author: Spear, J.

text:
    The Vindicator Printing Co. v. The State of Ohio.

      Number of publications of sheriff’s proclamation — Fixed by statute— No other county officer has authority to contract for excess— ■ County commissioners cannot allow claim for excessive publications — Authorized claim may be separated from unauthorized— Excessive claim allowed and paid — Prior to the act of April 25, 1898 — Cannot be recovered — Subsequent to said act may be recovered, when.

    1. Where the number of publications of a sheriff’s election proclamation or other public notice, is fixed by statute, there is no authority in the board of county commissioners, or other county officer, to contract for publications in excess of the number directed by statute. The board is also without authority to allow a claim for such excessive publications, and the allowance of such claim does not bind the county. Nor is authority'to adjudicate and allow such, claim given by the fact that with the eharge for unauthorized publications there is, on the same paper, a charge for a publication which is authorized by statute.
    2. But where a claim for such excessive publications has been presented to the board and allowed, and payment made by the treasurer on the warrant of the auditor prior to April 25, 1898, the prosecuting attorney cannot maintain an action, in the absence of both fraud and mistake of fact, to recover back the money.
    3. The act of April 25, 1898 (93 O. L., 408), clothes the prosecuting attorney with power to recover back money so illegally drawn from the treasury on and after the date of its passage.
    (Decided May 19, 1903.)
    Error to the Circuit Court of Mahoning county.
    The action below was brought by the State against The Vindicator Printing Co. in the court of common pleas of Mahoning to recover public moneys alleged to have been unlawfully drawn from the treasury of that county on the order of the board of county commissioners. It was averred in the first canse of action of the petition, in substance, that in the months of October and November, of the years 1894, 1895, 1896, 1897 and 1898, the defendant published in its newspaper, upon an order of the then sheriff of the county, a public notice styled “An Election Proclamation,” which notice the law required should be published not less than fifteen days before each general election, but only in one issue of such newspaper. Instead of being therein printed one time in each year, as required by law, said notice was printed by defendant in excess of the time so authorized, one hundred and twenty-seven times during the years above named. In the year 1894 defendant presented a bill to the board for publishing the said proclamation in which it included a charge for thirty-one publications in excess of what the law allowed to be charged for the same, in all making an excessive charge of $108.50. Similar bills, though varying in amounts, for like excessive publications, were presented in the years 1895, 1896, 1897 and 1898, all which were allowed by the board and warrants drawn on the’ treasury for the same and paid, the total ftir all the years named amounting to $556.28.
    Another cause of action followed charging excessive and illegal publications, by order of the board, of their report of financial transactions of the years 1895, 1896, 1897 and 1898, together with the report thereon of the examiners appointed to examine the same. The law authorized such notice to be published only for one week in two weekly. papers of opposite politics, whereas the defendant, without authority of law though directed by the board, published said notice in its weekly and also in its daily edition, the latter of which was illegal and excessive, and for those years the defendant presented bills and was paid by order of the board, $180.50 for such illegal and excessive publications.
    Another cause alleged illegal and excessive publications of the report of the examiners appointed by the probate judge of the county in the years 1896, 1897 and 1898, to examine and report upon the condition of the treasury, the same being ordered by the board. The law authorized the publication of such report once only in a newspaper. The defendant published the same twice, once in its weekly and once in its daily. The excessive and unauthorized publications were paid for during those years by allowance by the board in the sum of $103.25.
    Another cause alleged excessive publications of divers short notices during the years 1895, 1896, 1897 and 1898, directed by the board and paid by its order, in excess of statutory authority, amounting in all to $20.37.
    Defendant interposed a general demurrer to each cause of action, which, being overruled and defendant not desiring to plead further, judgment was rendered for the State in the sum of $860.40, which judgment was on error , affirmed by the circuit court,-and the Company brings error.

      Mr. John H. Clarke, for plaintiff in error,
    cited and commented upon the following authorities:

      Jones v. Commissioners, 57 Ohio St., 189; secs. 2977 and 4367, Revised Statutes; Muskingum Valley Co. v. Ward, 13 Ohio, 120; State ex rel. v. Akins, 10 Circ. Dec., 121; 18 C. C. R., 349; United States v. Healy, 160 U. S., 136; Sutherland, sec. 309; Downes v. Bidwell, 182 U. S., 244; Commissioners v. Noyes, 35 Ohio St., 201; State v. Griggsy, 8 Dec., 616; 6 N. P., 202; Shanklin v. Commissioners, 21 Ohio St., 583; Railway Co. v. Iron Co., 46 Ohio St., 44; Mays v. Cincinnati, 1 Ohio St., 269; Marietta v. Slocomb, 6 Ohio St., 471; Cincinnati v. Gas Light & Coke Co., 53 Ohio St., 278; Higgins v. Commissioners, 62 Ohio St., 621; State v. Ridenour, 60 Ohio St., 600; Warren Co. v. Gregory, 42 Ind., 32; McKee v. U. S., 12 Ct. Cl., 532; McElrath’s Case, 12 Ct. Cl., 201; Frederick v. Douglas County, 96 Wis., 411; Tacoma v. Lillis, 4 Wash., 799; Hillborn v. United States, 27 Ct. Cl., 547; Snelson v. State ex rel., 16 Ind., 29; County of Wayne v. Randall, 43 Mich., 137; Randall v. Lyon County, 14 Pac. Rep., 583; People v. Foster, 133 Ill., 496; Supervisors v. Briggs, 2 Denio, 26; Cox v. Mayor, 103 N. Y., 519; Commissioners v. Setzer, 70 N. C., 426; Hedrick v. United States, 166 Ct. Cl., 88.

      Mr. J. P. Wilson and Messrs. Gibson & Cramer, for defendant in error,
    cited and commented upon the following authorities:
    Sections 2977 and 4367, Rev. Stat.; 104 Wis., 432; 53 Wis., 237; State v. Akins, 9 Circ. Dec., 373; 18 C. C. R., 19; Jones v. Commissioners, 57 Ohio St., 189; Clark v. Commissioners, 58 Ohio St., 107; Higgins v. Commissioners, 62 Ohio St., 621; Richardson v. State, 66 Ohio St., 108; Commissioners v. Noyes, 35 Ohio St., 201; Cincinnati v. Gas Co., 53 Ohio St., 278; People v. Foster, 133 Ill., 496; Hoffman v. Chipewa, 77 Wis., 214; Washburn Co. v. Thompson, 99 Wis., 585; sec. 1129, Rev. Stat.; sec. 1136-2, Rev. Stat.; sec. 225, Rev. Stat.; sec. 798, Rev. Stat.
   Spear, J.

The correctness of the judgment below on the demurrer rests upon two propositions: One that the allowance by the board of commissioners of the bills for excessive publications was unauthorized and illegal, and the money received thereon was an. unlawful drawing of the public moneys, and second that the moneys so unlawfully received can be recovered back by suit brought by the prosecuting attorney. If either proposition fails the judgment as rendered cannot stand.

1. Was the allowance beyond the power of the board, and for that reason unauthorized? Publication of the sheriff’s proclamation is authorized by section 2977, Revised Statutes. It is to “be inserted in some newspaper published in the county, if any is published therein.” This is supplemented by section 4367, which requires publication in two newspapers of opposite politics, but taken together the meaning is one insertion in each ’ newspaper. Publication of the commissioners’ financial report together with that of the examiners is provided for by section 917, Revised Statutes. They are to be published “for one week in two weekly newspapers of opposite politics.” Publication of the report of the examiners of the county treasury, etc., appointed by the probate judge, is authorized by section 1129, Revised Statutes. It is to be published “one week in two newspapers of opposite politics, of general circulation in the county.” Section 4367 also authorizes the publication of certain notices of general interest to the taxpayers as the auditor, treasurer, probate judge, or commissioners may deem proper in two newspapers of opposite politics. This does not in terms limit the number of publications, but it does not give those officers discretion to fix the number of publications where the number is fixed by other sections. Sections 22b, 798 and 1136-2, fix the number of publications of notices for the sale of bonds, for notices to contractors, and for proposals to banks to become depositaries of county funds. In so far as these several sections of the statute provide for the number of publications they control, and publications in excess of the limit fixed are unauthorized. We hold the excessive publications stated in the petition to have been all unauthorized save as to the very small matter of notices to coal dealers, upon which no specific limit seems to have been placed by any section of the statute to which our attention has been called.

The case of Jones, Aud., v. Commissioners, 57 Ohio St., 189, which rests upon the provision of the constitution, section 5 of article 10, viz.: “No money shall be drawn from any county or township treasury except by authority of law,” establishes, so far as the matter affects claims of county auditors, the proposition that: “The board of county commissioners represents the county in respect to its financial affairs only so far as authority is given to it by statute. It may pass upon and adjudicate claims against the county for services-in a matter which, under the statutes, may be the subject of a legal claim against the county. But'it is without jurisdiction to entertain or adjudicate claims which in themselves are wholly illegal and of such a nature as not to form the subject of a valid claim for any amount. And an attempt by the board to allow a claim of such character will not bind the county.” This rule, it will be noted, applies to the power of the board to adjudicate and allow the claim. It is supported, also, by State v. Yeatman, 22 Ohio St., 546. We see no reason for confining the rule to claims of county officers, and if it is to stand as the law of this case it effectually disposes of the first proposition unless jurisdiction was given the board by the fact that, with the unauthorized charges, there was also included a legitimate charge for a publication authorized by law. The contention of the plaintiff in error is that such was its effect, and that the action of the board of commissioners in passing upon and allowing the bills, part of which is admitted to be ■legal, binds the county, such allowance having been made in good faith and in the absence of fraud or mistake of fact. This proposition is pressed by an ingenious and persuasive argument by the learned counsel in his brief. But it fails to convince. The publications were separate. They do not necessarily have relation one to the other. Each is an independent service and the right to receive pay for each service depends upon the authority to render and be paid for that service. Neither can aid or weaken the other. The fact that the Company had not authority for the excessive publications would afford no reason why it should not be paid for those authorized; so, on the other hand, the fact that it had a just claim to be paid for authorized publications affords no support to those unauthorized. As held in the Jones case, supra, the power of the board to act at all does not exist where in law a demand has no legal basis upon which to stand. Counsel’s argument we think not sound because it leads to the conclusion that jurisdiction to allow an unauthorized demand may be predicated upon the fact of its being presented on the same paper with a demand which is authorized, notwithstanding the two demands, although of like nature, have no necessary connection with one another. Such construction is entirely inconsistent with the rationale of the holding in the Jones case, .and would, we think, defeat the manifest purpose of the statute. So far as the allowance of the unauthorized claims is concerned, therefore, we think it clear that the board was without power to make such allowance. It would follow that the payments of such claims were illegal.

It is insisted that the fact, appearing in the petition, that the construction of the statute contended for by plaintiff in error had been placed on the statute by the officials of the county for at least five years, is of great significance. The rule of contemporaneous construction by officers charged with the enforcement of statutes is persuasive, but it cannot have forcible application to a situation where the construction of a general statute, having uniform operation throughout the state, appears to have been construed only by the officers of one county.

Counsel lay much stress upon the case of Shanklin v. Commissioners, 21 Ohio St., 575, and quote from page 583 to this effect: “It may be laid down as a general rule that the board of county commissioners is clothed with authority to do whatever the corporate or political entity, the county, might, if capable of rational action. * * * It is, in an enlarged sense, the representative and guardian of the county, having the management and control of its financial interests.” It is argued from this that what the board does respecting financial matters affecting the county must conclude the county. It seems hardly worth while to discuss this case at length, but it may be proper to add that the substance of the holding in the case is that the board might lawfully, take a certificate of deposit in satisfaction of a debt due the county from an embezzling treasurer whose debt to the county they had been otherwise unable to collect. Applying the language quoted to the case the court had in hand, it seems apposite, and, as a general proposition may he accepted as correct, but how can it have application to an issue such as is presented to us? The board had general authority to collect a debt due the county; if it could collect it could settle or compromise. In this sense the board would represent the county. We think, however, that we have an entirely, different case, one in .which the board did not represent the county, and that it was without power to bind the' county by an allowance. It would follow that the payment of such claims, though apparently regular, was without warrant of law.

2. Can the unauthorized payments be recovered back? We have found that the allowances for excessive publications by the board of commissioners were unauthorized and illegal; but the transactions did not stop there. In the ordinary course of business warrants were drawn by the county auditor and paid by the county treasurer. These were not the acts in any sense of the commissioners. That board has no authority to disburse the public moneys, and did not attempt to do so. The situation then was that the Company had received moneys of the county, in a way apparently regular but to which it was not in strict law entitled. But an accounting officer, the proper officer, had paid the money voluntarily, upon vouchers issued by another accounting officer, in form duly approved, and it is difficult to see why in these respects, as to a stranger, they did not represent the county, and why the facts do not present a case of voluntary payment with the usual legal result that, in the absence of an enabling statute and where there is no showing of fraud or mistake of fact, there can be no recovery back. . The rule recognizes the fact that the money paid was unjustly paid; that the claim itself was illegal, one which the party, had he sought to do so, could have resisted. He chose not to resist hut to pay, and he cannot afterwards ask the law to rectify his mistake. The cases of Mays v. Cincinnati, 1 Ohio St., 268; City of Marietta v. Slocomb, 6 Ohio St., 471; Railway Co. v. Iron Co., 46 Ohio St., 44, and Cincinnati v. Cas Light Co., 53 Ohio St., 278, are cases where the principle was applied to payments by individuals, to payments by private corporations, and to payments by municipal corporations. If the rule is correctly held in these cases and the principle on which it is based is' sound, and we are not inclined to question either, they seem to settle the rule generally for this state, and no sufficient reason appears why it should not be applied to counties when the facts otherwise require it. The order of the board furnished a sufficient justification for the auditor in drawing his warrants, and on presentation of the warrants to the treasurer the duty devolved upon him to pay. It will tend to a clearer understanding to keep in mind that allowance is not payment. A case in point is that of the State v. Yeatman, supra. One Bain had a claim against Hamilton county for certain maps made by virtue of a contract with the board of commissioners. It was allowed by the board but the auditor refused to draw a warrant. Bain, in the name of the state, brought mandamus. This court held that “the board of county commissioners can exercise only such powers as are conferred upon them by law,” and that the board had no authority to make the contract, and so refused the writ. Had the claim been paid and a suit brought to recover back, a far different question would have been presented. And, in the case at bar, had the prosecuting attorney interposed after allowance and before payment, a far different case would have been made. The payments' here challenged might have been prevented by virtue of the statute (section 1277, Revised Statutes), as then in force, but the statute did not then provide for a recovery back. Later an amendment incorporating such provision was made as hereinafter fully stated. The fact that this amendment was deemed by the general assembly necessary to authorize recovery back generally of money illegally drawn from the treasury, while not a conclusive argument in support of the proposition that the section was defective in that respect, yet is not without weight, and, to a certain extent, supports our conclusion.

If the rule of voluntary payment is to have application it disposes of all payments prior to those of the year 1898, for, as before stated, prior to the statute of April 25, 1898, there was no law which as to claims of this character enabled a prosecuting attorney to maintain an action. That act (present sections 127.7 and 1278, Revised Statutes), provides, among other things, that: “The prosecuting attorneys of the several counties of the state, upon being satisfied that the funds of the county * * * have been misapplied, or that any such public moneys have been illegally drawn out of * * * the county treasury, * * * may apply by civil action in the name of the state to a court of competent jurisdiction to * * * recover back for the use of the county all such public moneys so misapplied or so illegally drawn out * * * from the county treasury.” Manifestly it is the purpose of this statute to reimburse the treasury for unauthorized payments from it not otherwise provided for. It is in one sense a remedial statute, and yet it gives a right of action which before its enactment did not exist, and could not, we think, apply to past transactions.

This holding is in no yvay inconsistent with the judgment in Jones v. Commissioners, recovery in that case being based upon specific provisions of statutes authorizing such actions against the officers named.

It follows that the judgment below should be modified and the recovery confined to unauthorized payments made after April 25, 1898.

Judgment accordingly.

Burket, O. J., Davis, Shauck, Price and Crew, JJ., concur.


source: Caselaw Access Project

author: Burket, C. J.

license: Public Domain

text:
    Bobilya v. Priddy, Assignee.

      Conveyances in contemplation of insolvency — Section 6SJjS, Revised Statutes — Act of April 26, 1898 — Purchase for value from insolvent debtor valid, when — Replevin—Affidavit for order of recovery — Section 5815, Revised Statutes — Not error to overrule motion to set aside replevin, when — Question of belief and prejudice — Deposition—Evidence of proper writing and subscription.

    1. While good practice requires that the petition in an action of replevin, shall be separate from the affidavit required by Section 5815, Revised Statutes, it is not error to overrule a motion to set aside a writ of replevin based on the sole ground that the petition and such affidavit are contained in one pleading sworn to positively, and not merely on belief, there being no showing of prejudice.
    2. A certificate by a notary public that a deposition “was reduced to writing by M. D. McMaster, and was subscribed by the said witness in my presence,” shows with sufficient clearness that the deposition was both reduced to writing and subscribed in the presence of the notary.
    3. A purchase made in good faith and for fair value from an insolvent debtor, while Section 6343, Revised Statutes, as amended April 26, 1898, was in force, must be held valid as to such purchaser, even though the seller may have made the sale in contemplation of insolvency, or with a design to prefer one or more creditors to the exclusion of others, or with intent to hinder, delay or defraud his creditors, and even though a deed of assignment, made by such debtor, was filed within ninety days after such sale.
    4. Said section 6343, when so construed, is a valid enactment.
    (Decided May 19, 1903.)
    Error to the Circuit Court of Van Wert county.
    One Charles M. Spahr on and before January 29, 1901, was indebted to George L. Bobilya on a secured note in the sum of $130, and rent of room $10, total $140. He also owed the Wiltshire bank $63, and owed certain notes which he had forged, amounting to $514.59, which notes were held by the Wiltshire bank for collection, and which notes he desired to pay to prevent prosecution for forgery. He owned a stock of goods and a horse and buggy, and sold the same on said January 29, 1901, to Mr. Bobilya for the sum of $717.59, and Mr. Bobilya took out of the purchase price said $140, and gave his check to Mr. Spahr for the balance, $577.59, and Mr. Spahr took the check to the bank and lifted his aforesaid forged notes, and paid said sum of $63, which he owed the bank. Within ninety days after said sale to Mr. Bobilya, Mr. Spahr made an assignment to Oscar W. Priddy for the benefit of his creditors, and Mr. Priddy as such assignee, brought an action in replevin against Mr. Bobilya for the recovery of said stock of goods, horse and buggy under Section 6343, Revised Statutes, as amended April 26, 1898, his claim being that said sale was fraudulent and void as against an assignment made and filed within ninety days after such sale.

      The answer of Mr. Bobilya admitted that Mr. Priddy was the assignee of Mr. Spahr and denied generally each and every other allegation contained in the petition, and averred that he bought the property in good faith, and paid therefor the sum of 1717.59, which was a full consideration therefor.
    Upon trial to a jury a verdict was brought in finding the right of property and possession in the assignee, and fixing the value of the property at |718.
    A motion for a new trial was filed and overruled, and judgment entered on the verdict, to all of which proper exceptions were taken. The circuit court affirmed the judgment, and thereupon the case was brought here.

      Mr. C. S. Mauk, for plaintiff in error.
    1. The phrase “in contemplation of insolvency” is defined in Maas v. Miller, 58 Ohio St., 498.
    2. What constitutes a preference is fully discussed in Loveland on Bankruptcy, 456, Sec. 189; 457, Sec. 190; 464, Sec. 194; 467, Sec. 194; 468,' Sec. 194; 469, Sec. 194; and 479, Sec. 197; and Brandenburg on Bankruptcy, 325 note, 332 note. Preference is defined to mean the thing to which it is attached, has some advantage over another thing of the same character, which but for this advantage would be like the other. 19 Am. & Eng. Enc. Law, 3.
    A sale by a merchant of his entire stock of goods for full value in the absence of fraud can not. be. impeached. 8 Fed. Rep., 311. •
    It has also been held that a bona fide purchaser will be protected to the extent of the actual money paid as a consideration. Loveland on Bankruptcy, 476; Lancaster v. Collins, 7 Fed. Rep., 338; Sonsiby v. Keelley, 11 Fed. Rep., 578.
    It is not a preference for a debtor to pay rent on his building he occupies. Loveland on Bankruptcy, 474.
    By a transfer is meant, the sale and every other different mode of disposing of, or parting with property or possession of property absolutely, or conditionally as a payment, pledge, mortgage, gift, ór security. Loveland on Bankruptcy, 456.
    3. Where there is an agreement to secure when an advance is made, the subsequent giving out such security is not a preference, nor is the purchase of property when payment in cash is made for the property; and a small part of purchase price of $140 of an antecedent debt is surrendered secured. Brandenburg on Bankruptcy, 332; Loveland on Bankruptcy, 478, Sec. 197; and 480, Sec. 197; Douglass v. Vogeler, 6 Fed. Rep., 53.
    4. To the extent of the actual money paid or advanced there can be no preference, and the sale is good. Paddock v. Fish, 10 Fed. Rep., 125; Jamison v. McNally, 21 Ohio St., 295; 8 Fed. Rep., 496; Pendery v. Allen, 53 Ohio St., 253. Under this section it does not interfere with bona fide contracts and sales where the relation of debtor and creditor did not therefore exist, and no fraud in the transaction. In re Assignment Summers, 7 O. L. N., 301.
    By the express terms of the statute, an assignee can only assail conveyances, etc., on the ground that they are constructively fraudulent, because made within ninety days. Sections 6343, 6344, Revised Statutes. Preferences can be assailed only by creditors. Brinkerhoff v. Smith, 57 Ohio St., 610.
    Where a statute strikes at the inalienable rights of the citizen, where it infringes the spirit of the constitution, it is' void, though it' may not contravene any express word of that instrument. Wheeling Bridge Co. v. Gilmore, 4 Circ. Dec., 366; 8 C. C. R., 658; Coal Co. v. Rosser, 53 Ohio St., 23.
    While the courts will not declare a statute unconstitutional unless clearly satisfied that it is so, yet where the court is so convinced, it is one of its most important and sacred duties to so declare. Willyard v. Hamilton, 7 Ohio (pt. 2), 220; Bank v. Grocery Co., 34 L. R. A., 445, 448.
    The radical departure of these sections as now amended from the former statutes and the sweeping and revolutionary changes sought to be effected, render the decisions under the former statutes of but little value in construing the sections as they now are.
    It can hardly be said that any lawyer can say that the ninety-day clause is constitutional, and if so, it can not be urged upon the court that though it is unconstitutional, it may be so declared and the remainder of the section held good. But the assignee in this case can assail the plaintiff’s purchase only under this ninety-day clause; and if it fails then this proceeding must be decided in our favor.
    This clause declaring as it does, that all sales, conveyances, mortgages, etc., made within ninety days preceding an. assignment, shall be “conclusively deemed and held to be fraudulent,” it is not the declaring of a rule of evidence, which the legislature may do. (Pennsylvania Co. v. McCann, 54 Ohio St., 17), but it is an enactment shutting out all evidence, it does not declare that certain facts shall be prima facie evidence of fraud, and cast the burden of proving good faith on the assignor and the person with whom he deals, but it declares that if the transaction occurs within ninety days, no proof of good faith can he heard.

    It is not competent, for the legislature of a state to declare what shall be conclusive evidence of a fact. 3 Am. & Eng. Enc., 716, note; Wantlan v. White, 19 Ind., 470; Little Rock Ry. Co. v. Payne, 33 Ark., 816. The act in controversy is not regulating evidence, but is an unconstitutional confiscation of property.
    (a) Article 2, section 1, of the bill of rights which declares “that all men are endowed with the inalienable right of acquiring and possessing property to dispose of it.” Patton v. Patton, 39 Ohio St., 590.
    (b) “The liberty of making contracts is absolutely essential to the acquisition, possession and protection of property.” Bridge & Ter. Ry. Co. v. Gilmore, 4 Circ. Dec., 366; 8 C. C. R., 665; State, etc., v. Norton, 7 Dec., 354; 5 N. P., 187; State v. Goodwill, 33 W. Va., 179 (25 Am. St. Rep., 863); Cox v. Railway Co., 2 Dec., 594; 1 N. P., 213; Palmer v. Tingle, 55 Ohio St., 423; Railway Co. v. Cox, 55 Ohio St., 497.
    (c) It is not only when the restraint is for the common public welfare, or for the equal protection of all the people, that it can be sustained, as if a contract is immoral, illegal or fraudulent, it may be. restrained. Palmer v. State, 39 Ohio St., 236.
    1. Purchasers and lienholders who take their conveyances, mortgages or transfers more than ninety days before an assignment may plead and prove their good faith within that time.
    2. Where the debtor does not know of his insolvency, and does not intend to prefer a creditor by his-act, it is valid. But if he does know and does intend to prefer, his act is invalid. One innocent grantee is protected, and one is not.

    3. Those who acquire property, or take lien from an insolvent within ninety days, are all shut out, except one favored class of mortgagees who take a lien in good faith for a debt created at the time (and this no difference in principle as when cash is paid for property).
    ' 4. It permits the assignor at his own will to invalidate a contract after it has been fully consummated.
    Article 2, section 16, of the bill of rights which declares that “all courts shall be open and every person for an injury done him in his lands, goods, person or property, shall have remedy by due course of law, and justice administered without denial or delay.”
    A law which hears before it condemns. Brown v. Hummel, 6 Pa. St., 86 (47 Am. Dec., 431) ; Inhabitants of Saco v. Wentworth, 37 Me., 165 (58 Am. Dec., 786); Grace, Ex parte, 12 Ia., 208 (79 Am. Dec., 529); Wulzen v. Board of Supervisors, 101 Cal., 15 (40 Am. St. Rep., 17); Taylor v. Porter, 4 Hill, 140 (40 Am. Dec., 274); Bardwell v. Collins, 20 Am. St. Rep., 556, note; Burdick v. People, 149 Ill., 600 (41 Am. St. Rep., 329); State v. Billings, 55 Minn., 467 (43 Am. St. Rep., 525) ; 6 Am. & Eng. Enc. Law (1 ed.), 47, note; Rouse v. Donovan, 104 Mich., 234 (53 Am. St. Rep., 457); 9 U. S., 715; 118 How., 280; 102 U. S., 594; 66 Wis., 188; 11 U. S., 707; Turnpike Co. v. Parks, 50 Ohio St., 579; Coal Co. v. Rosser, 53 Ohio St., 24; State v. Guilbert, 56 Ohio St., 619.

      Mr. N. S. Johnson and Messrs. Saltzgaber & Hoke, for defendant in error.
    Is the law contained in Section 6343, Revised Statutes of Ohio, constitutional? We contend that it is.
    Every objection that can be urged against this law can be urged against the federal bankruptcy act. Section 6343 requires the act which is objectionable to be done “in contemplation of insolvency,” or “with a design to prefer one or more creditors to the exclusion in whole or in part of others.” And evéry such sale, “made with intent to hinder, delay or defraud creditors” in the event'of a deed or assignment being filed within ninety days after the doing of such thing shall be conclusively deemed fraudulent. The word “conclusively” can be left out and the meaning not changed. If the act is done which prefers the creditors of an insolvent it is against the provisions of the statute. Take this case. It is ascertained that Spahr is insolvent. Bobilya knew that. Beal, cashier of the bank, knew that. Bobilya received the stock of goods and paid for it exactly his claim and the bank claim. In other words he paid nothing but received the goods for those two claims. Both Bobilya and Beal told him he had better sell out and avoid being arrested. “Geo. Bobilya then said for Mr. Beal to go out” and Bobilya then made him the offer of exactly the two claims. It is a remarkable coincidence that the purchase was for exactly the two claims if Bobilya knew nothing of the claim of the bank. Beal would not have gone out if he had not understood the claim of the bank would be cared for.. He says: “Pay these notes off which they know is forgery, then you can have time to straighten up everything else.” What else? Why, the other debts. Bobilya says: “He (Spahr) told me he wanted to sell this stock for the purpose of taking these notes up.” That is his note and the bank note. “My agreement with him was to give him money enough to take up these notes at the bank.” Mr. Beal told him to go and see Mr. Bobilya about buying. Mr. Bobilya knew the check was to go to the bank. “You knew that the check was to be used for that purpose?” Yes, sir. Bobilya asked Beal what his claim amounted to. Cross v. Carstens, 49 Ohio St., 565; Clapp v. Dittman, 21 Fed. Rep., 15.
    So a conveyance of entire property of an insolvent debtor to one creditor, whatever its form, will inure to benefit of all creditors. Perry v. Corby, 21 Fed. Rep., 737; Kerbs v. Ewing, 22 Fed. Rep., 693.
    What is there to prevent the legislature from making the same rule as in bankruptcy cases, that all transfers to prefer creditors within a certain period of insolvency, shall be fraudulent as against an assignee for all creditors? The general assembly may change, alter, modify or abrogate a remedy. 3 Am. & Eng. Enc. Law (1 ed.), 284; Black, Const. Law, Sec. 284.
    This act does not wipe out the obligation but affects only the remedy. Under the bankruptcy act it is held that the fraud or innocence of the person to whom the transfer is made is immaterial. 2 Foster Fed. Prac., Sec. 476, p. 1091; In re Drummond, 1 N. B. R., 596; In re Rome Planing Mill, 96 Fed. Rep., 812; Gen. Am. Dig., Vol. 4, cols. 1577 and 1605.
    As to insolvent law affecting obligation of contract see 10 Am. Dig., Sec. 484, col. 1909, et seq. Also same as to effect upon remedies. Also same as to due process of law at section 939, col. 2345. Also as to establishing rules of evidence see 10 Am. Dig., Sec. 519, col. 1945, et seq. Also same section 260, col. 1606.
    We think that the case of Brown v. Smart, 145 U. S., 454, is decisive of every legal question raised in this case. Robertson v. Desmond & Ryan et al., 62 Ohio St., 487. In a similar case to this is in Massachusetts, Brown v. Case, 61 N. E. Rep., 279.
   Burket, C. J.

Two preliminary questions are made. The petition contained all the facts which a petition in replevin. should contain, and also all that is necessary in an affidavit for replevin, and the affidavit to the petition was positive, and not on belief merely. The defendant below made a motion to set aside the writ of replevin for the reason that there was no separate affidavit for such writ. The court overruled the motion to which the defendant excepted.

There was no error in the ruling of the court. While under Section 5815, Revised Statutes, an affidavit is required in order to warrant the issuing of a writ of replevin, there is nothing requiring such affidavit to be separate and apart from the petition. While good practice requires the petition and affidavit in a replevin case to be separate, so as to allow questions as to either to be made without reference to the other, it is not error to combine both in one, unless it appears that so doing causes material prejudice to the defendant. No such prejudice appears in this case.

The deposition of Mr. Spahr was taken and filed and the defendant below made a motion to strike it from the files for want of a proper certificate by the officer before whom it was taken. It is urged that the certificate does not show that the deposition was reduced to Avriting in the presence of the notary public. The part of the certificate as to that is as follows: “That the deposition by Charles M. Spahr subscribed as above- set forth, was reduced to writing by.M. Della McMaster, and was subscribed by the said witness in my presence.” When fairly and liberally construed, and words properly transposed, this means that the deposition was not only subscribed in the presence of the notary, but was also reduced to writing in his presence by M. Della McMaster. There was therefore no error in overruling the motion to strike the deposition from the files.

A more serious question arises as to the proper construction of said Section 6343, Revised Statutes, as amended in 1898. That section is as follows: “Every sale, conveyance, transfer, mortgage or assignment, whether made in trust or otherwise, by a debtor or debtors, and every judgment suffered by him or them, and every act or device done or resorted to by him or them, in contemplation of insolvency, or Avith a design to prefer one or more creditors to the exclusion in whole or in part of others, and every sale, conveyance, transfer, mortgage or assignment made, or judgment suffered by a debtor or debtors, or procured by him or them to be made in any manner, with intent to hinder, delay or defraud#creditors, shall be declared void as to creditors of such debtor or debtors at the suit of any creditor or creditors, as hereinafter provided, and shall operate as an assignment and transfer of all the property and effects of such debtor or debtors, and shall inure to the equal benefit of all creditors of such debtor or debtors in proportion to the amount of their respective demands, including those which are unmatured. And every such sale, conveyance, transfer, mortgage or assignment made, and every such judgment suffered, and every such act or device done or resorted to, by any debtor or debtors in the event of a deed of assignment being filed within ninety (90) days after the giving or doing of such thing or act, shall be conclusively deemed and held to be fraudulent, and shall be held to be void as to the assignee of such debtor or debtors, whereupon proof shown, such debtor or debtors was or were actually insolvent at the time of the giving or doing of such act or thing, whether he or they had knowledge of such insolvency or not. Provided, that nothing in this section contained shall vitiate or affect any mortgage made in good faith to secure any debt or liability created simultaneously with such mortgage, if the same be filed for record in the county wherein the property is situated, or as otherwise provided by law, within three (3) days after its execution, and whereupon foreclosure or taking possession of such property the mortgagee fully accounts for the proceeds of such property.”

It is claimed by counsel for plaintiff in error that this section makes every sale of an insolvent debtor conclusively fraudulent and void when made within ninety days of the filing of an assignment made by him for the benefit of his creditors, and that therefore the section is unconstitutional as to purchasers from such insolvent in good faith and for fair value, because it would curtail the inalienable right of contract, and would put it in the power of a vendor to render his sale void by making an assignment within ninety days after such sale. And it must be conceded that under such a construction of the section, the same would be unconstitutional under the principles of Palmer & Crawford v. Tingle, 55 Ohio St., 423, and many other cases. But such is not the proper construction of the section. The section clearly shows that the general assembly was legislating only as to transfers by insolvent debtors, and did not have in view the rights of innocent purchasers, and made no provision as to them, but allowed the law as to them to stand as it had stood for many years. It has been held as often as the question has arisen, that a purchase made in good faith and for fair value from an insolvent debtor, must be upheld as to the purchaser, even though the intent of the vendor may have been to hinder, delay or defraud his creditors. The property of such debtor cannot be followed into the hands of an. innocent purchaser. Burgett v. Burgett, 1 Ohio, 469, see also Schultz v. Brown, 2 Circ., Dec., 353; 3 C. C. R., 609.

True the decision in Burgett v. Burgett arose under the statute of frauds, now Section 4196, Revised Statutes, and which then as now provided that every conveyance, etc., made with intent to defraud creditors should be deemed utterly void and of no effect. Under that statute declaring all such conveyances utterly void, it was held that an exception must be made in favor of innocent purchasers. And as the language of said ■ section 6343 is not stronger than that in the statute of frauds, the same exception must be made under said section.

There are in this section as there were in the old sections 6343 and 6344 two classes, one in which there is no fraud but in effect a preference, and the other where there is a fraudulent purpose., It is first provided that every sale, conveyance, transfer, mortgage or assignment by a debtor, and every judgment suffered by him, and every act or device done or resorted to by him in contemplation, of insolvency or with design to prefer one or more creditors to the exclusion of others, shall be declared void, at the suit of any creditor, etc. So far no fraud or intent to defraud is necessary. Then another class, less expensive, is provided for in which an intent to defraud is necessary. The section as to this class is as follows: “And every sale, conveyance, transfer, mortgage or assignment made or judgment suffered by a debtor or debtors or procured by him or them to be made in any manner with intent to hinder, delay or defraud creditors, shall be declared void as to creditors of such debtor or debtors at the suit of any creditor,” etc. As to this class it will be noted that the words, “every act or device done or resorted to by him or them,” are omitted, and that therefore mere acts or devices done or resorted to with in-’ tent to hinder, delay or defraud creditors, cannot be declared void at the suit of a creditor under this part of the section, but can be so declared under the class first provided for in the section, when they are done or resorted to in contemplation of insolvency, or with a design to create a preference. And in the event of the filing of an assignment within ninety days such sales, etc., that is both classes, as well those made in contemplation of iusolvency or to create a preference, as those in which • there was an intent to hinder, delay or defraud creditors, shall be conclusively deemed and held to be fraudulent and void.

In all such cases if the transferee took otherwise than in good faith and for fair value, the statute would apply and the transaction would be held fraudulent; but in case the transferee acted in good faith and for fair value, the transaction would be upheld as to him. Under this construction the' section does not interfere with the - right of contract, and is free from constitutional objections. And where one of two constructions renders a statute constitutional, and the other renders it unconstitutional, the former, if reasonable, should be adopted.

With this construction of the section in question we hold the section constitutional. To make this construction more clear and remove all doubts, the general assembly afterward amended the section so as to expressly protect innocent purchasers. 95 O. L., 608.

This amendment for the first time supplies by legislative enactment that which had ever since the case of Burgett v. Burgett been read into the statute by judicial construction. But the legal effect of - the statute was not changed by this amendment of the section, but remains the same as when the court by construction read into the statute an exception in favor of innocent purchasers.

The court of common pleas erred in its construction of the section and charged the jury as follows:

“This is the single issue then, gentlemen, that you are called upon to determine, was Chas. M. Spahr insolvent, at the time mentioned, and was he in contemplation of insolvency or did he make this sale and transfer for the purpose of preferring creditors, if so, tlien this -sale is absolutely void and the plaintiff is entitled to the possession of the property.” * * *
“The burden rests upon the plaintiff to establish these facts, was Chas. M. Spahr insolvent on the date of this sale and transfer, did he make the sale and transfer for the purpose of preferring one or more creditors to the exclusion of others, if so, the plaintiff is entitled to recover.”

To this charge the defendant excepted. As the transaction in this case was a sale it came within both classes provided for in the section, those made in contemplation of insolvency or with a design to prefer one or more creditors to the exclusion of others without any intent to defraud, as well as those made with intent to hinder, delay or defraud creditors.

The court charged correctly as far as it went, because there might be a recovery if a preference was attempted in contemplation of insolvency, without any fraudulent intent. If the sale was with intent to hinder, delay or defraud creditors, that was an additional ground for recovery, and the refusal of that charge was in favor of the defendant, and was not prejudicial to him. But the charge as given, and to which there was an exception, was too narrow, in this: it failed to charge that in case the purchase by Mr. Bobilya was in good faith and for fair value it was valid as to him, even, though made by Mr. Spahr in contemplation of insolvency or with a de-' sign to prefer one or more creditors to the' exclusion of others, or made on his part with intent to hinder, delay or defraud creditors.

If Mr. Bobilya was innocent, and ignorant of any wrong purpose or intent on the part of the vendor, his purchase must be upheld, and cannot be held void as to him. The innocent must be protected, even though such protection, to some extent, inures to the advantage of the guilty. Yeoman v. Lasley, 40 Ohio St., 190, 203.

For this error in the charge, the judgment will be reversed and cause remanded for a new trial, and further proceedings according to law.

Judgment reversed.

Speak, Davis, Shauck, Price and Crew, JJ., concur.


text:
    The National Bank of Commerce et al. v. Gettinger.

      Creditor receiving payment from debtor — While debtor insolvent —Cannot be compelled to surrender such payment — Sections 6343 and 6344, Revised Statutes — Law of insolvency and preferences.

    A creditor who receives payment from his debtor while such, debtor is insolvent, and makes such payment in contemplation of insolvency, or with a design to prefer such creditor' to the exclusion of‘others, or with a design to hinder, delayer defraud creditors, cannot he compelled to surrender such, payment for the equal benefit of all creditors under Sections; 6343 and 6344, Revised Statutes, even though an assignment made by such debtor be filed within ninety days after such payment.
    (Decided May 19, 1903.)
    Error to the Circuit Court of Lucas county.
    On February 6, 1901, said Harris Gettinger filed his petition against The National Bank of Commerce, Arthur Klauser, Grant Benson, Charles B. Darling and Jay Benson, and afterward filed his amended petition as follows, omitting caption, signatures and verification:
    “Plaintiff' states that the defendant, The National Bank of Commerce, is a banking corporation organized under the laws of the United States and doing and earrying on a general banking business at No. 324 Madison street, in the city of Toledo, Lucas county, Ohio.
    “Plaintiff further states that on January 14, 1901, he recovered a judgment against the defendant Grant Benson in the city and justice courts of the city of Toledo and Port Lawrence township, Lucas county, Ohio, in the sum of one hundred twenty-three and 50-100 dollars ($123.50) and costs. That thereafter, to-wit: on January 17, 1901, transcript of said judgment was filed with the clerk of court of common pleas , of Lucas county, Ohio, and execution was issued thereon to the sheriff of Lucas county, Ohio. That said execution has been by said sheriff returned wholly unsatisfied.
    “Plaintiff further states that on or about January 8, 1901, the defendant, Grant Benson, was indebted to his codefendants herein, and other creditors, in a sum aggregating more than twenty-seven thousand dollars ($27,000). That on said date the defendant Grant Benson had no property of any name or nature subject to the payment of said indebtedness other than a stock of merchandise located at No. 310 Summit street in the city of Toledo, Lucas county, Ohio, of the value of not more than fifteen thousand dollars ($15,000). That on or about January 8, 1901, said defendant Grant Benson obtained a loan of twelve thousand dollars ($12,000), and to secure payment of same executed a chattel mortgage covering said stock of merchandise above referred to. That said stock of merchandise has now been sold and did not sell for enough_to satisfy said mortgage indebtedness, and that said Grant Benson now has no property of any nature to satisfy any portion of his indebtedness.
    “Plaintiff further states that on or about January 8, 1901, the defendants, The National Bank of Commerce, Arthur Klauser, Charles B. Darling and Jay Benson, were creditors of the defendant Grant Benson, and that on or about January 8, 1901, the said Grant Benson, in contemplation of insolvency, and with the intent and, design to prefer said The National Bank of Commerce, Arthur Klauser, Charles B. Darling and Jay Benson, to the exclusion in whole or in part of his other creditors, transferred and paid from said fund realized by execution of said chattel mortgage to said The National Bank of Commerce, the sum of five thousand dollars ($5,000) ; to Arthur Klauser the sum of five thousand dollars ($5,000) ; to Charles B. Darling the sum of fifteen hundred dollars ($1,500).; and to Jay Benson the sum of five hundred dollars ($500). That said payments so made by the defendant Grant Benson to his codefendants, The National Bank of Commerce, Arthur Klauser, Charles B. Darling and Jay Benson, were made in contemplation of insolvency . and with the design to prefer said creditors to the exclusion in whole or in part of the other creditors of the said Grant Benson, and with the further design to hinder and delay his other creditors in the collection of their demands, and to defraud the other creditors of the said Grant Benson.
    “Wherefore, your petitioner prays the court that said payments so made by the said Grant Benson to said The National Bank of Commerce, Arthur Klauser, Charles B. Darling and Jay Benson, be declared void as to the creditors of the said Grant Benson and that said transfers and payments so made be declared to be an assignment of all of the property of the said Grant Benson for the benefit of his creditors, and that said payments and transfers so made be declared to inure to the equal benefit of all of the creditors of the said Grant Benson, in proportion to the amount of their respective demands. That a trustee may be appointed to recover possession of said property and moneys so transferred and paid, and that the estate of the said Grant Benson be administered for the equal benefit of all of his creditors.”
    The defendants severally filed general demurrers to this amended petition, which were sustained by the court of common pleas, and, the plaintiff not desiring to plead further, the petition was dismissed at costs of plaintiff.
    The circuit court reversed the judgment, and remanded the cause for further proceedings. Thereupon the cause was brought to this court on error.

      Mr. Harvey Scribner; Mr. Wilber A. Owen and Messrs. Kohn & Northup, for plaintiffs in error.
    First — Does a cash payment of money by an insolvent debtor to a bona fide creditor who has no knowledge of such insolvency come within the provisions of Sections 6343 and 6344, Revised Statutes?
    Second — Assuming that such a payment is within said section, does the amended petition of the plaintiff below disclose facts sufficient to entitle him to take advantage of the provisions of those sections?
    The first question is purely one of construction of the statute, and is entirely new so far as this court is concerned, it having never been involved in any case except the one at bar.
    Prior to the act of February 23, 1835, 33 O. L., 13, Sec. 1, there was no legislation in Ohio on the subject of preferences given to creditors by insolvent debtors, and the common law rule that a debtor might prefer certain creditors over others was followed. This preference could he given either by. a transfer direct to the creditor or to a trustee for him, or might be contained in a general deed of assignment, so long as the debtor in giving the preference did not violate the statute of frauds, 29 O. L., 218, which made void all assignments of goods in trust for the use of the assignor, and all conveyances of every kind made with intent to defraud creditors of their debts.
    Before the statute of 1835 failing debtors attempted to assign their property in trust to prefer certain creditors and in the same instrument impose terms upon other creditors, such- as compelling all those who wished to participate in the division of the residue to execute releases of their claims within a certain stipulated time, or forfeit their rights to any part of the assets. Such attempts were declared to be in violation of the above provisions in the statute of frauds, and to amount virtually to an assignment in trust for the use of the assignor, as he was the party benefited, if the creditors did not choose to comply with the conditions of the assignment and execute the releases within the period named therein.
    In Atkinson et al. v. Jordan et al., 5 Ohio, 171, and Repplier et al. v. Orrich et al., 7 Ohio (pt. 2), 246, the court set such transactions aside at the suit of creditors, and held that the creditors suing, as a reward for their superior diligence, were entitled to a preference over other creditors: It was to declare the law on this subject and remedy this unequal distribution of a debtor’s property, so fraudulently-assigned, that the act of February 23, 1835, 33 O. L., 13, Sec. 1, was passed.
    This statute was held to apply only to cases where there was a fraudulent intent on the part of the debtor in giving .tbe preference, and did not prevent him from giving preferences in good faith, either by a direct assignment to the creditor or by a preference in the general assignment to a trustee. Hull v. Jeffrey et al., 8 Ohio, 390. In 1838,this act was amended. 36 O. L., 57, Sec. 3.
    It will be seen, that the act of 1838 was broader than the act of 1835 in that it included all assignments to trustees made in view of insolvency which preferred one or more creditors to the exclusion of others, the former act only applying to cases where the assignment was made with intent to defraud certain creditors.
    The purpose and extent of these enactments is clearly laid down in Hull v. Jeffrey, 8 Ohio, 391; Atkinson v. Jordan, 5 Ohio, 293; Repplier v. Orrich, 7 Ohio (pt. 2), 246; Stevenson v. Agry, 7 Ohio (pt. 2), 248. Hence the statute of 1835; the terms of which, as they appear, relate to fraudulent conveyances made to trustees only. It.does not affect conveyances made to a creditor nor a conveyance made without fraud. The statute of 1838 goes farther, and secures the equal distribution of all assignments made to trustees in view of insolvency.

    The next enactment on this subject was March 14, 1853, 51 O. L., 463. This statute differed from that of 1838 only in making the trusts therein contemplated “subject to the control of the courts” instead of “subject to the control of chancery.”
    In 1859 the above provisions were re-enacted as section 16 of “an act regulating the mode of administering assignments in trust for the benefit of creditors,” 56 O. L., 235, which later became Section 6343, Revised Statutes.
    It will be seen that there has been no change in the law governing preferences since the act of 1838 until the present law was enacted in 1898, 93 O. L., 290. During all this period frdm 1838 down to 1898 a failing debtor' might prefer one creditor over another by an assignment or conveyance of property to pay the debt or to secure it,^.provided that the sole object of the transaction was to pay or secure such creditor; but whenever the transaction went beyond what was necessary to secure such creditor, and undertook to protect other creditors or the debtor in any way, or was made to a third person in trust for the creditor, it was held to be an assignment in trust and within the provisions of the act of 1838. Brown v. Webb, 20 Ohio, 389; Fassett v. Traber, 20 Ohio, 545; Doremus et al. v. O’Harra et al., 1 Ohio St., 45; Atkinson et al. v. Tomlinson et al., 1 Ohio St., 237; Bloom et al. v. Noggle et al., 4 Ohio St., 46; Harkrader et al. v. Leiby et al., 4 Ohio St., 602; Cross v. Carstens, 49 Ohio St., 548; Pendery v. Allen, 50 Ohio St., 121; Gashe v. Young, 51 Ohio St., 376; Lee v. Hennick, 52 Ohio St., 177; Bonham, Assignee, v. Mersman, 45 Bull., 12.

      Messrs. Chittenden & Chittenden, for defendant in error.
    It is evident that it was the intention of our state legislature to greatly extend the scope and effect of the section relating to preferences made by insolvent debtors by amending Section 6343, Revised Statutes, as passed April 26, 1898 (93 O. L., 290). It followed closely upon the passage of the national bankruptcy act and expresses in positive language the apparent intention of the legislature to prevent any • insolvent debtor from preferring a creditor by means of any sale, conveyance, transfer, mortgage or assignment, whether made in trust or otherwise, or by suffering judgment to be taken against him, or by any act or device done or resorted to by him for that purpose. It places every insolvent debtor upon the same plane as an insolvent corporation has been placed under the laws of this state for several years. It requires such insolvent debtor to hold his property of every kind and description as a trust fund for the benefit of all existing creditors.
    The payment of money is certainly such a conveyance or transfer of property as comes within the provisions of this section. Money is a species of property, as has been held by our Supreme Court in the case of Hall v. State, 3 Ohio St., 575. It has always been considered as personal property by the legislature in all of the acts passed by it and is taxed as such.
    The old English authorities all hold that money can be followed and if the original bills or coins cannot be recovered, their equivalent may be recovered in such an action. If merchandise of any nature can be followed by virtue of this section of the statute, and its value recovered from a preferred creditor if. the merchandise itself cannot be located (which proposition we do not think can be questioned) then certainly moneys transferred and delivered to a creditor may be recovered, or the value thereof.
    Counsel for plaintiff in error contends that this section is in violation of Sec. 1, Art. 1, of the bill of rights, in that it interferes with the” acquiring, possessing and protecting of property. That no one is safe in transacting any business with an insolvent debtor. This contention however, is not borne out by the language of the statute, as it expressly excepts transactions in which is involved a present, valid consideration.
    Counsel also contends that it is in violation of Sec. 2, Art. 1, of the bill of rights in that it does not effect equal protection to all creditors. It was for the furtherance of this section of the bill of rights that the amendment was passed. Prior to the enactment of this amended section, all creditors were not equally-protected. It gave the insolvent debtor the privilege either with or without the knowledge of the creditor, to prefer such creditor to the exclusion in whole or in part of others, and it was for the purpose of avoiding that inequality and to place all creditors upon the same plane with equal protection that the amendment was enacted. -
    The act does not seek to avoid any transaction which is based upon a present, valid consideration. It only avoids such acts of an insolvent debtor as will create a preference.
    The act makes void only such transactions as result in a preference and which are done when the debtor is actually insolvent. The filing of a deed of assignment within ninety (90) days after any such act does not in itself make the act void, but by the terms of the act only makes such filing of deed of assignment conclusive evidence of the intent of the insolvent debtor to prefer such creditor.
    The burden of proof is still upon the complaining creditor to show that the debtor was insolvent at the time of the commission of the act of which complaint is made. The act is universal in its application and only carries out the intent of the legislature to make an insolvent debtor a trustee for the benefit of all of his creditors and carries out the provisions of Sec. 2, Art. 1, of the bill of rights, by placing all creditors of an insolvent debtor upon an equal basis.
   Burket, C. J.

This case and the case of George L. Bobilya v. Oscar W. Priddy, Assignee, were considered and decided together, and in the report of that case, at page 373 of this volume, will be found the holding of this court as to the constitutionality and proper construction of Section 6343, Revised Statutes, as amended April 26, 1898.

That section is as follows:

“Section 6343. Every sale, conveyance, transfer, mortgage or assignment, whether made in trust or otherwise, by. a debtor or debtors, and’every, judgment suffered by him or them, and every act or device done or resorted to by him or them, in contemplation of insolvency, or with a design to prefer one or more creditors to. the exclusion in whole or in part of others, and every sale, conveyance, transfer, mortgage or assignment made, or judgment suffered by a debtor or debtors, or procured by him or them to be made, in any manner, with intent to hinder, delay or defraud creditors, shall be declared void as to creditors of such debtor or debtors, at the suit of any creditor or creditors, as hereinafter provided, and shall operate as an assignment and transfer of all the property and effects of such debtor or debtors, and shall inure to the equal benefit of all creditors of such debtor or debtors in proportion to the amount of their respective demands, including those which are unmatured. And every such sale, conveyance, transfer, mortgage or assignment made, and every such judgment suffered, and every such act or device done or resorted to, by any debtor or debtors, in the event of a deed of assignment being filed within ninety (90) days after the giving or doing of such thing or act, shall be conclusively deemed and held to be fraudulent, and held to be void as to the assignee of such debtor or debtors, whereupon proof shown, such debtor or debtors was or were actually insolvent at the time of the giving or doing of such act or thing, whether he or they had knowledge of such insolvency or not.
“Provided, that nothing in this section contained, shall vitiate or affect any mortgage made in good faith to secure any debt or liability created simultaneously with such mortgage, if the same he filed for record in the county wherein the property is situated, or as otherwise provided by law, within three (3) days after its execution, and where, upon foreclosure or taking possession of such property, the mortgagee fully accounts for the proceeds of such property.”

In the Bobilya case this court held that transferees who acted in good faith, and for fair value, must he protected, and that with that construction, the section is constitutional.

In the case at bar there is no averment in the amended petition that the defendants below acted in bad faith, or had notice of the insolvency of Grant Benson, or received more money from him than he owed them, or that they knew that he made the said payments in contemplation of insolvency, or to create a preference, or to hinder, delay or defraud his creditors. The- amended petition avers that Grant Benson made said payments to create a preference, to defraud his creditors, and in contemplation of insolvency; but there is no averment that the persons receiving said payments knew of his said intent and purposes, and, therefore, said petition, by its silence, concedes that they acted in good faith, and without notice, in receiving said payments. It therefore follows, under the holding of this court in the Bobilya case, that they must be protected, and can not be compelled to repay the money which they so received on honest claims.

There is another reason why these creditors can not be compelled to repay, the money so received by them. Said section 6343, makes no provision as to payments made in contemplation of insolvency, or to create a preference, or with intent to hinder, delay or defraud creditors. It is urged that payments are included and covered by the words “every act or device done or resorted to by him.” This is not tenable. The word “payment” is as familiar, and' as well understood, as the words, “sale, conveyance, transfer, mortgage, or assignment,” and if the general assembly had intended to legislate against payments, it would have used that word. The legislature having omitted the word “payment” this court can not read it into the statute by construction; and especially is this true when we never had any legislation in this state against receiving payment of honest claims, and when such a construction would render the constitutionality of the act doubtful.

The circuit court erred in reversing the judgment, and its judgment of reversal will, therefore, be reversed, and that of the common pleas affirmed.

Judgment reversed.

Spear, Davis, Shauck, Price and Crew, JJ., concur.


author: By the Court.

text:
    Uphaus and Miller, Sheriff, v. Roof.

      Replevin — Section 5820, Revised Statutes — Personal property held by sheriff — Replevined and returned under bond — Duty of sheriff to retain same till replevin suit determined — Attempted sale by sheriff may be restrained by injunction.

    When personal! property held by a sheriff upon an execution in his hands, is taken from him by a writ of replevin, but is afterwards returned to him upon his executing an undertaking as provided in Section 5820, Revised Statutes, and conditioned as therein required, it is the duty of such sheriff to retain said property in. his possession until the determination of the replevin suit. And where after such redelivery to him, and before the determination of the replevin suit, he advertises and oilers said property for sale under the execution in his hands, such sale by him may be restrained by injunction.
    (Decided May 19, 1903.)
    Error to the Circuit Court of Putnam county.
    On August 28, 1900, the plaintiff in error, Nicholas Miller, as sheriff of Putnam county, Ohio, by virtue of an execution in his hands issued at the suit of John H. Uphaus, on a judgment in his favor against one Joseph Roof, levied upon and seized certain chattel property as the property of said Joseph Roof, ’the judgment debtor. Thereafter, on September 12, 1900, the defendant in error, Elizabeth Roof, claiming to be the owner and entitled to the immediate possession of the property so levied upon, brought her action in replevin in the court of common pleas of Putnam county, against said Nicholas Miller as sheriff, to obtain possession of the property so levied upon and taken by him under said execution as the property of Joseph Roof. Such proceedings were had in said action that said property ivas duly replevined ' from said Nicholas Miller by the coroner of Putnam county, on a writ duly issued to him as in such case made and provided by statute. Thereafter such further proceedings were had in the case that said Nicholas Miller, defendant in said action, gave bond to the plaintiff as provided by statute, and thereupon the possession of all of said property was redelivered to him by said coroner. Upon the redelivery and return to him of said property said Nicholas Miller as sheriff aforesaid caused said property to be advertised for sale, under the execution held by him in favor of J. H. Uphaus, and upon which execution said property had been originally seized by him. . To prevent such sale the defendant in error, Elizabeth Roof, brought this action in the court of common pleas of Putnam county against said Nicholas Miller, asking that he be enjoined from selling or disposing of said property or any part thereof. A temporary injunction was allowed by said court of common pleas, and upon the final hearing of the cause in that court, said temporary injunction was made perpetual. Error was thereupon prosecuted to the circuit court of Putnam county, where the judgment of the common pleas was affirmed. To obtain a reversal of these judgments this proceeding in error is prosecuted.

      Mr. George Fritz and Messrs. Straman & Malone, for plaintiffs in error.

      Messrs. Bailey & Bailey and Messrs. Handy & Unverferth, for defendant in error.
   By the Court.

The facts of this case are not in dispute, and they present for determination the single question of law, whether the defendant in error, Elizabeth Roof, was entitled to bring and maintain. her action of injunction against the plaintiff in error, Nicholas Miller, to restrain him from selling and disposing of the property redelivered and returned to him, as defendant in said replevin suit, upon the execution by him of the redelivery bond, provided for by Section 5820, Revised Statutes. A proper construction of the provisions of this and related sections governing actions in replevin requires, we think that this question be answered in the affirmative. Prior to the amendment of the replevin laws, April 3, 1891 (88 O. L., 273), there was no provision of the statute whereby the defendant in a replevin suit after judgment in his favór, could elect to have the property taken from him in such suit redelivered and returned to him upon demand made for that purpose. Under the statute in force prior to said amendment, upon the filing by the plaintiff in a replevin suit of the requisite affidavit and bond, the property described in the affidavit was required to be taken by the officer from the possession of the defendant and delivered to the plaintiff, and upon such delivery to him, plaintiff thereby became invested with the absolute title to the property so delivered and had full power to sell and dispose of the same at pleasure. In such case the bond given by the plaintiff, as between the parties to the suit, took the place of the property replevined, to the extent at least of the interest therein of the defendant in replevin, and there was no way provided whereby the defendant in replevin could thereafter have or enforce á redelivery and return to him of the specific property so taken, even though' upon final hearing judgment in the case should be rendered in his favor. Prior to said amendment the bond required to be given by the plaintiff in replevin was conditioned only that he should “duly prosecute the action and pay all costs and damages that should be awarded against him,” and upon the execution and delivery of such undertaking so conditioned the interest of the defendant in the property replevined vested absolutely in the plaintiff, and notwithstanding verdict and judgment .might thereafter, be rendered in said suit in favor of defendant, finding him to be the owner and entitled to the immediate possession of the property taken, said defendant could only look to his judgment and the bond given to secure it.for his indemnity, and he was without authority or right to have or enforce the ■ return or restoration to him of the specific property taken from him by the writ of replevin. But under amended Section 5819, Revised Statutes, as it now stands, and was in force at the time the defendant in error commenced her action in replevin in the court of common pleas of Putnam county, the bond given by plaintiff in a replevin suit is required to be so conditioned that it no longer operates or has the effect to transfer to plaintiff the absolute title and interest of the defendant in the property taken; under the statute as amended the plaintiff is required to execute to the defendant a written undertaking in at least double the value of the property taken conditioned “that the plaintiff shall duly prosecute the action and in case the judgment shall be against him that he then return the property taken or pay the value so assessed at the election of the defendant,” etc. Under this statute on the giving of such undertaking the interest of the defendant in the property taken only vests in the plaintiff conditionally, and should the defendant elect to have the property returned to him upon judgment in his favor he is entitled to it, and where the property can be found its return will be enforced by tbe court. By this amendment of April 3, 1891, Section 5820, Revised ■ Statutes, was also materially changed, by incorporating in said section the following provision: “And provided further, that the defendant may at any time within five days after the property is taken, execute an undertaking to the plaintiff with one or more sufficient sureties in at least double the value of the property taken conditioned that in case the judgment be against him, that he shall then return the property taken or pay the value so assessed, at the election of the plaintiff. * * * Whereupon, said property shall be returned to the defendant by the officer, to be retained by the defendant until the determination of the action.” It was under favor of the provisions of this amended section that the plaintiff in error, Nicholas Miller, executed his bond and procured the return to him of the property taken from him by the coroner at the suit of Elizabeth Roof. By force of the provisions of this section, upon the execution of the undertaking permitted to be given by a defendant in replevin, the plaintiff in replevin, upon judgment in his favor, is invested with alternative rights, viz.: the right to have restoration of the specific property, or the right to a recovery of its value as assessed, according as he may elect, and not only is this right of election given to plaintiff, on a judgment in his favor, but the.bond which is to be given by the defendant when the property is returned to him, in express terms obligates the defendant to observe and comply with such election when so made, and not only this, but such bond in express terms imposes upon defendant the obligation and duty to retain the property in his possession until the determination of the action, to the end and for the purpose that the same may be redelivered and restored to-plaintiff if he shall then so elect.

The plaintiff in error, Nicholas Miller, both by the provisions of the statute and the terms of his bond, was required and obligated to retain the property in controversy in his hands, until the final determination of the suit in replevin, and he was and is, without right to sell or dispose of the same in advance of such final determination, inasmuch as such sale would be in violation of the rights of the defendant in error respecting the subject of the action and would tend to render a judgment in her favor ineffectual, if she should elect to have the property returned to her. Section 5572, Revised Statutes. It follows, therefore, that the plaintiff in error was rightfully enjoined.

Judgment affirmed.

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