author: Summers, C. J.

text:
    Detroit, Toledo & Ironton Railway Company v. State of Ohio.

      Statutes requiring automatic couplers by railroads — Is valid and reasonable regulation by state — Section 3305-27b, Revised Statutes — Such state law not in contravention — Of regulations by congress requiring automatic couplers — Question of interstate traffic — Constitutional law.

    1. Section 3365-276, Revised Statutes of Ohio (98 O. L., 76), making it unlawful for any common carrier engaged in moving tfaffic by railroad between points within this state to haul, or permit to be handled or used on its line, any locomotive, car, tender, or similar vehicle used in moving state traffic, not equipped with couplers coupling automatically by impact, and which can be uncoupled, without the necessity of men going between the ends of the cars, is a valid and reasonable exercise of the police power of the state; it does not directly regulate interstate commerce or conflict with regulations thereof enacted by congress, but requires the use of the same kind of automatic couplers required by the act of congress, and therefore is not void on the ground that it is in contravention of the exclusive power of congress to regulate commerce among the states.
    2. A common carrier using a car in violation of the statute is not immune from the penalty therein provided because the car, or the railroad on which it was being hauled, is commonly used in interstate traffic, or because it was in a train containing cars loaded with interstate traffic.
    (No. 11767
    Decided March 15, 1910.)
    Error to the Circuit Court of Jackson county.
    The facts are stated in the opinion.

      Mr. Alexander L. Smith and Mr. John Robbins, for plaintiff in error.
    We claim that the fact that the car in question was commonly and usually employed in interstate commerce, subjects it to the federal control and that this is exclusive. Certainly this is true where as in the present instance the car was in a train, many of the cars in which were loaded with interstate traffic. Johnson v. Railway Co., 196 U. S., 1.
    The mere circumstances that this particular car happened at the time to be loaded with traffic loaded from a point in Ohio to another point in Ohio, does not take it out of the federal control. Voelker v. Railway Co., 116 Fed. Rep., 867. This case was cited with approval by the supreme court in Johnson v. Railway Co., supra.

    The United States supreme court has uniformly held that the power to regulate interstate commerce embraces all the instrumentalities by which that commerce is conducted. Welton v. Missouri, 91 U. S., 280; Sherlock v. Ailing, 93 U. S., 104; Ferry Co. v. Pennsylvania, 114 U. S., 203; Lottawanna Case, 21 Wall., 577; Snead v. Railway Co., 151 Fed. Rep., 614.
    It seems clear that it can make no difference— in determining the question whether this car was controlled by the federal act — whether it was loaded or empty at the time. Its character (as an instrumentality of interstate commerce) is determined by the fact that it' was commonly and usually employed in such commerce and was at the time in a train employed in such commerce.
    After the supreme court of the United States has held in the Employers’ Liability Cases, 207 U. S., 463, that the federal employers’ liability act was unconstitutional because its operation was not restricted to the case of employes actually engaged in interstate commerce, the safety appliance act was attacked on a similar ground, viz.: That it is made to apply to all cars, locomotives, etc., without expressly restricting its operation to cars and locomotives engaged at the time in interstate traffic. United States v. Railroad Co., 167 Fed. Rep., 198.
    It is therefore clear that this car was subject to the federal regulations. But this withdraws it effectively from state legislation. This is shown by the cases above cited. It seems clear enough practically that in a matter of this kind, a dual control is not permissible. It would lead to endless confusion and possible conflicts. Hanley v. Railway Co., 187 U. S., 617.

      Mr. U. G. Denman, attorney general; Mr. Freeman T. Eagleson and Mr. D. H. Armstrong, prosecuting attorney, for defendant in error.
    The question presented and contended for affirmatively by plaintiff in error, is, does this federal statute deny the state the right to the exercise of its police power in the manner herein sought to be exercised by it. Article II, articles of confederation ; Article X, amendments to constitution of United States; Article I, Section 8, federal constitution.
    Under the power thus granted, the congress passed an act to promote the safety -of employes and travelers upon railroads by compelling common carriers engaged in interstate commérce to equip their ¡cars with automatic couplers and continuous brakes and their locomotives with drive wheel brakes and for other purposes.

      The general assembly of Ohio in 1906 enacted a law upon the same subject as hereinbefore set out. It will be seen that in so far as these two acts refer to cars and required automatic couplers thereon the language used in each is identical.
    From the wording of these two sections, federal and state, it is perfectly clear that both, the congress of the United States and the general assembly of Ohio recognized their relative jurisdictions in the premises and therefore made the car and not the train the unit to which the provisions of these sections are to apply. And herein' is where the plaintiff in error in the brief argues beside the mark.
    The constitution of the United States expressly withheld from congress the right to assume such jurisdiction to the federal government in Article X of the amendment to the constitution as above quoted. It cannot be seriously contended on behalf of the railroad that the state is without power to legislate as to the public safety or even public convenience in reference to railroads or other carriers of intra-state traffic. How extensive this power is, is fully and clearly set forth in Railway Co. v. Ohio, 173 U. S., 285; Hennington v. Georgia, 163 U. S., 229.
    We claim that by express constitutional provision the power of the state, as questioned in the case at bar was never surrendered to congress, and furthermore the language of the congressional statute relating to automatic couplers is drawn with express care to the end that it would not interfere with a car except when being used as an instrument of interstate commerce. It is claimed by plaintiff in error that the Ohio statute is repugnant to the constitution of the United States because it applies to railroad cars used in transportation of intra-state traffic over interstate roads. This contention is entirely disposed of adversely to plaintiff in error in the case of Railway Co. v. Ohio, 173 U. S., 285.
    The Ohio statute questioned herein is nowhere in conflict with the federal law. It applies to the separate car and not to the train as a whole. If the car complained of herein was not used in intrastate traffic then there can be no such thing as intra-state traffic, when cars loaded with interstate traffic are hauled in the same train with cars loaded with intra-state traffic. Voelker v. Railway Co., 116 Fed. Rep., 867; Railway Co. v. Kentucky, 161 U. S., 677; Railway Co. v. Haber, 169 U. S., 613; Pipe & Steel Co. v. United States, 175 U. S., 211; Lord v. Steamship Co., 102 U. S., 541; Bridge Co. v. Kentucky, 154 U. S., 204; Railway Co. v. Voelker, 129 Fed. Rep., 522.
    There are many cases which illustrate that the federal government while it has exclusive control of commerce between the states cannot regulate commerce within the. state.
    The following cases hold that the possession of a federal coasting license does not authorize ferriage in violation of state laws: Chilvers v. People, 11 Mich., 43; Carroll v. Campbell, 108 Mo., 556; Conway v. Taylor’s Exr., 1 Black, 603; Ferry Co. v. East St. Louis, 107 U. S., 365; Railway Co. v. Mills Co., 211 U. S., 612; Fairbank v. United States, 181 U. S., 283.
   Summers, C. J.

This action was commenced in the court of common pleas of Jackson county to recover a penalty for the violation- of the statute making it. unlawful for any common carrier engaged in moving traffic by railroad between points within this state “to haul, or permit to be hauled, or used on its line, any locomotive, car, tender, or-similar vehicle used in moving state traffic, not' equipped with couplers coupling automatically by. impact, and which can be uncoupled, without the necessity of men going between the ends of the cars,” passed March 19, 1906, Section 3365-27b, Revised Statutes (98 O. L., 75).

It is averred in the petition that the defendant hauled and used a car, in this state for moving-state traffic, not equipped as required by the statute. The defendant for answer pleaded two defenses. First, that it is a railroad corporation in-: corporated under the laws of the state of Michigan, and that it owns and operates a railroad from the' city of Detroit in that state to the city of Ironton in the state of Ohio; that it was engaged in inter-1 state commerce, and that all its locomotives and cars, including the locomotive and all cars in the train described in the petition, were frequently and commonly used and engaged in said interstate traf- ■ fic. “That by reason of the premises all of the business of this defendant involving the use and operation of its said railroad and equipment is. subject to the exclusive power of the congress of the United States to regulate commerce among the several states, which power has been exercised by said congress in the several acts to regulate inters' state commerce and carriers of interstate traffic; to-wit.” Then reference is made, among others, to the so-called safety appliance act of March 2, 1893, as amended April 1, 1896, and March 2, 1903. It is then averred that the state statute is in conflict with these acts of congress and is, therefore, void. The second defense is to the effect that the car in question was in a train of cars, including a number of cars being used in moving interstate traffic, and that it was, therefore, exclusively within the regulations of congress.'' A general demurrer was filed to each defense and sustained, and a judgment for plaintiff entered. The circuit court affirmed and error is prosecuted here.

The admitted facts are, that the defendant is a common carrier operating a railroad in moving interstate and intra-state traffic, that the car in question was at the time complained of in use in moving state traffic, that the car, and the railroad over which it was being hauled, were commonly and usually used in interstate traffic, and that the car was in a train in which there were a number of cars loaded with interstate traffic.

Counsel for plaintiff in error contend, in effect, that the statute is void on the ground .that congress, under the authority conferred upon it by the constitution, Article I, Section 8, to regulate commerce among the several states, having enacted regulations respecting automatic couplers on cars upon railroads engaged in interstate traffic, the state is without power to legislate upon the subject, or to prescribe the kind of couplers for a car in use in hauling intra-state traffic, if the car is commonly used in interstate traffic, or is in a train, some of the cars of which are in use in interstate traffic, or is on a railroad engaged in interstate traffic. Or to quote them, they say, “The questions are:

“1. Does the fact that the car in question was commonly and usually employed in interstate traffic, although it was at the particular time actually carrying. intra-state traffic, subject it to the federal control in such wise as to take it out of the state control ?
“2. Does the fact that it was part of a train cpntaining other cars loaded with interstate traffic (and which are therefore subject to the federal act), have the effect to bring this particular car also within the operation of the federal act in such wise as to take it out of state control?
“3. Does the fact that the railroad was commonly and usually employed in interstate commerce and that defendant was engaged in business as an interstate carrier, have such effect?” And their contention is that each question should receive an answer in the affirmative.

If the statute regulates interstate commerce, or enacts regulations in conflict with valid federal regulations of such commerce, it is invalid. In Atlantic Coast Line Railroad Co. v. Wharton et al., 207 U. S., 328, it is held that, “Any exercise of state authority, whether made directly or through the instrumentality of a commission, which directly regulates interstate commerce is repugnant to the commerce clause of the federal constitution.”

The statute in question does not purport to be a regulation of interstate traffic, but is limited strictly to the moving of traffic from one point to another in the state, and it is evident from its várious requirements as well as its title that it was passed in the exercise of the police power of the state to promote the safety in the state of employes and travelers upon railroads, and without any thought or intention of meddling with interstate commerce.

The original safety appliance act so-called, passed March 2, 1893, by congress was entitled as follows:

“An act to promote the safety of employes and travelers upon railroads by compelling common carriers, engaged in interstate commerce to equip their cars with automatic couplers and continuous brakes and their locomotives with driving-wheel brakes, and for other purposes.”

Section 2 of that act provides as follows:

“That on and after the first day of January, eighteen hundred and ninety-eight, it shall be unlawful for any such common carrier to haul or permit to be hauled or used on its line any car used in moving interstate traffic not equipped with couplers coupling automatically by impact, and which can be uncoupled without the necessity of men going between the ends of the cars.”

And by the amendment of March 2, 1903, it was further provided that the provisions and regulations of this safety appliance act—

“Shall be held to apply to all trains, locomotives, tenders, cars and similar vehicles used on any railroad engaged in interstate commerce * * * and to all other locomotives, tenders, cars and similar vehicles used in connection therewith.” 32 U. S. Stats., p. 943; U. S. Compiled Stats., 1901, p. 3174; Supp. U. S. Comp. Stat. 1903, p. 367.

Whether the original act of congress, properly-interpreted, applies to cars while not employed in interstate traffic, and whether the amendment in so far as it attempts to regulate cars while not so engaged in interstate traffic does not transcend the powers of congress, we need not consider.

In Voelker v. Chicago, M. & St. P. Ry. Co., 116 Fed. Rep., 867-873, in referring to the act of congress of 1893, Shiras, district judge, says, “Legislation on this matter of the use of automatic couplers was sought and obtained from congress, as well as from the state legislature; so that the companies would not be afforded a loophole for escape from liability on the theory that the agencies used in interstate commerce are without the control of the state legislation.” And in the same case in the circuit court of aopeals, before Sanborn, Thayer and Van Devanter, circuit judges, Chicago, M. & St. P. Ry. Co. v. Voelker, 129 Fed. Rep., 522-527, Van Devanter, J., says: “The two statutes, federal and state, seem to have been enacted in pursuance of a common purpose to afford a remedy as broad as the mischief, and to remove the source or cause of the latter through the compulsory adoption and use of a new system of coupling and uncoupling which dispensed with the necessity of any one going between, or at least entirely between, the cars.”

Our statute does not conflict with the federal statute in the character of the coupler required, but requires the same kind of coupler, and was parsed to promote the same object, though under a different power, and, while no doubt it was enacted to apply to cases assumed not to be -covered by the federal statute, it is not unreasonable, and is not void merely because a failure to equip the car with automatic couplers would subject the railroad company to punishment under a state statute as well as under the act of congress. “The same act or series of acts may constitute an offense equally against the United States and the state, subjecting the guilty party to punishment under the laws of each government.” Cross v. North Carolina, 132 U. S., 131.

The regulation of commerce among the states is within the exclusive jurisdiction of congress, but it is well settled that a state statute, enacted in the exercise of its police power, not regulating or directly affecting" interstate commerce or in conflict with federal regulations, but merely regulative of the instrumentalities of commerce, is not void; and when such state regulations do conflict with federal regulations, they are not void on the ground that the state has exercised a power exclusively in congress, but because the constitution and the laws of the United States made in pursuance thereof are the supreme law of the land.

It is unnecessary to cite the cases by which these principles are established, they are cited in the following very recent cases upon which we base our decision. In Asbell v. Kansas, 209 U. S., 251, where a statute of the state of Kansas making it a misdemeanor to transport cattle into the state without inspection, was upheld against the contention that it interfered with interstate commerce and also conflicted with a statute of the United States and the rules and regulations of the department of agriculture, it is held: “While .the state may not legislate for the direct control of interstate commerce,, a proper police regulation which does not conflict with congressional legislation on the subject involved is not necessarily unconstitutional because it may have an indirect effect upon interstate commerce.” In Missouri Pacific Railway Co. v. Larabee Flour Mills Co., 211 U. S., 612, in which a peremptory writ of mandamus was allowed by the supreme court of Kansas, commanding one railroad company to transfer cars to and from a mill on another railroad, and which was affirmed, it is said by Mr. Justice Brewer: “The roads are, therefore, engaged in both interstate commerce and that within the state. In the former they are subject to the regulation of congress;.in the latter to that of the state, and to enforce the proper relation between congress and the state the full control of each over the commerce subject to its dominion must be preserved.” Again he says, (623) : “Running through the entire argument of counsel for the Missouri Pacific is the thought that the control. of congress over interstate commerce and a delegation of that control to a commission necessarily withdraws from the state all power in respect to regulations of a lpcal character. This proposition cannot be sustained.” Mr. Justice Moody, dissenting (624), says: “I venture to think that the weight of authority establishes the following principles: The commerce clause of the constitution vests the power to regulate interstate commerce exclusively in the congress and leaves the power to regulate intra-state commerce exclusively in the states. Both powers being exclusive, neither can be directly exercised except by the government in which it is vested. Though the state may not directly control interstate commerce, it may often indirectly affect that commerce by the exercise of other governmental powers with which it is undoubtedly clothed. And this indirect effect may be allowed to operate until the congress enacts legislation conflicting with it, to which it must yield as the paramount power. Gibbons v. Ogden, 9 Wheat., 1, 204; Atlantic Coast Line v. Wharton, 207 U. S., 328/334; Asbell v. Kansas, 209 U. S. 251.”

It follows that the questions propounded by counsel should receive a negative answer, and the judgment is affirmed.

Judgment affirmed.

Crew, Spear, Davis, Si-iauck and Price, JJ., concur.


source: Caselaw Access Project

author: Price, J.

license: Public Domain

text:
    Loe v. The State, ex rel. Platt, Prosecuting Attorney.

      Moneys paid into county treasury — From proceedings for construction of ditch — Not funds of county, when — Section 4447, Revised Statutes — Prosecuting attorney cannot recover from contractor sum paid him, when — Section 1277, Revised Statutes, construed.

    Moneys which are paid, into the county treasury by virtue of proceedings for the location and construction of a county ditch in conformity with Section 4447 and cognate sections of Revised Statutes, are not “funds of the county,” nor “public moneys in the hands of the county treasurer belonging to the county,” within the meaning of Section 1277, Revised Statutes; and where one who has contracted for the construction of all or a part of a county ditch has been fully paid by the county treasurer on warrants issued to such contractor by the county auditor, when the work of 'construction so contracted for was but partially performed-, the prosecuting attorney is not authorized by said Section Í277 to bring and maintain an action to recover back from the contractor the amount received by-him in excess of the work actually performed.
    (No. 11524
    Decided April 12, 1910.)
    Error to the Circuit Court of Seneca county.
    On the 20th day of April, 1906, the defendant in error filed his petition in the court of common pleas of Seneca county, wherein he alleged that he was prosecuting attorney of said county, and that as such officer he brought the action under and by virtue of the provisions of Section 1277, Revised Statutes of Ohio. To this petition he made the plaintiff in error, Mary A. Loe, and Jesse Stephens parties defendant. Two causes of action are stated as grounds for recovery.

      The substance of the first cause of action, is, that working sections seven (7) and nine (9) of a county ditch known as the Royer ditch, on or about the 29th day of March, 1904, were duly sold to the defendant, James H. Loe, by one W. O, Bulger, then the county surveyor1 of said county, said Loe being the lowest and best bidder therefor; that afterwards, on or about the 31st day of March, 1904, in pursuance of the statute in such case provided, a written contract for the construction of said working sections was duly entered into between said James H. Loe and said county, through its said surveyor, for the consideration therein expressed of $2,101.45 to be paid to said Loe for performing all the labor of constructing all that part of said Royer ditch before specified, in accordance with the specifications thereof, such work to be fully completed by the 20th day of September, 1904; that such written contract was duly signed in behalf of said county by said surveyor, and by the said James H. Loe in behalf of himself, which was duly approved, together with a bond in the penal sum of $4,000 securing the full and prompt performance of the work of constructing that part of the ditch so sold to said James H. Loe in accordance with the specifications and by the time specified in said contract with the commissioners, on or about June 8, 1904. It is further alleged that of said sum of $2,101.45, the sum of $941 was to be paid to said. Loe for the construction of working section seven of said ditch, and the sum of $1,160.45 for the construction of working section nine of the same.

      The bond was conditioned, in substance, that if said James H. Loe should well and truly perform all and singular the terms ,of said contract for construction of said sections of the ditch, and pay all damages which may occur by reason of any failure on his part to complete said work within the time aforesaid, then the obligation to be void; otherwise to be in full force.
    It is alleged that said 'Royer ditch was authorized to be constructed in pursuance of the provisions of the law relating to county ditches, and ■said contract and bond were executed, delivered and approved in pursuance of said laws. Copies of the contract and bond are, by exhibits, made part of the petition.
    The plaintiff next alleged that said James H. Loe proceeded to the construction of that part of said ditch known as working section seven, but never fully completed the same; that, said work was so “negligently and inefficiently done and performed” by said Loe, that fully 1,000 cubic yards of earth agreed to be excayated and removed in said working section were not removed by him or the sureties on said bond, or by anyone else for him or them, and by reason of such neglect and failure the “efficiency” of said ditch has been great7 ly impaired.
    Further, that on or about, the 23d of January,. 1905, the said county surveyor, conspiring with said James FI. Loe to defraud said county, and to enable him to draw money out of the county treasury of said county, which said Loe had not earned, and for alleged work not by him performed, issued to said Loe a certificate as county surveyor, under Section 4477, Revised Statutes, certifying that the work of said James H. Loe in said work-' ing section seven had been fully performed, and that he was thereby entitled to the full sum of $41, both of said persons, W. O. Bulger, surveyor, and James H. Loe, being fully aware that said work had not been fully performed, and that a large portion of .said work was not then .performed.
    It is averred that upon' said certificate so issued the county auditor issued his warrant in favor of said Loe and delivered the same to him, which he presented to the county treasurer and received payment thereof, and that on former certificates of like character issued in October and November,-1904, said Loe had received payment, in all the full contract price for said section seven.
    It is then averred that said sum of $941 so paid to Loe on account of that- work is excessive in the sum of $250, said last sum being the amount it will require to complete the contract; that said payments were made out of the public funds of said county, and that by reason of the premises there is due from the defendants the sum of $250 with interest from January 23, 1905. Of the sum of money required to construct said Royer ditch, to-wit: $19,834.85, the sum of.$4,098.33 was paid by the county, and .not assessed upon the benefited lands.
    The second cause of action sets out what was done and what was not done by Loe, in performance of the contract as to working section nine of said ditch, and the averments to fix his liability are similar to those contained in the first cause of action, except the date and amounts -of the. warrants issued to Loe, by the county auditor, on which he collected and received from the county treasurer at the different date of the warrants sums which aggregate the full contract price for that section, $1,160.45, and it is alleged that said sum is excessive in the sum of $337.75, in that to the extent of that sum the work was not completed as required by the contract, and which work Loe refuses to complete. The bond-set out in the first cause of action also covers the work required on said, section nine.
    The prayer is for judgment for the amounts stated in the twp causes of action, which it is said is the extent of the failure by Loe to fully perform the contract.
    The sureties demurred- to the petition. The court sustained the demurrer, and as to them the case thus ended.
    The principal, Loe, also demurred on the ground that neither of the causes of action states facts sufficient to constitute a cause of action against him. This demurrer was overruled and exception entered to the decision. Thereupon Loe answered admitting the execution of the contract and bond and their approval as alleged in the petition, and that he proceeded with work on both sections, and that he received the warrants and collected the same as charged in the petition, the said surveyor having certified to the completion of both sections according to contract.
    The defendant denied the charge of conspiracy with the surveyor, alleged in the petition, and all fraudulent conduct imputed to him or them, and he affirms in the answer that he fully performed the contract and completed the work.
    The cause was tried to a jury, and the defendant excepted to each paragraph of the court’s charge. The jury found for the plaintiff in the sum of $501.85. The defendant’s motion for .new trial was overruled and judgment entered on the verdict. This judgment was affirmed by the circuit .court, and this court is asked to reverse both judgments.

      Mr. Jesse Stephens, for plaintiff in error.
    The remedy here is a suit in favor of the aggrieved parties, if any, against the contractor and the sureties. Commissioners v. Krauss, 53 Ohio St., 628.
    The money paid to Loe on the certificate of the engineer in the absence of fraud or mistake, as in this case, would not give the'defendant in error a right of action against Loe. Commissioners v. Noyes, 35 Ohio St., 201.
    The contractor cannot sue and recover from the county for work done on his contract to construct a ditch. He must depend upon the land-owners paying the assessments. Griffin v. Smith, 9 C. C., 225; 56 Ohio St., 775.
    It does not become public money because it was brought into the county treasury by one, two or more individuals for their own use and benefit. The treasurer is not acting for the county in this respect, but rather as the agent of these beneficiaries. Smith v. Griffin, 9 C. C., 225.
    County money cannot be disbursed except upon a claim presented to and allowed by the board of county commissioners. The county commissioners are the financial representatives of the county. Printing Co. v. State, 68 Ohio St., 369; State v. Griggsy, 6 N. P., 202.
    This work was to be done under the supervision of and to be approved by the county surveyor; the county surveyor is the agent of the land-owners, and his acceptance of the work is their acceptance. Bristol v. Hussey, 16 W. L. B., 290; Griffin v. Smith, 9 C. C., 225; Kane v. Stone Co., 39 Ohio St., 10.

      Mr. Harry P. Black, prosecuting attorney; Mr. James H. Platt; Messrs. Royer & Spitler and Mr. Willis Bacon, for defendant in error.
    We think that the moneys of this character held by the county treasurer are public moneys, and thus come within the scope of the provisions of Section 1277, Revised Statutes. State v. Carter, 67 Ohio St., 422.
    In the absence of legislation specifically authorizing the recovery back of money illegally paid, the prosecuting attorney cannot recover back in the absence of fraud or mistake of fact. Printing Co. v. State, 68 Ohio St., 362.
    The power to tax is a public power, and it can be exercised for none other than public purposes. 25 Am; & Eng. Ency. Law (1 ed.), 87.
    A tax may be levied to build levies to prevent the overflow of land, provide for the drainage and reclamation of bodies of swamp and overflowed land. Holts v. Commissioners, 41 Ohio St., 423; Chesbrough v. Commissioners, 37 Ohio St., 508;
      Sessions v. Crunkilton, 20 Ohio St., 349; 25 Am. & Eng. Ency. Law (1 ed.), 91.
   Price, J.

The defendant in error has assumed to act under the authority conferred by Section 1277,- Revised Statutes, which is: “The prosecuting attorneys of the several counties of the state, upon being satisfied that the'funds of the county, or any public moneys in the hands of the county treasurer. or belonging to the county, are about to be, or have been, misapplied, or that any such public moneys have been illegally drawn out of, or withheld from, the county treasury, or that a contract in contravention of the laws of this state has been, or is about to be entered into, or has been or is being executed, or that a contract was procured by fraud or corruption, or that any property real or personal, belonging to the county is being illegally used or occupied, or is being used or occupied in violation of the terms of any contract, or that the terms of any contract or agreement made by or on behalf of the county are being or have been violated, or that any money is due the county, may apply, by civil action in the name of the state, to a court of competent jurisdiction, to restrain such contemplated misapplication of funds, or the completion of any such illegal contract not fully completed, or to recover back, for the use of the county, all such public moneys so misapplied or so illegally drawn out or withheld from the county treasury, or to recover, for the benefit of the county, any damages resulting from the execution of any such illegal contract, or to recover, for the b'ehefit of the county, any such real or personal property so used or occupied, or to' recover, for the benefit of' the county, any damages resulting from the non-performance of tht terms of any contract, or to otherwise enforce the same, or to recover any such money due the county.”

This section enlarges upon the duties and powers of prosecuting attorneys, as defined and prescribed in former legislation on the subject. The original act, found in volume seventy Ohio Laws, page thirty-eight, was an act “to prevent the misapplication of county funds, and the completion of illegal and fraudulent contracts.” This act was amended April 25, 1898 (93 O. L., 408), and again amended and broadened May 12, 1902, as found in 95.0. L., 558, and as thus amended is the present Section 1277 above quoted, and which the prosecuting attorney claims authorized him to bring and maintain the action under review.

In order to determine whether this position is sound, we must consider the character and purpose of the petition, and if we find that the case there made does not come within the purview of the statute, the demurrer to the petition should be sustained and the petition dismissed, for the decision of the trial court overruling the demurrer to the petition was assigned as error in the circuit court, and also in the petition in error filed in this court.

Attached to and made a part of the petition filed by the prosecuting attorney, is a copy of the contract for the construction of sections seven and nine of the Royer ditch improvement. It is dated March 31, 1904, and recites that the work was sold on March 29, 1904, to James H. Loe,'for the sum of $2,101.45, and that “in consideration of the premises, I, the said James Loe do hereby agree to and with the board of commissioners of said Seneca county, or whomsoever may be interested therein, that 1 will do and perform all the labor of constructing that portion of said improvement so sold to me as aforesaid in accordance with the specifications thereof,” etc.

The bond of $4,000 was conditioned for the faithful and timely performance of said contract. It was a contract to construct certain portions of a county ditch and was made with the county commissioners through the surveyor or engineer. While it was in some respects a public improvement, it was local in its nature, and affected only a small part of the count)'-.

• It appears in the petition that Loe, the contractor, proceeded to perform the work of constructing the sections awarded- to him, and before he had fully completed the same, at his request, the surveyor or engineer gave him certificates from time to time during the progress of the work, to the effect that Loe was entitled to certain amounts as compensation, and that finally the engineer or surveyor in charge of the work, gave final certificate and acceptance, which enabled Loe to obtain warrants for the full contract price. It is alleged that these were obtained through conspiracy and collusion with the engineer in charge, they being fully aware that the work was not completed, but only partially performed, and it is stated in dollars and cents, the extent of this failure to perform. For these amounts the prosecuting attorney asked judgment. For a more elaborate narration of the facts relied on for recovery, we refer to the statement of the case.

It is argued by the defendant in error that the “money thus drawn out of the county treasury was “public 'money” — “public moneys in the hands of the county treasurer, or belonging to the county,” and that by said statute he is authorized • “to recover back for the use of the county, all such public moneys.so misapplied, or so illegally drawn out, or withheld from the county treasury,” — “or to recover for the benefit of the county any damages resulting from the non-performance of the terms of any contract * * * or to recover any such money due the county.” These words and phrases are taken from Section 1277, which measures the scope of his authority.

We test the correctness of the claim by considering some of the provisions of the statutes regulating the locating and constructing of county ditches. This legislation begins with Section 4447, Revised Statutes, and as to the questions we are investigating, it is the law’ in force when the Royer ditch was established in 1904.

Section 4447 provides for the locating of county ditches. The next defines the meaning of the word ditch, and makes a limitation of assessments for same according to benefits. Section 4449 provides that “when the improvement will drain the whole or a part of any public or corporate road, or a railroad, or will so benefit any such road that the traveled track or road-bed thereof will be improved by its construction, there shall be apportioned to the county, if the road is a state, county, or free turnpike road, or to the townships if a township road, or to the.- corporation,. if a corporate road or railroad, a proper share of the costs and expenses thereof, as hereinafter provided.”

Section 4450 authorizes application for such-ditch by land-owners to be benefited, and also by “the trustees of any original surveyed township owning land granted by congress for the support of common schools, or the infirmary directors of any county may make such application and file the petition and bond provided for in this chapter.” Sections 4451 and 4451 a prescribe what the petition shall contain and the character of the bond to be filed and notice given. ■ Section 4452 provides for the hearing of the petition and the findings that may be made. If the commissioners find against the improvement, the petition must be dismissed at the costs of the petitioners. If they find for it, a survey and plat must be made as required by Section 4454. They order the surveyor or engineer to report assessments according to Sections 4455 and 4456. The apportionment made by the engineer may be changed by the commissioners, and if benefited parties are omitted, they may be brought into the proceeding and assessed a part of the cost and expense,, as stated in Section 4459.

Section 4460 authorizes application for compensation and damages by persons or corporations whose lands are taken or affected in any way, and the next section provides for the allowance of such compensation and damages. The latter part of the section1 (4461) provides that “when the allowance for compensation and damages is fixed and determined as provided in this section, the commissioners-shall consider and determine according to their best knowledge and judgment, the proportionate benefits to accrue from the construction of the proposed improvement. If they shall find that the public health, convenience or welfare will be promoted by said improvement, and that the samé is of sufficient importance to the public, cause the damages and compensation which. have been assessed to be paid out of the county treasury, they shall order the same to be so paid; or they may order a portion thereof to be paid by the county and the remainder by the benefited land-owners, as they may deem just and equitable.”

We pause here to remark that there is nothing in the petition or in the record to show that any claims for compensation and damages were filed with the commissioners, or that the county paid any part of such claims, if any were presented.' But the section last quoted proceeds to provide that where “such improvement is not of sufficient importance to the public to cause such damages and' compensation, or any part thereof to be paid by the county, they shall fix and determine the proportionate amount thereof which should be paid by the several land-owners benefited by the improvement; in either case the commissioners shall direct the auditor to issue an order on the county treasurer to each of the several claimants to whom compensation or damages was allowed for the amount due, and to enter on the ditch duplicate the amounts assessed against the several benefited land-owners for the payment of such compensation and damages, payable in the same ratio and manner as other assessments, and to bé collected as' other taxes.” • . ■

This language seems plain to the effect that where the improvement is not of sufficient importance to the public to justify the payment of all or part of the compensation and damages out of the county treasury as a charge against the county, the orders issued, for damages and compensation are paid by the county treasurer and the amounts are apportioned and entered on the ditch duplicate against the benefited land-owners, to be collected from them as other taxes. Therefore, the land-owners reimburse the county for such outlay. But as we have observed, we are not advised in this case that any such claims were paid by the county treasurer, and we need not pursue this point further. As yet we have not found in the petition or any part of the record that any county or state money was withdrawn by Loe.

Many subsequent sections provide for exceptions before the commissioners, for appeal from certain orders and findings of the commissioners, and for the mode of trial on appeal. These sections are not important here, as no appeal was taken in the present case.

Sections 4475 and 4475a provide when and how the commissioners shall sell the work of construction of the ditch, and the following section, Section 4476, for sale of work, and it authorizes the county surveyor to make contracts with bidders to whom work is awarded and to take bonds for the faithful performance of the work contracted for, and it provides that r‘the contractor for each job shall be liable on his bond so given for all delays after the expiration of the time named therein for the completion of the job, and for the payment of all damages which accrue by reason of the failure to complete the job within, the time required in the contract therefor, and for the' payment of all labor and material and for all debts incurred in the performance of this contract. All claims under this act shall be filed with the county surveyor before the expiration of the time for the completion of such contract.”

Section 4477 provides that the work of construction shall be under the supervision. of the county surveyor, and he is authorized to make certificates during- progress of the work for a certain per cent, of the work completed, upon which the contractor may receive warrants and obtain partial payment, etc. These payments shall be made by the treasurer out of any funds applicable to such purpose.

Section 4478 provides for a re-sale of uncompleted work at the expense of the contractor, and that anyone who has sustained damages in consequence of non-performance of such work “may bring suit for •damages against any contractor failing to perform his contract, or upon the bond of such contractor, and recover damages as provided by law in other cases.”

Section 4479 is of first importance now, for it directs the rhaking of assessments to pay for the work. It reads: “When the working sections of the improvement are let, as hereinbefore provided, and the costs and expenses of location and construction and all compensation and damages are ascertained, the commissioners shall meet . and determine at what time and in what number of assessments they will require the same to be paid, and order that assessments, as made, by them, be placed on the duplicate accordingly, against all the lots or lands, or corporate roads or railroads assessed ; they shall also determine whether they will issue bonds of the county to raise the money necessary to pay such costs and expense,” etc.

Section 4480 directs that “when the commissioners make an assessment, they shall cause an entry to be made, directing the auditor to make and furnish to the treasurer of the county a special duplicate with the assessments arranged thereon, as required by their order, and the auditor shall retain a copy - thereof in his 'office, and all assessments shall be collected and accounted for by the treasurer as other taxes;” the remainder of the section regulates proceedings where the assessments are not paid for a year after due, etc.

If bonds are issued to construct the ditch, Section 4481 directs how the assessments of benefited lands, lots and roads shall be made to pay for the bonds. There is one more section — 4501—which is of prime importance for a thorough understanding of preceding sections. It reads: “The commissioners shall, annually if necessary, at their March session, levy upon the - grand duplicate of the county a. tax not to exceed five-tenths of one mill on the dollar, sufficient to pay for the location and-construction of such portions of the respective ditches located by them, or by the commissioners' of two or more counties as may be apportioned to the county, and they -shall pay out of any fund applicable to stick purposes, any sum assessed upon land owned by the county. In all proceedings which have been, or shall be commenced under this chapter wherein compensation and damages, or either, has been or shall be awarded by the commissioners under section forty-four hundred and sixty-one, or by a jury on appeal to the probate court, an amount of the county general ditch improvement fund in the county treasury, sufficient to satisfy the same, shall be set apart and held as a deposit of money to secure and be subject to the payment of the same; and if in any case there shall be an insufficient amount of such ditch improvement fund unappropriated in the treasury for such security and payment, then an amount of the general revenue fund in the county treasury, equal to such deficiency, together with such an appropriated residue of said ditch improvement fund, if any, shall be set apart and held for said purposes; and the commissioners shall, before the property for which compensation and damages has been awarded, shall have been actually taken and occupied for the purpose of its appropriation, order the auditor on demand of the corporation or person entitled thereto, to draw his warrant on the county treasurer for the amount of such award, stating therein on what fund it is drawn, and deliver the same to the party so entitled, which shall be paid out of the county treasury; and all sums so paid shall be apportioned, assessed and reimbursed to said funds from the collection of assessments for compensation and damages as provided in sections four thousand four hundred and seventy-nine and four thousand four hundred and eighty of, the Revised Statutes

While it does not appear in this record that any compensation or damages was allowed for lands taken for the ditch improvement, and paid out of the county treasury, yet the above section informs us that had such payments been made from the county funds or county ditch fund, the same must be reimbursed by the assessments made upon the property of benefited land-owners, corporate or public roads, so that the burden rests at last upon such owners and public and corporate roads as are assessed for the improvement. So here, if the money drawn by Loe on the surveyor's certificate and warrants of the auditor may in part have been drawn out of a county ditch fund, it was a fund to be supplied and reinforced by the assessments made for the improvement, and therefore it was a special fund no doubt collected on a special duplicate required by Section 4480.

We have thus journeyed through these numerous sections of the county ditch law to learn the method and the means whereby county ditches are located, constructed and paid for, and we learn from their consideration, that the commissioners, county surveyor and the county treasurer, are mere agencies supplied by the statute for the parties interested in the locating and construction of the improvement, which does not concern the county or state at large, but the locality specially benefited.

It is true that the commissioners assessed some of the expense of construction on each of two townships and* another portion on the county, because, no doubt, township and county roads in that locality were benefited - by the construction of the ditch. In that respect the townships and county stood in the same relation thereto that was borne by benefited' land-owners.

This court has reported numerous cases wherein ditch legislation has been construed. In the list is Ohio, ex rel. McConahey, v. Seamon, Treas., 23 Ohio St., 389. In that case the court was considering the township ditch law, passed May 6, 1868 (65 O. L., 155). Several of its provisions resemble the statute in force when the Royer ditch was located and constructed. To give the -point to the decision, we quote from Section 13 of that act: “Immediately after the sale of any such sections or parts of sections, as provided for in the twelfth section of this act, said trustees shall certify to the auditor of the county the amount each section sold for, adding the proportionate amount of cost and expenses of such sale, together with a correct description of each piece of land, and said auditor shall place the same on the duplicate to be collected as other state and county taxes are collected. As soon as such work shall, be completed in conformity with such sale and to the satisfaction of said trustees, said trustees shall certify the amount due to each person to the auditor of the county, and said auditor shall draw orders for the payment of such amount out of the county treasury,” etc. One Kdhn completed several jobs of ditching -under that act, and pursuant to said Section 13, he received an order for each job completed payable out of the county treasury. He sold and transferred these orders to the relator McConahey. These ditch jobs had been certified to the county auditor, to which was added in each case the proportionate share of costs and expenses of the sale of the work and the same had been placed on the duplicate. Thereafter McConahey presented said orders to the county treasurer and demanded payment, which was refused. The treasurer had sufficient county funds to pay all of said orders, but no funds had been collected upon the said assessments. McConahey sued out an alternative mandamus, to which the treasurer responded with the foregoing facts.

This court held in that case as follows: “Section 13 of the act of May 6, 1868, provides that orders drawn pursuant to its provisions by the county auditor shall be payable out of the county treasury. It designates the place of payment, but does not specify the fund out . of which such payment is to be made. It, however, prescribes an assessment by which the sums so required may be collected into the treasury. The legislature has directed the levy of taxes separately, for county purposes, for bridges, roads, etc., each to be kept distinct from the other; and the disbursements of moneys raised for one purpose, in payment of obligations contracted for any other object, is forbidden, save in cases expressly named by statute. It is not claimed by the relator that any part of the bridge or road funds can be Used in payment of the orders held by him, but he urges that money collected for ‘county purposes’ may be so used. We think not. While the construction or maintenance of public roads and bridges is by express enactment excluded from ‘county purposes,’ it can hardly be maintained that the legislature intended to include within them labor on a local drain.” The writ was refused and he could not be paid out of county funds, because his claim was against a special fund when it should- be collected from the assessments. And when collected, it did not become “public moneys” or “moneys belonging to the county,” as mentioned in Section 1277, Revised Statutes, but a special fund to pay for a local improvement. The same principle of construction must prevail in characterizing the funds alleged to have been drawn out by Loe. While the law in force when the Royer ditch was made is more elaborate in scope and details than the said act of May 6, 1868, it is but an enlargement of the same scheme for paying for ditch improvements, whether located by township trustees or county commissioners.

There is another reason why the prosecuting attorney must lose his contention. He makes it appear in his petition and in his proofs, that Loe had a valid contract for the performance of the two working sections, and had given an acceptable bond to secure performance; further, that the money he drew from the county treasury was drawn on warrants issued by the auditor, and the whole ground of complaint is, that he did not fully complete the contracts — did not excavate all the rock and earth in the path of the ditch. He received more than he was entitled to, it is alleged. If that is true, there is use for the contract and bond, and not a case for the prosecuting attorney under Section 1277, supra. If the work was not all performed as required, the ditch statute furnishes an ample remedy.

We think the relator has no authority under said section to bring and maintain the action under review. The trial court erred in submitting the case to the jury, and in charging the jury as to its duties under the averments of the petition.

The judgments o£ the lower courts are reversed, the demurrer to the petition sustained and petition dismissed.

Judgment reversed.

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


author: Shauck, J.

text:
    Nicholson v. Franklin Brewing Company.

      A statute authorising' a corporation — To adopt by-laws regulating issue of stock• — Gives validity to a by-law, when — -Stockholder in transferring stock, bound by said by-laws — Laws governing corporation slock.

    1. A statute which expressly authorizes a corporation formed under it to adopt by-laws regulating the issuance and transference of shares in its capital stoclc and aiding in the promotion of its business gives validity to a by-law which requires a stockholder who desires to sell and transfer his stock, before doing so, to notify the directors of such desire and to give them a reasonable time to sell the stock to classes of persons designated in the by-laws because of the belief that their -occupations would render them efficient promoters of the business of the corporation.
    2. A suit cannot be maintained against the corporation to compel it, to register stock which 'a holder has attempted to transfer in violation of such by-law.
    (No. 11118
    Decided April 12, 1910.)
    Error to the Circuit Court of Franklin county.
    Plaintiff brought suit in the court of common pleas to compel the brewing company, a corporation of the state of Delaware, to accept the surrender of two certificates of its capital stock which he had received by assignment and. transfer from former owners thereof and issue to him a new certificate therefor. The judgment of the court of common pleas was in favor of the plaintiff, and the defendant appealed the cause to the circuit court, where, at the request of plaintiff, the facts were found and stated separate from the court’s conclusions of law. The finding of facts being appropriate to the issues joined and evidence adduced may be taken as a full statement of the case. It is as follows:
    1. On the 25th day of May, 1903, the defendant, Franklin Brewing Company, was duly organized and incorporated under.and by virtue of the laws of the state of Delaware, and has ever since continued to be and exist as such corporation.
    2. The defendant, Franklin Brewing Company, has ever since its organization conducted a general brewing business at Columbus, Franklin county, Ohio, with its entire property and holdings located at said place.
    3. Said defendant company has a capital stock of $225,000.00, divided into 2,250 shares, of the par value of $100.00 each.
    4. On or about the first day of February, 1905, plaintiff purchased, paying therefor a full and valuable consideration, twenty-five shares of the capital stock of said Franklin Brewing' Company from one M. H. Neil, who was then and there the owner and holder thereof and a stockholder in said defendant company, said shares of stock being represented by stock certificate No. 437. The said M. FT. Neil thereupon endorsed upon said certificate of stock his written assignment thereof to plaintiff, and delivered said certificate to plaintiff, who has ever since been the owner and holder thereof.
    The face of said certificate No. 437 reads as follows:
    “Incorporated under the laws of the State of Delaware.
    “No. 437. Shares 25.
    “Franklin Brewing Company.
    “Capital Stock, $225,000.00.
    “The Franklin Brewing Company has a lien upon the stock represented by this certificate for any and all indebtedness owing to it by the holder hereof, as shown upon the books of the company.
    “This certifies that M. H. Neil is the owner of 25 shares of the capital stock of Franklin Brewing Company, fully paid up, transferable only on the books of the corporation by the holder hereof in person, or by attorney, upon surrender of this certificate properly endorsed.
    “In witness whereof, the said corporation has caused this certificate to be signed by its duly authorized officers and to be sealed with the seal of the corporation, at Columbus, Ohio, this 10th day of January, A. D. 1905.
    Henry Seibert,
    “ [ Corporate Seal. ] PresidentA
    “Leonard Moi-ir, Secretary.

    The assignment of the said M. H. Neil on the back of said certificate No. 437 reads as follows:
    “For value received I hereby sell, assign and transfer unto James C. Nicholson twenty-five shares of the capital stock represented by the within certificate, and do hereby irrevocably constitute and appoint - to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.
    “M. H. Neil.
    “Dated-
    “In presence of: W. L. McLaughlin/'’
    5. On or about the first day of February, 1905, plaintiff purchased, paying therefor a full and valuable consideration, two shares of the capital stock of said Franklin Brewing Company from one John E. Crooks, who was then and there the owner and holder thereof, and a stockholder in said defendant company, said shares of stock being represented by stock certificate No. 395. The said John E. Crooks thereupon endorsed upon said certificate of stock his written assignment thereof to plaintiff, and delivered said certificate to plaintiff, who has ever since been the owner and holder thereof.
    The face of said certificate No. 395 reads as follows:
    “Incorporated under the laws of the State of Delaware.
    “No. 395. Shares 2.
    “Franklin Brewing Company.
    “Capital Stock, $225,000.00.
    “The Franklin Brewing Company has a lien upon the stock represented by this certificate for any and all indebtedness owing to it by the hol'der hereof, as shown upon the books of the company. ' “This certifies that John E. Crooks is the owner of two shares of the capital stock of Franklin Brewing Company, fully paid up, transferable only on the books of the corporation by the holder hereof in person, or by attorney, upon surrender of this certificate properly endorsed.
    “In witness whereof, the said corporation has caused this certificate to be signed by its duly authorized officers and to be sealed with the seal of the corporation, at Columbus, Ohio, this 5th day of December, A. D. 1904.

      urr. , „ , , ' Henry Seibert, [Corporate Seal.] President” “Leonard Mohr, Secretary. rresiaem.

    The assignment of the said John E. Crooks on the back of said certificate No. 395 reads as follows:
    “For value received I hereby sell, assign and transfer unto James C. Nicholson two shares of the capital stock represented by. the within certificate, and do hereby irrevocably constitute and appoint- to transfer the said stock on the books of the within named corporation with full power of substitution in the premises
    “John E. Crooks.
    “Dated-=-
    “In presence of: Besse M. Baker/’’
    6. At the time plaintiff purchased said certificates'Nos. 437 and 395 there was printed on the back of each the following provision, together with the blank form for the written consent of the directors and president:
    “The stock represented by this certificate is not transferable except with the consent of at least two-thirds' of the directors of the corporation indorsed upon the back hereof and signed by said directors and the president of this corporation, naming the person to whom the same may be transferred, and bearing the corporate seal.
    “We hereby consent to the transfer of -
    shares of the stock represented by this certificate
    to- Signed by us this-day of
    -, 190 — .”
    “President.

      “Directors.”'

      7. On the 23d day of March, 1905, plaintiff presented each of said certificates, Nos. 437 and. 395, at the office of the defendant company, to. Leonard Mohr and Henry Seibert, who were at-the time secretary and president, respectively, of ■ said defendant company, and who were the proper officers of said company to make transfers of all stock certificates which had been sold and assigned and to accept a surrender of the old certificates and to- issue new certificates, at which time plaintiff offered to surrender said certificates Nos. 437 and 395, and demanded of said officers that they transfer to plaintiff said shares of stock and issue to him a new certificate therefor.
    Afterwards, on the 30th day of March, 1905, plaintiff presented each of said certificates, Nos. 437 and 395, at the office of the defendant company to its board of directors, which board of directors was then in session, and offered to surrender said certificates Nos. 437 and 395, and demanded of said board of directors that they cause said shares of stock to be transferred to plaintiff and a new certificate therefor to be issued to him. No further or other action in this matter was taken by the plaintiff, or by John E. Crooks or by Moses H. Neil, except the institution of this action.
    Said defendant company and said officers and board of directors at said times refused, and have ever since refused to accept a surrender of said certificates Nos. 437 and 395, and to transfer said shares of stock to plaintiff and to issue to him a new certificate therefor.
    8. On or about the 1st day of April, 1905, plaintiff requested the defendant company, through its proper officers, to allow him to inspect the books and records of said corporation and to fix a reasonable time for said inspection, which request was refused.
    9. Said defendant company has at all times refused to admit plaintiff as a member or stockholder of said corporation, and has denied him the fight to vote or to be voted for at any and all of its stockholders’ meetings, and has denied him the .right to exercise any of the rights or privileges of a stockholder.
    10. On the 25th day of May, 1903, at the first meeting of the incorporators and subscribers to the capital stock of said defendant company, held at the office of the Delaware Charter Guarantee and Trust Company, at Wilmington, Delaware, a set of by-laws was adopted. Section 19 of said bylaws reads as follows:
    “Section 19. In case’ any member of this company desires to sell all or part of the stock held by him, he shall notify the secretary of this company in writing, stating the amount of stock he desires to sell and the market value of same, when this company shall have an option on said stock for thirty days following such notice. The directors in turn shall first offer it for sale to saloonkeepers who are not stockholders; second, to saloonkeepers who are stockholders, and, third, to stockholders who are not saloonkeepers. The meaning of the word 'saloonkeepers/ as applied in this section, is held to be all men actually engaged in the saloon business/’
    Said Section 19 has not been changed, amended or affected in any manner by other or subsequent action.
    11. Paragraph 6 of Section 2 of the corporation laws of the state of Delaware provides that every corporation shall have the power—
    “To make by-laws, not inconsistent with the constitution or laws of the United States or of this state, fixing and altering the number of its directors for the management of its property, the regulation and government of its affairs, and for the certification and transfer of its stock, with penalties for the breach thereof not exceeding twenty dollars.”
    12. Section 3 of the corporation laws of the state of Delaware reads as follows:
    “Section 3. In addition to the powers enumerated in the second section of this act, every cor.poration, its officers, directors and stockholders shall possess and exercise all the powers and privileges contained in this act, and the powers expressly given in its charter or in its certificate under which it was incorporated, so far as the same are necessary or convenient to the attainment of the objects set forth in such charter or certificate of incorporation; and shall be governed by the provisions and be subject to the restrictions and liabilities in this act contained, so far as the same are appropriate to and not inconsistent with such charter or act under which such corporation was formed; and no corporation shall possess or exercise any other corporate powers, except such incidental powers as shall be necessary to the exercise of the powers so given.”
    13. Section 12 of the corporation laws of the state of Delaware reads as follows:
    “Section 12. The power to make and alter bylaws shall be in the stockholders, but any corporation may, in the certificate of incorporation, confer that power upon the directors. By-laws made by the directors under power so conferred may be altered or repealed by the directors or stockholders.”

      14. Section 16 of the corporation laws of the state of Delaware reads as follows:
    “Section 16. The shares of stock in every corporation shall be deemed personal property and transferable on the books of the corporation in such manner and under such regulations as the by-laws provide; provided, however, that no stock or bonds issued by any corporation organized under this act shall be taxed in this state when the same shall be owned by non-residents of this state, or airy foreign corporation. Whenever any transfers of shares shall be made for collateral security and not absolutely, it shall be so expressed in the entry of the transfer.”
    15. The section of the corporation laws of the state of Delaware, referred to in these findings of facts, were in full force and effect during the time of the matters and questions involved in this action.
    16. The plaintiff had no actual knowledge or notice of the provisions of the by-laws of the defendant company, except such knowledge and notice as he is chargeable with by reason of the provisions and recitations in and on the certificates. of stock, as the same are set forth in paragraphs 4, 5 and 6 of this findings of facts.
    17. The plaintiff had no actual knowledge of the provisions of the statutes of the state of Delaware.
    18. The plaintiff was at all times a citizen and resident of the state of Ohio.
    Upon this finding of facts the circuit court rendered judgment in favor of the defendant.

      Mr. John J. Chester and Mr. James C. Nicholson, for plaintiff in error.
    If the true lega* construction of the printed provisions of the certificate of stock was to vest in the directors and president the absolute discretion and determination as to whom a stockholder might sell and to whom not, it must be conceded at once that with such an interpretation, the provision was an unreasonable and unauthorized restraint on alienation as to be utterly void, and might be ignored. In such a case the majority of directors could absolutely control forever the trust property, and make worthless and valueless anyone’s stock and raise to high value another’s. 2 Thompson on Corporations, Section 2360, et seq.

    Even a by-law made and properly passed, giving such power, would be void as against its own members unless authorized by express statute or charter. 2 Thompson on Corporations, Sections 2310, 2311; In re Klaus, 67 Wis., 401.
    But even in case of express authority, while binding among each other (i. e., the stockholders), a different question is presented as to third persons. Bank v. Wasson, 48 Ia., 336.
    The fact that the charter of a corporation, or the general law under which it is formed, expressly confers upon it, or its directors, the power to regulate transfers of stock, does not give unlimited power to refuse to recognize transfers. It merely gives the power to prescribe such regulations as may be reasonably necessary to protect the corporation. Under the pretense of prescribing the manner of the transfer the association cannot clog the transfer with useless restrictions, or make it dependent upon the consent of the directors or other stockholders. Bloede Co. v. Bloede, 84 Md., 129, 57 Am. St., 379; Spring Co. v. Harris, 20 Mo., 383; Bank v. Pinson, 38 Am. Rep., 330; 3 Clark & Marshall on Private Corporations, Section 560; Johnston v. Laflin, 103 U. S., 800; Bank v. Wasson, 48 Ia., 336; Rice v. Rockefeller, 134 N. Y., 174; Kinnan v. Sullivan County Club, 26 App. Div., 213; Bullard v. Bank, 18 Wall., 589; Driscoll v. Manufacturing Co., 59 N. Y., 96; Bank v. Bank, 20 N. Y., 501; Carroll v. Bank, 8 Mo. App., 249; Moore v. Bank, 52 Mo., 377; McNulta v. Bank, 164 Ill., 427; Morgan v. Struthers, 131 U. S., 252; Purdy’s Beach on Private Corporations, Section 170.
    It is a well established principle of law that citizens of one state are not charged with knowledge of the laws of another state. 2 Purdy’s Beach on Private Corporations, Section 871; Hoyt v. Thompson’s Exr., 19 N. Y., 207.
    Even our courts will not take judicial notice of the laws of other states. When relied upon they must be proved by competent evidence, like any other fact material to the case. Williams v. Finlay, 40 Ohio St., 342; Pelton v. Platner, 13 Ohio, 209; Evans v. Reynolds et al., 32 Ohio St., 163.
    Ignorance of the law of a foreign government is ignorance of fact. And in this respect the statute laws of other states of this Union are foreign laws. Bank v. Dodge, 8 Barb., 233; Haven v. Foster, 9 Pick., 112; Norton v. Marden, 18 Me., 45.

      ,, While a certificate of stock is not strictly a negotiable instrument, yet where they have been assigned in blank, with an • irrevocable power of attorney, the rules of agency and estoppel are applied so as to give to the transaction practically the same effect as if it were a transfer of commercial paper, and by the operation of estoppel have acquired a quasi-negotiable character.
    From the character of the certificate the company must be held to contemplate and know that persons relying upon it will purchase the certificate in- the market and meet with loss if the conditions and restrictions were other than those recited therein. It must therefore be held to care in regard to this-, and answer for any loss the result of its negligence or of its agents or officers.
    If the statements contained in a certificate of stock, made by a company, cannot be relied on by a purchaser in the market, without further inquiry, it may well be asked what real purpose does the certificate subserve. Bank v. Railway Co., 11 W. L. B., 87; Railway Co. v. Bank, 56 Ohio St., 351; Krebs v. Forbriger, 21 W. L. B., 313; Bank v. Blakesley, 42 Ohio St., 645; Watch Case Co. v. Dougherty, 62 Ohio St., 589; Lee v. Bank, 2 C. S. C. R., 298; 1 Purdy’s Beach on Private Corporations, Sections 272, 273; Bank v. Lanier, 11 Wall., 369; Taylor on Private Corporations, Section 795; Beach on Private Corporations, Section 678; Holbrook v. Zinc Co., 57 N. Y., 616; Railroad, Co. v. Bank, 60 Md., 36; Willis v. Fry, 13 Phila. (Pa.), 33; Fitzhugh v. Bank, 19 Ky., 126; Bank v. Bank, 63 Cal., 359; Driscoll v. Manufacturing Co., 59 N. Y., 96; Salisbury Mills v. Town

      send, 109 Mass., 115; Shepaug Voting Trust Cases, 60 Conn., 553; Bank v. Railroad Co., 30 Conn., 231; McNeil v. Bank, 46 N. Y., 325; Moore v. Bank, 55 N. Y., 41.
    The provision on the back of the certificate recites that “ the stock represented by this certificate is not transferable except with the consent of at least two-thirds of the directors of the corporation,” was relied upon by the defendant in the court below, but, as hereinbefore stated, it was entirely ignored by the circuit court in arriving at its final decree.
    As stated by Judge Dillon, the provision was such an unreasonable and unauthorized restraint on alienation as to be utterly void and might be ignored. To this effect are the following authorities: 2 Thompson on Corporations, Section 2360, et seq.; 3 Clark & Marshall on Private Corporations, 1728; 2 Cook on Corporations, Sections 621, 622; Bloede Co. v. Bloede, 33 L. R. A., 107; Ireland v. Milling Co., 19 R. I., 180; Moses v. Scott, 84 Ala., 608; Feckheimer v. Bank, 79 Va., 80; In re Klaus, 67 Wis., 401; Fassler v. Whiteley, 17 W. L. B., 141; Marshall on Private Corporations, 135, 136, 146; 2 Beach on Private Corporations, Sections 612, 616, 309, 315; 1 Wilgus on Private Corporations, 1159; 10 Cyc., 359; Moore v. Bank, 52 Mo., 377; Morgan v. Struthers, 131 U. S., 253; Insurance Co. v. Waters, 1 W. L. B., 172; State v. Bank, 10 Ohio, 92; Trust Co. v. Lumber Co., 118 Mo., 447; Weston’s Case, 4 L. R. Ch„ 20; Insurance Co. v. Smith, 11 Pa. St., 120; Sargent v. Insurance Co., 8 Pick., 90; Trust Co. v. Abbott, 27 L. R. A., 271; 23 Am. & Eng. Ency. Law (1 ed.), 637; Herring v. Ruskin, 52 S. W. Rep., 327.

      A reason why the by-laws should have been rejected is that third persons are not chargeable with knowledge, nor presumed to be cognizant of the special provisions of the by-laws. Fay v. Noble, 12 Cush., 1; Ten Broek v. Boiler Co., 20 Mo. App., 19; Kingsley v. Insurance Co., 8 Cush., 403; Bank v. Smith, 19 Johns. (N. Y.), 115; Bank v. Bank, 63 Cal., 359; Walker v. Railroad Co., 26 S. Car., 80.

      Messrs. Williams, Williams & Taylor, for defendant in error.
    A purchaser of stock is charged with constructive notice of the statutes which give life to the corporation issuing the stock. Taylor on Private Corporations (5 ed.), Sections 28, 118; Relfe v. Rundle, 103 U. S., 222; Hammond v. Hastings, 134 U. S., 401, 33 L. Ed., 960; Bank v. Laird, 2 Wheat., 390.
    The plaintiff in error being charged with notice of the Delaware statutes, is also charged with notice of all by-laws authorized by those statutes.
    The language of the statute “transferable in such manner and under such regulations as the by-laws provide,” authorized a restrictive by-law. 26 Am. & Eng. Ency. Law (2 ed.), 618; Pancoast v. Ruffin, 1. Ohio, 381; Turley v. Turley, 11 Ohio St., 173; Bloom v. Richards, 2 Ohio St., 387; In re Klaus, 67 Wis., 401; Laws of Wisconsin, 1872, Chap. 144, page 195.
    The by-law is reasonable and necessary to the protection of the interests of the corporation. Carter v. Oil Co., 182 Pa. St., 551, 39 L. R. A, 100.

      Such a by-law is held to be valid. Barrett v. King, 181 Mass., 476, 63 N. E. Rep., 934; Trust Co. v. Abbott, 162 Mass., 148.
    Certificates of stock are not negotiable. Bank v. Safe & Lock Co., 66 Ohio St., 367; Bank v. Manufacturing Co., 67 Ohio St., 306; Hammond v. Hastings, 134 U. S., 401, 33 L. Ed., 960.
   Shauck, J.

There is no occasion to doubt that the defendant in refusing to transfer the shares of stock acquired by the plaintiff, in view of the failure to give an option to the directors for thirty days in order that they might have opportunity to sell it to persons whose business would aid in. promoting the welfare of the corporation, is strictly within section nineteen of its by-laws. The question of doubt in the case concerns the validity of the by-law and its binding obligation upon the plaintiff. Separate analysis of the very numerous cases cited in the briefs of counsel is impracticable and unnecessary. A few generalizations will meet the requirements of most of the cases and materially narrow the field of inquiry. The • corporation being organized under the laws of the state of Delaware, although its principal place of business is in Ohio where the plaintiff resides and where these transactions in stock were conducted, he had actual knowledge that he was acquiring the stock of a Delaware corporation and l^e is deemed to know all restrictions which the laws of that state or by-laws not inconsistent with them imposed upon its alienation. Relfe v. Rundle, 103 U. S., 222; Hammond v. Hastings, 134 U. S., 401. Effective regulations of the transfer of stock in a corporation must be prescribed in statutes or in by-laws of the corporation which are not inconsistent with the statutes. A corporation may not refuse to transfer stock because of the motive which may have prompted the transferee to acquire it, this being upon the well established ground that however important may be the motive ' which prompts one to the commission of a wrong, the motive which prompts him to the exercise of a legal right .can never be the subject of judicial inquiry.

By-laws of a corporation, to be valid, must not contravene the policy defined in the statute of its creation, and this renders it entirely unnecessary to consider further the cases in which it has been held that corporations formed under the national banking laws may not provide for liens upon their stock to secure the debts of their stockholders, since the laws provide expressly that they may not loan money upon the security of their stock. When statutes under which corporations are formed authorize them to make by-laws upon specifically named subjects there is an implied denial of authority to make by-laws upon subjects not named.

In very many cases it has been held that a bylaw imposing a restrictive regulation upon the transfer of stock is invalid unless it is expressly authorized by statute. Quite uniformly when that conclusion is reached it is placed upon the ground that such regulations impose a restraint upon the alienation of property and that they are therefore inimical to public policy. It does not appear to have been deemed necessary in these cases to- demonstrate that the right to alienate property should be more highly regarded than the right to make contracts respecting it. By the assumption that it should be, a task of much obvious difficulty has been avoided. In a few cases the opposite conclusion has been reached and supported by reasons of much strength. In New England Trust Co. v. Abbott, 162 Mass., 148 (27 L. R. A., 271), a by-law differing in no essential respect from that relied on by the defendant here was enforced although it was wholly without express- statutory sanction. The court did not consider whether the by-law was technically valid so as to impress upon property in the stock of the company a restricted alienability, but placed the decision upon the ground that the terms of the bylaw became a contract between the corporation and the subscriber for its stock. In the later case of Barrett v. King, 181 Mass., 476, which arose out of the refusal of the Continental Brewing Company to enter a transfer of its stock, the refusal being' for non-compliance with a by-law not distinguishable from this, the rights of the parties were determined by the same view.

What may be the effect of a by-law of this character upon the transferability of stock.when the question is not affected by any provision of the statute under which the corporation is formed, we need not determine in the present case. • The different conclusions with respect to that question result from different views of the policy involved. To define and establish rules of public policy is a recognized function of legislation. The statute of the state of Delaware, under which this corporation was formed, expressly authorized it to make by-laws “for the management of its property, the regulation and government of its affairs, and for the certification and transfer of its stock.” It also provides expressly that “the shares of stock in every corporation shall be deemed personal property and transferable on the books of the corporation in such manner and under such regulations as the by-laws provide.” The third section of the act further provides generally that the corporation shall have such powers not inconsistent with law as may be necessary or convenient to the attainment of the objects of the corporation. Certainly power to regulate transfers of stock could not properly be regarded as power to prohibit the transfer, and it may be that in the interpretation of acts conferring such power it would be the duty of courts to see that prohibition is not accomplished under the guise of regulation, and that restrictions would not be permitted if foreign to the purpose for which the corporation is formed. The by-law here called in question contains no suggestion of a purpose to prevent the alienation of stock nor to restrict it beyond reasons suggested by a consideration of the welfare of the corporation and the express provisions of the statute. It interposes no permanent impediment to the transfer, providing only for an option in the directors for thirty days as a reasonable opportunity to them to dispose of stock to persons deemed desirable as holders. The statute having recognized the lawfulness of the purpose for which the corporation is formed and having' empowered it to make by-laws in furtherance of that purpose, expressly including the issuance and transfer of stock within the subjects for regulation by by-laws, we find no reason for saying that the by-law is invalid.

Judgment affirmed.

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


author: Davis, J.

text:
    Henry, Executor, v. Doyle, Executor, et al.

      Suit by legatee against executor — Section 6211, Revised Statutes — ■ Necessary to prove demand before action — Finding of balance in hands of executor — Not foundation for action, when — Account died by executor conclusive — Unless impeached for error or fraud in four years,

    1. In a suit brought under Revised Statutes, Section 6211, by a legatee or 'other distributee against an executor or administrator, it'is necessary to allege and prove a demand upon, and neglect or refusal by, the defendant before the commencement of the action.
    2. In such an action a general finding of a balance in the hands of the executor or administrator and an order to distribute the same according to law, is not a sufficient foundation for the action; but the specific amount, if any, due to the plaintiff must have been first fixed by a court of competent jurisdiction as provided by law.
    3. When an executor or administrator has filed in the probate court an account of final distribution and the same has been approved and confirmed by the court and the executor or administrator discharged from the trust, such account is conclusive unless impeached for manifest error, or for fraud within four years after the discovery of the fraud.
    (No. 11954
    Decided April 12, 1910.)
    Error to the Circuit Court of Summit county.

      Dayton A. Doyle, as executor of the last will and testament of William B. Doyle, deceased on May 2, 1897, filed an account of his administration of said estate, on the hearing of which account it was found that there was in the hands of said executor the sum of $60,769.51 for distribution, which the probate court ordered to be distributed according to law and according to the statute in such case made and provided. Afterwards, on the 20th day of January, 1898, he filed an account of final, distribution, which was approved and confirmed and the said executor discharged from the trust. On the 28th day of November, 1903, this action was begun against Dayton A. Doyle personally, and as such executor, to recover certain sums of money alleged to be due to the plaintiff. The defendant denied each and every allegation, averment and statement contained in the plaintiff’s petition, with the exception of some specific admissions, and also defended upon the ground that said cause of action was barred by the statute of limitations and that the plaintiff was not the real party in interest. In the court of common pleas a jury was waived and trial was had to the court and judgment rendered in favor of the defendant. This judgment was affirmed by the circuit court and the present proceeding is prosecuted to reverse the judgment of the circuit-court and that of the court of common pleas.

      Mr. H. H. Henry and Mr. Howard A. Couse, for plaintiff in error.
    The action was brought more than six years but less than ten years after the order for general distribution was made by the probate court. Section 4984, Revised Statutes, provides expressly for actions on official bonds and the ten year limitation was held to apply even where a bond had been given before the adoption of the code. King v. Nichols, 16 Ohio St., 80; State v. Orr, 16 Ohio St., 523; State v. Kelly, 32 Ohio St., 421; Whittaker’s Civil Code, citing Section 4984, Revised Statutes.
    We contend that the requirement is satisfied by an order settling the account of an executor and ordering general distribution of the balance on hand “according to law.” This is- the only “order” which the probate court is authorized to make. Armstrong v. Grandin, 39 Ohio St., 369; Cox v. John, 32 Ohio St., 532; Swearingen v. Morris, 14 Ohio St., 424; Bank v. Beebe, 62 Ohio St., 41.
    This precise question has not been decided in Ohio, although the case of Gondolfo v. Walker, 15 Ohio St., 251, has some bearing. Text-book writers differ in their’ opinions. 2 Bates’ Pleading, Practice, etc. (1907), 1644; 1 Whittaker’s Code Forms, 136; Whittaker’s Probate Code, Section 6211, note.
    Where an account has been settled showing a balance due from one to' the estate, this is conclusive (unless re-opened or impeached for fraud) against all parties, as to the existence and amount of the fund. Slagle v. Entrekin, 44 Ohio St., 637.
    Under the code, a general allegation that a defendant “refused” to perform his obligation implies a previous demand and is equivalent to an allegation of a demand and refusal. Brossard v. Williams, 114 Wis., 90; Divan v. Loomis, 68 Wis., 150; Ferguson v. Hull, 136 Ind., 339; Hammond, v. Organ Co., 92 U. S., 724; Gardner v. Donnelly, 86 Cal., 367; 4 Ency. Pl. & Prac., 649.
    Under the issue made by the pleadings, no proof of a demand was necessary. Where a necessary demand has been properly alleged in a petition, it need not be proved, where the answer denied all liability so that it is apparent that the demand would have been met with a refusal. Thompson v. Whitney, 20 Utah, 1, 57 Pac. Rep., 429; Waddell v. Swann, 91 N. Car., 108.
    The appellant, having in his answer disclaimed all liability and entirely repudiated the respondent’s claim, cannot be heard to object that no demand was proven. Parrott v. Byers, 40 Cal., 614; Cox v. Delmas, 99 Cal., 106; 9 Am. & Eng. Ency. Law (2 ed.), 209; 4 Ency. PI. & Prac., 647, 648.

      Messrs. Rogers & Rowley, for defendants in error.
    The only action that could have been brought by the original plaintiff (Llenry) on the bond would have been one under favor of Section 6211, Revised Statutes, which requires:

      First. The ascertainment of the amount due to the widow or other distributee by an order of court.

      Second. A demand upon the executor or administrator for the same and a neglect on his part to pay the same when demanded.
    Neither of these things are set forth in the petition, and the plain inference is that, without these allegations, the pleader certainly did not intend to plead on the bond.
    If any cause of action is set forth in the petition, it is one under Section 6200. Such an action is barred in six years. Yearly v. Long, 40 Ohio St., 27; Stewart v. Welch, 41 Ohio St., 483; Webster v. Bible Society, 50 Ohio St., 1; Langley, Admr., v. Stump, 11 W. L. B., 234; Duhme v. Mehner, 3 N. P., 266; Lease v. Downey, 5 C. C., 480, 3 C. D., 235; Mount v. Lakeman, 21 Ohio St., 643; Douglas v. Corry, 46 Ohio St., 349; State v. Conway, 18 Ohio, 234; State v. Newman's Exr., 2 Ohio St., 568; State v. Blake, 2 Ohio St., 147; Bank v. Beebe, 62 Ohio St., 41; Cox v. John, 32 Ohio St., 532; Armstrong v. Grandin, 39 Ohio St., 369.
    This rule is generally followed. 2 Woerner on Administration (1 ed.), Sections 568, 569.
    This being the law, the distributee must, before bringing suit on the bond, have his right as a distributee and the amount due to him ascertained by proceedings under Sections 6195, et seq. Douglas v. Day, 28 Ohio St., 175; State v. Cutting, 2 Ohio St., 1; Dawson v. Dawson, 25 Ohio St., 443 ; Commonwealth v. Stub, 51 Am. Dec., 533; Giauque on Settlement (2 ed.), 620, note 1; 2 Lawson’s Rights, Remedies & Practice, 1632, note 6; Mighton v. Dawson, 38 Ohio St., 650.
    The petition is fatally defective in that it does not aver that a demand was made upon the executor. Woodson v. State, 17 Ohio, 161; State v. Cowles, 5 Ohio St., 88; Swan’s Manual, 196.
    The statute further provides that the approval of this, account shall work a discharge of the party and his sureties from all liability unless the same shall be impeached for fraud or manifest error. This is not an action to impeach this account for fraud or error. Proctor v. Dicklow, 45 Pac. Rep., 86; State v. Gray, 17 S. W. Rep., 500; Wood-worth v. Woodworth, 70 Mo., 601.
   Davis, J.

The plaintiff in error, plaintiff below also, insists that he has properly brought this action against an executor on his bond under Revised Statutes,■ Section 6211, which is as follows: “Such suit may also be brought by a 'legatee, after he shall be entitled to the payment of his legacy, and by the widow, or other distributee, to recover his or her share of the personal estate, after an. order of the court ascertaining the amount due to him or her, if the executor or administrator shall neglect to pay the same when demanded.”

The oetition does not contain any averment of a demand upon the executor, unless it is contained in the allegation that he “has heretofore neglected and refused, and he now refuses, to pay and account for the same, contrary to the condition of the bond;” nor does the petition contain an averment that the amount claimed has been ascertained by an order of the court, unless it be included in a general allegation that, in settling the executor’s final account the court found in his hands a gross sum, “for distribution, which said court ordered to be distributed according to law, and according to the statute in such case made and provided.”

The statute seems to require an actual demand upon the executor or administrator, as a precedent condition to bringing an action by a legatee or distributee. A mere neglect to pay an amount due to the distributee is not enough. The statute is clear that such an action is authorized when the executor or administrator neglects to pay an ascertained amount “when demanded.” In a related section (Revised Statutes, Section 6195) which provides in part the manner in which an order of distribution may be enforced, the language is still more explicit; for it declares that “if such executor, administrator or guardian shall neglect or refuse to pay * * * when demanded,” etc. The petition was therefore defective in not showing one of the jurisdictional facts, which are necessary to confer the right to sue.

Another condition precedent to the bringing of such an action is the ascertainment of the amount due to the distributee. A general finding of a balance in the hands of an executor or administrator, and an order to distribute it according to law, does not determine either the persons entitled under the law nor the amount to which each is entitled. First National Bank of Cadiz v. Beebe, 62 Ohio St., 41. Difficult, and sometimes intricate, questions arise in ascertaining who are distributees, or how and in what proportions the fund is to be distributed according to law. Accordingly the tribunals and the mode of procedure for ascertaining the amount due to the distributees, in case of doubt or contention, are provided in Revised Statutes, Sections 6195 to 6203, inclusive. An executor or administrator may, if he thinks it proper to do so, voluntarily pay out the distributive fund, trusting to be .exonerated on. his final distributive account; but he cannot be compelled to do so until the claimant has established his right under the forms of the statutes. The plaintiff, therefore, has shown no right to recover in this action.

This executor filed an account of final distribution of the funds in his hands, and the same was approved, confirmed and recorded, more than four years before the commencement of this action; and the executor was thereupon discharged from the trust. By Revised Statutes, Section 6190, he and his sureties are forever exonerated, unless such account shall be impeached for fraud or manifest error. This final distributive account can only be directly attacked and opened up by a proceeding for that purpose within four years after the discovery of fraud relating to it. Revised Statutes, Section 4982. Nothing which would impeach the validity of this final account and discharge appears in the record; and therefore it alone is a sufficient defense to this action.

The judgment of the circuit court and that of the court of common pleas are

Affirmed.

Summers, C. J., Crew, Spear, Shauck and Price, JJ., concur.