author: Spear, J.

text:
    Ratterman, Treas., v. Ingalls.
    . Taxation — Return of property for— What is “ a false return V — Section 2781, Revised Statutes, construed — Shares of stock — Sow taxable, when pledged.

    1. In order to render a return made by a taxpayer to the assessor of property for taxation, “ a false return” within the meaning of original and amended section 2781, Revised Statutes, there must appear, if not a design to mislead or deceive on the part of the taxpayer, at least culpable negligence.
    2. Where it is found that tax returns during the years 1881 to 1885, inclusive, from which certain shares of stock owned by the taxpayer were . omitted, were made by him under an honest belief that the shares were not taxable, which belief was induced by reliance upon the opinions to that effect given by capable lawyers, and like opinions by the taxing officers of the county and state of his residence, and by the action of such officers in refusing to correct returns of persons whom they knew were holders of such stock, and it further appears that the taxpayer had .given to the county auditor, in the year 1881, information as to his ownership of such stock, and had not, during any of said period, done any act indicating a purpose to conceal such ownership, the returns so made will not be treated as false returns within the meaning of section 2781, Revised Statutes, although it is afterwards adjudged by the courts that such shares were, under the laws of the state, taxable during each of the years named.
    3. Shares of stock which'have been pledged as collateral security for loans, with power to the pledgee to transfer the shares to his own name, and in case the loans are not paid, to sell, but which stand on the books of the company in the name of the pledgor, are properly taxable in his name.
    (Decided June 16, 1891.)
    Error to Superior Court of Cincinnati.
    Action was brought June 80, 1887, by the plaintiff in error, in the Superior Court, to recover taxes charged by the auditor of Hamilton county for the years 1881 to 1886, inclusive, with penalty of fifty per centum for the year 1886, by reason of the omission by the defendant of his holdings of stock of The Cincinnati, Indianapolis, St. Louis & Chicago Railway Company from his tax statements to the assessor in each of these years. Upon trial at special term, judgment was rendered for the defendant as to the claim for taxes for the years 1881 to 1885, inclusive, and for the plaintiff for the full amount claimed for the year 1886. The court made findings of fact and of law separately. A bill of exceptions was also taken. Each party presented a petition in error to the general term. The court there affirmed the findings of fact, after argument and examination of the evidence, and affirmed the judgment of the special term.
    Among the findings of fact are the following:
    “ 4. From August, 1852, until August, 1886, the auditors of Hamilton county and the annual boards of equalization of Cincinnati, in said county, where said Ingalls resided during all of said period, declined and refused to take steps to correct returns for taxation by owners of shares of stock in said and like corporations, who had omitted the same from such returns, although such officers knew that a large number of such shares were owned by persons so making returns for taxation in said county; and declined and refused to tax such shares when ownership thereof was disclosed in tax returns, but therein claimed to be non-taxable; which action of said taxing officers was at various times during said period prior to 1881 submitted to the auditor of the state of Ohio, and approved by him, and no directions of a different nature were afterwards given by said auditor of state to said county auditor and city board of equalization, or either of them, prior to November, 1886. Opinions that such stock was not taxable under the laws of Ohio were given by distinguished lawyers of that state to said Ingalls, and others prior to the day preceding the second Monday in April, 1881.
    “ In April, 1881, said Ingalls stated to the then auditor of Hamilton county, in a conversation on the streets of said city, as to the taxability of The Pittsburgh, Fort Wayne & Chicago Railway Company stock, and said C. I. St. L. & C. Ry. Co. stock, that he owned shares of said stock last named. Such actions and rulings by said taxing officers, and such opinions so given were generally known, and until November, 1886, the belief was practically universal in said Hamilton county that the statutes of Ohio did not subject such shares of stock to taxation in the hands of the owner or holder thereof, or require the' owner or holder thereof to include the same in the list or statement of his taxable property to be delivered to the assessor or auditor.
    “5. Knowing the facts and having the belief aforesaid, said Ingalls omitted his investment in said stocks from the statement for taxation of his chattel property given by him in each of said years to the ward or township assessor. This belief was honestly held by said Ingalls; he had reasonable grounds for the same, and there was no intent on his part to evade the payment of any taxes which the law imposed.”.
    To reverse the judgment against him as to the years 1881 to 1885, the plaintiff below has filed here his petition in error, and the defendant in error has filed a cross petition in' error to reverse the judgment against him for taxes for the year 1886, and penalty thereon.

      Wm. Jj. Avery, Gross §- Cohen, and Foraker, Black Bosworth, for plaintiff in error.
    Brief of Wm. L. Avery.

    That the auditor of Hamilton county, and annual city board of equalization for Cincinnati, “declined and refused” to correct returns for taxation by owners of such shares who had omitted them from their lists, or- were returned, to tax them, had only for support of it the evidence of Culbertson to his being cited before the board touching his Pittsburgh, Ft. Wayne & Chicago Railway stock, and to the board taking no action; and the evidence of the insurance company’s returns of the stock as not taxable. This was not “ action,” although so called in the findings, “ which action of said taxing officers,” etc., but inaction. It was only, that, official ease and convenience were being consulted in Hamilton county by keeping “ hands off.”
    That “ knowing the facts and having the belief aforesaid, said Ingalls omitted his investment in said stocks from the statement for taxation,” etc., is a finding, without any evidence of knowledge in Mr. Ingalls, except of the opinions of lawyers, Mr. Springer’s and his own, and of the belief “ practically universal ” in the county. He did not know of the letters to Bell or to Hornberger, the conversation of Thrasher with the state auditor, the returns of the insurance companies, the citation by boards of equalization to Culbertson, or of exhibits “ G ” and “ H, ” from files of the state auditor. He knew, of course, the “ practically universal opinion,” indeed, had done all that in him lay to promote it. The plaintiff proved the taxation of stocks of The Pittsburgh, Ft. Wayne and Chicago Railway Co., by the auditors of Highland county from 1879, and of Columbiana county, from 1881, and the letters from state auditor’s office to M. D. Harter; but the finding of the belief being practically universal of the non-taxability of such stocks, and of auditors and boards of equalization declining and refusing to tax them, is confined to Hamilton county.
    “ Though penal statutes are said to be construed strictly, yet tbe courts are bound to give effect to their plain and obvious meaning, and not narrow the construction. They must search out and follow the true intent of the law giver.” Buller, J., in 1 Term, 101; 'Story, J., in 3 Sumner, 209 ; Pike v. Jenkins, 12 N. H. 255. 1 Kent. Comm., marginal page 467, note d. “ In penal statutes, we are not at liberty to depart from the words employed; but we are bound to ascertain the fair meaning of those words, in view of the sense in which they are used.” Ranney, J., Turner v. State, 1 Ohio St. 422, 424, 425.
    “ False return or statement ” is a return or statement to an assessor which is false. How false ? Why, false for the purposes of assessment. That is the purpose for which made to the assessor; the connection determines. The full language is, “ shall make a false return or statement, or shall evade making a return or statement.” In the one case as the other, the auditor is required to “ ascertain the true amount the person ought to have returned or listed.” This from the same necessity, or necessity of the same nature, that taxables shall not escape by omitting in listing, whether the omission be to return any list at all, or, in returning a list, to include the property. “ Evade ” is but to avoid; no sinister motive, within the purview of the statute, is essential to it. It is not connected with “false,” as applying to a return made; but is necessarily independent of any such connection, since it implies that no return is made. It is not to “ evade ” making a true return or statement, but to “ evade ” making any. And if from some sort of mental association with “ false,” that were to be taken as if written, “ false with intent to evade,” it would be expected to find in the provisions of section 2782, for notice to the person, opportunity there given to show no intent to evade. But, on the contrary, all there provided for, is to show the return or statement to have been “ correct.” Thus; § 2782. “ It shall be the duty of the auditor, in all such cases, to notifj^ every such person, before making the entry on the tax list and duplicate, that he may have an opportunity of showing that his statement or return of the assessor was correct.”
    As to the penalty, that is not the essential object. In the original section, to which necessarily the same construction of the word “false ” must attach, as in the amended section, the remedy for the back years was without penalty. In the supplementary act of March 29, 1861, which was the same in its language, “ if any person, etc., shall make a false return, or shall evade making a return,” and was for the addition of fifty per centum, but was confined to the current year, the duty of the auditor was “ to ascertain the true amount of the taxable property, etc., that such person ought to have returned or listed, in the manner prescribed in the 84th section of said act.” (Act of April 5, 1859.) This latter section becoming 2782 of the Revised Statutes, the provisions of the supplementary act were embodied in section 2781, and extended back four years, without addition of the fifty per centum for the back years, but continuing to express, in even more unmistakable language, that the conditions of the inquiry in both sections were the same. Thus: “and the inquiry and corrections provided for in this and the next section may go as far back as the same can be traced, not exceeding the four years,” etc. The same connection is continued in the section as amended, thus: “ The county auditor shall, for each year, ascertain, as near as practicable, the true amount of personal property, moneys, credits, and investments that such person ought to have returned or listed, for not exceeding (the) five years next, prior to the year in which the inquiries and corrections provided for in this and the next section are made.”

    The general tax law (act of April 13, 1852), contained identically the same language as section 34 of the later act; indeed this was but the re-enactment of section 46 of the former. Section 46 of the act of 1852 is construed in Champaign Co. Bank v. Smith, 7 Ohio St. 42; “ The intention of the whole section, the purpose of its insertion, clearly is, to declare that the oath of an interested party shall not be conclusive of the correctness of the statement; but that fraud or mistake therein shall, if discovered in proper time by the auditor, be corrected.”
    The familiar rule of statutory construction is, that, “ where the same word or phrase is used more than once in the same act, in relation to the same subject matter and looking to the same general purpose, if in one connection its meaning is clear, and in another it is otherwise doubtful or obscure, it is in the latter case to receive the same construction as in the former, unless there is something in the connection in which it is employed, plainly calling for a different construction.” Rhodes v. Weldy, 46 Ohio St. 234; Raymond v. Cleveland, 42 Ohio St. 529.
    The default, for which the supplementary act provided, was the same as in section 34 of the general tax law of 1859, to which the act was supplementary; and “ the true amount ” the person “ ought to have returned or listed ” was to be ascertained in “ the manner prescribed ” in said section 34. The notice to be given under that section, now 2782, Revised Statutes, was only that such person “ may have an opportunity of showing that his statement or return of the assessor was correct;” thus making the “ correctness ” of the statement, or its truth in normal sense, the statutory test.
    The amended section has been construed by this court.
      (Gayer, Treas., v. Prout et al., 25 Law Bulletin, 197.) Minshall, J. (p. 201) : “ This section in its original and amended form, simply prescribed a remedy for the recovery of taxes due the state and its subdivisions under those provisions of our tax law, which make it a duty of every citizen to return his property for taxation and to pay the taxes levied upon it equally with others.”
    The principle of construction is the uniform one for the advancement of the remedy, applying to tax laws. Taylor v. United States, 3 How. (U. S.) 197, 210; Cliquots’s Champagne, 3 Wall. 114, 145; United States v. Hodson, 10 Wall. 395, 406; U. S. v. Bbls. Spirits, 2 Abb. (U. S.) 305, 315; Cornwall v. Todd, 38 Conn. 443, 447.
    Finally, at its last analysis, the question comes to this: The return or statement of the defendant in all these years was false. No ? It was true then ? But this could not be ; it was certainly not a true statement of his investments subject to taxation in those years. But he believed it to be true? No! he did not; he knew he owned his stock and that he was listing or returning them. But he believed them to be not taxable ? Did he ? That was belief against the law then. But it was a reasonable belief ? As if the law, against itself, would allow of any reason for belief. Ignorantia juris neminem .excusat.

      Harmon, Colston, Groldsmith $ Hoadly, Wm. Worthington, J. H. Bates, Stephens, IAneoln Smith, John W. Warrington and Thomas MeJDougall, for defendant in error.
    Brief of Wm. Worthington, Harmon, Colston, Goldsmith & Hoadly.

    I. Is a return, made honestly, under a mistake of law, false, within the meaning of that word as used in Revised Statutes, see. 2781 ?
    First, it will be observed that although the adjective false is frequently used as the opposite of “ correct” or “true,” yet this is not the strict .and primary meaning of the word, but a secondary and broader one involved by the process of weakening so common in the growth of language. Webster’s Dictionary; The International Dictionary; Webb v. State, 29 Ohio St. 358.
    That this same active working of a malicious mind is ordinarily an essential part of the meaning of the word when used in English Law, is stated in the Law Dictionaries. 1 Abbott’s Law Diet., 478 ; Anderson’s Law Diet., 447 ; 7 Am. & Eng. Encycl. of Law, 661.
    As the primary meaning of the adjective “ false ” and its usual signification in jurisprudence, is “ untrue with intent to deceive ; ” but as used in common speech it has sometimes this primary meaning, and at others the broader one of merely “ untrue ” without regard to intent; in which sense was it used in Revised Statutes, sec. 2781? Presumably in its usual juridical meaning. Grogan v. Garrison, 27 Ohio St. 50, 63. And this presumption is here intensified by looking at:
    1. The subject matter of the statute, the purpose at which it was aimed; for “ all words, whether they be in deeds or statutes, or otherwise, if they be general, and not express and precise, shall be restrained unto the fitness of the matter or person.” Steamboat Messenger v. Pressler, 13 Ohio St. 262; Horton v. Horner, 16 Ohio 145, 147; Board of Education v. Board of Education, 46 Ohio St. 395.
    2. The collocation for — as Lord Bacon again says — copulatio verborum indicat acceptationem in eodem sensu ; or more briefly, noscitur a soeiis.

    3. The history of the legislation, and the nature of previous acts on the same general subject.
    The purpose of the statute is apparent, and has been briefly stated by this court in Gager v. Prout, 25 Bull. 200.
    What is an honest return ? One made truly according to such lights as the taxpayer can reasonably be expected to have. Dishonesty necessarily imports a conscious transgression.
    Securing honest returns being the end, and punishment the means, it cannot be supposed the general assembly purposed to punish alike the unintentional and the intentional error, the guiltless equalty with the guilty (I say guiltless,
      because nullus reus nisi mens red) ; rather the means will be limited to the end. The evil thought makes the guilty act. Mistakes may occur combined with the purest and best motives ; through mistake made in perfect innocence and good faith, a tax return may be erroneous. To suppose the lawmaker intended to punish such mistake equally with designed fraud, is to impute a ferocity unknown to the code of Draco. Sawyer v. State, 45 Ohio St. 344.
    Again, the penal nature of the act, by the established canon of construction, requires that if its words be double in their significance, having a larger and a narrower meaning, the narrower shall be held the one intended. This rule has been repeatedly recognized by this court. Schultz v. Cambridge, 38 Ohio St. 659; White v. Woodward, 44 Ohio St. 347; Sutherland on Statutory Construction, secs. 361,363; Cooley on Taxation (2d ed.), 265, 275; Mitchell v. State, 42 Ohio St. 383; Stephenson v. Higginson, 3 H. L. Cas. 686.
    Its application is also important in the case at bar; for not only is the judicial meaning of the adjective “false” as being not merely “untrue,” but “untrue with intent to deceive,” declared in the law dictionaries, but the judicial decisions are numerous, and, so far as I know, uniform, that when a penalty is affixed to the doing of an act falsely, mere error is not aimed at, but the intent with which the act is done; it must be done wilfully, with intent to deceive, else the penalty is not incurred. United States v. King, 5 McLean, 208; Putnam v. Osgood, 51 N. H. 192, 206, 208; Maher v. Hibernia Ins. Co., 67 N. Y. 282; Franklin F. I. Co. v. Updegraff, 43 Pa. St. 350; Franklin Ins. Co. v. Culver, 6 Ind. 137; Marion v. Great Rep. Ins. Co., 35 Mo. 148; Mason v. A. M. A. A., 18 Up. Can. (C. P.) 19; Derry v. Peek, 14 App. Cas. 337.
    The provisions of Revised Statutes, section 2781, apply alike to any person who shall “ make a false return or statement, or shall evade making a return or statement.” There can be no question as to the meaning of the word “ evade; ” it always signifies volition, a purposed and intentional avoidance and not a mere omission; and when used with reference to a duty or obligation, it is invariably a word of sinister signification. An instance, with reference to a revenue law, is found in Smith v. The State, 43 Ala. 344.
    The use here of the word “ evade ” sheds a flood of light upon the sense in which the legislature used the word “ false,” if any obscurity could otherwise exist. It is absolutely incredible that it was intended to mulct with a fine, one, who by blameless accident omitted a portion of his property from his return, and at the same time let one, who by a similar accident omitted all his property, go free; yet such result would necessarily happen if a return erroneous without moral fault is to be considered false within this section.
    For application of this maxim in ascertaining the sense in which words are used, see, in addition to the cognate cases on insurance policies already referred to, Howland v. Carson, 28 Ohio St. 625, 628; Elliott v. Shaw, 32 Ohio St. 431, 434; Rutherford & Co. v. Railroad Co., 35 Ohio St. 559, 563; Myers v. Seaberger, 45 Ohio St. 232, 236.
    The history of the amendment. to Revised Statutes, sec. 2781, leads to the same conclusion as that drawn above from its language. Sec. 4 of act of 1816, 2 Chase 987; sec 7 of act of 1824, Ibid. 1383; sec. 28 of act of 1825, Ibid. 1483; sec. 15 of act of 1831, 3 Id. 1804; Act of 1846, secs. 32, 33, 35, 36, 39, 40, 43; 2 Curw., 1273, 1276 ; Act of 1852, secs. 26, 28, 43, 44, 46; 3 Curw., 1774,1780; Act of 1859, secs. 18, 20, 32, 33, 34; 4 Curw., 3313, 3318; Act of 1878, secs. 17, 19, 22, 51, of chap. 2; 75 Ohio L. 446, 448, 458; Revised Statutes, secs. 2750, 2752, 2755, 2784; see. 14, act of 1847, 2 Curw. 1359; Act of 1857, 4 Curw. 2985; Exchange Bank v. Hines, 3 Ohio St. 35; Champaign County Bank v. Smith, 7 Ohio St. 42, 48, 49; Bloom v. Richards, 2 Ohio St. 387, 402; Medical College v. Zeigler, 17 Ohio St. 52, 67; sec. 2, act of 1857, 4 Curw. 2986; sec. 1, act of March 29, 1861, 1 Sayler, 54, from which, by subsequent amendments, the present sec. 2781 of the Revised Statutes has been developed. Genin v. Auditor, 18 Ohio St. 534.
    It is, of course, contended by counsel for plaintiff in error (for this is absolutely essential to their case), that the phrase “false statement,” in this act of 1861, means merely incorrect statement. That one having no knowledge of the previous legislation would come to a contrary conclusion, I have already urged. Does not the history of the legislation confirm this view beyond a peradventure ? From 1816 to 1846, the law punished with penal taxation him who had wilfully tried to defraud it in his sworn return, and not him who had unwittingly made an error therein. From 1846 to 1857, no punishment of any kind was imposed for any such errors, whether wittingly or unwittingly made. From 1857 to 1861, the penalty of all costs of correction was imposed for wilful errors ; but for other errors the taxpayer either paid no costs at all, or else only his own, which in all probability would amount to none at all.
    Then comes this act of 1861, which, wherever it applies, imposes a penalty. It was not a remedial act, merely enabling the state to collect its just dues, for that power was fully given by sec. 34 of the act of 1859, now Revised Statutes, sec. 2782. It was a preventive act, passed solely because of the penalty it imposed, and expected by that penalty to check frauds upon the revenue — a penal act in the usual cense of that term.
    In the revision of the tax laws'in 1878, the act of 1861 was amended so as to permit the collection not merely of the taxes and penalty for the current year, but of simple taxes for the four years preceding. 75 Ohio L. 456, sec. 48 of ch. 2. This amendment, it may be remarked in passing, originated with the general assembly and not with the codifying commission. In this form the law was carried into the Revised Statutes as sec. 2781. But while the number of years for which correction could be made was increased, the circumstances under which such correction could be made were left unchanged. The subjects of correction under this act were still such false statements, and such only, as had previously been corrigible under the act of 1861, if attacked in time. The penalty was not charged for back years; but unless it could have been if the inquiry had been made in the year the statement was rendered, the right to correct for back years was not given by Revised Statutes, sec. 2781.
    The amendment of 1886, 83 Ohio L. 82, increases the number of back years open to review to five, and imposes a penalty of fifty per centum for each year ; but the kinds of false statements and evasion which can be thus punished still remain the same as under the act of 1861 — statements wilfully false, made with intent to evade taxation.
    It follows that, before there can be a correction of any statement under that statute, the knowledge of error, the intention to evade the payment of taxes, must appear. For it is well settled that where a penalty or forfeiture is imposed, not for the mere doing of an act, but the doing of it wilfully, or with a certain knowledge or intent, the existence of that will, knowledge, or intent is an essential part of the offense, and must be proved before the penalty or forfeiture is inflicted. United States v. Buzzo, 18 Wall. 125; Stebbins v. Edmands, 12 Gray 203; Miller v. State, 5 Ohio St. 275; Crabtree v. State, 30 Ohio St. 388; Ex parte Falk, 42 Ohio St. 638; Cohn v. Neeves, 40 Wis. 392; United States v. De Groot, 30 Fed. Rep. 764; Queen v. Tolsen, 23 Q. B. D. 168; Breitung v. Lindauer, 37 Mich. 217; State v. Fritchler, 54 Mo. 424.
    Where knowledge or intent is a necessary ingredient of an offense, not merely ignorance of fact, but ignorance of law may establish innocence. 1 Bishop on Criminal law, sec. 297, 300; Meirelles v. Banning, 2 Barn. & Adol. 909; Regina v. Bowler, Carr. & Marsh 559; Regina v. Ellis, Ibid. 564; Regina v. Dodsworth, 8 Carr. & Pa. 218; State v. Macomber, 7 Rhode Island 349; Commonwealth v. Bradford, 9 Metc. 268; Crabtre v. State, 30 Ohio St. 382, 388; Republica v. Hannum, 1 Yeates (Pa.) 71; Cutter v. State, 36 N. J. L. 125; Pier v. Hanmore, 86 N. Y. 95; Bonnell v. Griswold, 89 N. Y. 122; Wright v. Smith, 5 Esp. 203; Regina v. Reid, Carr. & M. 306; Regina v. Mayor, L. B. 3 Q. R. 629; State v. Preston, 34 Wis. 675; Thomas v. State, 14 Tex. App. 200; Rose v. State, 19 Tex. App. 470; Black v. Ward, 27 Mich. 191; Brent v. State, 43 Ala. 297; Folwell v. State, 49 N. J. L. 31; Wharton on Criminal Evidence, sec. 724; Del. Div. Canal Co. v. Commonwealth, 50 Pa. St. 399.
    Thus far, I have discussed the meaning of “ false ” in sec. 2781, as if this court had not heretofore decided it, having taken this course because counsel for plaintiff treated it as an open question, and because I saw no reason to shrink from the debate thus challenged. But in fact the question has already been decided, I submit, by the case of Ins. Co. v. Cappellar, 38 Ohio St. 560; Ins. Co. v. Ratterman, 46 Ohio St. 153.
    II. The ownership of a pledgor, under the circumstances in this case, is not such an ownership as makes the pledgor taxable for the property at its full value as an “ investment in stocks,” but only for the difference in value between the property and the loan, as a credit. It is needless to examine the cases of Henkle v. Salem Mfy. Co., 39 Ohio St. 547, and Norton v. Norton, 43 Ohio St. 509, for the rules of law generally as to where the ownership of pledged stocks is as between pledgor, pledgee, the corporation, and the world at large, or any of them. The result here does not depend on that rule, but upon the specific provisions of the tax law.
    The enactment in Revised Statutes, sec. 2737, that the tax statement shall include the amount of all credits and of all moneys invested in bonds, stock, etc., is to be read in connection with the definitions given in section 2730, and the requirements of section 2736.
    Where stocks are pledged with power to transfer and sell, the pledgor no longer holds .moneys invested in stocks within the meaning of the definition of that phrase in section 2730; nor are these stocks investments in his possession or under his control under section 2736. The actual possession and holding, as well as the power of control, is no longer in the pledgor, but in the pledgee. The pledgor is left holding, possessing, and controlling simply a right to demand the return of the stock upon payment of the loan, which is nothing more than a “ credit ” under the definition of that phrase in section 2730. The difference between investments, or moneys withdrawn from the ordinary business, and credits, is noted in Payne v. Watterson, 37 Ohio St. 124, 125.
    As the auditor charged the defendant not for omitted credits, but for omitted investments in stocks, I submit that no recovery could be had in this action, based as it is upon an erroneous correction.
   Spear, J.

A large amount of money is involved in the decision of this case, and many persons are interested in the result. With it were argued and submitted two cases of Executors of Reuben Springer, deceased, v. The Plaintiff in Error, brought in the court below to recover back taxes upon similar stocks. Some seven other cases, decided in the superior court, of like character, are also to depend upon the event of this case. Having in mind these facts, quite full consideration has been given the case by the court, and, impressed with the practical importance of the questions involved, more than the usual space is given to it in this report.

That the stock of the railway company is taxable against the shareholders in this state, it being a foreign corporation, though having property within the state on which it pays taxes here, was established by the decision in Insurance Company v. Ratterman, 46 Ohio St. 153, decided at January term, 1889.

The principal question at issue involves a construction of section 2781, of the Revised Statutes, and the chief point of dispute relates to the true meaning of the word “ false.”

This section was amended April 14, 1886, but the change in no way affects the questions made by the record. As it now stands, that section reads as follows:

“ See. 2787. If any person whose duty it is to list property or make [a] return thereof for taxation, either to the assessor or county auditor, shall, in any year or years make a false return or statement, or shall evade making a return or statement^ the county auditor shall, for each year, ascertain, as near as practicable, the true amount of personal property* moneys, credits and investments that such person ought to have returned or listed, for not exceeding [the] five years next prior to the year in which the inquiries and corrections provided for in this and the next section are made; and to the amount so ascertained, for each year, he shall add fifty per centum, multiply the sum or sums thus increased by said penalty by the rate of taxation belonging to said year or years, and accordingly enter the same on the tax lists in his office, giving a certificate therefor to the county treasurer, who shall collect the same as other taxes.”

The question mainly argued is: Were the returns, or any of them, made by the defendant to the assessor, false returns within the meaning of this section ? Necessarily, this is, in great measure, a question of fact, and to the end that this court may correctly apprehend the facts, it is asked that we review the findings of the trial court in the light of the evidence, the claim being that the findings are against the weight of the evidence.

Without denying to itself the right to review the evidence upon petition in error, this court has heretofore declined to examine the evidence with a view of determining whether or not the trial court erred in its decision upon the weight of the evidence. In Damarin v. Huron Iron Company, 47 Ohio St. 590, the court uses this language: “ We might, upon the evidence in this case, have arrived at a different conclusion from the court below as to whether there was any actual intention on the part of the company to continue business after the execution of these mortgages. There are a number of things in the evidence that might be regarded as casting a doubt upon this question. Still it is not the practice of this court to weigh the evidence, but to accept the facts as they have been found by the court in which the evidence was heard.” See also, Ford v. Osborne, 45 Ohio St. 1. Following the well established precedent, therefore, we are, in this case, to take the facts as found by the trial court.

Accepting the findings as truly setting forth the facts, were the returns false ? In support of the contention of plaintiff in error it is urged that the word “ false ” is to be taken as implying simply the opposite of correct, or true, while the defendant in error insists that the word, as used in the statute, necessarily implies that which is not only untrue, but is designedly untrue, the result of an intent to deceive. Of course, no one would doubt that the latter definition satisfies, to the fullest extent, the terms of the statute ; does the former ?

There is abundant authority among lexicographers for either definition. As used here, should the word be given a broad meaning, or should we seek a more restricted meaning ? It is to be borne in mind that the statute, while not strictly penal, is of that nature, as well as remedial. It is elementary, we suppose, that remedial statutes which prescribe penalties or forfeitures, though not to be construed strictly as criminal statutes are construed, nevertheless will not receive that liberal construction which would be given if .they were simply remedial. The legislature having used words admitting of more than one meaning, it is the court’s duty to ascertain, if it may, the sense in which the words were intended, the intention of the law-makers being in all cases the ultimate object sought in construction. Looking for the use of the word in a legal sense, we find it given in 7 Am. & Engl. Enc. of Law, 661, as meaning “ something more than untrue; it means something designedly untrue, deceitful, and implies an intention to perpetrate some treachery or fraud.” In Abbott’s Law Dictionary, 478, under the head “ false,” it is stated: “ In the more important uses, in jurisprudence, of false and falsely, they usually import somewhat more than the vernacular sense of erroneous or untrue. They are oftenest used to characterize a wrongful or criminal act, such as involves an error or untruth, intentionally or knowingly put forward. A thing is called false when it is done, or made, with knowledge, actual or constructive, that it is untrue or illegal; or is said to be done falsely when the meaning is that the party is in fault for its error.” Putnam v. Osgood, 51 N. H. 192, gives construction to a statute rendering void, as against a subsequent attachment, the lien of any pledgee or chattel mortgagee who, on the officer holding the process demanding a statement of his account, renders & false account. The opinion by Chief Justice Bellows, is full, well reasoned, and instructive. The holding is that such “ account is not necessarily false within the meaning of the statute, because, by mistake, it is made greater than the amount really due, provided the account is rendered in perfect good faith, and with all reasonable efforts to make it just and correct.” For applications of like definition as applied to the term “ false swearing ” in insurance law, see Maher v. Hibernia Insurance Company, 67 N. Y. 283; Franklin F. I. Company v. Updegraff, 43 Pa. St. 350; Franklin Insurance Company v. Culver, 6 Ind. 137; Marion v. Great Rep. Insurance Company, 35 Mo. 148; Mason v. A. M. A. A., 18 Up. Can. (C. P.) 19; and for full discussion of the question generally, see Derry v. Peek, 14 App. Cases (H. of L.) 337.

If we say that a statement which is simply not true, and which does not show design or culpable negligence, is false within the meaning of this statute, then it would seem to follow that the state has done that which is most unusual, to wit: prescribed a punishment in the nature of a penalty for an act of omission, which is but an innocent mistake on the part of the citizen. For, according to the terms of the section, the penalty of fifty per centum to be added by the auditor, necessarily follows the finding by him that the return made was a false return, or that the making of a return has been evaded. He “ shall for each year ascertain..... the true amount .... such person ought to have returned or listed.....and to the amount so ascertained he shall add fifty per centum,” etc. There is no discretion. The true amount of the property being found, the penalty is added with the same certainty that the tax itself is entered. Genin v. Auditor, 18 Ohio St. 534.

We are considering the language with a view of ascertaining the bearing of the section, taken as a whole, upon the meaning of the word “ false.” It has been held in Gager v. Prout, decided at this term, that as to years .prior to the amendment of the statute, the tax itself could, in a proper case, be collected, but that the penalty could not be added. In other words, the penalty clause was separable from the remainder of the act. This did not read the penalty clause out of the statute. To put a proper construction on the act, to ascertain the meaning of the legislature, it is present to every intent and purpose, for “ the rejection of some of the provisions of a statute for unconstitutionality, will not vary the sense or meaning of its remaining provisions.” State v. Dumbaugh, 20 Ohio St. 174. The words of .the entire section, therefore, are to be considered. The law was intended to be permanent. That vice which is necessary to make a return false at one time is necessary at all times, and no different test can be applied in a case which involves taxes for years prior to the amendment of 1886, than to a case arising after that date. It follows that, whatever is a false return as to the penalty is a false return as to the tax without the penalty, and vice verm.

That the word “ false ” is used in a sense other than merely untrue finds support by a consideration of the context. The section includes as well those who “ shall evade making a return ” as those who “ make a false return,” and the maxim nosdtur a sociis is invoked. True, it is urged that the word “ evade ” here is synonymous with “ omit,” and hence gives color to the opposite construction. This, we think, is Avholly inadmissible, for the word, comparing the definitions of lexicographers, scarcely admits of any meaning, when applied to the act of a person, which does not involve a perverse or sinister element. We conclude that “ evade,” as here used, means to avoid by effort or contrivance. If we are correct as to this meaning, its use in conjunction with the word “ false,” has an important bearing upon the sense intended by that word, and tends strongly to the conclusion that “ false ” implies design, for it is difficult to conceive that the legislature would intend to impose a severe penalty upon one who, by an innocent oversight, omitted a portion of his property from his return, and at the same time wholly excuse another who omitted to return any property at all. And yet this certainly follows if a return erroneous, without fault is a “ false return.”

In Insurance Co. v. Cappellar, 38 Ohio St. 560, the company disclosed the real facts to the auditor by returns on the blanks furnished, but deducted its re-insurance fund as a debit from its credits, and returned the balance for taxation. The auditor proposed to correct these returns under section 2781, for five years, and the suit was to enjoin this proposed action.

As made by the company, the statements were unquestionably erroneous. The claim was made in argument by the learned attorney-general, that the returns were false, and he argued as is urged here, that the word “false ” meant “not truethat the returns did not comply with the statute, and hence were “ false.” This was denied by counsel for the company, (now one of the eminent counsel for defendant in error in this case), who contended, as is here contended, that the returns were not “false,” inasmuch as there was no concealment, or intentionally false statements, and that the returns showed every item, and the auditor had full knowledge of their character. The information as to ownership was given the auditor on the returns; in the present case like information was given by the taxpayer verbally. The court held that the returns were not false within the meaning of the statute, and confined the judgment to the amount due as taxes for the current year, without penalty.

It is insisted that in section 2782, the term “ false statement ” is used as meaning simply a false or incorrect statement, as held in Champaign County Bank v. Smith, 7 Ohio St. 42, where the language of section 46 of the act of 1852 (now incorporated into section 2782) is construed. And, as a result, it is claimed that a like signification must be given to like language in section 2781, on the principle laid down in Rhodes v. Weldy, 46 Ohio St. 234, that “ where the same word or phrase is used more than once in the same act in relation to the same subject-matter and looking to the same general purpose, if in one connection its meaning is clear and in another it is otherwise doubtful or obscure, it is in the latter case to receive the same construction as in the former, unless there is something in the connection in which it is employed, plainly calling for a different construction.” A full analysis of section 2782 is not necessary to the point we make. It is apparent on the surface that there is not full identity of subject-matter in the two sections, nor is the connection in which the term stands in one the same as in the other. In 2781, it is used, in effect, as the equivalent of “evade;” in section 2782, it is used apparently in contrast with “evade.” There is, therefore, manifestly, something in the connection in which the language is employed in section 2781, “plainly calling for a different construction.” And while the general subject-matter is the same, a special subject-matter, to wit: penalty, is present in one section and absent in the other. The two sections were originally passed at different dates, and were intended to accomplish, in part, different results. One is intended solely for the correction of errors, from whatever cause arising, the taxpayer being liable for more than simple taxes only in case it is shown that the return was made with intent to evade the payment of taxes, and that liability being for costs of correction only; the other to correct false returns only, and impose a severe penalty upon those who make them, thus punishing the wrongdoer and serving as a warning to others.

It is not doubted that the legislature had full authority to provide for an inquiry into past years, and to prescribe such conditions, as, in its wisdom, seemed proper for Sscertaining and placing upon the duplicate, taxes omitted to be returned for any cause, and there certainly would be no inequity, as between the state and the citizen, in opening up settlements for periods prior to the current year upon the ground of mere mistake. Such policy would but place the state in the same attitude towards its citizens as it places citizens in towards one another. But, had such been the purpose of the legislature, it seems natural to expect that that body would have employed plain, unequivocal terms, words admitting of but one meaning, and clearly expressive of the precise purpose intended. Our language is not lacking in words adequate to the expression of exact ideas. As we have already seen, the word “ false ” has a legal meaning, and we would suppose that if the legislature intended to use it in a more general sense, such intention would have plainly appeared by the context. Stephenson v. Higginson, 3 H. L. Cases 686. The terms of the entire section, however, not only do not clearly indicate a purpose to provide for correction of errors in returns for past years for mere mistake, but, while admitting of dispute as to the real meaning, nevertheless, tested by ordinary rules, as applied to a statute where a penalty or forfeiture is imposed, fairly imply, as we think, a purpose to limit such corrections to cases where the taxpayer is shown to have been in fault; and the courts have no other duty than to give effect to that language.

An examination of the cases upon the proper construction of tax laws, cited by defendant’s counsel, fails to impress us that the conclusion of counsel is correct. The cases go to the extent of holding that revenue statutes are not to be regarded as penal, and therefore to be construed strictly, but are remedial in their character, and to be construed liberally to carry out the purposes of their enactment. This need not be disputed. But we discover no inclination in any of the decisions of the Federal courts to impose the penalties of the United States revenue laws upon the innocent. Indeed, the . purpose seems to be to refuse to do so except where the language of the law will fairly admit of no other result. This is illustrated tn the case of U. S. v. Bbls. Spirits, 2 App. (U. S.) 305. The syllabus is: “ Reve’nue laws inflicting penalties for their violation, are not to be construed strictly, nor with excess of liberality; but in such a manner, looking at their policy, purpose, spirit, and language, as will best effectuate the legislative intention. The courts will not construe a law imposing a forfeiture, as extending to property which, before seizure, has been sold to a person innocent of the of-fence by which the forfeiture is incurred, and who has purchased in good faith, unless the intention of Congress that the forfeiture should be absolute and instantaneous on the commission of the offense, be manifest and unmistakable.”

Upon a consideration of the entire statute in the light of the authorities, and having in mind the purpose to be accomplished by this section, as heretofore held by this court, to wit: “not merely to afford a remedy for a recovery of wbat is due the state under its system of taxation, but also to secure honest returns by adding a penalty to the making of false ones,” we are led to the conclusion that, in order to be “ false ” within the meaning of section 2781, there must appear, if not a design to mislead and deceive, at least such culpable negligence in the making of a return as carries with it the consequences of intentional default. Culpable negligence may well be said to be present where a party, under obligation to make a true statement, states that which is false in fact, and which he has no sufficient reason to believe to be true. It is the duty of the resident property owner to return his taxable property for taxation. In the performance of this duty he must use diligence and care in acquiring knowledge from sources where information is obtainable. If he uses such care, and acts honestly, making his return in accordance with his best knowledge and belief, after using all reasonable means to obtain an intelligent belief, his return will not be false within the meaning of section 2781. But this belief must result from a careful effort to perform the duty. Blind reliance upon an indolent belief that one’s property is not taxable, without investigation, inquiry, or disclosure to the taxing officer, would show culpable negligence, as fatal to the claim of good faith and innocent purpose, as would a direct intent to deceive. With this construction we think the rights of both the state and the owner will be reasonably protected, and no injustice result to either paily. The citizen is held to a high degree of vigilance in the performance of an important duty, and yet is not visited with severe penalties by reason of an honest mistake. This conclusion is believed to be in harmony with the holdings in the following cases: Breitung v. Lindauer, 37 Mich. 217; Pier v. Hanmore, 86 N. Y. 95; Bonnell v. Griswold, 89 N. Y. 122; Wright v. Smith, 5 Esp. 203; Black v. Ward, 27 Mich. 191; and to be fully sustained by Del. Div. Canal Co. v. Commonwealth, 50 Pa. St. 399.

There is force, too, in the consideration that the duty to make proper return is not satisfied by a return honest when made, but attaches to the taxpayer to such extent that if, before the return has been finally acted upon by the taxing officer, the party obtains knowledge that his return is incorrect, he should voluntarily correct it by a supplemental return, and that a failure to do this is, within the meaning of this section, an evasion which would authorize the auditor to add the penalty for the current year. He knows that unless such correction is made, the auditor, except he have information from other sources, will act on a return which is untrue, and the failure to speak, under the circumstances, may be regarded, in its nature, sivppressio veri.

Applying these conclusions to the case before us, what should the judgment be ? From the findings of fact we learn that, prior to the second Monday in April in the year 1881, the defendant took advice of eminent lawyers as to the taxability of the stock in question, and received opinions from them that it was not taxable under the laws of Ohio. During that month he informed the then auditor of Hamilton county that he owned such stocks, and discussed with him the question of their taxability. ' From a period long prior to this date, the auditor and boards of equalization of the county declined to take steps to compel returns of persons who, they knew, owned such stock; which action was approved by the auditor of state, and no instructions to the contrary were given by that officer prior to November, 1886. This conclusion of the taxing officers was generally known in the county of Hamilton, and the belief was practically universal in the county, for the period stated, that such shares were not subject to taxation. These facts were known to the defendant, and honestly entertaining the belief that the shares were not taxable, and having no intent to evade payment of taxes, he omitted the shares from his returns. Such, in brief, are the facts as found by the trial court. If the conclusion before stated as to what is necessary to constitute “ a false return ” be correct, it must be manifest that these facts do not show that the returns were “ false.”

As to the returns for the years 1881 to 1885, inclusive, there seems, therefore, no real question but that the judgment below was right. As to the year 1886, there may possibly be room for doubt regarding the penalty. It is urged that if the return is true when made, it cannot be rendered false by what is learned afterwards. . Defendant’s return in April, 1886, was correct so far as it went. It did not include the railway stock. The trial court apparently thought there was evasion in not making voluntary correction. It was not necessary to find that the return itself was false. The court may have reasoned that, inasmuch as the defendant knew of the claim of the auditor shortly after November, 1886, that the shares ought to be returned, his failure to make voluntary correction was an evasion which rendered him liable to the penalty, and that his true disclosure, upon being cited some time afterward by the auditor, did not relieve him. The sixth finding of fact is consistent with this conclusion. This court is not prepared to say that the legal conclusion was erroneous.

The findings of fact further show that a number of the certificates representing stock owned by the defendant had been pledged as collateral security for loans, with power to the pledgees to cause a transfer of the stock to their own names, and, in case the loans should not be paid, to sell. It is insisted by defendant that such shares cannot be taxable in his name on the ground that they were not in his possession or under his control within the meaning of sections 2730, 2736 and 2737, Revised Statutes. We are of a contrary opinion. The books of the company showed the shares to be in the name of the defendant, and he was the real owner. He had the power to resume absolute control by paying off the indebtedness. It is not the policy of our law to assess taxes upon pledged property against the pledgee, and the language of the sections referred to will not, in reason, bear so literal a construction. Waltham Bank v. Waltham, 10 Met. 334; Tucker v. Aiken, 7 N. H. 113.

Other questions argued at length are rendered unimportant by reason of the conclusion reached on.the main question.

Acknowledgment is here made to counsel for their most thorough and elaborate argument of the case. The able briefs thorough and elaborate argument of the case. The able briefs have been freely resorted to in the preparation of this opinion, and have materially lightened the labor of the court.

Finding no error in the record the judgment is

Affirmed.


source: Caselaw Access Project

author: Williams, C. J.

license: Public Domain

text:
    Betz v. Snyder.

      Assignment for benefit of creditors — When deed of, takes effect — Need not befiledfor record with the recorder of deeds — Superior to existing mortgages not deposited for record.

    1. A mortgage of real property, which has not been deposited for record with tlie recorder of the proper county, before an assignment of the property by the mortgagor for the benefit of his creditors takes effect, is not a valid lien upon the property, as against the assignee, or the creditors ; nor does it become so by being subsequently recorded.
    2. Such an assignment takes effect, as to all persons, from the time of its delivery to the probate court of the county in which the assignor resided at the time of its execution. It is not necessary that it be also filed for record with the recorder of deeds.
    (Decided June 16, 1891.)
    . Error to the Circuit Court of Columbiana county.
    On the 1st day of December, 1885, James M. Hape executed a mortgage on all his real estate situated in Columbiana county, to Salathiel Betz, to secure an indebtedness of 13,000, due in one year, with six per cent, interest. Josephine M. Hape, the wife of the mortgagor, joined in the execution of the mortgage.
    On the 21st day of December, 1885, the mortgage was delivered to the recorder of the county, for record, and was duly recorded. On the 16th day of December, 1885, said James M. Hape, who then resided in Columbiana county, made an assignment for the benefit of his creditors, to Charles N. Snyder. The deed of assignment, which embraced all the property, real and personal, of the assignor, (including that mortgaged to Betz) was executed, attested, and acknowledged in conformity to the requirements of the statute relating to conveyances of real estate, and was filed in the probate court of the county, on the 17th day of December, 1885. when the assignee qualified, and entered upon the execution of his trust. He thereafter filed his petition in the probate court of that county, to have the validity and priority of the liens determined, and the property sold. Betz, who was made a party defendant, filed an answer, setting up 'his mortgage, and asking for its payment out of the proceeds of the sale. The cause, after having proceeded to judgment in the probate court, was appealed to the court of common pleas, where it was submitted upon an agreed statement of facts, substantially as above stated, upon which, that court adjudged the mortgage to be a valid lien, and ordered the amount found to be due on it to be paid out of the proceeds of the sale, before any distribution to the general creditors. This judgment was reversed by the circuit court, which held, that, as the mortgage was not filed for record until after the deed of assignment was filed in the probate court, it was invalid as against the assignee, and not entitled to preference over the general creditors. Whether there was error in that judgment, is the question presented to this court.

      Wallace, Billingsley Taylor, for plaintiff in error.
    Among the adjudicated cases bearing on the question in controversy, we think none can- be found more directly in point than the case of Mellon's Appeal, 32 Penna. 121. The statutes of Pennsylvania as to the recording of mortgages are substanially the same as ours. Brightly’s Purdon’s Digest, vol. 1, page 588, sec. 122.
    When Hape made the assignment on December 16, 1885, he could only assign what rights he held in the land previously mortgaged to Betz. American and English Encyclopaedia of Law, vol. 1, 854; Lemon, Assignee, v. Hutchins et al., Ohio Circuit Court Reports, vol. 1, p. 388; see also Hodgsen v. Barrett, 33 Ohio St. 63.

      There is no question made about the bona fide character of the mortgage. Now the subsequent assignment of Hape to his assignee, in no sense of the term constitutes him purchaser for a valuable consideration, as is clearly shown by all the authorities, which treat upon that subject. Gill v. Pinneys, Adm’r, 12 Ohio St. 38; Giauque on Assignments, p. 44, sec. 15 and notes. See also note on p. 46. Jones on Mortgages, vol. 1, p. 468, 2d ed; Burrill on Assignments, 5th ed., sec. 391; Morgan v. Kinney, 38 Ohio St. 610.

      W. G. Wells and O. K. Snyder, for defendant in error.
    Section 4133, Revised Statutes, relating to the recording of mortgages, and section 6335, relating to the filing of deeds of assignment, and the holdings of this court as to the effect and policy of our recording acts, must largely control this case, and hence the decisions of the courts of other states can throw but little if any light upon the question here presented.
    The principle running through all the cases since the recording act of 1831 is, that the subsequent acquired legal rights or title of third persons cannot be displaced by an unrecorded mortgage, a defectively executed mortgage, or any specific though merely equitable lien. Stansell v. Roberts, 13 Ohio 149; Mayhew v. Combs, 14 Ohio 429; Jackson v. Luce, 14 Ohio 514; White v. Denman, 16 Ohio 60; White v. Denman, 1 Ohio St. 11; Fosdick v. Barr, 3 Ohio St. 471; VanThornly v. Peters, 26 Ohio St. 471.
    The force and effect of these decisions is, that a duty executed but unrecorded mortgage as to all third persons, who have acquired a legal lien on, or been clothed with a legal title to, the property, is entirety void, both in law and equity, and stands in no better position, but on an equal footing with a defectively executed mortgage or a contract for a mortgage. Does an assignee for the benefit of creditors come within this rule? Is he a third person clothed with a legal title? In two cases before this court he was distinctly and squarely brought within this rule. Bloom v. Noggle, 4 Ohio St. 45; Erwin v. Shuey, 8 Ohio St. 510.
    Under these decisions it follows conclusively that an assignee for creditors holding the legal title for the benefit of creditors, by force of. the statute, stands in a better position than the assignor, for in each of those cases the court find, that instrument though good and valid as against the assignor, is entirely inoperative against the assignee. Following out this principle and thereby preserving the harmony of the law, are the chattel mortgage cases. Hanes v. Tiffany, 25 Ohio St. 549; Kilbourne v. Tay, 29 Ohio St. 264; Lindemann v. Ingham,, 36 Ohio St. 11; Blandy v. Benedict, 42 Ohio St. 299.
    It is difficult to conceive upon what principle a distinction could be drawn between a judgment creditor, whose rights have been repeatedly declared superior to an unrecorded mortgage, and an assignee holding the legal title in trust for the benefit of creditors. The logic which establishes the one applies equally to the other. If it is said that an assignee is not a purchaser for a valuable consideration, this is likewise true of a judgment creditor. If it is said that the assignee takes only the interest of the debtor and stands in his shoes, this is likewise true of a judgment creditor. If it is said that the law favors the diligence of the judgment creditor, then it is also true that the assignment statute, which, by requiring the exact time when the deed is filed to be stated, and providing that it shall take effect only from the time it is so filed, provides for diligence on the part of the assignor, and possible priorities of judgments and mortgages as a penalty for lack of diligence. If it is said that the judgment is superior because it is in favor of a creditor and that an assignee is not a creditor, as in the case of Mellon’s Appeal, cited in plaintiff’s brief, then it may be replied that, by the policy and holding of our courts, the rights of creditors may be as effectually asserted through an assignee as by judgment and execution; that the possession of the assignee is the possession of the creditor.
    But it is claimed that this case must be controlled by Gill v. Pinney, 12 Ohio St. 38, where it was held that a mortgage not recorded until death of the mortgagor, was not for that reason inoperative as against the general creditors of the estate. While there are many analogies between an administrator and an assignee for the benefit of creditors, yet there are important distinctions also.
    The case of Gill v. Pinney seems to be doubted as correct in principle in 42 Ohio St., page 214, and is virtually overruled in the 29 Ohio St., 264, where the facts were similar to those in Gill v. Pinney, and where, as shown above, the language of the statutes regulating chattel mortgages and real estate mortgages cannot be appealed to to explain the difference in the holdings of the court. The words “ entirely inoperative,” 4 Ohio St. 55, “ entirely nugatory as to third persons both in law and equity,” 3 Ohio St. 475, and other language employed by the court, in construing sec. 4133, are equally as strong, being equivalent to the language used in sec. 4150, relating to chattel mortgages. The case of Hodgsen v. Barrett, 33 Ohio St., page 63, cited by counsel for plaintiff in error, asserts the general equity doctrine, and is not disputed as sound law where not controlled by the policy of the recording acts, as in the case here cited, and the rule there stated is recognized in all the cases above cited, but declared to be displaced and overthrown by the statute.
    We claim, therefore, a decision in favor of the defendant in error is demanded, to preserve the consistency and harmony of the law of our state, as well as by a sound public policy; that there may be a clear, certain and unwavering standard of decision, free from the evils of fraud and uncertainty, by which alone titles and rights may be certainly known and easily ascertained by an appeal to the records to determine priorities.
   Williams, C. J.

The common law rule, that an assignee for the benefit of creditors succeeds only to the rights of the assignor in the property at the time of the assignment, and takes it subject to all equities and liens which could have been asserted against it had the assignment not been made, is not without important exceptions, in this state, growing out of our legislation. It is well settled, that chattel mortgages which fail to conform, in any substantial requirement, to the provisions of the statute relating to their execution, or registry, though good against the mortgagor and the property while it is retained by him, are ineffectual as liens upon the property after it has passed into the hands of an assignee for the benefit of the creditors of the mortgagor, under an assignment made subsequent to the execution of the mortgage. Hanes v. Tiffany, 25 Ohio St. 549; Blandy v. Benedict, 42 Ibid. 295.

In Hanes v. Tiffany, it was contended in behalf of the mortgagee, that, as the mortgage was good against the mortgagor, it was also good against the assignee for the benefit of his creditors; for the assignee, it was claimed, stood in no better situation than the assignor. In disposing of this contention, White, J., in the opinion of the court, said: “ The correctness of this position at common law is admitted; but not so under the statute.” It was held in Blandy v. Benedict, that where the affidavit, which the statute requires the mortgagee to make on his chattel mortgage before filing the same with the proper officer, was defective in the statement of the liability the mortgage was given to secure, but the mortgage was otherwise properly executed and filed, and the mortgagor subsequently made an assignment of his property for the benefit of his creditors, the mortgage was not entitled to priority over the general creditors under the assignment, although the assignment contained a provision expressly excepting from its operation, all liens ; and, though the mortgage was good as against the mortgagor, constituting a valid lien while the property remained in” his possession. With respect to the purpose of that provision of the assignment which excepted all liens from its operation, and its effect upon the assignment and the rights of the creditors, it is said in the opinion by McIlvain, J.: “We think there can be no doubt that the intention was to secure the mortgagees the full amount of their liens to the extent that such liens were valid as against the assignor. Can such purpose be accomplished by such means ? We think not. Undoubtedly these mortgages were valid as against the assignor, but void as against his creditors.”

These decisions rest- upon the provisions of the chattel mortgage statute, which enacts, that such mortgages, when not accompanied by an immediate delivery, and followed by an actual and continued change of possession of the property mortgaged, shall be void as against the creditors of the mortgagor, unless the mortgage or a true copy, with the necessary affidavit of the mortgagee thereon, as prescribed by the statute, be deposited with the proper officer. The right of the creditors to subject the property to the payment of their claims, is in no way affected by such void mortgages, and an assignment of the property by the mortgagor for the benefit of his creditors, clothes the assignee, not only with the assignor’s title to the pioperty, but also, with all the rights of the creditors with respect to it. As was said in Blandy v. Benedict, “By the assignment, the rights of the creditors passed to the assignee as matter of law,” and they are, thereafter, to be worked out through him, in the administration of his trust. Up to the time of the assignment, the creditors might seize the property by attachment, or other process, and their liens, so acquired, would undoubtedly be superior to such a mortgage; and, in the language of McIlvain, J., in Blandy v. Benedict, “ Every right which the creditors might have asserted against the propertj1- before the assignment, the assignee is bound to secure for their benefit after the assignment.” The assignment, therefore, as effectually fixes the rights of the creditors to the property, and establishes their priority over the mortgage, as if they had taken the property on execution or attachment. This operation of the assignment, upon the rights of the creditors, must, of course, be the same, whether the property embraced in it be real, or -personal, or both; and hence, upon the principle established by the cases referred to, the creditors are entitled to priority over a mortgage of real property which has not been deposited for record when the assignment is made, unless, under our recording acts, the effect of the failure to deposit the mortgage for record, is substantially different from that which results from the like failure to properly file a chattel mortgage. Is there a substantial difference in this respect ? The statute regulating the execution and registry of mortgages of real property, does not, in terms, declare that such mortgages, when not deposited for record, shall be void as against the creditors of the mortgagor; but it does enact, that they shall be recorded in the office of the recorder of the county in which the mortgaged premises are situated, and, that they shall take effect from the time the same are delivered to the recorder of the proper county for record. Mortgages of real property, which are not so filed for record, like unfiled chattel mortgages, are good between the parties; and, while the latter are declared void as to creditors, the former do not take effect as to third persons, until they are filed for record. A mortgage which has no effect, is no better than a void one; for, a void mortgage is simply without effect.

It has been held, by this court, as often as the question has been presented, and it has been made in a variety of forms, as well as in numerous cases, that mortgages of real property have no effect, either at law or in equity, until they are delivered to the recorder of the proper county for record, as against third persons acquiring a legal interest in, or lien upon the property. In Stansell v. Roberts, 13 Ohio 148, it was decided, that as between a prior unrecorded mortgage and a subsequent one which was recorded, the latter had priority. In the cases of Mayham v. Coombs, 14 Ohio 429; Jackson v. Luce, 14 Ohio 514; White v. Denman, 16 Ohio 60; Holliday v. The Bank, 16 Ohio 533; White v. Denman, 1 Ohio St. 110, and Fosdick v. Barr, 3 Ohio St. 471, it was held, that an unrecorded mortgage, or one defectively executed, so as not to be entitled to record, was not entitled to preference over a subsequent judgment recovered against the mortgagor. It was not doubted that such mortgages were good as against the mortgagor, and, but for the statute, would have been entitled to preference over the judgments, under the general rule that the lien of a judgment attaches only to the interest which the debtor has in the property at the time of its rendition. But, as is said in the last case cited above, while such unrecorded instruments are good and effectual between the parties, they are “ entirely nugatory as to third parties, both at law and in equity, until they are recorded.” It was held in Bloom v. Noggle, 4 Ohio St. 45, that a valid agreement in writing for a mortgage on real property, gave to the party entitled to the mortgage no priority over the general creditors of the other contracting party, under an assignment made by him for the benefit of his creditors after the execution of the agreement for the mortgage. And in Erwin v. Shuey, 8 Ohio St. 510, this court held that a mortgage of lands, defective because not under seal, but otherwise properly executed and recorded, created no lien in favor of the mortgagee, as against an assignee, under a general assignment subsequently made by the mortgagor for the benefit of his creditors, although the assignee had notice of the mortgage at the time of the assignment.

These cases, like those of Hanes v. Tiffany, and Blandy v Benedict, supra, afford instances of the exceptions, which obtain in this state, to the rule of the common law, that an assignee for the benefit of creditors takes the property assigned subject to all equities which could have been enforced against it in the hands of the assignor at the time of the assignment; and it is shown by them, that the exceptions grow out of the similiar effect given to the recording statutes applicable to the different classes of mortgages. In Bloom v. Noggle, Ranney, J., speaking of the effect of the statutes upon the rules of the common law, and the rights of the parties before, and since their enactment, said: “ If the case could be decided upon general principles, the right of the complainants to the relief they seek would seem to us as clear as it now seems clear that it cannot be given consistently with statutory provisions bearing upon the questions stated. Upon general equity principles, unaffected by statutory provisions, an agreement in writing for a mortgage, is a valid contract, fixing a specific lien upon the property agreed to be mortgaged, and will be specifically enforced by a court of chancery, against the party and all subsequent purchasers from him with notice, as well as against any general assignment, either voluntary or by operation of law, for the benefit of his creditors. These principles may be regarded as well settled, and the jurisdiction of courts of equity in such cases has been exercised, without question, from a very early period, as is abundantly shown by the cases cited in argument. It rests upon the same foundation and has all the reasons for its support, that exists in favor of a like interference upon contracts for the execution and delivery of absolute deeds. As between the parties to such a contract, the agreement is valid and effectual in this state, and we see no reason to doubt that a specific performance may be enforced by our courts of chancery, in the same manner and to the same extent, that such relief has been given in England, and other states of the Union. But while these principles and remedies have their full application and effect, as between the parties to such a contract, we are clear in the opinion that no effect whatever can be given to it consistently with section 7 of the act of June 1, 1881, (Swan’s Revised Statutes, 310), to provide for the proof, acknowledgment, and recording deeds, etc., as against third persons who have subsequently acquired the legal title to, or lien at law upon, the property to which it relates. By the positive provisions of that section, as construed by the declaratory act of March 16, 1838, (Swan’s Revised Statutes, 311), and repeated decisions of this court, as against such third persons, mortgages have no effect either at law or in equity until delivered to the recorder of the proper county for record.” “ To give them any effect before,” says the learned judge, “ as against the persons intended to be protected by the statute, would be to repeal it. It was not made for the mortgagor, and therefore, as to him, the record of the mortgage was wholly unnecessary; but it was designed to protect third persons who might acquire legal interests in, or leins upon, the property. As to them, the record was made conclusive; and they are only bound to regard such mortgage liens as the record discloses at the time their rights accrue. The principle dedueible from all the cases is, that the legal rights of such persons cannot be displaced, at the instance of the holder of a prior unrecorded mortgage, or contract for a mortgage, al-. though acquired with notice of such mortgage, or of the existence of such contract; the object of the law being to avoid all the vexed questions of notice, actual or constructive, in determining priorities of lien.”

We have quoted at some length from the opinion in Bloom v. Noggle, because we thinlc the case before "us comes within the principle established by it, and subsequently approved in Erwin v. Shuey, supra, which is, that the essential condition to the validity of a mortgage of real property, as against an assignee of the mortgagor for the benefit of his creditors, is, that the mortgage shall be deposited for record with the proper officer, before the assignment takes effect. It can make no difference, in the application of the principle, whether the want of such record, or deposit for record, results from the defective execution of the mortgage, by reason of which it is not entitled to record, or from the voluntary withholding from the record, of a mortgage properly executed.

There can be no doubt that an assignment for the benefit of creditors, operates as a conveyance, and not as a mere power. Nothing remains in the assignor but the incidental right to discharge the trust by the payment of the debts, or to claim whatever residue may remain after the debts are paid. That the deed of assignment, when properly executed, clothes the assignee with the legal title, is settled by the cases just referred to, and, according to those decisions, against the legal title thus acquired, the prior unrecorded mortgage cannot prevail. If the conveyance were made directly to the creditors, for the payment or security of their debts, it would not be claimed that either their title, or their rights under the conveyance, could be displaced, or affected by a prior unrecorded mortgage, nor by its subsequent record; and their rights, we apprehend, are none the less when the conveyance is made to the assignee for their benefit. The subsequent record of the mortgage, could, of course, give it no validity as against rights which had been acquired before.

We therefore hold, that a mortgage of real property, which has not been deposited with the recorder of the proper county for record, before an assignment of the property by the mortgagor for the benefit of his creditors takes effect, is not a valid lien upon the property, as against the assignee or the creditors, nor does it become so by being subsequently recorded.

It has been suggested, though it is not so contended by counsel in the argument, that the assignment lost its priority, because the deed of assignment was not deposited for record with the recorder of the county, while, soon after it was filed with the probate court, the mortgage was duly recorded. The record now under review, does not show that the deed of assignment was not filed with the recorder. But assuming that it was not, does the result suggested follow ?

The consequences of the failure to record deeds, differ from those attending a like failure with respect to mortgages. As to deeds, the statute simply declares that until recorded, or filed for record, they “shall be deemed fraudulent, so far as relates to a subsequent bona fide purchaser, having at the time of purchase no knowledge of the existence of such former deed.” If it were conceded, though we do not deem it necessary to so decide, that by recording his mortgage, after the deed of assignment was properly filed in the probate court, the mortgagee, Betz, then became a subsequent bona Ude purchaser, within the meaning of the statute, it was still essential, in order to bring him within its protection, that at the time of filing his mortgage for record, he had no knowledge of the assignment; and this, it is incumbent upon him to show. He makes no claim of that kind in his answer, and the record of the courts below is silent on the subject.

But, is it essential to the validity of an assignment of real property, as to third persons, that the deed should be recorded in the office of the county recorder? As a deed conveying real property, it falls within the class of instruments whose record is provided for by section 4134 of the Revised Statutes, and is subject to its provisions, unless controlled by other statutory regulations made especially applicable to such assignments. The whole subject of assignments by insolvent debtors for the benefit of their creditors, is specifically provided for, and regulated, in detail, by chapter 4 of title II. of the Revised Statutes. By the first section of that chapter, (section 6335,) it is made the duty of every assignee, within ten days after the delivery of the assignment to him, to cause it to be filed in the probate court of the county in which the assignor resided at the time of its execittion; and it enacts, that every “ such assignment shall take effect only from the time of its delivery to the probate judge, and the exact time of such delivery shall be indorsed thereon by the probate judge, who shall immediately note the filing on the journal of the court; and it may be delivered by the assignor to the probate judge, either before or after its delivery to the assignee.” Upon the filing of the assignment, the assignee is required to enter into a bond for the faithful performance of his duties; and from that time, the administration of the assignment becomes a pending proceeding in the probate court, and so continues, until the trust is fully executed. Notice that the assignee has qualified, is required to be given by publication, and notice must also be given by publication or otherwise, of various steps in the proceedings. The probate court is invested with complete jurisdiction of the whole subject-matter of the assignment, and of its administration to final completion. Its records, equally with those of the courts of common pleas, and of the records of deeds and mortgages, are constructive notice of what they are required to contain. It is a rule of construction, that special statutory provisions for particular cases, operate as exceptions to general provisions which might include the particular cases. The object of those provisions of section 6335, to which we have referred, was not, we think, simply to provide when, and how, assignments should become operative as between the parties to the instrument. They were not necessary for that purpose. As between them, the conveyance is complete without a compliance with those provisions. Their design, evidently was, to fix definitely, a time from which such instruments should take effect as to all persons. And, it having been so specially enacted, that assignments for the benefit of creditors shall take effect from the time of their delivery to the probate judge, the courts are not at liberty to annex, as a further condition to their taking effect, that they shall also be deposited with the recorder of deeds. This conclusion is sustained by the decision of the Supreme Court of Massachusetts in Guildford v. Childs, 22 Pick. 434, which involved the interpretation of statutes very similar to ours.

Judgment affirmed.


author: By the Court.

text:
    State ex rel. v. Finger.

      County Boards of Elections — TP7¿o eligible to appointment on — Duty of Probate Judge in respect of.

    Where, under the provisions of section three of the act to provide for the mode of conducting elections, etc., passed April 30,1891, the executive committee of the political party casting the highest, or the next highest number of votes in the state, at the last November election, recommend, before the first Monday of July, to the probate judge of any county which does not contain a city of the first class,the appointment on the board of elections of such county of two persons who are qualified electors of the county, and members of the political party represented by the committee, it is the duty of such probate judge to appoint the persons so recommended on the board of election of the county. And any appointment by the probate judge prior to the first Monday of July, in the absence of such recommendation, is premature and inoperative.
    (Decided June 24, 1891.)
    Mandamus.

      JD. K. Watson, Attorney General, and Geo. K. Nash, for the relator.

      N. M. Campbell, for the defendant.
   By the Court.

The petition alleges, that the defendant is the probate judge of Ashland county, which does not contain a city of the first class; that the duly constituted and acting executive committee of the republican party in that county selected and designated W. N. Starr and Jesse R. Hissem, as members of the board of elections for that county, under the provisions of the act to provide for the mode of conducting elections, etc., passed April 30, 1891, the former for one year, and the latter for two years; that the persons so selected are qualified electors of the county and members of the republican party, which party, cast the highest number of votes in the state at the election held in November, 1890; that on the sixth day of June, 1891, said executive committee recommended to the defendant, who was then the probate judge of Ashland county, the appointment of the persons so selected, as members of the board of election, and requested the appointment to be made, but the defendant refused to make such appointment, and claims to have appointed, June 3, 1891, two other persons, members of the same party and citizens and electors of said county, as members of such board. The petition prays for a writ of mandamus, commanding the defendant to appoint the two persons recommended by the executive committee, as members of the board of elections of Ashland county. The defendant waives the issuing of an alternative writ, and demurs to the petition.

The demurrer calls for a construction of the third section of the act of April 30,1891, known as the Ballot Law, and the single question presented is: may a probate judge, in a county of the class named, appoint a county board of elections prior to the first Monday in July, in the absence of any recommendation by the executive committees of the political parties casting the highest, and next highest, number of votes at the last previous November election ?

Held: That the executive committees referred to, have, under the terms of the act, until the first Monday of July in which to recommend qualified persons for appointment by the probate judge as members of the board of elections. It is the duty of such judge, upon such recommendation being made, within said time, to make the appointments so recommended, and appointments made by him before the first Monday in July, in the absence of such recommendations, are premature and inoperative.

Demurrer overruled, and peremptory writ awarded.


author: By the Court :

text:
    Kirker v. Cincinnati.

      Defacto officers.

    Members of the board of city affairs, before law declared unconstitutional, were defacto members of the administrative board of Cincinnati, and tbeir acts valid.
    Error to the Superior Court of Cincinnati.

      Burch §• Johnson ; Harmon, Colston, Goldsmith §• Hoadly, and Bamsey, Maxwell Bamsey, for plaintiff in error.

      Theodore Horstman, City Solicitor, and J. B. For alter, for defendant in error.
   By the Court :

By the act of the general assembly entitled, “ An act to create and establish an official board of city affairs in cities of the first grade of the first class,” passed October 24, 1890, the boards of public improvements in cities of that grade and class, were abolished; but, by the same act, § 2281, Revised Statutes, as then amended, all the powers and duties of the board of public improvements, were conferred on the board of city affairs, and the latter was made the successor in all respects of the board of public improvements. This act was declared unconstitutional by this court in State ex rel. Reemelin v. Smith, ante 211. The question now presented is, whether the official acts of this board, performed before the act was held invalid and the appointees under it were ousted by the judgment of this court in the above case, are also invalid and of no effect. We think not. The act did not in a legal sense create a new office. The board of city affairs was clothed with the same functions as the board of public improvements. If then, as can hardly be questioned, the identity of an officers to be determined by the functions that belong to it, the board of city affairs is, in law,' the same as the board of public improvements: For there is nothing in a name by which the essence of things can be changed. The designation, board of city affairs, is only another appellation for the administrative functions with which it was clothed, as is, also, the designation, board of public improvements. So that the act of October 24, 1890, held unconstitutional, simply provided a mode for the removal of the then members of this administrative board, and the appointment of new ones. The persons appointed in pursuance of the provisions of the act were, for the time being, members de facto of this board; and the acts performed by them as such members before they were ousted by the proceeding in quo warranto, are, on principles of public policy, as valid as if they had been performed by the de jure members of the board. State v. Carroll, 38 Conn. 449; State v. Alling, 12 Ohio 16; State v. Jacobs, 17 Ohio 143; Seovill v. Cleveland, 1 Ohio St. 126; Ex parte Strang, 21 Ohio St. 610; State ex rel. Herron v. Smith, 44 Ohio St. 348.

It is argued that the separate character of the two boards is recognized in Reemelin et al. v. Mosby, 47 Ohio St. 570. This may seem so from the second clause of the syllabus. But no such question was involved, nor considered or necessary to be considered, in that case. It is true that the members of the new board are there referred to as members of. another board. In one sense this is true, in another it is not: With regard to the personnel, a change in the membership. makes another board, but with regard to its functions, the board remains the same so long as its functions remain unchanged. This was an immaterial distinction in that case, and - so not considered. For, so far as the right of the plaintiffs to relief was concerned, it was immaterial whether they were to be superseded by a new board with new functions, or simply by new members of the board then filled by themselves; in either case, they would not have been entitled to an injunction before the appointment of the new members.

Judgment affirmed.


author: Minshall, J.

text:
    State v. Long.

      Intoxicating Liquors — Sale of within two miles of Agricultural Fair— Section 6946, Bevised Statutes, construed.

    A place where the industrial products of a people, in agriculture, manufacturing and the arts, are received and placed on exhibition, for the purpose of displaying them and awarding premiums as a reward for excellence, is an agricultural fair, and, although organized for profit under the provisions of §§ 3235 and 3236, Revised Statutes, is within the provisions of § 6946, Revised Statutes, making it an offense for anyone to sell.intoxicating liquors within two miles of the place where any agricultural fair is being held.
    (Decided October 20, 1891.)
    Exceptions by prosecuting attorney to the rulings of the Court of Common Pleas of Columbiana county.

      I). K. Watson, Attorney General, and P. M. Smith, Prosecuting Attorney, for the state.

      J. A. Ambler, for the defendant.
   Minshall, J.

At the October term 1890, of the Court of Common Pleas of Columbiana county, John W. Long was indicted for selling intoxicating liquors to certain persons in said county, on the 18th day of September, 1890, at a time when an agricultural fair was being held by The Salem Fair and Exposition Company, and within two miles of the place where the fair was so held. The defendant entered a plea of not guilty, and a trial was had. At the conclusion of the* evidence of the state, the court, on motion of the defendant, directed the jury to return a verdict of not guilty, which was done accordingly.

The prosecuting attorney excepted to the ruling of the court, and tendered a bill of exceptions containing all the evidence offered by the state, which was signed by the court and made a part of the record.

The bill of exceptions shows that evidence was offered by the state tending to show that sales of intoxicating liquors were made by the defendant within two miles of the place where the Salem Fair and Exposition was then being held as charged in the indictment; and that The Salem Fair and Exposition Company was incorporated January 31, 1890, under the provisions of section 3235, Revised Statutes, with a capital stock of $10,000, divided into shares of $25 each, with its location and place of business at Salem, Columbiana county, Ohio. The certificate states that, “ The purpose for which this corporation is formed is to provide, maintain and manage grounds for the exhibition of farm and fancy stock, together with domestic animals of all kinds, agricultural, horticultural, mechanical and industrial products of every description, including works of art. Also for speeding horses, giving exhibitions of riding and driving, and such other displays as will conduce to the interest and entertainment of the community, for profit.”

The ground upon which the court directed a verdict for the defendant is, that the company being organized for profit under the provisions of the section above referred to, is not an agricultural fair within the meaning of section 6946, under which the indictment was framed; that this section applies only to sales made within the distance named of such state, district, county and township agricultural fairs as are provided for in the chapter on “ agricultural corporations,” Revised Statutes, p. 926.

The language of the section, 6946, on which the indictment is framed, is, Whoever sells intoxicating liquors..... within two miles of the place where any agricultural fair is being held,” shall be punished as therein provided. It is true that the primary, and ‘we may say the etymological meaning of the word “ fair,” simply embraces a market for the buying and selling of such articles as may be exhibited; but, it is also true, that it is now more generally used to designate an exposition where the industrial products of a people are exhibited as a display of the success, workmanship and art of the exhibitors, and to obtain such premiums as may be paid by the owners of the fair as a reward of excellence. So that the Salem Fair and Exposition falls within the usual and ordinary acceptation of the word “fair,” as used in the statute.

The argument, however, of the defendant that such construction should not be placed on it, is based upon a review of the history of legislation upon the subject. The Salem Fair is a private corporation organized for profit under the provisions of section 3235, Revised Statutes, authorizing individuals to incorporate for any purpose that they may lawfully associate, except for dealing in real estate, or carrying on professional business. The provisions of this section were first incorporated into our statutes by the revision of 1880; so that prior to this time, as claimed, there were no private agricultural fairs organized for profit, as the Salem company now is; and the only fairs known to our statutes were such state, district, county and township fairs, as "were provided for in the various statutes collected and codified in the chapter of the revision above referred to. So that the offense of selling intoxicating liquors, made punishable by section 3 of the act of 1856, to protect fairs and fair grounds, (S. & C. 68,) was of necessity, as well as by its language, confined to sales made “ within two miles of the place where any such agricultural fairs” were held; and, therefore, that section 6946 of the revision, being, as claimed, simply a codification of the provisions of the criminal law on the subject, then in force, should not be extended to fairs organized as the Salem company is.

Here it should be observed, in the first place, that the act of 1856, (S. & C. 67,) punishing sales of liquor within two miles of a fair ground, was made applicable to “ any independent agricultural society ” as well as to state, county and township organizations — manifesting a purpose to extend its provisions to all such societies then existing, irrespective of the mode of their organization. And no reason appears why such should not have been the policy of the state. Certainly the same inconvenience and annoyance will result to the individual and the public from the sale of liquor near a fair ground, however the fair itself may be organized; for whether organized upon one plan or another, it will be attended and patronized in the same community by substantially the same persons. And we take it that the policy of the statute is founded on the duty of protection to the people who attend such fairs, rather than to the fair itself. Again this section of the Revised Statutes has been amended a number of times since 1880 — the last amendment having been made in 1888 ; and at each time the language, “ any agricultural fair ” was inserted and continued in the amendment, although many fair companies organized as the Salem Company is organized, are known to have existed throughout the state at the time of each amendment.

But independent of these considerations, the construction claimed is inadmissible. The language of the statute is free from any ambiguity, and therefore precludes any construction contrary to the plain import of its terms. “ Any agricultural fair,” must include all agricultural fairs, or none, for there is nothing in the statute by which any distinction can be taken as between such fairs. This section was under consideration in Heck v. State, 44 Ohio St. 536. It was then claimed, in an argument based upon the provisions of the prior statute, that the section did not apply to one whose place of business is permanently located within the distance named of any fair. In answer to which it was said, “ when the language used in a revised statute is of such doubtful import as to call for construction, it is both reasonable and usual to refer to the statute or statutes from which the revision has been made. But where the language is plain, and leads to no absurd or improbable results, there is no room for construction, and it is the duty of the courts to give it the effect required by the plain and ordinary signification of the words used, whatever may have been the language of the prior statute, or the construction placed upon it.” The authorities are there cited, and the principle laid down, is shown to be in conformity to the rule adopted by the federal supreme court in construing the Revised Statutes of the United States. United States v. Bowen, 100 U. S. 508.

It is true that the commission was simply appointed to revise, and not to change the statutes of the state. Their report was, however, made to the legislature. That body, without criticism of the manner in which the work had been performed, adopted the revision with a few changes, and made it, as far as it went, the statute law of the state, to be construed as any other act of the legislature. And it is a settled rule of construction that, whatever aids may be invoked for that purpose, the sense of the legislature must in all cases be collected from the language employed in the statute, in accordance with the maxim, sermo index animi. And from which this further rule results as a corollary, that where the language is plain and unambiguous, and leads in its application to no absurd or improbable results, there is no room for construction. As sometimes said, the courts cannot be called on, nor have they the power, to construe that which does not need construction.

Therefore, the common pleas, as we think, erred in taking the evidence from the jury and directing a verdict for the defendant. If any of the terrible consequences that seem to be apprehended from this construction are likely to occur, application can be made to the legislature, which will soon be in session, when a remedy can be had by amendment.

Exceptions sustained.'