author: Williams, J.

text:
    Walsh v. Miller.

      Sureties — Construction of contract, of — On bond of assignee, concluded by settlement — Effect of release of one.

    1. While sureties are not liable beyond the plain terms of their engagement, the rules governing the interpretation of their contracts are not different from those which are applicable in the construction of all written agreements; and it is enough, in any written contract, that the intention of the parties clearly appear, though it be not expressed in the most appropriate words.

      2. A duly executed bond of an assignee for the benefit of creditors’ ■which r.ocites that, by a certain deed of assignment he was appointed “ trustee ” for the purposes therein expressed, and is conditioned for the faithful performance by him of all his duties as “ such trustee,” according to law, binds the sureties for the faithful performance of his duties as assignee, under the deed of assignment.
    3. In an action on such a bond, for the recovery of the amount found due the successor of the assignee on the settlement of his accounts, he having resigned, the sureties are concluded by the settlement, and, in the absence of fraud or collusion, can neither question the correctness of the settlement, nor demand a rehearing of the accounts; nor will they be heard to assert that the assets with which the assignee is charged in his accounts, were not the property of the assignor.
    4. The sureties on the bond of such an assignee, when he has failed to pay the money in his hands to his successor in the trust, are joint débtors, within the purview of section 3166, of the Revised Statutes ; and a compromise with, and release of one surety, will not discharge the others.
    5. Such release operates as a payment on the liability, equal to the released surety’s proportionate share thereof, but does not prevent the creditor from proceeding against the other sureties fot the balance; nor is the released surety a necessary party to such proceeding.
    6. The released surety’s proportionate share of the liability is determined from the number of the,sureties, and the amount of the total liability, and not from any agreement between them fixing a different ratio of liability.
    7. Whether, -in case of the insolvency of one of the unreleased sureties, those who are solvent may call on the surety who has been released, for contribution, Quere ? but, whether they may or not, the amount which the creditor is entitled to recover from those not released, iá not thereby reduced.
    (Decided June 19, 1894.)
    Error to the Circuit Court of Hamilton county.
    The original action was brought in the court of common pleas of Hamilton county, by I. J. Miller and Gustav Tafel, as trustees of the estate of Edward Purcell, under an assignment for the benefit of creditors, against John B. Mannix, John Holland, Charles Stewart and Michael Walsh.

      The petition, which was filed on the 26th day of February, 1890, is as follows:
    “Plaintiffs say that on the 4th day of March, 1879, said Edward Purcell made an assignment to said John B. Mannix, in trust, for the benefit of creditors under the law governing voluntary assignments of insolvent debtors, which assignment the said John B. Mannix accepted, and on the 12th day of March, 1889, the said John B. Mannix duly entered into a bond as such trustee and assignee, with the defendants, John Holland, Charles Stewart and Michael Walsh, and one George Hoadly as sureties, a copy of which is hereto attached marked ‘Exhibit A, ’ whereby said defendants, John Holland, Charles Stewart and Michael Walsh, and one George Hoadly became bound with the said John B. Mannix to the state of Ohio in the sum of two hundred and fifty thousand dollars, subject to the conditions in words and figures as follows, to wit:
    “‘Now, therefore, we, John B. Mannix, George Hoadly, John Holland, Charles Stewart and Michael Walsh undertake and bind ourselves unto the state of Ohio in the sum of two hundred and fifty thousand ($250,000.00) dollars that the said John B. Mannix will faithfully perform all his duties as such trustee according to law. ’
    “And thereupon, the said John B. Mannix entered upon the trusts of said assignment, and a large amount of assets came into his hands as such assignee, which he converted to his own use; and he continued as such assignee until the 4th day of January, 1886, when his resignation as such assignee was accepted.
    “2. That afterward, on the 13th day of May, 1886, on the settlement of the accounts of the said John B. Mannix, as assignee as aforesaid of Edward Purcell, in the probate court of the said county of Hamilton, there was then found by the consideration of said court the sum $305,827.70, with interest from the 4th day of January, 1886, in the hands of the said John B. Mannix, which the said John B. Mannix was ordered and adjudged to pay over according to law to the plaintiffs herein, his successors in the said trust. That thereafter the said George Hoadly, one of the sureties on the said bond, by proceedings in the probate court of Hamilton county, was released from liability on said bond on the payment of one-fourth of the face of said bond, leaving the remaining sureties on said bond liable for three-fourths of the face of said bond; that is to say, $187,500.00. That thereafter, the said John B. Mannix and his said sureties, John Holland, Charles Stewart and Michael Walsh, caused an appeal to be taken to the court of common pleas of Hamilton county, and after the hearing, order and judgment in said last mentioned court, the said John B. Mannix and his said sureties, John Holland, Charles Stewart and Michael Walsh, took the said case to the circuit court of Hamilton county on error, where, on hearing and consideration, the said circuit court found, after allowing all credits made pending the suit, including the amount paid by George Hoadly, with interest from the time of' payment to the 6th day of January, 1890, there was still due from John B. Mannix, as assignee of Edward Purcell to the estate of Edward Purcell, the sum of $189,975.83, with interest from the 6th day of January, 1890, which amount the said John B. Mannix was ordered and adjudged to pay over according to law to the plaintiffs herein, and that he also pay one-half of the costs in the circuit court, amounting’ to $5.76, and all the costs in the court of common pleas, which amounts to $807.31. And the Yourt further found that by reason of the assignment of certain stocks to George Hoadly, for the benefit of the said sureties, which had been sold, the said sureties were entitled to a credit on their liability for $187,500.00, in the sum of $17,789.97, leaving an amount chargeable to the said three sureties, John Holland, Charles Stewart and Michael Walsh, of $169,710.03, with interest from the 6th day of January, 1890.
    “3. Plaintiffs further say that said John B. Mannix is wholly insolvent, and that he left this state before the said order and finding in the circuit court and went to the state of California, as plaintiffs are informed, and that he is now and has been ever since he left this state beyond the reach of the process of this court.

      “4. The said probate court duly appointed the plaintiffs herein as trustees of the estate of Edward Purcell, and they were duly qualified and entered upon their duties as such trustees and successors of JohnB. Mannix, on the4thdayof January, 1886, and have continued ever since to be such trustees, and as such are entitled to receive from the defendants the said several sums of money.

      “5. That the said John B. Mannix has wholly failed and neglected to pay over to the plaintiffs the said sum so found due from him to. the said plaintiffs herein, or any part thereof, and the said sureties, John Holland, Charles Stewart and Michael Walsh, have wholly failed, refused and neglected to pay said sum, or any part thereof, and that there is due the plaintiffs herein from the said John B. Mannix, his said sureties, John Holland, Charles Stewart and Michael Walsh, the said several sums of money so as aforesaid set forth.
    “Wherefore the plaintiffs ask judgment against John B. Mannix as principal for $189,597.83, with interest from the 6th day of January, 1890, and for the costs, amounting to $813.07, and they further ask for a judgment against the said John Holland, Charles Stewart and Michael Walsh, for $169,710.03, with interest from the 6th day of January, 1890, and for the costs, amounting to $813.07.”
    Mannix was not served with process. Holland demurred to the petition on the grounds, that there was a defect of parties defendant, and the petition did not state a cause of action against him. The demurrer was overruled,, and the defendants Walsh, Stewart and Holland, filed separate answers, which allege, in substance, (1) that they were not liable on the bond set out in the petition, because, by it, they bound themselves only for the faithful performance by Mannix of his duties as trustee of Purcell, when, in fact, Mannix was not the trustee, but was the assignee of Purcell, under a voluntary assignment, and no property of the assignor came to the hands of Mannix as trustee, and therefore, he was guilty of no default as trustee; (2) that Purcell had no estate which passed to Mannix, either as trustee or assignee; (3) that the bond sued on was executed by the answering defendants and George Hoadly jointly, as sureties, under an agreement made among themselves that Hoadly .should be responsible to the amount of one hundred thousand dollars, and each of the others to the amount of fifty thousand dollars only; and that Hoadly had been released from his liability on the bond upon his payment of the one-fourth of its amount, which operated to discharge all of the sureties; (4) that since Hoadly was released, the defendant Stewart has become insolvent, and has no property out of which any part of the plaintiff’s claim can be collected; and Walsh and Holland allege that neither of them' should be held liable upon the bond for an amount exceeding the one-fifth part thereof; and, (5) that Hoadly, being a joint surety on. the bond, was a necessary party to the action. Am additional answer was filed by Walsh and Holland jointly, in which they plead the pendency of another action between the same parties, and for the same cause, when the action below was commenced.
    . By the reply it is denied that the pending action referred to in the answer was upon the same cause of action, or between the same parties; and a supplemental reply alleges the action had been dismissed. It appears from the bill of exceptions, that the plaintiffs, at the trial, gave in evidence over the objections of the defendants, a certified copy of the bond on which the action was brought, which is as follows:
    “Whereas, by a certain deed of assignment executed by Edward Purcell to John B. Mannix, on the 4th day of March, in the year of our Lord one thousand eight hundred and seventy-nine, the said John B. Mannix is appointed trustee for the purposes therein expressed.
    “Now, therefore, we, John B. Mannix, John Holland, George Hoadly, Charles Stewart and Michael Walsh, undertake and bind ourselves unto the state of Ohio, in the sum of ($250,000.00) two hundred and fifty thousand dollars, that the said John B. Mannix will faithfully perform all his duties as such trustee, according to law.

      “ Witness our hands and seals this 12th day of March, A.' D. 1879.
    “Signed and sealed in presence of Dan Herider.
    “JohnB. Mannix, [seal]
    “John Holland, [seal]
    “George Hoadly, [seal]
    “Charles Stewart, [seal]
    “Michael Walsh, [seal]”
    The plaintiffs also gave in evidence, over the defendant’s objection, an authenticated copy of the judgment of the circuit court of Hamilton county, in the case of Mannix v. Miller and Taf 'el as Trustees, etc,., and of a consent entry made in that case. These documents are as follows:
    “ Circuit Cowrt of Hamilton Coionty, Ohio.

      "JohnB. Mannix v. T.J. Miller, and Gustav Taf el, trustees of estate of Edward Purcell. No. 575.

      ‘ ‘ This cause coming on for hearing on the petition in error, cross-petition, original papers and pleadings from the court of common pleas, and was argued by counsel, and, on consideration whereof, the court find that there is error ajuparent upon the record and proceedings of said court to the prejudice of the plaintiff in error, and it is therefore considered by the court that the judgment rendered by the said court below be reversed and held for naught.
    “And the sureties on the bond of said John B. Mannix, as assignee of the estate of Edward Purcell, appearing in the case for trial, and they and all the parties to the action consenting hereunto, the court now proceeds to render such judgment as the said court of common pleas ought to have rendered, and the court finds that part of the items in the account of John B. Mannix to the probate court were chargeable to the estate of Edward Purcell, and part of them to the estate of John B. Purcell, and that the amount chargeable to John B. Mannix, as assignee of the estate of Edward Purcell, after allowing' all proper credits and commissions to tbe first day of this term, is two hundred and ninety-three thousand seven hundred and ten dollars and eighty-two cents ($293,710.82).
    “But the court does further find and adjudge, by consent of said trustees and parties, that since the appointment of I. J. Miller and Gustav Tafel, as trustees of said estate of Edward Purcell, they, as said trustees, by virtue of a consent entry in case No. 77008, in the court of common pleas, since the pendency of this case, to wit: On November 1, 1887, received out of the sale of real estate, deeded to them by Mannix and wife, the sum of $12,729.-57, which, with interest from said November 1, 1887, to the first day of this term, amounts to the sum of $14,395.02, and which should be and operate as a credit to that amount on the said sum of $293,710.82.
    “And it further appearing to the court, by like consent of the parties, that George Hoadly, one of the sureties on the bond of John B. Mannix, assignee of Edward Purcell, by proceedings in the probate court of this county, has been released from liability on said bond on the payment of $62, - 200, and that the remaining sureties on said bond' are legally liable for not exceeding’ three-fourths of said bond by reason of the said payment and release of said Georg’e Hoadly.

      “And it further appearing by like consent that in said settlement the said George Hoadly turned over to I. J. Miller and Gustav Tafel, said trustees, certain stocks which were sold on October 30, 1886, for the sum of $19,916.00, and that only the one-fourth part thereof, to wit: $4,979.00 should be placed to the credit of the liability of George Hoadly on said bond (and for which he received credit in said settlement with him), and that the other three-fourths, viz: $14,937.00, ■ with interest thereon from said 30th day of October, 1886, amounting to $2,852.97, in all the sum of $17,789.97, should also be and operate as a credit on said sum of $293,710.82, viz.: $5,929.00 to each of the remaining three bondsmen, viz.: John Holland, .Charles Stewart and Michael "Walsh.
    “But the said George Hoadly, as surety as aforesaid, having heretofore paid, settled and compromised his liability as surety as aforesaid by paying in cash and cash items $60,000.00, and in fees paid by Mannix $2,200.00, which is cred-ted in the account, in all $62,200.00, it is adjudged by the court, by the consent of the parties, that said sum of $60,000.00, with interest from the time the same was paid to said trustees, viz.: October 21, 1886, amounting to $11,550.00, in all the sum of $71,550.00, be also deducted from said sum of $293,710.82.
    “And having- deducted said sums of $14,395.02 and $17,789.07, and $71,550, from said sum of $293,710.82, the court finds that on the first day of this term there was due from said John B. Man-nix-, as assignee as aforesaid, to said estate, a balance of $189,975.83, which he, said John B. Mannix, is ordered to pay over according to law.

      “And it is further ordered and adjudged that the one-half the costs in this court be paid by the plaintiff in error, and the other half by defendants in error, and that the costs in the court of common pleas be paid by said John B. Mannix.
    “And this cause is remanded to the court of common pleas for execution as to costs.
    “And it is further ordered that a certified copy of this final judg’ment be made and sent by the clerk'of this court to the probate court of Hamilton county, Ohio to be entered upon the records of said court.
    “To all of which findings, judgment and decree, Mannix and the bondsmen, Walsh, Holland and Stewart except.”
    The defendants, upon the conclusion of the plaintiff’s evidence, moved the court to dismiss the action, upon ,the grounds that there was a defect of parties plaintiff, and defendant; which being overruled, they moved for judgment upon the pleadings and evidence; and that motion having been overruled, they gave in evidence, the record of the journal entries of the court of common pleas, and also of one of the probate court, of which the following are copies:
    “ Common Fleas Court, Hamilton County, Ohio.

    “7. 7. Miller and Gustav Tafel, Trustees of the estate of E&wa/rd Furcell in Assignment, Plaintiffs, v. John B. Mannix, John Holland, George HoadVy, Charles Steioart and Michael Walsh, Defendants. Entry No. 75743. Made October 21,1886.
    “It appearing to the court that defendant, George Hoadly, has fully settled and compromised with the ■ plaintiffs, his liability to them on said bond, and the cause of action set forth in said petition, and has been fully released and discharged by plaintiffs from all liability to them on said bond and said cause of action, without prejudice to the right of said plaintiffs to recover from the remaining defendants in this cause the amount the court may find due from them on said bond and said cause of action, it is ordered by the court; by and with the consent of the plaintiffs, that the said George Hoadly go hence, without day, and recover his costs taxed at $-, and that said cause be, and is hereby continued as to said other defendants for such proceedings as the court may determine. ’ ’
    “ Probate Court of Hamilton County, Ohio.

    “In the matter of the estate of Edward Purcell, in Assignment. Entry made October 21,1886.
    “This cause coming on this day to be heard upon the petition filed October 18,1886, of Isaac J. Miller and Gustav Tafel, as trustees of said estate, to compromise and settle with George Hoadly his liability as one of the sureties on the bond of J. B. Mannix, the former assignee of said estate, as set forth in said petition, and on the report of said trustees making said compromise and on the evidence, and the court, being fully advised in the premises, and said trustees representing to the court that said claim on said bond against said George Hoadly, as one of the sureties thereon is difficult of collection, involving a long and expensive litigation to said estate, and that it will be to the best interest of said estate, to settle and compromise said claim against George Hoadly as one of the sureties on said bond, on the terms set forth in said petition.

      “And it further appearing to the court, that said Isaac J. Miller and Gustav Tafel, as trustees as aforesaid, have accepted the proposition of said George Hoadly to compromise and settle, and have compromised and settled said claim against said George Hoadly, as one of the sureties on said bond, on the terms set forth in said petition, subject to the ratification of said creditors, and subject to the approval of the Court.
    “And it further appearing to the court, that said trustees have submitted said proposition and compromise to a meeting’ of the creditors of said estate, and'that a large majority of said creditors have ratified and approved the acceptance of said settlement and compromise, it is ordered by the court that said compromise is hereby approved and confirmed. ’ ’
    The defendants then rested their case; and the court rendered judgment ag’ainst the three sureties, Walsh, Holland and Stewart, for $191,018, and costs; to which Walsh and Holland excepted. That judgment was affirmed by the circuit court, and the case is now here on error to that court.

      Follett & Kelley and Mallon, Coffey & Mallon, for plaintiff in error.
    There is no principle of common law more firmly established than that the release of one surety upon a joint bond operates as a discharge of all the co-sureties. Murfee on Official Bonds, section 721; Hunt v. Rousmanier's Admr. 1 Peters, 1.
    While the general principle is admitted by all parties, it is claimed by the defendants in error that, in Ohio, statutory enactment has changed this common law rule, and that Hoadly was released without discharging the other sureties by virtue of the provisions of section 3166 of the Revised Statutes.
    • We shall show: 1. That the act of 1857, sections 3162-3166, Revised Statutes, are not in conflict with the common law rule above stated. 2. That it abrogates no common .law right. 3. That the right of a creditor to release one ‘ ‘partner or joint debtor” and reserve his right of action against others, as stated in these sections, always existed at common law. 4. That this right of release never existed as against, the co-obligors upon an official bond, joint in form, and not joint and several. 5. That our statute is simply and strictly declaratory of the common law. 6. That other states have similar statutes, and although some doubt as to their exact effect has been entertained by the courts, they have never been held to apply to sureties on a joint bond; and 7. That our statute is the same verbatim as the act of New York passed 1838, and that said statute while in force in that state was subject' to judicial construction by the courts of that state.
    We shall further show that were this res integra, the statute could by no possible line of argument be made applicable to the ease at bar; sureties upon a bond are hot partners; nor are they joint debtors; no liability attaches until judgment has been obtained against the principal.
    The common law rules in early times was broad and unqualified. Coke Littleton, 232a; Evans v. Bainbridge, 2 Kay M. J., 174; Nicholson v. Revill, 4 A. & E., 673, 683; Wiggins v. Tudor, 40 Mass., 434; Tuckerman v. Newhall, 17 Mass., 581, 584; Bryant v. Smith, 64 Mass., 169, 171; People v. Buster, 11 Cal., 215; Clayton v. Kynaston, 2 Salk., 574; Higgins Case 6 Coke, 44; Lechmere v. Fletcher, 1 Crompton & Meeson, 623; Brown v. Marsh, 7 Vt., 320; Kendall v. Hamilton, 4 App. C., 504; Solley v. Forbes, 2 Brod. & Bing., 38; In re Davison, 13 Q. B. D., 50, 54; Story’s Eq. Jur., sec. 163; Sheeley v. Maudeville, 6 Cranch, 253; Kennedy v. Carpenter, 2 Whart., 344; Waters v. Riley, 2 Harris & Gill, 305; Weaver v. Shrylock, 6 S. & R., Pa., 261; United States v. Price, 9 How., 83; Hunt v. Gaylor, 25 Ohio St., 620.
    We think that it must appear from the long line of authorities above cited, to which we might add almost ad libitum, that the right of compromise with, and discharge of, one of several obligors, existed at common law, and that the act of 1857, “for the relief of partners and joint debtors, ’ ’ is simply declaratory thereof.
    The General Assembly of Ohio, in adopting the New York law, must be presumed to have intended to establish as the law of Ohio, the law of New York as it then was. Rowley v. Stoddard, 7 John, 207; Bank v. Osgood, 4 Wend., 607; Bank of Poughkeepsie v. Tibbotson, 5 Hill, 461; Bronson v. Fitzhugh, 1 Hill, 185; Hoffman v. Dunlap, 1 Barb., 185.
    Were the questions .res integra, and had we no decisions explanatory of sections 3162 to 3166, looking simply to the wording of the act, we should find that it cannot control the rights of the co-sureties, for the reason, that the co-sureties upon an official bond are not “partners or other joint debtors.”
    Those cases which establish the doctrine that a judgment against a principal is conclusive upon his bondsmen, hold that no liability attaches as against the bondsmen until the fact of default and the amount thereof have been established by a judgment of the court. Thracy v. Goodwin, 5
      Allen, 409; Smalling v. King, 73 Tenn., 585; Hempstead v. Coste, 36 Mo., 437; Eddy v. Heath, 31 Mo., 141; Musser v. Stewart, 21 Ohio St., 353.
    Hoadly’s release was prior to such judgment, and, therefore, section 3166, of the Revised Statutes, can have no application to the case at bar. Beall v. Cochran, 18 Ga., 38; Carr v. Beckett, 1 C. C., 72; Story’s Eq. Jur., secs. 730, 849.
    We think it clear that section 3166 did not give to the plaintiffs the right to compromise with George Hoadly, one of the sureties upon a joint bond, and to release and discharge him from all liability on the bond without releasing the other sureties. Whatever steps might have been taken would have been futile; but the plan adopted, i. e., a judgment in favor of George Hoadly, in an action u pon the bond, No. 75,743, wherein the principal and sureties were joint defendants, is prohibited in terms by the Code of Civil Procedure, sec. 371, Revised Statutes, secs. 5311, 5312, 5313; Voss v. Loomis, 1 C. C. R., 20; Aucker v. Adams, 23 Ohio St., 543; Clinton Bank v. Hart, 5 Ohio St., 34; Lampkin v. Chisom, 10 Ohio St., 451; Smetters v. Harris, 14 Ohio St., 291; Roby v. Ramsberger, 27 Ohio St., 674; Hazell v. Belcher & Doral, 31 Ohio St., 572; Carr v. Beckett, 1 C. C. R., 72; Avery v. Vansickle, 35 Ohio St., 270; Sloo v. Lea, 18 Ohio, 279.
    Conceding, for the purpose of argument, that George Hoadly was released “without prejudice to the right of said plaintiffs to recover from the remaining defendants,” by virtue of section 3166, Revised Statutes, this action was not properly brought in the court below. That section gives a right; it does not provide a remedy. It is not a section of the civil code. It does not change the form of action or the method of procedure. In-an action upon a bond, all the sureties must be joined as parties defendant. In the case at bar there is a defect of parties defendant.
    Each surety “has a right in equity, to recover as contribution from his solvent co-sureties, a pro rata amount of the sum paid by him, based upon the number of solvent co-sureties, and excluding the insolvent ones.” Brandt on Suretyship, section 288.
    For Hoadly to escape upon payment of $62,500, leaving each of these plaintiffs in error liable for $93,750, would be to change the terms of the contract which these sureties entered into. Miller v. Stewart, 9 Wheat. (U. S.), 681.
    This change of contract was made without the knowledg-e or consent of Walsh or Holland. Barry v. Ransom, 12 N. Y., 462.
    The offices of trustee and assignee are distinct and their duties are not identical. The defendants, Walsh and Holland, as sureties on the bond of Mannix, trustee, cannot be held for a defalcation of Mannix, assignee. These plaintiffs in error do not seek to take advantage of a legal technicality to avoid liability. They simply ask to have a well established principle of the common law applied to their case. The rule that sureties are favorites of the law, that their liability is strictissimi juris, and that they can be held only under the exact letter of their contract, are principles which have been recognized in every system of jurisprudence and are founded in justice. We need not discuss the reasons of such a doctrine, and we need not offer an apology for asking this court to apply it in favor of these plaintiffs in error. Addison on Contracts, Am. Ed. (1880), 70; Bank v. Carroll, Admr., 5 Ohio, 214; State v. Medary, 17 Ohio, 554;
      State v. McGovney, 20 Ohio, 93; Williamson, Admr., v. Hall, 1 Ohio St., 190; Palmer v. Yarrington, 1 Ohio St., 253; State v Cutting, 2 Ohio St., 1; Myres v. Parker, 6 Ohio St., 501; Hall v. Williamson, Admr., 9 Ohio St., 17; State v. Corey, 16 Ohio St., 17; Lang v. Pike, 27 Ohio St., 498; Alber v. Froehlick, 39 Ohio St., 245; Smith v. Huesman, 30 Ohio St., 662.

      S. A. Miller for defendants in error, cited the following statutes and cases:
    Revised Statutes, sections 6 and 3166; State v. Alden, 12 Ohio, 59; Cunent & Hibler v. Thompson, 2 C. S. C. R., 54; Partridge v. Jones, 38 Ohio St., 375; Dawson v. State, 38 Ohio St., 1; McLain v. Simington, 37 Ohio St., 484; Kelly v. State, 25 Ohio St., 567; Feigert v. State, 31 Ohio St., 432; King v. Nichols, 16 Ohio St., 80; Probst v. Skillen, 16 Ohio St., 382; Bld. Assn. v. Cummings, 45 Ohio St., 664.
   Williams, J.

The grounds upon which it is claimed the judgment below should be reversed, are, (1) that the plaintiffs in error incurred no liability on the bond in suit; or, (2) if they did, they were discharged therefrom by the release of their co-surety; and, (3) the released co-surety was a necessary party to the action.

The first of these g’rounds is based, in part, on the terms of the bond, the obligatory provisions of which bind the sureties for the faithful performance, by Mannix, of his duties as trustee of Edward Purcell, when, in fact, he was appointed and qualified as assignee; the claim being, that the duties of Mannix, within the contemplation of the bond, were those only of a trustee appointed under the statute; and, not having- been appointed such a trustee, he received no assets, nor had any duties to perform in that capacity, and hence his default as assignee, was no breach of the condition of the bond. This position is not tenable. While it is undoubtedly the law, that sureties are not liable beyond the plain terms of their engagement-, the rules governing the construction of their contracts in arriving at their terms and scope, are not different from those which are applicable in the interpretation of all written agreements. “It is enough in any written contract that the intent of the party clearly appear, though it be not fully and particularly expressed.” Partridge v. Jones, 38 Ohio St., 377. “When the meaning and intention of the parties are perfectly plain, no grammatical inaccuracy or want of the most appropriate words shall render the instrument unavailing.” Knisely v. Shenberger, 7 Watt’s, 193.

An examination of the bond in question, in the light of the statute under which it was executed, can leave no doubt as to its meaning- and effect. The statute (section 6335, of the Revised Statutes) provides that when any person shall make an assignment “to a trustee,” of any property for the benefit of creditors, it shall be the duty of the assignee to. “enter into a bond, payable to the state, in such sum and with such sureties as shall be approved by the court, conditioned for the faithful performance, by said assignee of his duties according-to law. ” The bond executed by the plaintiffs in error, as sureties of Mannix, recites that, “whereas, by a certain deed of assignment executed by Edward Purcell to John B. Mannix,” on the 4th day of March, 1879, “the said John B. Mannix is appointed trustee for the purposes therein expressed,” and is conditioned for the faithful performance by Mannix of ‘ ‘ all his duties as such trustee, according- to law.” The expression, “such trustee,” refers to Mannix as the trustee appointed by the deed of assignment executed by Purcell, and not as a trustee appointed by the court, or chosen by the creditors; so that, by the literal terms of the bond the sureties became bound for the faithful performance, by Mannix, of his duties as assignee. The meaning of the bond would not be different in any sense, or more cleaily expressed, if the word ‘ ‘ assignee, ’ ’ were substituted for ‘ ‘ trustee. ’ ’

It was also contended at the trial, that Purcell owned no property when the assignment was made, and, as none passed under it to Mannix, the sureties were not liable on the bond. This point does not appear to be insisted upon in argument here; and it is not apparent how it could avail the sureties. It is shown by the record, that Mannix settled his accounts as assignee, in the probate court, the appropriate tribunal for that purpose, which found, upon the settlement, the amount in his hands due his successors in the trust, he having resigned, and ordered its payment to his successors, the defendants in error. Prom that order of the probate court, - Mannix and his sureties united in taking an appeal to the court of common pleas where, upon hearing, a like finding- and order weremade; and errorwas prosecuted from that judgment to the circuit court, by Mannix, and the plaintiffs in error, where, as appears from the record of that court, the judgment of the common pleas was reversed, and by the consent of the plaintiffs in error, as well as the other parties to the action, the court, instead of remanding the case for further trial in the common pleas, proceeded to hear the case and render the judgment which the common pleas should have rendered. And the circuit court thereupon, with the consent of all the parties, as appears from the record, made certain deductions from the amounts charged by the lower courts against Mannix, and further credited the accounts with something over sixty-two thousand dollars paid by Hoadly in compromise of his liability as surety on the bond; leaving’ a balance of $189,-975.83, which the court ordered to be paid to the defendants in error. That judgment of the circuit court remains in full force.

It is the settled law of this state that sureties on the bond of a guardian, or assignee, are in privity with their principal, and so bound and concluded by the findings and judgments of the probate court in the settlement of the trust, that they cannot question their correctness, or dispute the amount found due from the principal. Braiden v. Mercer, 44 Ohio St., 339; Garver v. Tisinger, 46 Ohio St., 56. And though the circuit court was not authorized, without the consent of the parties, to pursue the course it adopted, yet, that having been done by the express consent given in open court for that purpose by these plaintiffs in error, and all the other parties interested, and no at. tempt having been made to set aside its judgment,' they are bound by it, in the same respect as if it had been rendered by the court of common pleas upon a retrial of the cause, after being remanded. It was, therefore, not necessary for the plaintiffs below, to otherwise show at the trial, the amount of assets that passed to Mannix under the assignment, or the amount due from him on the settlement of his accounts; nor was it competent for the plaintiffs in error to contradict the judgment in those particulars. The real contention on this point, of these plaintiffs in error, was not so much that the property and assets with which Mannix was charged in the settlement of his accounts were not received by him from the assignor, Edward Purcell, as that they did not, in fact, belong to him, but belonged to his brother, Archbishop Purcell. But, having been received from Edward, the duty of Mannix was to administer and dispose of the assets under the assignment, unless, and until, he was deprived of them by some one asserting a superior right; and the sureties on his bond, bound themselves for the performance of that duty. They cannot, therefore, avoid their liability by asserting such a right of another person who'is himself making no such claim.

Whether the plaintiffs in error were discharged from their liability on the bond, by the release of their co-surety, depends upon the applicability of our statute which authorizes the release of one or more partners or joint debtors without discharging the others, to obligations of that nature, and its effect upon them. It was the well settled law, before the enactment of the statute, that the release of one joint obligor operated to discharge all jointly bound with him who did not consent to the release; and unless that rule has been changed by the statute, in cases like the one before us, the plaintiffs in error cannot be held on the bond. The provisions of the statute, originally adopted in 1857, are contained in sections 3162 to 3166, inclusive, which read as follows :

“Section 3162. When a partnership is dissolved, by mutual consent or otherwise, any partner may make a separate composition or compromise with any creditor of the partnership; and such composition or compromise shall be a full and effectual discharge to the debtor who makes the same, and to him only, of and from all and every liability to the creditor with whom the same is made, according to the terms thereof. ’ ’
“Section 3163. Every such debtor who makes such composition or compromise, may take from the creditor with whom he makes the same a note or memorandum in writing, exonerating him from all and every individual liability incurred by reason of his connection with the partnership, which note or memorandum may be given in evidence by such debtor, in bar of such creditor’s right of recovery against him; and if such liability be by judgment in any court of record in this state, then on a production to and filing with the clerk of such court the note or memorandum, such clerk shall discharge such judgment of record as far as the compromising debtor is concerned.”
“Section 3164. Such compromise or composition with an individual member of a firm shall not be held to discharge the other partners, nor shall it impair the right of the creditor to proceed against such members of the partnership as have not been discharged. And the member of the partnership so proceeded against shall be permitted to set off , any demand against the creditor which could have been set off had the suit been brought against all the individuals composing the firm; nor shall the compromise or discharge of an individual of a firm prevent the other members of the firm from availing themselves of any defense that would have been available had not this chapter been passed, except that they shall not set up the discharge of one individual as a discharge of the other partners, unless it appear that they all were intended to be discharged; but the discharge of any such partner shall be deemed a payment to the creditor equal to the proportionate interest of the partner discharged in the partnership concern.”
“Section 3165. Such compromise or composition of a member of a firm with a creditor of such firm shall in no wise affect the right of the other partners to call on the member who makes it for his ratable portion of- such partnership debt.”
“Section 3166. The above provisions in reference to partners shall extend to other joint debtors, who may, individually, compound or compromise for their joint indebtedness, with the like effect in reference to creditors and to joint debtors of the individual so compromising,' as is above provided in reference to partners.”

It will be noticed that under the provisions of the statute, any partner, after the dissolution of the firm, is authorized to make a separate composition with “any creditor of the partnership;” and such composition operates as a full discharge to the partner who makes it, “and to him only,’’according to its terms, but does not discharge the other partners, or impair the right of the creditor to proceed against them. And the same provisions are expressly extended to all joint debtors. So that the practical questions here are: (1) Were the defendants in error, when. Hoadly was released, ‘ ‘ creditors ’ ’ of the sureties on the bond ? and: (2)Were the latter “joint debtors” within the meaning of the statute? We think both questions must receive an affirmative answer.

The record shows that when the compromise was made with Hoadly, Mannix had resigned as assignee, and the defendants in error had been duly appointed his successors in the trust; and that on the settlement of his accounts in the probate court, the balance in Ms hands belonging to the trust had been ascertained, and ordered to be paid to his successors. Section 6341, of the Revised Statutes, requires that on the resignation of an assignee, he shall forthwith file and settle his accounts, and immediately after such, settlement pay over to his successor all moneys found due from him to the trust; and on failure to do so, or to deliver over to his successor all propertjq moneys, books, evidences of title, papers and other effects in any way belonging to the trust, such successor may, by action in the court of common pleas or otherwise, proceed against such assignee and “the sureties on his bond.” A creditor is defined by Bouvier, to be a person “who has a right to require the fulfillment of an obligation or contract. ’ ’ And it is said in Stanly v. Ogden, 2 Root (Conn.), 261, that “he is a creditor who has a right by law to demand and recover of another a sum of money on any account whatever. ” The defendants in error, as successors of Mannix, were entitled to receive the entire assets belong’ing to the trust at the time of his final settlement, and were authorized to enforce the payment and delivery of the same to them by action on his bond; and indeed were the only persons who could do so. And we are of the opinion they were creditors, in the sense contemplated by the statute, of all the obligors of the' bond. True, they were creditors in their representative character only, but not, on that account, any the less creditors; and if creditors, the obligors were debtors, for the terms are correlative. Any one who is under an obligation to pay another a sum of money, comes within tfie legal definition of a debtor; and it is not essential that the obligation be due. The obligation of the sureties on .the bond of Mannix was created when the bond was executed. Their liability accrued when the principal failed to perform his duties. The settlement of his accounts was merely the method prescribed by law for ascertaining the amount and extent of the liability; and, although that settlement had not been finally effected when the compromise was made, the liability existed to an amount equal, at least, to the face of the bond, and the sureties were then joint debtors to that amount, within the meaning of the statute. It was urged in argument, that the term “joint debtors” in the statute, must be limited to principal debtors, because it is used in such connection with the word “partners, ” as shows that- intention. We do not think so. A surety, as well as a principal, may be a debtor, although a right of action on the obligation has not matured; and the phrase “other joint debtors” is broad enough to embrace all persons who are jointly indebted, except partners with respect to whom special provision is made by the preceding sections. We find nothing in the statute indicating an intention to deprive sureties of the benefit of its provisions. It is also contended that the statute is merely declaratory, and does not change the law as it existed prior to its adoption. And as tending to establish that position, it is said the statute is a transcript of a New York statute, which had there received that construction before its adoption in this state. The cases of Bank v. Ibbotson, 5 Hill, 461, and Hoffman v. Dunlop, 1 Barb., 185, are cited in support of this contention. We have examined those cases. The most that can be made from the meager report of them is, that the court seems to draw a distinction between a composition with a partner or joint debtor, and a technical release under seal; holding in the last case that the latter is not within the statute, unless it purports to have been made under it, or makes some reference to it; and intimating the same thing in the first of the cases, though the question was not before the court. The soundness of that holding may well be doubted; for if the release be within the statute, it is not apparent why any reference to the statute should be necessary. In this state, before the passage of the act, it had been held that the discharge of one partner from a partnership liability discharged all of the partners. Westcott v. Price, Wright, 220. And the design of the act no doubt was, to so change that rule, not only as to partners, but as to all joint debtors as well, that a creditor might be enabled to receive payment from one partner or joint debtor, of his proportionate share of the indebtedness, and release him therefrom, without affecting the creditor’s right to collect the balance from the others bound by ' the same obligation. We therefore conclude, that the compromise with, and release of Hoadly, did not discharge the plaintiffs in error from their liability. A question is made, however, as to the extent of that liability. The statute requires that the compromise shall be treated as a payment equal to the proportionate amount of Hoadly’s liability on the bond ; and the other sureties are entitled to have the bond credited accordingly. There being four sureties, the bond was credited with one-fourth of its face. But, it is claimed an agreement was made between the sureties, when the bond was executed, to the effect that Hoadly should be liable to the-extent of onehundred thousand dollars, and the others in the sum of fifty-thousand dollars each, and they qualified for those amounts respectively; and the discharge of Hoadly, it is contended, entitled the other sureties to a credit for the amount for which he agreed to become liable. It is not claimed that the state, the ’ obligee named in the bond, or the court of probate by which it was approved, was, or could be, a party to such an agreement; and, though it be binding upon the sureties, it is not apparent how the creditors represented by the assigmee or his successors in the trust, could be affected by it. The probate court in approving the bond of an assignee, deals only with its amount and condition, and the sufficiency of the sureties. The court may satisfy itself of the property qualifications of the persons offered as sureties, by their affidavit, or otherwise; and its duty is to do so, in order to protect those beneficially interested in the trust; but such qualification does not apportion the liability incurred by the sureties, according to the amount of property they appear to own. They all become jointly and equally bound to the full amount of the bond, for the performance, by the assignee of the duties of his trust; and the proportionate interest of each, within the contemplation of the statute under consideration, is his proportion of the liability thus incurred, to be determined from the amount of the bond and number of the sureties, and not from any agreement among themselves concerning the extent of their liability. The bond contains the contract between the obligee and obligors, and no agreement among the latter can affect that contract, or interfere with the right of the former to release one of the latter from his proportion of the liability as shown by the bond, without discharging* the others from their proportion, or increase, or diminish the amount which the statute requires shall be treated as paid on the obligation, by reason of such release.

The record discloses that since the release of Hoadly, his co-surety Stewart, has become insolvent, and nothing* can be collected from him; and the question arose, in the consideration of the case, as to whether Walsh and Holland should not have a further credit to the extent of one-third of Stewart’s proportion of the liability; that being what Hoadly’scontributive share thereof would Have been if he had not been released. The question is not made in argument; but Stewart’s insolvency, which is admitted, is referred to for the purpose of . showing the hardships resulting* from an application of the statute to sureties. The answer to the question must depend upon the operation of the statute, which, being in force when the bond was executed, became as much a part of that instrument, as if incorporated in it. The parties .are presumed to have contracted with reference to the provisions of the statute, and to have ’ agreed to all the consequences resulting* from their operation, and from whatever action might be taken by the parties in pursuance of them. By the terms of the statute, the discharge of one partner “shall be deemed a payment to the creditor equal to the proportionate interest of the partner discharged in the partnership concern;” and the compromise by which such discharge is obtained, “shall in no wise affect the right of the other partners to call on the member who makes it, for his ratable proportion of such partnership debt.” But the statute does not provide that the amount of such ratable share for which the compromising partner may be called upon by the other partners, shall be considered a payment on the debt, or credited thereon; nor, that it shall in any way affect the right of the creditor to proceed against the unreleased partners. The adjustment of the rights of the partners with respect to that “ratable share ” is a matter entirely between them, and does not concern the creditor; and so, with respect to any right of contribution arising between the partners, after the compromise is effected. Joint debtors are placed on the same footing. If section 3162 was intended to, and does preserve the right of contribution against the discharged partner or joint debtor, when one or more of the other partners or debtors become insolvent, that right still exists in favor of Walsh and Holland, unless they have lost it otherwise than by the compromise, and may be enforced if they shall ever pay more than their proportionate share of the bond. But that does not entitle them to have the amount they may so recover also credited on their liability. To allow that to be done would make the release a partial defense, contrary to the provisions of the statute. As yet, neither Walsh nor Holland has any claim for contribution, for neither of them has paid any part of Stewart’s proportion of the liability on the bond, or any part of the judgment rendered against them; and the right of eontribur tion cannot arise in favor of either until he shall pay more than his own share of the debt. The rights of the parties under the compromise, accrue when it is completed. As against the creditor it operates as a payment on the debt equal to the proportionate interest of the discharged partner or joint debtor, and for no more; and the creditor is authorized to proceed against the other partners or joint debtors for the balance. The payment is considered made when the compromise is made, and stops interest from that time. The amount is definitely fixed or easily ascertained, which would not be the case if it depended upon rights of contribution subsequently arising’. Those are rights exclusively between the partners or joint debtors themselves, and constitute no defense to the action of the creditor.

Hoadly was not a necessary party to the action below, because the trustees were expressly authorized by the statute to credit the bond with the amount paid by him and proceed against the other sureties for the balance. His presence, or absence, could in no way affect their rights. Whether contribution can be enforced against him, in any event, is a question not involved in the case,-and upon which we express no opinion.

Judgment affi/i'med.


source: Caselaw Access Project

author: Dickman, C. J.

license: Public Domain

text:
    State ex rel. v. Jones, Auditor.

      Constitutionality of the Nichols Law — Taxation of Express, Tele~ graph and Telephone Companies.

    1. The act to amend and supplement sections 2777, 2778, 2779 and 2780, of the Revised Statutes of Ohio, passed April 27, 1893 (90 Ohio Laws, 330), and known as the Nichols Law, is not in conflict with section 2 of article XII of the constitution, which provides that: “Laws shall be passed, taxing by a uniform rule, all moneys, credits, investments in bonds, stocks, joint stock companies, or otherwise; and also all real and personal property, according to its true value in money; ” and is a valid law.
    2. The act of April 27,1893, is not in violation of section 16 of article I of the constitution, which provides that: “All courts shall be open, and every person, for an injury done him in his land, goods, person or reputation, shall have remedy by due course of law; ” nor, in violation of the 14th amendment of the Federal constitution, which provides that, no “ state shall deprive any person of life, liberty, or property, without due process of law.”
    (Decided June 19, 1894.)
    Mandamus. On April 27, 1893, the general assembly of this state passed, an act known as the Nichols law, to amend and supplement sections 2777, 2778, 2779 and 2780, of the Revised Statutes of Ohio (90 Ohio Laws, 330).
    Section 2777 defines express, telegraph and telephone companies.
    Section 2778 constitutes the treasurer, attorney-general and auditor of state “a board of appraisers and assessors for such express, telegraph and telephone companies.” The auditor is made president, and is to appoint the time and place for the meeting of the board. The board is required to appoint one of its members secretary and keep full minutes of its proceedings.
    “ It shall be the duty of such board to meet in the month of May, in the present and each succeeding year at such time as the president shall appoint. ”
    “Said board shall proceed to ascertain the entire amount and value of the personal and real property of said express, telegraph and telephone companies.”
    The board shall have power to require from the officers of such companies “a detailed statement under oath of all the items and particulars constituting such property, moneys, credits, and the value thereof,” and may inspect books and papers, and examine officers and agents under oath.

      The board shall report annually, “on or before the first Mondajr in the month of June,” to the auditor of state:

      (a) “The total value of the property of said companies;

      (b) “ The value assessed against said companies for their property in the state of Ohio;

      (c) “The distribution of the same as hereinafter provided.”
    All of which shall, by the auditor of state, be communicated to the general assembly with his annual report.
    The board shall have all the powers possessed by county auditors under sections 2781 to 2785, inclusive, and the companies are made subject to the provisions and penalties of said sections.
    Section 2778a provides that each of these companies, “whether chartered by the laws of this state or any other state or country,” shall annually, between the first and tenth days of May, return to the auditor of state:
    1. The amount of its capital stock;
    2. Its place of business;
    3. The par value and market value (or, if there be no market value, then the actual value) of its shares at the time of said return;
    4. A statement in detail of the entire real and personal property of said companies and where located, and the value thereof as assessed for taxation;
    5. - • Telegraph and telephone companies shall, in addition thereto, return the whole length of their lines, and the length of so much of their lines as is without and is within the state of Ohio, including the lines controlled and used, under lease or otherwise;

      6. Express companies shall include in the return a statement of their entire gross receipts for the year ending the first day of May, of the business done in the state of Ohio, giving the receipts of each office in the state and the location thereof.
    The board, in determining the value-of the property of said companies in Ohio, to he assessed and taxed within the state, shall “be guided by the value of said property as determined by the value of the entire capital stock of said companies, and such other evidence and rules as will enable said board to arrive at the true value in money of the entire property of said companies within the state of Ohio, in the proportion which the same bears to the entire property of said corporations, as determined by the value of the capital stock thereof, and other evidence and rules as aforesaid.”
    Section 2779 provides penalties for failure on the part of officers of such companiés to attend or testify before the board.
    Section 2780 regulates the apportionment of the valuations found of the property of telegraph and telephone companies among the several counties. The board is required to , apportion the valuation among the several counties through which the lines run in the proportion that the length of the lines in the respective counties bear to the entire length in the state. The amount apportioned is to be certified by the board to the county auditor and the county auditor apportions -the amount among the cities, villages, townships, and other taxing districts.
    “The auditor shall put the same (meaning the apportioned valuation) on the tax list to be assessed, and the taxes thereon collected the same as taxes assessed and collected on other personal
      property. And the rate of taxation shall be the same as that assessed against real and personal property in said cities.”
    Section 2780a provides for the apportionment of valuations of express companies among the several counties in which they do business in the proportion that the gross receipts in each county bear to the gross receipts in the state. The board is to certify its valuation to the auditor; the auditor is to apportion the amount for the county to the taxing districts therein, and there is the same provision as to placing the apportioned valuation upon the tax list and subjecting it to the local rate of taxation, as in section 2780, relating to telegraph and telephone companies.
    Section 27805, provides that these companies shall not be required to make returns under section 2744, governing the returns and the appraisements or assessments of corporations'generally ; and, further, that the valuation of all real estate of the companies situated in this state shall be deducted from the total valuation of the property of the companies, as fixed by the board.
    The board duly apportioned the valuation of the property in Ohio of The National Express Company — a foreign corporation — among the several counties of Ohio in which said express company did business, apportioning $754.00 to Lucas county, and certifying that amount to the defendant, Charles H. Jones, as auditor of that county; but said auditor refused to apportion the amount so certified to him among the cities, villages, townships and districts in Lucas county, and to put the same on the tax list of said county to be assessed and taxes thereon collected, as on other personal property.

      Thereupon this proceeding in mandamus was brought by the board to compel said auditor so to do.
    The petition avers that the suit is brought on the relation of Ebenezer W. Poe, Auditor of State, John K. Richards, Attorney-General, and William T. Cope, Treasurer of State, of the state of Ohio. That they, as such officers, constitute the board of appraisers and assessors for express, telegraph and telephone companies in the state of Ohio, under the act of April 27, 1893; that acting under and by virtue of authority conferred upon them by said act, they, as such board, prior to the 22d day of November, 1893, duly fixed and determined the value of the property of The National Express Company in Ohio for the year 1893, to be taxed therein, at the sum of $9,450.00; that, acting in accordance with the provisions of said act, they duly apportioned the valuation of the property of said express company among the several counties in Ohio, in which said express company did business, apportioning to Lucas county, Ohio, the sum of $754.00; that said petitioners certified to the defendant, Charles H. Jones, as auditor of Lucas county, the foregoing amount apportioned to his county, of the total valuation of said express company in Ohio; that the defendant received said certificate, and that, thereupon, it became and was, and is, his duty as auditor of Lucas county to apportion said sum of $754.00 among the cities, villages, townships and districts, or parts thereof, in Lucas county, and to put the same on the tax list of Lucas county, to be assessed as taxes and collect the same as taxes assessed and collected on other personal property, and the rate of taxation to be the same on said apportioned valuation thus certitled as that assessed against real and personal property in. said cities, villages, townships and districts in Lucas county.
    The petition further avers that the defendant, claiming that the act of April 27, 1893, creating’ a state board of appraisers and assessors of the property of express, teleg’raph and telephone companies, under which said board had acted in assessing the property of the company named in Ohio and apportioning’ the valuations among’ the several counties, including Lucas, and certifying to said Lucas county its 'proportion of the valuations, as aforesaid, was and is unconstitutional and void in that it was a violation of the provisions of the' constitution of the United States and the constitution of the state of Ohio, has refused and still refuses to apportion the valuation certified to him by sai d board, as aforesaid; and'refuses to place the same on the tax list to be assessed, and taxes thereon collected the same as taxes assessed and collected on other personal property; and refuses to perform any duty imposed on him by the said act.
    And said petition prays that a writ of mandamus might issue against the said 'defendant, commanding’ him forthwith to apportion the amount assessed against the said express company and certified to him, as aforesaid, to the cities, villages, townships and districts, or parts thereof, in Lucas county, and to place the same on the tax list to be assessed and taxes collected thereon, the same as taxes assessed and collected on other real and personal property, etc.
    To this petition the defendant answered. The answer admits the creation of the board as alleged in the petition, and that the defendant, as auditor of Lucas county, refused to apportion the valúation thus certified to him ainong the taxing districts of his county, and refused to place said amount on the tax duplicate of his county, and that he refused and still refuses to perform any duties imposed upon him by the act of April 27, 1893. The answer alleges as a reason for the defendant’s conduct that the act in question provides for a method of appraisement and valuation which violates the provisions of the constitution of the United States and the constitution of Ohio in the following respects, among others:

      First — The property of the express companjr is not, under this act, taxed by a uniform rule. It is of the same character as the property of individuals, but is valued by a special board after a peculiar method, which is in violation of section 2, of article XII,- of the constitution of Ohio.

      Second — The property of said company is not assessed at its true value in money, because the value of the capital stock is taken as a guide, thereby adding to the intrinsic value of the tangible property in this state, a value inherent in the capital stock, and due to the franchises conferred by other states, the g’ood will and the business of the company, and the value of its property in other states, in contravention of said section 2, of article XII.

      Third — The equal protection of the law is denied to the express company, because its property is classified, and the method of valuation distinct from that used in valuing the property of individuals for taxation, and this in contravention of the 14th amendment of the constitution of the United States.

      Fowrth — The property of- said company is taken without due process of law, in violation of the 14th amendment of the constitution of the United States, in this, that there is no provision in the act for a notice to the company, and for a hearing by the board of appraisers and assessors, and no appeal is provided to any superior authority for the correction of illegal, erroneous or excessive valuations.

      Fifth — The said act, in that it attempts to tax the franchise of said company by taking the capital stock as a guide in valuing the tangible property, thus adding to the value of the tangible property a fictitious value inherent in the capital stock and due to the franchise and business of the company, provides, in effect, for an excise tax; and under the constitution of Ohio; no excise tax may be levied, the state being limited by section 2, of article XII, of the constitution, to the taxation of property in raising general revenue.

      Sixth — The act is in violation of that clause of the constitution of the United States giving Congress the power to regulate commerce among the several states, because express companies are engaged in interstate commerce, and the tax provided is a discriminating tax upon the business of such companies, amounting to an interference with and burden upon interstate commerce.
    To the answer of the defendant, the board, through the Attorney-General, filed a general demurrer.

      J. K. Richards, Attorney-General, and Thomas McDougall, for the relator.

      D. K. Watson, for the respondent.
   Dickman, C. J.

The questions involved in the case at bar go directly to the constitutionality of parts of an act to amend and supplement sections 2777, 2778, 2779 and 2780, of the Revised Statutes of Ohio, passed April 27, 1893. The amendatory section of most material import, and which especially claims our consideration, is section 2778a, which is as follows:

‘‘Every express, telegraph and telephone company, embraced in section 2777, whether chartered by the laws of this state, or any other state or country, doing business in this state, shall, annually, between the first and tenth days of May, return to the auditor of state, under the oath of its treasurer, the amount of its capital stock, its place of business, the par value and market value (or if there be no market value, then the actual value) of its shares at the time of said return. The return shall also contain a statement in detail of the entire real and personal property of said companies and where located, and the value thereof as assessed for taxation; and telegraph and telephone companies shall, in addition thereto, return the whole length of their lines, and the length of so much of their lines as is without and is within the state of Ohio, which lines shall include what said .telegraph and telephone companies control and use, under lease or otherwise; and said board of appraisers and assessors shall, in determining the value of the property of said companies in this state, to be taxed within the state and assessed as herein provided, be guided by the value of said property as determined by the value of the entire capital stock of said companies, and such other evidence and rules as will enable said board to arrive at the true value in money of the entire property of said companies within the state' of Ohio, in the proportion which the same bears to the entire property of said corporations, as determined by the value of the capital stock thereof, and the other evidence and rules as aforesaid. Express companies shall, in making said return, include therein, as a part thereof, a statement of their entire gross receipts for the year ending the first day of May, of the business done within the state of Ohio, giving the receipts of each office in said state, and the location thereof for said year.

Section 2780a, which regulates the apportionment of the valuation of the property of express companies,-and the rate of taxation, provides as follows:

‘ ‘The value of said property, moneys and credits of any express company, as found and determined by such board, to be assessed for taxation within this state, shall be apportioned by said board among the several counties in which said express companies do business, in the proportion that the gross receipts of the business of said express companies in the places where they transact business, bear to the entire gross receipts in this state of said express companies. And the board shall certify to the county auditor of each county, and to each city and incorporated village, township or district, or any part thereof therein, the amount proportioned to his county, and said board shall make and forward a like certificate to go with all the reports of the various express companies, and other papers and evidence, which form the basis of their valuation, to the auditor of state. It shall be the duty of the county auditor, upon receiving the certificate aforesaid, to apportion the amount therein stated to the cities, villages, townships, districts, or parts thereof, and the auditor shall place the same on the tax list, to be assessed and collected the same as.taxes are assessed and collected on other property. And the rate of taxation shall be the same as that assessed against real and personal property in said cities, villages, townships and districts.”

In compliance with the act, The National Express Company made return to the board of appraisers and assessors, consisting of the state treasurer, the attorney-general, and auditor of state, of ali its property in Ohio, and of its entire gross receipts in this state'for the year ending' the first of May, 1893. The board, in accordance with the provisions of the act, fixed the value of the company’s property in Ohio for that year at $9,450.00; and apportioned that valuation among :the several counties of the state in which the company did business, in the proportion which the gross receipts in each county bore to the entire gross receipts in the state — apportioning the sum of $754.00 to Lucas county, and certifying such amount to the auditor of that county, Charles H. Jones, the defendant, to be by him placed on the tax list to be assessed and collected the same as taxes are assessed and collected on other property. On the allegéd ground that the act of April 27, 1893, is in violation of the provisions of the constitution of the United States and of the constitution of Ohio, the auditor refused to apportion the valuation thus certified to him, among the taxing districts of Lucas county, and to place the amount on the tax duplicate; and indeed refused to perform any duties imposed upon him by the act.

In determining whether an act of the legislature is or is not in conflict with the constitution, it is a settled rule, that the presumption is in favor of the validity of the law. The legislative power of the state is vested in the general assembly, and whatever limitation is placed upon the exercise of that plenary grant of power must be found in a clear prohibition by the constiution. The legislative power will generally be deemed ample to authorize the enactment of a law, unless the legislative discretion has been qualified or restricted by the constitution in reference to the subject matter in question. If the constitutionality of the law is involved in doubt, that doubt must be resolved in favor of the legislative power. The power to legislate for all the requirements of civil government is the rule, while a restriction upon the exercise of that power in particular case is the exception. As said by Waite, C. J., in the Sinking Fund Cases, 99 U. S., 700: “One branch of the government cannot encroach on the domain of another without danger. The safety of our institutions depends in no small deg’ree on a strict observance of this salutary rule.” Until, therefore, the invalidity of an act is shown beyond a reasonable doubt, it is the duty of this court to hold that the co-ordinate legislative department of the state government has not exceeded its constitutional power.

It is contended in behalf of the defendant, that the property of the National Express Company is not, under the act of April 27, 1893, known as the Nichols Law, taxed by a uniform rule; that it is of the same character as the property of individuals, but is valued by a special board,' having a peculiar method; and that the act is in violation of section 2 of article XII, of the constitution of Ohio, which provides that, “laws shall be passed, taxing by a uniform rule, all moneys, credits, investments in bonds, stocks, joint stock companies, or otherwise; and also all real and personal property, according to its true value in money. ”

The constitution thus provides that there shall be equality in the burdens of taxation; and that when the true value of all property, real and personal, has once been ascertained, the same value shall be subjected to the same burden. • Taxation by a uniform rule will require, that the rate of taxation shall be uniform, and such uniformity coextensive with the territory to which it applies, whether the tax is a state, county, township, or city tax; and that every species of property not exempt from taxation, whether lands, goods, money or choses in action, and however used or employed, shall go upon the tax duplicate at its true value in money. The true value in money is adopted as a standard for taxation — as the basis upon which a uniform rate of. taxation is to be fixed. But taxation by a uniform rule does not necessarily demand that there should be the same mode of assessment for every species of property, without regard to any classification.

An assessment, in the sense of a valuation of the property of the taxpaj^er for the purpose of determining- the proportion of tax to be paid, should, it is true, be uniform in its mode, to the extent that the property is assessed according- to its true value in money. But it would not follow that different classes of property may not be valued for taxation by different officers and boards, and by different modes and agencies. The same rigid and inflexible method of assessment for all classes of property might result in a marked inequality in the burden of taxation.

Hence, it has been the policy of the legislature to classify, for the purpose of assessment and taxation, various kinds of property, such as the property of merchants, manufacturers, incorporated banks, unincorporated banks, and bankers, railroad companies, and other corporations. A classification, however, for that purpose does not, of necessity, infringe the constitution of the state, because the same mode and the same officers and boards are not resorted to, for listing and valuing* for taxation the different kinds of property embraced in the respective classes.

As illustrative of differences in the modes of assessment g*rowing out of a classification of the property above referred to, a merchant, by section 2740, of the Revised Statutes, is required to make out and deliver to the assessor a statement of the value of his goods and merchandise, not as estimated on the regular day for listing property under the statute, but the average value during* the year next previous to the time of making such statement, or during such previous months as he shall have been engag*ed in business. Manufacturers, under section 2742, are required to return to the assessor the average value of raw material and manufactured articles on hand during the year next previous, or during' such. portion of the year as they shall have been eng*ag*ed in business.

The mode and agencies employed, under the statute, for listing, valuing and equalizing shares of bank stocks, are not the same as those employed for the like as to other property. Unincorporated banks and bankers, and incorporated banks make returns for taxation to the county auditor, and not to the local assessor. The cashier of each incorporated bank returns annually to the county auditor the resources and liabilities of the bank, together with the number of shares held by each stockholder, and the par value of each share. The county auditor fixes the total value of the shares according to their true value in money, and deducting the value of real estate included in the statement of resources, transmits a copy of the cashier’s report, together with the valuation of such shares, to an annual state board of equalization consisting of the governor, auditor of state, and attorney-general, who equalize the value of the shares, being authorized to increase or diminish the value returned by the auditor. As in the case of incorporated banks, so, the mode of ascertaining the taxable value of the personal property of unincorporated banks is alike peculiar to those associations, as belonging to a distinct class for the purposes of taxation. Sections 2758-2769 and 2808, Revised Statutes.

In Wagoner v. Loomis, 37 Ohio St., 571, it was urged in argument, that because a method of return, and mode of valuation, and agency for determining valuation, separate and distinct from that as to individuals, was fixed in reference to banks, the law violated section 2 of article XII of the constitution. But it was held in that case, that statutory provisions whereby different classes' of property are listed and valued for taxation in and by different modes and agencies, are not necessarily in conflict with the provisions of the constitution which require all property to be taxed by a uniform rule, and according to its true value in money.

Under the statute, the county auditors of the several counties in the state in which any railroad company has its road or any part thereof, constitute a board of appraisers and assessors for such company. As a board of valuation, it is made their duty tp apportion the value of the property, moneys, and credits of such railroad company, among the several counties through which such road or any part thereof, runs. And when any railroad company has part of its road in this state, and part in another state, the total value of the property, moneys, and credits of such company is to be apportioned, for the purposes of taxation, in the proportion the length of the road in this state bears to the whole length of the road. It will be observed that, the mode of apportioning the value of the property of railroad companies among the several counties, as provided in section 2774, of the Revised Statutes, is substantially applied in the Nichols law to the apportionment of the value of the property of teleg-raph and telephone companies.

And by section 2744, of the Revised Statutes, a special mode is provided by which corporations, generally, are to list their property for taxation. In all cases return is to be made to the several auditors of the respective counties where such property is situated, and the value of the property is apportioned among the different taxing- districts.

Thus it will be seen, that by legislative enactment, different species of property have been classified, and subjected to different modes of assessment, but all having- in view one result — the ascertainment of the true value in money of the property embraced in the respective classes, and the taxation of all property by a uniform rule. As said in Wagoner v. Loomis, supra, ‘ ‘whether it was wise to adopt different modes and agencies for determining the value of taxable property, we need not consider. Much might be said in its favor. But we can, and do affirm, with the utmost confidence, that an honest and intelligent discharge of duty by those intrusted with the execution of the respective modes provided by law, would accomplish all that was intended by the constitution.”

But it is contended in behalf of the defendant, that not only was the property of The National Express Company valued by a special board, after a special method, but that its property was not assessed at its true value in money, because the value of the capital stock was taken as a g-uide, thereby, in contravention of the constitution, adding to the intrinsic value of the tangible property in this state a value inherent in the capital stock, and due to the franchise, good will, and business of the company, and the value of its property in other states.

The Express Company, between the first and tenth days of May, as required by the Nichols law, returned to the auditor of state, under the oath of its treasurer, the amount of its capital stock, its place of business, and par value and market value of its shares at the time of such return. The return also contained a detailed statement of the entire real and personal property of the company and where located, and the value thereof as assessed for taxation. The board of appraisers and assessors, in determining the value of the company’s property in this state to be assessed and taxed, were, in the words of the statute, guided by the value of the property as determined by the value of the entire capital stock of the company, and such other evidence and rules as would enable the board to arrive at the true value in money of the entire property of the company within this state, in the proportion which the same bore to the entire property of the company as determined by the value of the capital stock thereof, and other evidence and rules.

The board, in determining the value of the company’s property in this state for taxation, is not required to fix the value of such property upon the principle that the value of the entire property of the company shall be deemed the same as the value of its entire capital stock, thus making the respective values equivalents of each other. But taking the market value of the entire capital stock as a datum, the board is to be only guided thereby in ascertaining the true value in money of the company’s property in this state. The statute does not bind the board to find the value of the entire property of the company equal to that of the entire capital stock. While the value of the property may be less, there may be cases, and not uncommon, in which the value of the property will exceed the market value of the capital stock.

The property or means contributed by the stockholders of a corporation as the fund or basis for the business for which the corporation was formed, constitutes its capital. But “there is a distinction between the capital of a corporation and its capital stock, though they are often used as interchangeable terms. The capital stock is clearly not the same as property possessed by the corporation; for the capital stock remains fixed although the actual property of the corporation varies in value and is constantly increasing or diminishing in amount. What the amount of the capital shall be is within the discretion of the managers, but the amount of the capital stock is limited and deter-ruined by the charter and the laws governing it. It follows therefore that a limit imposed- upon the capital stock of a corporation does not restrict the amount of property which it may own.” Beach, Priv. Corp., § 466.

It is contended that when the value of the shares of the capital stock of a corporation is augmented through the franchise, good will and successful management of the business of the concern, such value should not avail to add to the true value in money of the tangible property of the corporation for the purpose of taxation. The fact, it is said, that the shares in a corporation with a capital stock of $100,000, are selling at $150 each, on a par value of $100, should not serve for guidance in arriving at the true value in money of the tangible property of the company. If the component parts of the whole machinery and apparatus employed in carrying on a trade or manufacturing business were sold separately, at public or private sale, to different purchasers, the market value 'of the capital stock might play a very unimportant part. But the property of a corporation may be regarded in the aggregate, as a unit, an entirety, as a plant designed for a specific object ; and its value may be estimated not in parts, but taken as a whole. If the market value — perhaps the closet approximation to the time value in money — of the corporate property as a whole, were inquired into, the market value of the capital stock would become a controlling factor in fixing the value of the property. Should all the stockholders unite to sell the corporate plant as an entirety, they would not be inclined to sell it for less than the market value of the aggregate shares of the capital stock. Besides, while the amount of the capital stock may be limited by the charter and the laws governing it, the real and personal property of the corporation may be constantly augmented, and may keep pace with any increase in the value of the capital stock. The market value of the capital stock, it is urged, has no necessary relation to the value of the tangible property of the corporation. But such is the well understood relation between the two, that not only is the value of the capital stock an essential factor in fixing the market value of the corporate plant, but the corporate capital or property has a reflex action on the value of the capital stock. ‘ ‘ Shares in a corporation,” says Mr. Morawetz, “represent fractional interests in the entire corporate concern, and their value necessarily depends upon the real capital which the company owns. The whole and the sum of its parts must be equal.” Priv. Corp., § 288.

If by reason of the good will of the concern, or the skill, experience, and energy with which its business is conducted, the market value of the capital stock is largely increased, whereby the value of the tangible property of the corporation, considered as an entire plant, acquires a greater market value than it otherwise would have had, it cannot properly be said not to be its true value in money within the meaning of the constitution, because good will and other elements indirectly entered into its value. The market value of property is what it will bring when sold as such property is ordinarily sold in the community where it is situated ; and the fact that it is its market value cannot be questioned because attributed somewhat to good will, franchise, skillful management of the property, or any other legitimate agency.

It will, we think, be conceded that the earning-capacity of real estate owned by individuals may be considered in fixing its value for taxation. Take an office building on a prominent street in one of our large cities. It will not be doubted, that by care in the selection of tenants, and in the preservation of the reputation of the building, by superior elevator service, by vigilance in guarding- and protecting the property, by the exercise of skill and knowledge in the general management of the premises, a good will of the establishment will be promoted, which will tend to an extra increase in the earning capacity and value of the building. For the purpose of taxation, it would be none the less the true value in money of the building, because contributed to by the operative causes that gave rise to the good will. We discover no satisfactory reason why the same rule should not apply to the valuation of corporate property — why the selling value of the capital stock, as affected by the good will of the business, should be excluded from the consideration of the board of appraisers and assessors under the Nichols Law, charged with'the valuation of corporate property in this state, especially as the capital stock when paid up, practically represents, at least, an equal value of the corporate property.

But it is contended furthermore, that the act of April 27, 1893, is in violation of section 16, article I of the constitution of Ohio, which provides that: “All courts shall be open, and every person, for an injury done him in his land, goods, person or reputation, shall have remedy by due course of law; ” and also in violation of the 14th amendment of the federal constitution, which provides, among other things: “Nor shall any state deprive any person of life, liberty, or property without due process of law.” The property of the express company, it is alleged, was taken without due course or process of law in this, that the act in question does not provide for any notice to the company, nor for a hearing by the board of appraisers and assessors, nor for an appeal to any superior authority for the correction of illegal, erroneous or excessive valuations.

In the case at bar, it will not be claimed that the expressjcompany has, in fact, been deprived of its constitutional right of due process of law. The company had timely notice, and appeared by counsel before the board, and had a full hearing touching its property, money, credits, and the value thereof, and its objections to the Nichols Law.

The law itself states the time when the board shall meet, and the express company could not ignore the time of meeting. The meeting's of the board are not secret, and the company had the right to be present and explain the statement rendered of its property and the value thereof. Indeed, 'without notice from the board, or by the terms of the law, the company would have been unable to make the return prescribed by the statute. And of the company’s return, it majr be said, in the language of the opinion in the Kentucky Railroad Tax Cases, 115 U. S., 321: “This return, made by the corporation through its officers, is the statement of its own case, in all the particulars that enter into the question of the value of its taxable property, and may be verified and fortified by such explanations and proofs as it may see fit to insert.”

In the State Railroad Tax Cases, 92 U. S., 575, it was charged that the board increased tlie estimates of value reported to the auditor of state, without notice to the companies, and without sufficient evidence that it ought to be done; and it was strenuously urged upon the court, that for want of such notice and a hearing, the whole assessment of the property and levy of taxes was void as being without ‘ due process of law. ’ ’ But it was said by Mr. Justice Miller, in delivering the opinion of the court: “This board has its time of sitting fixed by law. Its sessions are not secret. No obstruction exists to the appearance of any one before it to assert a right, or redress a wrong; and, in the business of assessing taxes, this is all that can be reasonably asked. ”

It is said, however, that the act under consideration makes no-provision for an appeal to any higher authority, board, or tribunal authorized to hear complaints, and correct excessive, illegal, or erroneous assessments. The power vested in the state auditor, by section 167 of the Revised Statutes, to correct errors of assessment, though not supplying a complete remedy, is not inapplicable, we think, to the procedure under the act of April 27,1893. The section reads as follows: “He may remit such taxes and penalties thereon as he ascertains to have been illegally assessed, and such penalties as have accrued or may accrue in consequence of the negligence or error of any officer required to do any duty relating to the assessment of property for taxation, or the levy or collection of taxes, and he may,, from time to time, correct any error in any. assessment of property for taxation, or in the duplicate of taxes in any county; provided, .that, when the amount to be remitted in any one case shall exceed one hundred dollars he shall proceed to the office of the governor and take to his assistance the governor and attorney-general, and in all such cases may remit no more than shall be agreed upon by a majority of the officers named.” This section is in pari materia, and is a part-of the taxing system of the-state, or of the machinery for collecting’ the public revenue. The Nichols Law is part of the same system, and is merely an amendment and supplement of the sections of the statute regulating express and telegraph companies. While it might seem improper to submit the quasi judicial action of a board composed of the treasurer, attorney general and auditor of state to the review of the state auditor alone, it would not seem exceptionable, when the amount of - taxes to be remitted exceeded one hundred dollars, that there might be an appeal to a board consisting’ of the governor, auditor of state, and attorney-general.

In Davidson v. New Orleans, 96 U. S., 97, it was laid down as a general proposition, that whenever, by the laws of a state, or by state authority, a tax, assessment, servitude, or other burden is imposed upon property for the public use, whether it be for the whole state or some limited portion of the community, and those laws provide for a mode of confirming or contesting’ the charge thus imposed, in the ordinary courts of justice, with such notice to the person, or such proceeding in regard to the property as is appropriate to the nature of the case, the judgment in such proceeding’s cannot be said to deprive the owner of his property without due process of law, however obnoxious it may be to other objections. By section 5848, of the Revised Statutes, “courts of common pleas and superior courts shall have jurisdiction to enjoin the illegal levy of taxes and assessments, or the collection of either.” And by section 5849, in actions to enjoin the illegal levy of taxes and assessments, “if the levy would go upon the county duplicate, the county auditor must.be joined in the action. ” In Jones v. Davis, 35 Ohio St., 474, it was held by this court, that the addition pf an item pf prpperty to the return of ‘the taxpayer, by a board of equalization, with a direction to the auditor to carry the same upon the duplicate, and to assess against it the fixed rate for state, county, and other purposes, does not of itself constitute the levy; nor does the mere ascertainment of the rate of assessment by those whose duty it is to determine the rate to be levied. The process is not complete until the valuation of the property, with the sum to be charged against it, is carried upon the duplicate.

So that, in the case of an express company, after the board of appraisers and assessors has certified to the county auditor the amount proportioned to his county of the value of the company’s property; and before the county auditor has apportioned the amount among the several taxing districts, and placed the same on the tax lists to be assessed and collected as taxes are assessed and collected on other property, an injunction will lie in favor of the company, to enjoin the auditor from carrying such amount upon the duplicate, and thereby afford an opportunity to inquire into the legality of the assessment before a lien attaches, and before the treasurer is warranted to make collection.

In McMillen v. Anderson, 95 U. S., 37, it was held, that a statute which gives a person against whom taxes are assessed a right to enjoin their collection, and have their validity judicially determined, is due process of law. The defendant, a tax collector, of the state of Louisiana, seized property of the plaintiff, and was about to sell it for the payment of a license tax, for which the latter was liable. The plaintiff obtained a temporary injunction against .the sale of the property seized. Defendant pleaded that the seizure was for taxes due, and that his duty as collector required him to make it. Judgment was rendered against the plaintiff, and in the Supreme Court of the United States, it was assigned for error, that the law under which the proceedings of the defendant were had was void, as it deprived the plaintiff of his property without due process of law. But the court was of opinion that the person charged with such a tax was not without legal remedy by the laws of Louisiana. “It is probable,” said the court, “that in that state, as in others, if compelled to pay the tax by a levy upon his property, he can sue the proper party, and recover back the money as paid under duress, if the tax was illegal. But however that may be, it is quite certain that he can, if he is wrongfully taxed, stay the proceeding for its collection by process-of injunction. See Fonqua’s Code of Practice of Louisiana, articles 296-309, inclusive.”

In addition to the foregoing objections to the act of April 27, 1893, on constitutional grounds, others are urged by the defendant, but we deem them untenable, and not sufficiently involved in doubt to require consideration.

The demm-rer to the answer is sustained and a peremptory writ of mandamus allowed.