repeal by implication. Hirn v. State, 1 Ohio St. 15, 20; More v. Given, 39 Ohio St. 661.
   Williams, J.

The ground for the attachment, as stated in the affidavit on which it was procured, is, that the defendant has property or rights in action which he conceals.” This charge having been denied by the affidavit of the defendant, it devolved upon the plaintiff to sustain it by proper evidence. Without such evidence, it was the duty of the justice to discharge the attachment; and his order refusing to discharge it, was reviewable by petition in error, in the court of common pleas. Such proceeding is specifically authorized by section ■6524 of the Revised Statutes, which provides that “ any party to a suit, affected by an order discharging or refusing to dis•charge an order of attachment, shall be entitled to file a petition in error in the court of common pleas to reverse, vacate, or modify the same, and, when necessary, a bill of exceptions may be taken and signed for this purpose.” It is, however, -contended, that a bill of exceptions can only be taken to the -opinion of the justice upon some question of law, and that there is no authority for embodying in the bill, the evidence heai'd by the justice, for the purpose of reviewing his dfecisipn upon it. Baer v. Otto, 34 Ohio St. 11, is relied on in support -of this claim. It was said in that case, “that there is no pro - vision made by legislation, as it now stands, for preserving the ■evidence offered on such'mot-ion, or for reviewing the decision •of the justice, upon the ground that such order, either in granting or refusing the motion, is contrary to the evidence.”

When that case was decided, the only statute providing for Tills of exceptions in proceedings before justices of the peace, was the act of February 11, 1869 (66 Ohio L. 7), under which, the extent of the right of the party, was “ to except to "the opinion of the justice upon any question of law arising ■during the trial of the cause,” and, of the duty of the justice, to sign and seal a bill containing such exceptions, if truly alleged, with the point decided.” Since that decision, section 6524 has been made part of the justice’s code, and affords ample authority for taking bills of exceptions to the orders of Justices discharging or refusing to discharge orders of attachment. The section contains no such limitation as that contended for, but is broad enough to allow any questions to be raised by bills of exceptions taken under its provisions, that may properly be presented by a bill of exceptions. If the •question thus presented is simply one of the weight of the evidence, this court will not enter upon its review, or disturb the judgment of the conrt below. But, whether there was any evidence tending to* sustain the charge made in the affidavit for the attachment, is a question of law, which the plaintiff in ■error is entitled to have determined by this court. It is only with this view, that we have examined the bill of exceptions before us, and from such examination we conclude there was no evidence of that character.

The court of common pleas therefore rightly reversed the order of the justice of the peace, and dismissed the attachment, and in reversing that judgment, the district court erred.

Judgment of the district court reversed, and that of the common pleas affirmed,.


author: Dickman, J.

text:
    Garver v. Tisinger.

      Assignment for benefit of creditors — Jurisdiction of probate court in — Reconveyance by assignee to assignor — Inability of sureties on assignee’s bond.

    1. Where one makes a voluntary assignment under the statute, in trust for the benefit of creditors, it is within the jurisdiction of the probate court, at the request of the creditors, the assignor, and the assignee, to terminate the trust, and require the assignee to re-convey the property left in his hands to the assignor, for the purpose of enabling the latter to effect an adj ustment with his creditor’s.
    2. Where by the decree of the probate court upon the final account of the assignee, he is ordered to pay over a balance remaining in his hands to the assignor, who thereupon assigns the same to a creditor in satisfaction of his claim, the sureties on the assignee’s bond will be liable for his default of payment; and, in an action by the creditor against the sureties to recover the balance so assigned to him, the sureties will be concluded by the decree, although in executing the assignment, there may have been collusion between the assignor and assignee to defraud the creditors, unless an appeal has been taken, or the j udgment has been reversed upon a proceeding in error.
    3. Upon a proceeding to vacate the trust, and procure a re-conveyance to the assignor of the property assigned, the probate court will not, in rendering a decree that the assignee file his final report and that the trust be ended by complying with the terms of the decree, lose its jurisdiction over the person of the assignee for the settlement of his final account; nor will the sureties on his bond, by such a termination of the trust, be released from liability for the assignee’s failure to pay over, when ordered by the court, a balance found remaining in his hands.
    (Decided October 16, 1888.)
    Error to the Circuit Court of Butler County.
    The original action -was commenced in the Court of Common Pleas of Butler County, by Joseph Garver, Thomas Millikin and Samuel McAnderson, the plaintiffs in error, against Isaac M. "Warwick, principal, andN. E. "Warwick, W. S. Warwick, G. W. Shuler, S. L. Beeler, Peter Tisinger and John McMeen, sureties on the bond of Isaac M. Warwick, assignee of Daniel Shafer, the defendants in error. Being unable to meet h is liabilities, Daniel Shafer, on the 23rd day of July, 1879, made a deed of assignment to Isaac M. Warwick of all his property, except what was exempt by law, in trust for the equal benefit of all his creditors. The assignee duly filed on that day the deed of assignment in the Probate Court of Butler County, accepted the trust, and then and there gave bond, payable to the State of Ohio, in the sum of $20,000, with N. E. Warwick and the other defendants in error as sureties, conditioned as required by law. The bond was duly accepted by the probate judge, and Isaac M. Warwick entered upon the discharge of his duties as trustee, and as assignee and trustee took charge of the real and personal estate assigned to him. In November, 1879, a paper, of which the following is a copy, signed by the creditors of Daniel Shafer, and attested by N. E. Warwick, one of the sureties, was addressed to, and delivered to Isaac M. Warwick, the assignee, viz: “ The undersigned ci’editors of Daniel Shafer, insolvent, having withdrawn our respective claims from the assignee and concluded to settle the same with said Daniel Shafer, hereby consent that the said assignee of Daniel Shafer may, under the order of the Probate Court of Butler County, Ohio, surrender his trust, put an end to the assignment, and re-convey to said Daniel Shafer the residue of the property assigned to him, and that he may be discharged (so far as we are concerned), from all liability as said assignee.”
    Upon proceedings thereafter instituted in the probate court to vacate the trust, the court, on December 2, 1879, found that Daniel Shafer had either paid or otherwise arranged all debts, and that his creditors had petitioned to put an end to the assignment, and to have re-conveyed by the assignee to Daniel Shafer all the real and personal property that was left. The probate court decreed, that Isaac M. Warwick as assignee file his final report and settlement, and that the trust be ended, and that after paying costs and expenses and any preferred debts he inay have paid, he reconvey to Daniel Shafer whatever real and personal estate was so assigned to him; all which was so done with the consent of Isaac M. Warwick.
    In pursuance of such decree, Isaac M. Warwick, as assignee, filed his final report and account in the probate court, and the same was (upon exceptions filed by said Daniel Shafer) finally heard and determined on February 17, 1880. The probate court found that there was then remaining in the hands of the assignee a balance of $909.05, which sum was found to be assets of Shafer, and the assignee was ordered to pay over the same to him.
    In accordance with the decree of the probate court, the assignee re-conveyed to Shafer all the assigned property except the balance of $909.05, which he refused to pay when demanded. That balance, Shafer assigned to the plaintiffs, in payment of debts owing by him to them, and they became the joint and equal owners of the same. Upon refusal by Isaac M. Warwick to pay such balance, with interest, to the plaintiffs, they commenced their action for the recovery of the same; and the court of common pleas thereupon rendered judgment for the sum of $1,167, against Isaac M. Warwick, as principal, and N. E. Warwick, W. S. Warwick, G. W. Shuler, S. L. Beeler, Peter Tisinger and John McMeen as his sureties. On petition in error by the defendants, the circuit court reversed this judgment, and remanded the cause for further proceedings, on the sole ground, that the court of common pleas erred in sustaining the demurrers of the plaintiffs to the second, third, and fourth defenses in the separate answer of the sureties, and also sustaining the demurrers of the plaintiffs to each of the defenses in the separate answer of Isaac M. Warwick. To reverse the judgment of the circuit court this proceeding is instituted.
    The second defense of the sureties sets up, in substance, that before the assignment, Daniel Shafer owed a large amount of debts, and that he and Isaac M. Warwick confederated and conspired together, to defraud Shafer’s creditors out of their just claims and demands; and that the deed of assignment from Shafer to Isaac M. Warwick was a scheme or contrivance resorted to, in order to consummate the fraudulent arrangement.

      Third defense of sureties. — The plaintiffs signed and delivered to Daniel Shafer a written release directed to Isaac M. Warwick, assignee, releasing the assignee from payment of .each of their claims, agreeing that he might be discharged from liability as assignee, and that they would look to Daniel •Shafer for payment of their then existing claims; and thereupon, plaintiffs, on November 24, 1879, delivered to Shafer a paper, which enabled' Shafer to file his petition to put an end to the assignment, alleging that he had satisfied the claims of ■the plaintiffs, and asking to put an end to the assignment; and thereupon the probate court put an end to the assignment; ■that the claim of $909.05 was assigned to the plaintiffs to pay the same debt they had against Shafer, in regard to which, they agreed to release the assignee; that the order of discharge was made December 2, 1879, when the money, $909.05, was in the assignee’s hands, without first procuring the payment over of such sum; and that the effect of thus putting an ■end to the trust was to discharge the bond signed by the sureties.

      Fourth defense of sureties. — That since December 2, 1879, when Isaac M. Warwick was discharged by the probate court as assignee, there has been no successor appointed by the court to take Isaac M. Warwick’s position and receive the money; and besides, there are other creditors of Daniel Shafer not paid in full, and who are entitled to a pro rata share of "the $909.05, and four years had not elapsed, within which ■creditors who have been fraudulently settled with would have .a right to receive from Isaac M. Warwick the $909.05.
    The defenses set up in the separate answer of Isaac M. Warwick contain nothing — essential to be considered — different from the second, third and fourth defenses of the sureties.

      Thomas Millikin and Isaac Robertson, for plaintiffs in error.
    JV. E. Warwick, for defendants in error.
   Dickman, J.

The record discloses that the creditors of' Daniel Shafer, assignor, having withdrawn their claims from the assignee, and concluded to settle the same with Daniel Shafer himself, gave their consent by a writing addressed to-the assignee, that he might, under the order of the probate court, surrender his trust, terminate the assignment, re-convey to Daniel Shafer the residue of the assigned property, and be discharged from all liability as assignee. The probate court,, upon petition filed by the assignor, found that he had either-caused to be paid or had otherwise arranged all his debts, and had produced satisfactory evidence, that all his creditoi’s had petitioned to vacate and put an end to the1 assignznent, and to have the assignee re-convey to the assignor the residue of the-property in his hands as assignee. It was thereupon ordered, by the probate court, that the assignee file his final report and settlement; that he reconvey to Daniel Shafer whatever real or personal estate might remain in his hands as assignee; that nothing in the decree should prevent the assignee re-conveying-the real estate, personal property, and any portion of the znoney and other effects he might deezn proper before his final report and settlement; and that the trust be ended by complying with the terms of the decree. The assignee settled his final account; and it was oz’dered, that a balance found reziiainingin his hands be paid over to the assignor. From this order there was no appeal, and there was no proceeding in error to-reverse it.

The court did not traziscend its jizrisdiction in directing the re-conveyance to the assignor, and the dischaz-ge of the assignee.

The assignee, the debtor, and the creditors were the only pez’sons who had the beneficial interest in the assigned property, and the power of disposal over it. They concurred in invoking the action of the court, and it is not alleged, nor was-there any fraud in obtaining the decree of the court. An insolvent, to secuz’e equality and prevent.a z-ace of diligence among his creditors, may assign his property, but, after the assignment, the creditors may, as frequently occurs, be convinced that the insolvent can realize more from his assets than an assignee, and may therefore desire to re-in vest him with-the assigned property. That the assignment in such case should be canceled, with the consent of creditors, or at their instance, would be just and proper. Thus in Small v. Sproat, 3 Metc. 303, an insolvent debtor made an assignment under the statute, of all his property, which wras insufficient to satisfy the debts •of his creditors, and the assignees, with the consent of all those ■creditors, were permitted to re-convey the property to the as.signor for the purpose of enabling him to make an adjustment with them.

It is for the assignee to guard the rights of creditors, and also of the assignor; and while in compliance with the order of the court, it is incumbent upon him to reconvey all the assigned property to the assignor, that he himself may adjust the claims of his creditors it is also incumbent upon him, if in administering the trust he has paid all the assignor’s debts, to turn over to him any surplus that may then remain in his possession, or under his control. In such cases, there necessarily arises a resulting trust by mere operation of law, in favor of the debtor, which will entitle him to claim the surplus of the assignee. Brashear v. West, 7 Pet. 608; Halsey v. Whitney, 4 Mason, 206, 222, 223. And under section 6356 of the Revised Statutes, whenever, on settlement, the same shows a balance remaining in the hands of the assignee or trustee, it is to be divided pro rata among the creditors until they are paid in full, and the remainder, if any, is to be refunded to the assignor or his legal representatives.

But it is alleged substantially in the second defense of the sureties, that there was a fraudulent arrangement between Isaac M. Warwick, the assignee, and Daniel Shafer, the assignor, to defraud creditors; and that, therefore, they are discharged from liability on their bond, for the failure of the assignee to pay over to the assignor the balance of $909.05, as ordered by the court, and which balance Daniel Shafer had assigned to the plaintiffs, for value received, for the purpose of paying debts which he owed them. It is not claimed that the decree of the probate court is open to impeachment for fraud or mistake. Full knowledge of the proposed reconveyance and surrender of the trust was brought home to one of the sureties, N. E. Warwick, at the earlest stage, as evidenced by his attestation of the. writing signed by the creditors, and directed to the assignee. The order of the court for the payment over of the balance held by the assignee, was made after a hearing upon exceptions to the assignee’s final account; the sureties had ample time and opportunity to resist the order; and under the statute — Revised Statutes, section 6407 — an appeal may be taken to the court of common pleas, from any order of the probate court in settling the accounts of assignees, by any person against whom such order may be made, or who may be affected thereby. The sureties not having appealed or instituted proceedings in error, they, as well as their principal, are concluded by the decree of the probate court.

The principle, that a surety upon a guardian’s or adminis-* trator’s bond is concluded by a settlement in the probate court of his principal’s accounts, may by parity of reason be applied to a surety upon the bond of an assignee. In Braiden v. Mercer, 44 Ohio St. 339, it was held, that in an action upon a guardian’s bond for the recovery of the amount found due the wards upon a final settlement of the guardian’s accounts in the probate court, the sureties are concluded by the settlement, and will not be heard, in the absence of fraud and collusion, to question its correctness, or to demand a re-hearing of the accounts. The sureties are presumed to contract with reference to the jurisdiction and action of the court to which the principal may be answerable, and are bound by the judgment against them.

In Casoni v. Jerome, 58 N. Y. 321, the court say, “The question whether the plaintiff’s demand was a debt against the estate, was necessarily determined by the surrogate on the ac-^ counting, and so long as the decree stands unreversed, it cannot be questioned in a collateral action either by the administratrix or her sureties. Sureties are bound by the decree of the surrogate in such a case, because by their conduct they have made themselves privy to the proceedings against their principal, and when the principal is concluded, the surety, in the absence of fraud and collusion, is concluded.”

In Little v. Commonwealth, 48 Penn. St. 337, when by -the final decree upon the account of an assignee for the benefit of creditors, he is directed to pay the claim of a specific creditor, it was held that his sureties were liable for default of payment, and could not defend on the ground that they were not bound by the decree; that the duty of the assignee was fixed by a competent tribunal whose judgment could not be tested collaterally by the bail; that the remedy of the sureties, if any, was by an appeal from the decree of distribution; but that, where no appeal is entered, they are bound by the decree, and cannot, in an action on the bond, set up that it was erroneously made against the assignee.

And in Commonwealth v. Steacy (Supreme Court of Pennsylvania, Oct. 2, 1882), “The Reporter” vol.'14, p. 667, the rule is stated, that the bond of an assignee for the benefit of creditors, is for the benefit of any one interested in the assigned estate, and a decree of distribution is conclusive as to the fact that the persons to whom awards are made are so interested ; that the only remedy against an erroneous award is by appeal, and in an action upon the bond to recover the amount of an award, neither the assignee nor his sureties can set up as a defense that the award to the plaintiffs was erroneous. See, also, Kelley v. West, 80 N. Y. 139 ; Harrison v. Clark, 87 N. Y. 572; Johnston v. Smith, 25 Hun, 171.

It is contended, that if there was a scheme between Daniel Shafer and his assignee to defraud creditors, he could not under such a contract, illegal and immoral as it would be, maintain an action against the assignee or his sureties, to recover the balance ordered to be paid over by the probate court; and that the same bar to an action would extend to the plaintiffs, who were creditors at and from the date of the assignment. Should it be conceded that the relations between the primary parties — assignor and assignee — out of which the agreement of the sureties arose, were contaminated by fraud, it is manifest that the sureties were not induced to become such by any false representations as to material facts, or by any other fraud perpetrated on them by the creditors. The sureties in their separate answer and defenses, do not charge that the creditors, or any of them, have been parties to any fraudulent transaction : and the allegation, that Daniel Shafer and Isaac M. Warwiclc entered into a conspiracy, and had a secret understanding with each other to defraud creditors, should not deprive the creditors of recourse to the sureties for indemnity.

When the order of payment was made by the probate court, the plaintiffs were unpaid creditors of Daniel Shafer, and the balance in the assignee’s hands, if properly applied, would have inured to the benefit of the plaintiffs as creditors. The order was, in fact, in the interest of the creditors who had withdrawn their respective claims from the assignee, but who had not yet been satisfied. If there was a secret arrangement between Daniel Shafer and his assignee, of such a character as to furnish the sureties an available defense in an action against them by the assignor, they would 'stand in a very different attitude in an action by innocent creditors. In the one case, they might be exempt from liability, while in the other they would be bound for the delinquency of their principal. When the bond is given with sureties in an amount fixed by the court, the creditors look to it as securing the fund that may arise from the sale of property; and if there is a misapplication of such fund by the assignee, or a fraudulent collusion between him and the assignor, the creditors may have recourse to the sureties as an especial protection designed for them in such emergencies.

It is furthermore urged in behalf of the sureties, that the balance of 1909.05, was assigned to the plaintiffs to pay the identical claim they had against Daniel Shafer at the date of his assignment; that through the action of the plaintiffs and other creditors, the court by its decree of December 2, 1879, put an end to the trust; and that, although the assignee then had such balance in his hands, he was not ordered to pay it over until the hearing upon his final account, on February 17, 1880, of all which, the legal effect was, to discharge the bond signed by the sureties. The order of the court was that said trust be and the same is ended by complying with the terms of this decree,” which terms required that the assignee file his final report and settlement. Until he had settled his account, and obeyed the order of the court in reference to the same, he would remain charged with the obligations of the trust. But this court has determined that, in cases which are somewhat analogous to the one under consideration, the surety is not released from liability by an acceptance of the resignation of his principal before the settlement of his accounts.

In Slagle v. Entrekin, 44 Ohio St. 637, the court held, that by accepting the resignation of an administrator pending the settlement of his accounts, the probate court does not thereby lose its jurisdiction over his person, or the settlement of his accounts, and may proceed to hear and determine exceptions thereto and ascertain the amount due from him to the estate, in like manner, as if he had continued in the execution of his trust; and the amount so found due will, in the absence of fraud and collusion, be conclusive, not only upon him, but upon his sureties, in an action upon the administration bond, unless an appeal has been taken, or the judgment has been reversed upon a proceeding in error. See also Casoni v. Jerome, supra. The bond of the assignee was given pursuant to the statute, was intended for his good behavior as trustee under the assignment, and it is right that his sureties should be held for his neglect to pay over funds coming into his hands during the continuance of his trust, although the amount thereof may not have been determined until his final report filed after an order of the court providing for a determination of the trust.

As a further defense by the sureties, it was alleged, that from the 2d day of December, 1879 — when, they say, the trust was ended — there had been no successor appointed to whom the assignee could legally pay over the. money remaining,in his hands at that time; that at that time, there were other creditors of Daniel Shafer besides the plaintiffs not paid in full, and entitled to a p¡ o rata share of the balance of $909.05; and that four years had not elapsed since that time, within which such creditors who had been fraudulently settled with, would have a right to have a trustee appointed by the court, who would be the assignee’s successor, and alone authorized to receive and receipt for such balance. -This defense of the sureties should not avail. It will readily occur upon examination of the- record, that no creditors complain of any fraud upon their rights. They asked, not for the appointment of a successor to the assignee in the administration of the trust, but that the trust might be ended; and, in accordance with their request, the trust was terminated, and the balance remaining in the hands of the assignee ordered to be paid over to Daniel Shafer.

We find nothing in the separate answer of Isaac M. Warwick — in which he acknowledges and explicitly sets forth his own fraudulent motives and conduct as assignee — that requires any further consideration than what we have already given to the defenses of the sureties contained in their separate answer. It is our opinion, therefore, that the judgment of the circuit court should be reversed, and the judgment of the court of common pleas affirmed.

Judgment accordingly.


author: Owen, C. J.

text:
    West v. Weyer.

      Rents and profits— When tenant in common.liable for— When not liable for interest— Section 5774, Revised Statutes, construed.

    1. By virtue of section 5774 (Bevised Statutes), which provides that one tenant jn common may recover from another his share of rents and profits received by such tenant in common from the estate, “ according to the justice and equity of the case,” a tenant in common who uses the common estate simply to pasture his cattle, is liable to ac- . count to his co-tenants for their share of the value of such use as for rents and profits received.
    2. Where no demand has been made upon such tenant in common, either for the possession of the premises or for the value of their use, before the commencement of the action, he is not liable to account for interest upon the amount found due his co-tenants for such use.
    (Decided November 13, 1888.)
    Error to the Circuit Court of Highland County.

      The suit below was tried on appeal in the circuit court. It was originally brought for partition of real estate, and for an account of the rents and profits received by the defendant below, Allen P. West, a tenant in common in possession of the lands. The trial court found and stated the following facts and conclusions of law :
    That the plaintiff and defendants, mentioned in the pleadings as co-tenants with them, arc the heirs-at-law and tenants in common of said real estate in the several proportions set forth in the pleadings; that there were no improvements upon the land excepting the outside fences, and that it contained about 146 acres, of which about 100 acres were in pasture and the rest in woods; that the defendant, Allen P. West, owned the land adjoining and sui'rounding it upon three sides, and that there was no fence between his land and that mentioned in the petition; that the defendant, Allen P. West, pastured upon his own land adjoining this, containing about 400 acres, about 100 head :of cattle each year, and that they had access to and pastured upon the land described in the petition, and that during different years of the time that he was in possession he fed the cattle on the woodland of the premises described in the petition; that he had ample pasture each year for his own use without using this land, and that he could not have used his own pasture without the cattle going upon this land unless he had erected a partition fence between his own land and that in question; that West did not cultivate or crop the premises, or receive any rent therefor from others, or make any use of the same as aforesaid; that Allen P. West did not occupy the premises adversly to any of his co-tenants, nor did he exclude any of them from the possession thereof, nor did he occupy the same under any lease from or contract with any of them to pay rent therefor; nor did any of his co-tenants ask or demand possession of the premises or any share of the rents and profits thereof prior to the beginning-of this suit; that the fair rental value of the premises was $150, and that the value of West’s use and occupation thereof was $150 per year; that he occupied the premises one year after the bringing of this suit under the same circumstances as before; and that he paid the taxes on the premises before said suit was brought at the rate óf $35 per year.
    And from the foregoing finding of facts, the court, as its conclusions of law, finds that the defendant, Allen P. West, is liable, and should account to the other tenants in common in the proportion of their respective shares thereof for his use and occupation of the real estate in the petition described for the full period of six years prior to the beginning of this suit, at the yearly value of $150 as aforesaid, with interest on the said annual installments of rent to this date, and for the year after the beginning of this suit at the same rate with interest to this date, and he is entitled to credit upon his several payments of taxes made before the commencement of this suit, with interest on each payment to this date; the balance being $986 09.
    Judgment was rendered accordingly, which this proceeding is brought to reverse.

      Steel & Hough, for plaintiff in error.
    I. We claim that section 5774, Rev. Stats., does not authorize a recovery against a tenant in common, only, when he has received rents and profits more than comes to his share; and not for mere use and occupation. There is a wide and well recognized difference between receiving rents and profits, and use and occupation. Freeman on Co-tenancy and Par., § 270, 274; 1 Wash. Real Prop. pp. 695-6; Peck v. Carpenter, 7 Gray, 283; Woolever v. Knapp, 18 Barb. 265; Sargent v. Parsons, 12 Mass. 149; Wilcox v. Wilcox, 48 Barb. 327; Dresser v. Dresser, 40 Barb. 300; Davidson v. Thompson, 22 N. J. Eq. 83; Barrell v. Barrell, 25 N. J. Eq. 173-6; Izard v. Bodine, 11 N. J. Eq. 403; Varnum v. Leek, 23 N. W. Rep. 151; Austin v. Barret, 44 Ia. 488; Reynolds v. Wilmeth, 45 Ia. 693; Israel v. Israel, 30 Md. 120; Noble v. McFarland, 51 Ill. 226 ; Sears v. Sellew, 28 Ia. 501; Kean v. Connelly, 25 Minn. 222; Hause v. Hause, 13 N. W. Rep. 43; Pico v. Columbet, 12 Cal. 414; Conard v. Conard, 38 Ohio St. 467.
    II. If this court should hold that the words of our law, “according to the justice and equity of the case,” takes our statute out of the long line of decisions hereinbefore quoted or referred to, and that it enlarges the rights of co-tenants and creates a new right in equity, how in equity do these defendants stand? Here is a field surrounded on three sides by the lands of this plaintiff; in addition to his right as a tenant in common to use and occupy this land, was his right to use his own property.
    Chief Justice Field disposes of this case in equity, in Pico v. Columbet, supra.

    III. The court erred in charging the plaintiff in error with interest. Rev. Stats. § 3181; Wait’s A. &. D., vol. 4, 127

      Newby & Morrow, for defendants in error. •
    All the questions of law arising in this court on the finding of facts, are determinable, we think, by a construction of that part of section 5774 of the Revised Statutes, which reads as follows:
    “ One tenant in common, or coparcener, may recover from another his share of rents and profits received by such tenant or coparcener from the estate, according to the justice and equity of the case.”
    At common law, one tenant in common or coparcener could not maintain an action for rents and profits against another tenant in common or coparcener.
    Hence the English Statute of 4 Anne, which gave an action at law by one co-tenant against another as bailiff. Our statute is quite similar to the English statute, except that our statute contains the additional words, “according to the justice and equity of the case.” By the use of these additional words, we claim that the action given by our statute is not one at law, like the one given by the English statute, but is one in equity, where an account may be had by one co-tenant against another in possession of the common property. This view of the statute, we contend, is supported by this court in the case of Conard v. Conard, 38 Ohio St. 467.
    And we submit that the meaning intended by the words “justice and equity of the case,” as used in the statute, can mean nothing else than that if the tenant in possession of the common property has, by such possession, derived a benefit therefrom in which the others, equally entitled with himself, have not shared, he shall be compelled to account and pay to them the amount that their property, not his, has benefited him.
   Owen, C. J.

The principal question in the case, involves a construction of section 5774, of the Revised Statutes, which provides that: One tenant in common, or coparcener, may recover from another his share of the rents and profits received by such tenant in common or coparcener from the estate, according to the justice and equity of the case;” etc. The fact that no such remedy was available at common law, led to the enactment of the statute of Anne, (4 Anne, ch. 16, sec. 27), which provides that actions of account shall and may be brought and maintained * * * by one joint tenant, and tenant in common, * * * against the other, as bailiff for receiving more than comes to his just share or proportion,” etc.

It is contended by the plaintiff in error, that neither this statute, nor our own, authorizes a recovery by the out-tenant against the tenant in possession, for the value of the mere use and occupation of the joint estate. There are cases which seem to sustain this construction of the statute of Anne, supia, where the tenant in possession is to be regarded as a bailiff of the out-tenants. A bailiff in husbandry was, at the common law, one appointed by a private person to collect his rents and manage his estates. (Bac. Abr.) The leading English case which holds that mere use and occupation by a tenant in common, did not create a liability against him to his co-tenants, is Henderson v. Easen, 17 Ad. & El. N. S. 701, 718. The court says: It is to be observed that the statute does not mention lands or tenements, or any particular subject. Every case in which a tenant in common receives more than his share is within the statute; and account will lie when he does receive, but not otherwise. It is to be observed, also, that the receipt of issues and profits is not mentioned, but simply the receipt of more than comes to his just share; and, further, he is to account when he receives, not takes, more than comes to his jusi share.” Further construing the language of the statute, the court concludes that use and occupation merely do not render the possessory tenant in common liable to his co-tenants. It will be observed that the word “ profits,” whose absence from the statute of Anne is made prominent by the court, is supplied in our statute. This construction of the English statute has been followed in this country in Sargeant v. Parsons, 12 Mass. 149; Woolever v. Knapp, 18 Barb. 265; Crane v. Waggoner, 27 Ind. 52; Ragan v. McCoy, 29 Mo. 367, and other cases. A different view was taken of the same question in Thompson v. Bostick, 1 McMullan Eq. (S. C.) 75, where the court says that “ to cultivate and have the use of lands, is to receive the rents and profits, though the occupier is his own tenant,” etc. In Early v. Friend, 16 Grat. Va. 47, the judge speaking for the court says: “ With all deference to the Court of Exchequer Chamber, I think the construction they put upon the word * receiving,’ is too technical and narrow at least for our country. * * * I do not see the force of the distinction drawn by that court between the words receive ’ and e take ’ in this connection. I think the word ‘ receiving ’ in the statute literally means a receiving of profits as well by use and occupation as by renting out the property.” This view is taken in Shiels v. Stark, 14 Geo. 429; and in a recent case in Vermont, Hayden v. Merrill, 44 Vt. 336, where the court say: “ It is safe to say that where the occupancy of one tenant in common is beneficial, and at a profit to such occupant, and is entire and exclusive, he is bound to account to his co-tenant for what he has received by such occupancy more than his just proportion.” We think this the better view.

The question does not rest, however, upon a construction of the statute of Anne nor upon its assumed similarity with our own. In framing the latter the general assembly departed from the phraseolgy of the English statute. The language, which in the latter limited the liability of the tenant in possession to that of bailiff, is omitted. The words “ rents and profits” are added. Then we are not at liberty to conclude or say that the words, “according to the justice and equity of the case,” were added without a purpose. This court has said in Conard v. Conard, 38 Ohio St. 467, construing this statute : “ The' action given by the statute is a civil action for rents and profits ‘ received ’ by a co-tenant in exce ;s of his full share, ‘ according to the justice and equity of the cased The case made upon this record is not an action for the recovery of money merely, but for an account according to the principles of equity, in which neither party had a right of trial by jury. In this respect, at least, our statute differs from the English statutes of 4 Anne, C. 16 sec. 27, which gave an action at law against a co-tenant as bailiff.”

We conclude that the voluntary and profitable use, occupation and enjoyment by a tenant in common of the common estate creates a liability against him to account to the out-tenant as for his share of the rents and profits received by the former, according (o the justice and equity of the case.

II. It is maintained, however, that in the peculiar circumstances of the case at bar the j udgment against the plaintiff' in error is wholly without equity. The lands occupied by him adjoined his own, and there was no partition fence between them; he had ample pasture of his own, and for the cattle pastured upon the common estate, and did not need the pasturing with which he was charged. Nevertheless, he did use the lands, and the value of that use was $150 per year. What effect the trial court gave to the conscious possession of these lands, as shown by the fact that during different years of the time he was in possession he fed his cattle on the woodland of the premises described in the petition,” we are not permitted to know. If he voluntarily used and enjoyed the profitable possession of the lands, it would not seem to be a defense against an action to account, that he did not need them —• that he had sufficient pasturage of his own for his. cattle.

The trial court was called upon to deal with all the facts according, to principles of equity, and while this case seems at first view to sound in hardship, we cannot say that it is sufficiently clear to us that the court so far ignored the justice and equities of the case as to justify us in reversing its judgment.

III. Was there error in charging the interest?

The plaintiff in error was in no sense i n default. His possession of the common estate was rightful. No demand was made upon him for its possession, nor for the value of the use until the suit was brought. The claim was one as for unliquidated damages. There was no warrant for charging him with interest upon each annual installment of the yearly rental value of the lands. In this there was error, for which the judgment is modified by deducting the interest included in the judgment, and as thus modified the

Judgment is affirmed.


author: Hickman, J.

text:
    Arnold v. Donaldson.

      Assignment of dower to former divorced wife of decedent — Application of the rule, caveat emptor, to purchasers at executor’s sale, where dower has not been assigned— When executor cannot bind decedent’s estate, by a promise of indemnity against incumbrances.

    An executor, under an order issued by the probate court in a suit to sell lands to pay the debts of the decedent, sold the same without making the former wife of the decedent, who had obtained a divorce from him on account of his aggressions, a party to the suit. The purchaser being advised by counsel that the title to the lands was clear and unincum.bered, and that the wife had no dower-estate therein, bought the lands at their full value in money, paid over the money to the executor, and entered into possession of the premises. The court of common pleas afterwards adjudged, that the divorced wife was dowable of the lands, and dower therein was accordingly assigned and set off to her. Held .• That the purchaser can not maintain an action to recover back sufficient of the purchase-money, to compensate him for the loss he has sustained, by reason of the assignment of dower, and that the rule, caveat emptor, is applicable.
    2. In the absence of authority derived from the.will, or from the order issued by the court for the sale of the lands, the executor can not bind the estate of his decedent, by a verbal promise to indemnify the purchaser against incumbrances or defects in title.
    (Decided November 13, 1888.)
    Error to the District Court of Wood County.
    The defendants in error, James Donaldson, Benjamin F. Kerr, Thomas J. Sterling, Smiley McKee, Lewis Fitch, Isaac Groff and William Markloff, filed their petition in the Court of Common Pleas of Wood County, against the plaintiffs in •error, Wesley Arnold, Sarah Ann Seip, Louisa Bortle, Ada-line A. Arnold, and George P. Hinsdale, as executor of the last will and testament of Emanuel Arnold, deceased.
    The plaintiffs in their petition, in substance aver : “ That Emanuel Arnold died on or about July 14, 1874, leaving a last will and testament, of which George P. Hinsdale was duly appointed and confirmed the executor; that the testator died seized and possessed of the following described lands and tenements situate in the township of Weston, county of Wood, and state of Ohio, to-wit: The west half of the south-west-quarter of section number eight (8), township number five (5), north of range number nine (9) east, containing eighty acres; that defendants, Wesley Arnold, Sarah Ann Seip and Louisa Bortle are the only surviving children, heirs at law, and devisees of Emanuel Arnold; that some time in the year 1844, Emanuel Arnold intermarried with one Sarah Arnold, who on or about February 26, 1852, obtained a divorce from him by reason of his aggressions; that after the rendition of such decree of divorce in favor of Sarah Arnold, Emanuel Arnold was married to Adaline A. Arnold, and they lived together as husband and wife a number of years, when, she commenced an action against him for divorce and alimony, and duly obtained a divorce from him, by decree of said Court of Common Pleas of Wood County; that after Adaline A. Arnold had commenced her action for divorce and alimony against him, he paid to her by compromise and agreement about $2,500, in consideration, and in lieu of all her marital and property rights against him or his estate, either by -way of alimony, dower or otherwise; but through the mistake and inadvertence of the attorney who drafted the decree, the compromise and agreement was not entered upon the journal of the court; that afterwards, Sarah Arnold began her suit in the Court of Common Pleas of Wood County, praying that she might be endowed out of the above described lands and tenements, and of which her husband so died seized and possessed; that such proceedings were had in her suit, that it was adjudged by the court, that she was entitled to dower in the above described premises, and the same was duly assigned and set off according to law; that some time after the death of Emanuel Arnold, the probate court, upon the petition of George P. Hinsdale as executor, finding it necessary to sell real estate to pay the debts of the testator and the costs and expenses of administration, duly issued an order to the executor, empowering and commanding him to appraise, advertise and sell Said lands and tenements according to law; that in obedience to the command of such order, the executor did cause such lands and tenements to be appraised at their true value in money, and advertised and sold the same according to law to the plaintiffs for the sum of $5,240 — the plaintiffs not taking title thereto jointly, but mutually agreeing with each other to take and hold, in severalty, separate and distinct portions thereof, and severally pay said executor therefor; that George P. Hinsdale, executor, made said heirs-at-law and devisees of Emanuel Arnold, parties defendants to said proceedings for the sale of said lands and tenements, but did not make Sarah Arnold or Adaline A. Arnold parties thereto, because, the executor did not think that said Sarah or Adaline had any interest in or to said real estate, by way of dower or otherwise, and that he, the executor, had been so advised by counsel. That the plaintiffs believed when they purchased said lands, that they were acquiring a clear and unincumbered title thereto; that they were advised by counsel that said executor could make such a title to the same, and that neither Sarah Arnold nor Adaline A. Arnold had any interest by way of dower or otherwise, in said premises. That said executor believed he could make and was making a clear and unincumbered title to said lands and tenements, and in view thereof, caused the same to be appraised at their true value in money, free from dower, or any other lien or charge thereon: That the plaintiffs purchased the premises at their full value in money : That the sale to the plaintiffs was duly approved and confirmed by the probate court; that proper Reeds of conveyance were executed and delivered to them, and they went into possession of said lands and tenements.
    That on or about the 14th day of July, 1876, Adaline A. Arnold commenced an action in said court of common pleas, against the plaintiffs and the said defendants — the children and heirs-at-law and devisees of Emanuel Arnold — praying that she might also be endowed of the one-third of the two-thirds of said lands and tenements, and that it was adjudged and determined by said court, and by the District Court of Wood county, and by the Supreme Court of Ohio, that she was entitled to dower therein, and the same was duly set off and assigned to her according to law. That the court further adjudged the said Adaline A. Arnold to be entitled to the rental value of the one-third of said two-thirds of said premises, from the 14th day of July, 1876, to the first day of January, 1881, and accordingly rendered judgment against the plaintiffs, and in favof of said Adaline A. Arnold, for the sum of $317.05 in lieu thereof, and made the same a lien and charge upon said lands and tenements, less the portion set off to Adaline, as aforesaid: That said George P. Hinsdale, when he sold said lands to the plaintiffs, promised and agreed to indemnify and keep them forever harmless, and that if dower was ever asserted or assigned to either Sarah Arnold or Ada-line A. Arnold, he would refund to plaintiffs sufficient of said purchase money, paid by plaintiffs, to make them whole and keep them forever harmless, against any such claim or claims.

      “ That defendants, the heirs-at-law and devisees of said Emanuel deceased, were also of opinion that neither the said Sarah nor Adaline A. was entitled to dower in said premises. That since the dower has been assigned to the said Sarah, the said defendants, the heirs-at-law and devisees, have purchased the dower interest of the said Sarah in said lands, and paid her therefor, the sum of one thousand dollars in money, and said Sarah has quit-claimed all her right, title and interest in said premises to the plaintiffs.
    “ That the dower estate, set off and assigned to said Ada-line A., covers the entire ten acres sold and conveyed to Benjamin F. ICerr, and six acres of the portion sold to Lewis Fitch, and by reason thereof, said Kerr and Fitch have been damaged in about the sum of five hundred dollars, to be rated pro rata, according to their relative purchases.

      “ That said executor, Hinsdale, has yet in his possession, as executor of said estate, and as part of the moneys arising from said sales, the sum of one thousand dollars ($1,000), or more: That said executor has fully administered upon said estate, and has fully discharged and paid all debts and liabilities against the same, together with the costs and expenses of administration, and that said sum remains in his hands awaiting distribution amongst the defendants, Wesley Arnold, Sarah Ann Seip and Louisa Bortle, the children and heirs-at-law of said Emanuel, deceased.
    “That said executor threatens to pay over, and distribute all of said moneys in his hands, to said children and heirs-at-law: That he will pay over all of said moneys to said heirs unlegs enjoined, by order of this court, from doing so until this cause can be fully heard; thereby leaving these plaintiffs wholly remediless at law; for plaintiffs say that all of said heirs are wholly insolvent, and that there can be nothing whatever collected from them on execution at law, and that if said sum is paid over to them, the same will be hopelessly and irredeemably lost to these plaintiffs.”
    The petition concluded with a prayer for an injunction and all proper and equitable relief. In the court of common pleas there was j udgment for the plaintiffs. The defendants appealed to the district court, and there filed a demurrer to the petition, which was overruled. And thereupon the district court ordered and adjudged, that George P. Hinsdale, out of the moneys in his possession as such executor, and belonging to the estate of Emanuel Arnold, pay and refund to all the plaintiffs, pro rata, the amount, with interest, paid by them to Adaline A. Arnold in lieu of her dower from July 14,1876, to January 1, 1881, and to the plaintiffs Benjamin F. Kerr and Lewis Fitch the sum of $500, the present value ■ of the dower estate set off and assigned to Adaline A. Arnold; that out of the residue thereof, he pay the costs of the action, and distribute the balance, if any in his hands, to Wesley Arnold, Sarah Ann Seip and Louisa Bortle.
    The circuit court awarded a special mandate to the court of common pleas, to carry the judgment of the district court into effect, and to reverse that judgment this proceeding is instituted..

      Jashar Pillars and John McCauley, for plaintiffs in error.

      James B. Tyler, for defendants in error.
   Hickman, J.

When the land of which the testator, Emanuel Arnold, died seized and possessed, was sold by the executor, George P. Hinsdale, under the order of the court of probate, the knowledge had been brought home to the purchasers, that Sarah Arnold and Adaline A. Arnold were then alive; that they had been wives of the testator, and had been divorced from him on account of his wrongs and aggressions. Prior to the sale, it was a subject of inquiry with the executor and purchasers, whether the latter could acquire a clear and unincumbered title, free from dower — -the former wives of the deceased not having been made parties to the suit in the court of probate for the sale of the land. After advising with counsel, the purchase was made; but not until the executor had promised and agreed, to indemnify the purchasers against any claim for dower. The purchasers were, from the beginning, put on their guard, and acted in full view of the fact, that no dower had ever been assigned and set off to either of the wives. The right of the dowress is as plain and obvious as the right of the heir-at-law. It is a legal estate, and not a secret equity, and until assigned and set off, is a recognized incumbrance upon the land of the deceased husband. But the defendants in error purchased while cognizant that the surviving wives not only had not been endowed, but had not been made parties to the suit for the sale of the land, although the children, heirs-at-law and devisees of the testator, were parties to the proceedings. There is no intimation that any concealment, misrepresentation or fraud can be imputed to the executor, -whereby the purchasers were induced to buy the land.

The facts in this case require, we think, the application ■ of the rule, “Let the buyer beware.” The maxim caveat emptor is applied in all its force to judicial sales. Vattier v. Lytle’s Executors, 6 Ohio 477; Corwin v. Benham, 2 Ohio St. 37; Creps v. Baird, 3 Ohio St. 277; Dunlap v. Robinson, 12 Ohio St. 530; Westfall v. Dungan, 14 Ohio St. 276; Mechanics’ Loan Association v. O’Connor, 29 Ohio St. 651. In the absence of fraud, the buyer buys at his own risk as to title. The executor’s express warranty of title, unless authorized by the will or by the order of the probate court under which the sale is made, will not bind the estate of the testator. And no warranty of title by the executor, which can bind the estate, will be implied in law. He sells, and the purchaser gets only the interest or estate of the deceased in the premises, whatever it may be; and if the executor warrants expressly, he binds himself individually, but the warranty affects no one else.

It is alleged that when the executor sold the land to the defendants in error, he promised that he would indemnify them against any claim for dower, and that if dower should ever be asserted and assigned to either Sarah Arnold or Adaline A. Arnold, he would refund to the purchaser sufficient of the purchase money paid by them, to make them whole and save them harmless. It is not claimed that authority to make such promise in behalf of the estate, was derived from any power' contained in the will, or from the order of sale issued by the court; and if any liability was incurred by reason of the promise, it was that of the executor individually. It was-said by the court in Dunlap v. Robinson, supra: If express covenants contained in the deed of the administiator, do not bind the estate, we think it clear that his verbal representations, in regard to the state of the title, can have no such effect. Whatever ground such representations may furnish for rescinding or setting aside the sale, or whatever personal liability they may impose upon the administrator, the law which gives him the character of a trustee, has conferred upon him no power to create liabilities against the estate by any warranties, either within or outside of his deed of conveyance.”

It is averred in the original petition, that the executor' caused the lands and tenements to be appraised at their true value in money, and that they were bought for their full value in money. The executor could not have caused the appraisal to be made otherwise. And, as the surviving wives were not made parties to the action for the sale of the premises, and in no way appeared therein, there could not have been an appraisal subject to the dower interests. But the dower incumbrance existed nevertheless; and to what extent a knowledge of the existence of such a probable claim might have impaired the marketable value and saleableness of the property, we cannot definitely determine. It may be, however, that the purchasers would have been compelled to pay a higher price, had there been no such incumbrance, and they may have profited in their purchase by what others regarded a cloud on the title.

It is urged in behalf of the defendants in error, that at and before the time they purchased the lands and tenements, they, as -well as the executor, honestly believed that neither Sarah Arnold nor Adaline A. Arnold were entitled to dower in the premises; in other words they were mistaken as to the law governing the dower-rights of the former wives. They had been divorced from their husband at the date of the executor’s sale, and when the divorces were granted, the “ act concerning divorce and alimony,” passed March 11, 1853, (S. & C. 509) provided in section 7 — which is substantially retained in the Revised Statutes — as follows: That where a divorce shall be granted, by reason of the aggression of the husband, * * * * if wjfe survive her husband, she shall also be entitled to her right of dower in the real estate of her husband, not allowed to her as alimony, of which he was seized at any time during the coverture, and to which she had not relinquished her right of dower.” It would have been patent from an examination of the records of the court of common pleas, that neither at the time the divorce was granted to Sarah Arnold, nor at the time Adaline A. Arnold was divorced from Emanuel Arnold, was any allowance made by the court to either of them in lieu of their respective dower-rights. In view of the statutory provision, in connection with other facts set out in the original petition, it is manifest, that the claim of dower which might be asserted in the future, was not •one of those latent defects of title which a vigilant buyer could not guard against. Nor is there, in our view, in the case before us, such a mistake of law as to call for relief by a court of equity. The remedial power claimed by courts of chancery to relieve against mistakes of law, as said by the court in Bank of the United States v. Daniel, 12 Peters, 32, is a doctrine rather grounded on exceptions than upon established rules. It is well established, as was declared in Hunt v. Rousmaniere, 1 Peters, 15, that mere mistakes of law are not remediable, and that whatever exceptions there may be to the rule, they will be found few in number, and to have something peculiar in their character.” The circumstances connected with the judicial sale to the defendants in error, were not of so unusual a character as to constitute an exception to the general rule.

We are of the opinion, therefore, that the demurrer to the plaintiff’s petition should have been sustained by the district court; that the judgment of that court should be reversed, and the cause remanded to the circuit court for further proceedings.

Judgment accordingly.


author: Minshall, J.

text:
    Railway v. Bosworth.

      Statutory duty of railroad company to fence its track, secs. 3324, 3325 and 3329, JBev. Stats. — Agreement of land-owner to fence— Whether it runs with the land as a burthen — Purchaser without notice — Constructive notice, what is.

    1. A written agreement by the grantor of the right-of-way to a railroad company, to fence it on each side through his lands, will not affect the right of a subsequent purchaser to require the company to fence its road, under the provisions of Sections 3324 and 3325, Revised Statutes, where ■ the purchase was made without actual or constructive notice of the existence of such agreement.
    2. Such agreement not being recorded, the mere use and occupation of the right-of-way by the company and its successors for the purpose of a railroad, will not constitute constructive notice of the existence of such agreement.
    (Decided November 13, 1888.)
    Error to the Circuit Court of Clinton County.

      In the original action the plaintiff sought to recover of the-defendant $570.00 as the reasonable cost of building a fence on each side of its right-of-way through his lands, under the provisions of sections 3324 and 3325 of the Revised Statutes, imposing the duty on railroad companies of fencing their roads, and giving the abutting owner the right to build the ffences- and to recover the reasonable cost of the company, where it. fails to do so.
    The defendant answered, relying on an agreement by which one A. W. Miller, who in 1852 granted the right-of-way to its-predecessor, bound himself to keep up and maintain the fences-on the line through his lands, and from whom the plaintiff by intermediate conveyance, derives his title. A demurrer to this having been overruled, the plaintiff replied denying the existence of the agreement, or any knowledge of it- at the time he purchased.
    The ease was submitted to the court on an agreed statement, of the facts, which is as follows:
    “agreed statement oe facts.
    “ The parties to this action agree that the following statement contains and shall constitute the facts therein :
    “ 1. That the facts stated in the petition are true.
    “ 2. That the plaintiff derived his title to the lands described in the petition through, by, and under Andrew Miller.
    “ 3. That on the 17th day of June, A. D. 1852, the said Andrew Miller was the owner of said lands, and on that day executed and delivered to the Cincinnati, Wilmington & ZanesvilleRailroad Company a certain paper writing, in the words and figures as set forth in a copy thereof hereto attached, marked exhibit “ A,” and made a part of this agreed state of facts, and under, and by virtue of which said company entered upon said lands and built its road through the same.
    “ 4. That the railroad stock specified in said paper writing was delivered to said Andrew Miller, and said crossing and cattle-guards built as in said paper writing required.
    “ 5. That said paper writing was on the 21st day of January, A. D. 1884, recorded in the office of the Recorder of Clinton county, Ohio, and after the commencement of this action, and at no other time.

      “ 6. That the plain tiff had no actual notice of the existence or contents of said paper writing, his only notice being the use and occupation of the roadway through said lands by the defendants and the several companies through and under which it claims as stated in its answer.
    “ 7. That the defendant occupies and possesses said railroad by virtue of a lease thereof from the Cincinnati & Muskingum Valley Railway Company for the term of ninety-nine years, not yet expired. That said Cincinnati & Muskingum Valley Railway acquired the title to said railroad and all interests and property connected therewith, including rights of way, by means of certain mortgages and judicial sales thereof, thereunder, and at and from the said Cincinnati, Wilmington & . Zanesville Railway Company as fully as such proceedings could transfer them, and the said Cincinnati, Wilmington & Zanesville Railway Company has long since ceased to exist as a corporation.

      “ The above agreed statement of facts is submitted to the court as containing all the facts in the case to be entered of record as such, and upon which the court is asked to pronounce the law alone.
    “ EXHIBIT ‘A.’
    “ State of Ohio,
    Clinton County.

      “ In consideration of one dollar to me paid by the Cincinnati, Wilmington & Zanesville Railroad Company, I do hereby grant and release to said company the right to enter upon any lands I own, which lie on the line of said company’s road, surveyed and adopted by (hem, (or intended to be surveyed or adopted by them) and the right to run in curves and amend the line on the final construction of such railroad over said land, and to hold and use a strip thereof to be selected by the engineers, not exceeding 100 feet in width, for the purpose of a railroad so long as may be necessary, and to use the material standing or lying on said strip for the construction and repair of said road. I also agree to build and sustain all fences on. each side of said roadway, and to pay all taxes on said land during the occupancy by said company of the same ; and also the right of crossing other parts of my land to get at said railroad in construction and repair of said road. I will require said company to construct a farm crossing at the nearest surface grade, or within two feet thereof where I select; also a cattle guard on either side, and I hereby demand for said privilege four hundred and fifty dollars to be paid in stock of said company. »
    “Witness my hand and seal the seventeenth day of June, A. D. 1852.
    “A. W. Miller, [seal.]
    “In presence of Lawrence Fitzhugh.
    “ Received January 31, 1884.
    “Recorded February 1, 1884.
    “E. B. Howland, Recorder.”
    The common pleas rendered judgment for the defendant below; this was reversed on a proceeding in error by the circuit court, and judgment rendered for the plaintiff for the amount of his claim ; and this proceeding is now prosecuted to reverse the circuit court and affirm the common pleas.

      John S. Brasee, for plaintiff in error.

      J. B. Foraher, for defendant in error.
   Minshall, J.

A number of questions presented in argument as arising upon the record, need not, from the view we take of the case, be disposed of here. (1.) Thus it is claimed that the rights conferred by the agreement between the original parties, did not pass to the present owner of the railroad, because “ successors ” are not named, and that, therefore, the right-of-way itself, as well as the agreement as to fencing, was limited to the original company, and that the present owners can take nothing under that agreement. But, speaking for myself, I think this is not so. Being a grant to a corporation aggregate, it might last forever, and so the word “ successors ” was not necessary to create a perpetuity of right, or a fee simpie. Words of perpetuity are only necessary to create such right, where the grant is to a corporation sole. 2. Blk. Comm. 109, Angelí & Ames, Corp. § 172; Overseers of the Poor v. Sears, 22 Pick. 122; Shaw, C. J., 126, Mora. Corp. § 330. (2.) Again it is contended that the obligation to build the fence is a personal one, binding upon the grantor only, and that it was not susceptible of being imposed upon the land so as to run with it as against subsequent purchasers. But, speaking for myself, I am inclined to think, after a pretty full examination of the authorities, that there is nothing in the nature of the burthen that would prevent its being made to run with the land of the grantor as against subsequent owners, in favor of the right-of-way granted. That it would not have been so at common law may be conceded. It, with characteristic rigidity proceeded upon a few inelastic principles. It did not admit of any new or unusual burthens being imposed upon the land, and required in all instances that a privity of estate should subsist between the parties — the owner of the land upon which the burthen was placed and the owner of the land enjoying the benefit. But, to prevent the unj ust disappointment of expectations raised by agreements not regarded at law, equity, in the exercise of one of the frequent grounds of its jurisdiction, that of fraud, recognized and applied a different principle to such covenants. It took into consideration the convenience of the parties and their intention in the matter, rather than the technical rules of the common law, and generally gave effect to the intention, where the covenant concerned the land and would promote the convenience of the parties in the iise and enjoyment of it. Such covenants were not regarded as collateral, and were made to attend the land and affect its ownership as against purchasers with notice. Whitney v. Union R. R. Co., 11 Gray, 359, 364; Trustees v. Finch, 70 N. Y. 440, 449; 1 Smith’s Leading Cases, 6 Am. Ed. 167, Pom. Eq. Juris. § 689, § 2295 and § 1342. Holm. Com. Law, 392 et seq. There are, however, cases and authorities which limit the doctrine to what are called restrictive covenants, and stop short of affirmative ones, like that in this case. Pol. Cont. 227, 228. But they are not general. Many cases are to be found where affirmative covenants have been held to run with the land, on the ownership of which the burthen of performing them is imposed. Blain v. Taylor, 10 Abb. Pr. 228; Burbank v. Pilsbury, 48 N. H. 475; Bronson v. Coffin, 108 Mass. 175; Kellog v. Robinson, 6 Vt. 276; Holmes v. Buckley, 1 Abr. Eq. 27; Allen v. Culver, 3 Denio, 284, 293; Pom. Eq. Juris. § 689 and n. 5, § 1295 ; Holm. Com. Law, 402. And, in Huston v. R. R. Co., 21 Ohio St. 236, an agreement of the railroad company to keep up the fences and crossings, was held, by this court, to run with the land so as to be binding as between the assignees or grantees of both the parties. And, in the prior case of Easter v. Railroad Co., 14 Ohio St. 48, the agreement of the owner in his grant of the right-of-way to the company to keep up the fences, was, also, held to run with land. Grholson, J., in delivering the opinion, said : “The construction and maintenance of a fence on each side of the strip of land over which the right-of-way was to be exercised, manifestly affected the mode of enjoying it, and it may properly be added," beneficially to both parties.” In this case “assigns” were mentioned. But this is not material, where it may be inferred from the circumstances that such was the intention. Thus in Masury v. Southworth, 9 Ohio St. 340, it was held that a covenant by a lessee to insure ran with the land, and might be asserted by the assignee of the reversion against the assignee of the lessee, though not mentioned, where it appeared from the circumstances that such was the intention of the parties to the covenant. The addition of the agreement to sustain, to the agreement to build the fences, necessarily makes the obligation coextensive with the duration of the grant, and compels the inference that the parties intended to treat it as attending the land of the grantor so long as the way granted should be used for the purpose of a railroad. “An owner may subject his lands to any servitude, and transmit them to others charged with the same; and one taking the title to lands, with notice of any equity attached thereto, or any outstanding right or claim affecting the title or the use and enjoyment of the lands, takes subject to such equities, and such, right or claim, and stands in the place of his grantor, bound to do or forbear to do whatever he would have been bound to do or forbear to do.” Allen, J., in Trustees v. Lynch, 70 N. Y. 449. In equity, the precise form of the covenant or agreement is immaterial, if the intention is reasonably •clear. Thus, it is said : “ It is not essential that it should run with the land at law. A personal covenant or agreement will be held valid and binding in equity on a purchaser taking the estate with notice. It is not binding on him merely because he stands as an assignee of the party who made the agreement, but because he has taken the estate with notice of a valid agreement concerning it, which he cannot equitably refuse to perform.” Whitney v. Union Ry. Co., 11 Gray, 364. Bigelow, J.

But it is not necessary to determine either of these questions. The suit was brought to enforce a claim based upon the obligation of the company, created by the statute (§§. 3324 and 3325, R. S.) to fence its track. It, by way of defense, relied upon a certain agreement as bringing it within the provisions of section 3329. The agreement obliges the owner of the land from which its predecessor acquired its right-of-way, to keep up and maintain the fences along the track on each side; and the plaintiff derives his title from th'e same person. This agreement, whether susceptible of being admitted to record or not, was not recorded until after the suit was brought. And the agreed statement is “ that the plaintiff had no actual notice of the existence of said paper writing.” Now, conceding that there may be some question as to whether such an agreement may be made to run with the land so as to affect a subsequent purchaser, yet, in every case, where it is so held, it is subject to the equitable qualification that the purchaser had ' notice of the agreement. In treating the subject, Mr. Pollock says: “All these rights and liabilities being purely equitable, are like all other equitable rights and liabilities subject to the rule that purchase for value without notice is an absolute defense.” Pol. Cont. 226, Pom Eq. Juris. § 689. And we may further •observe, that to give them such effect as against, a purchaser without notice, would, not only be inequitable, but contrary to the policy of our recording statutes.

The fact that the defendant was in the possession and occupation of its road over the land at the time the plaintiff purchased, does not amount to constructive notice of the existence of such agreement. Such possession would be notice of the usual incidents of such right-of-way, but not of such as are exceptional. The general duty to fence its track is imposed by statute upon a railway-company. This was the statute at the time the plaintiff purchased. The right asserted by the defendant is exceptional to its statutory duty, and its possession was not, therefore, constructive notice to the plaintiff of its existence. There must be some visible material object upon or connected with the land, the sight or knowledge of which would reasonably suggest the existence of the right to constitute constructive notice. Pom. Eq. Juris. § 600. No such object is shown to have existed in this case, from which it might reasonably have been inferred that the owner of the land purchased by the plaintiff, was under an obligation to fence as claimed. Nor had there been any such exaction of the right upon the one hand or performace of the duty upon the other, as would, by its notoriety, have amounted to notice. Had the instrument been properly executed, acknowledged and recorded, it would have constituted notice; but such was not the case; and the rights of the defendant under it are of an equitable nature, and cannot avail against a purchaser without notice.

The provision contained in section 3329, of the Revised Statutes, to the effect that section 3324 shall not be held to affect “any contract or agreement” between “any railroad ” and “the proprietor of lands adjoining” for “the construction and maintenance of fences,” is limited by its terms to parties to the agreement; and, whilst we have no doubt but that such agreements may be made to attend the ownership of the lands adjoining the road, yet this can only be done against those who purchase with notice, actual or constructive.

Judgment affirmed.