text:
    Sidener v. Hawes.
    1. The creditors of an estate are entitled to have the same settled in due course of administration, and in case of a sale of real estate to pay-debts, that it be made by order of a competent court. It is no bar to an action by an administrator to sell land to pay debts, that the heir has, without an order of court, sold the same at private sale and applied the proceeds in satisfaction of preferred claims.
    2. An order of sale of real estate to pay debts, made by the court of common pleas on a petition which states facts sufficient to warrant such an order, will not be reversed for want of a journal entry showing that the facts stated in the petition were found to be true. In such a case, the reviewing court will presume that the judgment was founded on proper proof.
    3. If an heir, to whom lands descend subject to the debts of his ancestor, sells the same with covenants of general warranty at private sale, without administration on his ancestor’s estate, to a Iona fide purchaser who applies the purchase-money to discharge liens thereon created by the ancestor, and to the payment of preferred claims, such purchaser is in equity entitled, in the distribution of the purchase-money, to be subrogated to the rights and equities of the holders of such claims.
    4. In a proceeding to sell land to pay judgment creditors, pending in the court of common pleas, it is competent for the heir, who still retains an interest in the subject-matter, by cross-petition to attack such judgments on the ground of fraud.
    5. A sale of the real estate by the heir, with covenants of general warranty, before the commencement of proceedings to sell the same to pay debts, where the purchase-money is applied to the payment of preferred claims thereon, does not thereby divest him of such an interest in the subject-matter, as to defeat his right to file such cross-petition, and to protect his vendees.
    6. If the allegations of the cross-petition implicate the administrator, as well as the judgment creditors, in fraudulently obtaining such judgments, they are, as against the heir, united in interest as to the subject-matter of the controversy.
    7. On error by the heir to reverse a judgment dismissing such cross-petition, service upon the administrator within the time fixed for the commencement of such proceedings, saves the action as to his co-defendants so united in interest, though not served within that time.
    Error to the District Court of Greene County.
    The following is a statement of facts, so far as is necessary, to present the points decided.
    James E. Hawes, as administrator of Daniel Sidener, filed a petition in the court of common pleas of Greene county, to sell lands to pay debts of his intestate. Mary Sidener, who was sole heir, and Clements & Wetherholts and William Law, her vendees, were the defendants. He alleges that Daniel Sidener died in 1864, leaving neither widow nor children, nor any personal assets, but seized in fee of the land sought to be sold, lying in Greene county, to pay about $800, debts of the intestate.
    It is averredj that said Mary Sidener, sister and sole heir of deceased, sold said land in 1865, to defendants, Clements & Wetherholts, and that she, with one Jane Sidener, her mother, conveyed the same, by deed of general warranty, and that Clements and Wetherholts sold and conveyed the same to defendant, William Law, who is in possession under the title so derived.
    The prayer is “that the several rights, liens, &c., of the above defendants be adjusted, &c.; and that your petitioner may be ordered to sell said real estate, and for such other relief as the facts proven may at the hearing of this cause warrant and justify.”
    The defendants answered separately. Mary Sidener admits that she is sole heir, and states that Daniel Sidener, at the time of his death, resided in Fayette county, Kentucky, but died in Greene county, while there on a visit. That letters of administration on his estate were granted by the county court of Fayette county to one Huffman, who discharged his duties and made full settlement of said estate, in said court. That in 1865, he with this defendant, came to Ohio, contracted to sell said land to Clements & Wetherholts for $1,800, which was paid as follows: $1,185, to satisfy a purchase-money mortgage, made by Daniel Sidener, and the balance was used to defray certain debts, which by law are preferred. She also sets up the fact, that Daniel Sidener was indebted to her some $1,200, the purchase-money of land she sold to him in Kentucky. Her prayer is. that the petition be dismissed. A demurrer to this answer was sustained.
    Clements.& Wetherholts filed an answer and cross-petition, claiming to be Iona fide purchasers of said land, and averring that they applied the purchase-money to the discharge of said mortgage, the payment of taxes, funeral expenses and other preferred debts. They insist on the validity of their title, and admit the sale to Law, who is in possession.
    Their prayer is, that plaintiff be denied the relief he asks; that the title derived from Mary Sidener be declared valid, and that they have such other relief as in equity they are entitled to.
    William Law sets up his title and possession in good faith, and that he has made permanent and valuable improvements worth $650, and prays for proper relief.
    At the November term, 1869, the cause came on for hearing on the petition and said answers and-cross-petitions, and the court found that none of them constituted a defense to the action, and proceeded to order a sale of the real estate. At the same time, all questions concerning distribution'of the proceeds of sale, and all issues that may be raised on the cross-petitions, were reserved for further consideration, with leave to plaintiff to reply thereto.
    Replies were filed, putting in issue the claims of Clements & Wetherholts, William Law, and of Mary Sidener.
    Such proceedings were had under the order of sale, that the land was sold to said Law for $2,132.52.
    The sale was confirmed January 4, 1871, and the administrator was ordered to make him a deed, but no order was made respecting the disposition of the purchase-money.
    February 4, 1871, Mary Sidener, by leave, filed an amended answer and cross-petition. She states that Daniel Sidener died November 13, 1864, while on a visit to a family of his manumitted slaves, whom he had settled in Greene county. This family consisted of the mother and two minor children, John cmd Mary Sidener, Jr.
    She restates the settlement of the estate of Daniel Sidener, in Fayette county, Kentucky, with full knowledge of said children, and alleges that neither of these minor children had any claims against the same, and yet they are the only parties who are making claims against the estate, and that it was at their instance that plaintiff was appointed administrator in Greene county. She charges that these children have fraudulently conspired with others unknown, to cheat and defraud said estate, and have presented false and fraudulent claims against the same for services to said Daniel Sidener, and that plaintiff, well knowing their fraudulent character, by carelessness and negligence has suffered them to be referred to arbitrators, and to be determined on false and ex jpa/rte evidence, all for the purpose of defrauding said estate, by means of which neglect and carelessness the claim of John Sidener for $750 has become a judgment of the court, which he has assigned to John Little, without consideration.
    A second defense is, in substance, the same as the original answer and cross-petition as to the full settlement of the estate, under the Kentucky administration.
    The prayer is, that said John Sidener and his assignee John Little, and Mary Sidener, Jr., be made defendants; that the judgment against said estate, in favor of John and Mary, be set aside, and for all other proper relief.
    On February 20, 1871, said John Sidener, John Little and Mary Sidener, Jr., filed a joint demurrer to said answer and cross-petition, on the ground that it did not state facts sufficient to entitle said Mary Sidener to the relief prayed for, nor to constitute a cause of action against them, and on the further ground that there was a misjoinder of causes of action.
    The plaintiff neither demurred nor replied, and as to him, this answer and cross-petition stands as upon default.
    On the day this demurrer was filed, it was submitted to court and sustained, and thereupon judgment was rendered against Mary Sidener and in favor of plaintiff, for all the costs made by her under said answer and cross-petition; also a judgment against said Mary Sidener and Clements & Wetherholts, and in favor of plaintiff, for all the costs made by them subsequent to the service of summons and prior to filing said amended answer and cross-petition.
    No further proceedings seem to have been had in the court of common pleas as to the distribution of the purchase-money.
    February 12,1873, Mary Sidener filed her petition in error, in the district court, to reverse said judgment rendered February 20, 1871, sustaining said demurrer and for costs. The defendants to this petition were Hawes, administrator, Clements & Wetherholts, William Law, John Sidener, John Little and Mary Sidener, Jr., being all the parties to the record except plaintiff in error. John Sidener, John Little and Mary Sidener were not brought before the district court by service or otherwise.
    At the April term, 1875, the district court, without these parties before it, reversed the judgment of the common pleas as to parties served, for error in sustaining tlie demurrer, and remanded the cause for further proceedings. To reverse this judgment of reversal, Hawes, administrator, prosecuted error to this court, and at the December term, 1876, this court reversed the district court, on the ground that that court erred in proceeding in said cause before all the necessary parties were before the court, the reason being that John Sidener, John Little and Mary Sidener, Jr., were necessary parties in error to reverse a judgment rendered on their demurrer. The cause was remanded to the district court for further proceedings, and at its April term, 1877, the proper parties being before the court, separate demurrers were filed to said petition in error by C. L. Maxwell, administrator of John Sidener, J. McStewart, administrator of Mary Sidener, Jr., and by John Little, claiming that, as to each of them, the proceedings in error were not commenced within three years from the rendition of the final judgment sought to be reversed.
    At the April term, 1878, of the district court, said demurrers were sustained, as appears by the following entry: “ And the court being advised in the premises, is of opinion, that as to final judgment of said court of common pleas, rendered -. . . upon said demurrer, filed February 20, 1871, this court is without jurisdiction, all the parties to such judg-' rnent not having been brought before the court as required by law. It is therefore ordered that this cause as to such judgment, and said answer and cross-petition filed . . . February 1, 1871, and the proceedings thereunder be, and the same are hereby dismissed.”
    The court then proceeds to affirm the judgment, ordering and confirming the sale, and as to all matters reserved by the common pleas for further consideration, and not adjudicated, the cause is remanded. To reverse this judgment is the object of the present proceedings.

      R. F. Howard, for plaintiff in error:
    I. The proceeding in error was commenced within the statutory period of limitation of three years, against all the parties to the judgment of the court of common pleas, rendered June 28, 1871, as well those who were served with process after as those who were served with process before the expiration of the period of limitation imposed by the statute, and that the district court had full and complete jurisdiction of the case. Sections 20 (Rev. Stat. § J987), 523 of the Code; Robinson v. Orr, 16 Ohio St. 281; Buckingham v. Commercial Bank, 21 Ohio St. 131.
    II. If there was no such unity of interest as that referred to in section 20 of the code, and the parties who were brought before the court by the amended petition in error were not co-defendants of those who had been served with process before the expiration of the statutory period of limitation, or that, being co-defendants, they were not united in interest with them, then they wore not necessary parties to the petition in error, and the district court had jurisdiction of the case as to the parties Hawes, Law and Wetherholts, who had been served with process and were before the court.
    III. The district court erred in affirming the judgment of the court of common'pleas, overruling the motion of Mary Sidener and others to set aside the sale, and also in affirming the order of the court confirming the sale. The record shows that the court at the same time that it made the order for the sale of the real estate by Hawes, administrator of Daniel Sidener, deceased, also gave leave to Hawes to file replies to any or all of the cross-petitions and answers of the defendants, and ordered that all issues that might be raised by said cross-petitions and answers of the defendants, or by the replies which might be filed thereto by Hawes, should be reserved for future consideration. Hawes subsequently filed replies to the answer of Clements and Wetherholts, the answer of law and the answer of Mary Sidener. None of the issues thus raised were disposed of by the court at the time the order for the confirmation of the sale was made. Nor have they ever been heard and determined by the court. They still remain undisposed of. The court proceeded to confirm the sale and render a judgment in favor of Hawes, administrator, &c., for costs, without having passed upon any of the questions reserved. Further, Hawes failed to answer or demur to the amended answer and cross-petition of Mary Sidener. As to bim the allegations of the amended answer and cross-petition are to be taken as true. It is a fact therefore admitted by the pleadings, as shown by the record, that the claims preferred against the estate by John Sidener and Mary Sidener, Jr., were not valid claims. They were unjust and fraudulent, and their allowance as valid claims against the estate was fraudulently obtained, yet they were the claims and only claims for the satisfaction of which the land was sought to be sold by the administrator. Besides, it also stands admitted by the pleadings, as shown by the record, that this land had been once sold by the heir of the decedent through Huffman, the former administrator, as her attorney in fact, and the proceeds of the sale applied to the payment of the privileged debts, and had, in fact, been exhausted in the payment of privileged debts. Under these circumstances the land was not liable to be subjected to sale for the payment of any debt of the decedent.

      John Little, for defendant in error:
    The construction of section 4987, Rev. Stat., given by plaintiff’s counsel, is incorrect. It would render the qualifying clauses of the section nugatory. I claim that the phrase “ united in interest ” relates to a thing or matter in which parties have or may have a mutual or common interest independent of the action or its result. The mutuality or unity of interest exists before and independent of the action. And the meaning is the same in proceedings in error, as in the original action.
    As respects the cross-petition of Mary Sidener, none of the defendants whose rights were sought to be affected thereby were made parties to the error case within the statute. The administrator in nowise represented their interests. His duty forbade that. The other defendants had no interest united or otherwise in the questions sought to be raised by that pleading-
    Unless there was error to the prejudice of the plaintiff in error there will be no reversal. Rev. Stat. § 5715.

      A foreign administrator could not have sold lands in Ohio under the circumstances set up in the answer. Daniel Sidener did not die in Ohio, nor did Hoffman live or own assets or property in Ohio. 1 S. & C. 595, § 152; Id. 615, § 255.
    There could be no proceedings to sell lands without an administrator. And a sale by an administrator without an order is void. Lessee v. Park, 4 Ohio, 447; 4 Ohio, 68 ; Beal v. Price, 13 Ohio, 368.
    The claim that Mary Sidener paid the debts and in effect administered the estate is without sanction of law.
    There were no pleadings filed before the order of sale which constituted any defense.
    As to the claim that the court made no finding upon which to predicate an order, it is enough to say that the presumption is that the court did make the finding. Lessee v. Ruffin, 6 Ohio, 255 ; Valentine v. Smith, 8 Ohio, 36.
    The matters pleaded in the petition requisite to secure an order of sale were not denied and were therefore taken as true.
    The sale was regularly made and no error is revealed in what follows the order of sale up to the confirmation.
    The confirmation—no liens having been set up—was the end of the case in that court.
   Johnson, J.

The district court at its April term, 1878, had before it all necessary parties. The judgment sought to be reversed was rendered by the common pleas, February 20, 1871, sustaining the demurrer of same date filed by John Sidener, John Little and Mary Sidener. The petition in error was filed February 12, 1873, and all the parties were served within three years from February 20, 1871, except John Sidener, Mary Sidener, Jr., and John Little, who were not brought before the court until August, 1877, over six years after final judgment was rendered on said demurrer.

The district court held, that inasmuch as these three defendants were not served within three years from the rendition of said judgment, it was without jurisdiction as to any of the defendants in error, even as to those served within the three years limitation. ¥e think this was erroneous. The judgment sought to be reversed was one sustaining the demurrer of February 20, 1871, and taxing costs against Mary Sidener and other defendants, and rendering a judgment in favor of plaintiff below for such costs. This judgment for costs was in favor of Ilawes, administrator, and against Mary Sidener and Clements & Wetherholts. All these parties were before the district court within the three years. This judgment for costs was brought under review by the petition in error. It was a several judgment for costs in favor of Hawes, administrator, and against plaintiff in error. Of this question the court had acquired jurisdiction, though John Sidener and others were never served. It was a judgment to reverse which they were not necessary parties. Hence the district court had jurisdiction of the parties served within the three years, so far as to reverse the judgment for costs. We do not, however, rest the case on this ground alone. The judgment sought to be reversed, was, in legal effect, that the answer and cross-petition of plaintiff in error did not state facts sufficient to entitle her to the relief prayed for, nor to constitute a cause of action against her co-defendants, John and Mary Sidener, Jr., and John Little, assignee of John Sidener. They are judgment creditors of the estate and the only persons having claims against the same that had not been fully settled by administration in the courts of Fayette county, Kentucky. These judgments are alleged to be fraudulent, and the present administrator is implicated in the fraud. He is seeking to sell land to pay these fraudulent claims, and files his petition to sell this land for that purpose.

Mary Sidener as sole heir, and as owner of the land in fee, conveyed the same with covenants of general warranty, to Clements & Wetherholts, in pursuance of a contract of sale made with the Kentucky administrator, and the purchase-money was all applied to the satisfaction of claims having priority over general creditors of the estate.’ As heir, and a3 warrantor of the title to Clements & Wetherholts, Mary Sidener was a proper party to these proceedings to sell land. She had the right to make any defense which would defeat the right to make the order of sale, even though fraud was not alleged. The petition to sell was filed under the code of civil procedure. It tacitly admits rights and equities in her vendees who are made defendants. Its prayer is, that the several rights, liens, &c., of said defendants be adjusted, and for such other relief as the facts on a final hearing may warrant. These facts, as disclosed by the amended answer and cross-petition and the cross-petitions of her vendees, entitled them to subrogation as preferred creditors over the judgment in favor of John and Mary Sidener, Jr.

Further than this, if the allegations of fraud contained in said answer and cross-petition were true, and the administrator does not deny them, she was entitled to the judgment of the court setting aside said fraudulent judgments and for, other proper relief.

In Conway v. Duncan, 28 Ohio St. 102, it was held, that in a proceeding in the court of common pleas to sell land to pay judgments entered upon the award of arbitrators, it is competent for- the heir, upon a cross-petition, to attack said judgments for fraud. That was a case quite like the one before us, and establishes the right of an heir to impeach judgments which are the basis for an order to sell the real estate ‘ belonging to him.

To sustain the demurrer of John Sidener and others of February '20, 1811, was to deny this right. As this amended answer and cross-petition was not filed until a,fter the sale was made and confirmed, it was not available to defeat a sale, but as the court had expressly reserved all questions of distribution of the purchase-money, it was equally applicable to the distribution of the proceeds of' sale.

William Law was the purchaser at the administrator’s sale, as well as the holder of the legal title derived from the heir. He was claiming compensation for permanent and valuable improvements, and was entitled to be subrogated to all the rights and equities of the heir, and of his vendee, Clements & Wetherholts. If the claims of John and Mary Sidener, Jr., were fraudulent and void, then his title derived from the heir was good, and entitled him to the whole of the purchase-money as the heir had the right, to convey, subject only to the valid debts of her ancestor. If they were not fraudulent and void, but were valid, still liis right of subrogation would give him priority. A judgment to that effect would protect the heir, to that extent, ou her covenants of warranty. The judgments therefore, sustaining said demurrer of February 20,1871, was one affecting all the parties to the controversy. It involved the distribution of an estate, held, in trust by the ad-, ministrator, and not merely the rights of these alleged creditors to payment of their claims. "Whether these claims could be successfully impeached or not, was not the most vital question in the case, after the sale had been confirmed. The vital question was, whether the heir, who sold with covenants of warranty, and purchasers in good faith, who had applied the purchase-money to the satisfaction of debts having priority, and who' bad made permanent and valuable improvements on the land, had, as against the claim of the administrators and of these alleged creditors, any rights and equities that entitled them to relief in the distribution of the purchase-money arising from the sale made by the court.

The default of the administrator in replying to said answer and cross-petition of Mary Sidener, and the demurrer of alleged creditors, admitted her allegations to be true. If so, she was entitled to be protected, and to have her vendees protected in the distribution of the purchase-money, and the court of common pleas erred in sustaining said demurrer, thereby holding she was not entitled to some proper relief.

The district court, when the case first came before it on error, so held, but because these alleged judgment creditors had not been served with process, this court reversed that judgment because the necessary parties were not before the district court. The case was remanded to the district court, for further proceedings. When these parties were brought in some six years had elapsed. They each demurred, because as to each, the proceeding in error had not been commenced within three years from the rendition of the judgment on the demurrer of February 20, 1871. The district court not only sustained this demurrer as to these creditors, but held, that although their co-defendants, including the administrator, had been served within the throe years, yet as to them also, the court had no jurisdiction, and dismissed the petition in error.

This conclusion is incorrect if the proceeding in error was commenced within three years from February 20, 1871. The petition in error was filed May 12, 1873, and service was made on Hawes, administrator, Wctherholts and Law, March 5th, 1873. The summons was returned not found as to other defendants.

Section 20 of the code (R. S. 4987,) furnishes by analogy the rule to determine when a proceeding in error is commenced. Robinson v. Orr, 16 Ohio St. 285 ; Buckingham v. Commercial Bank, 21 Ohio St. 131. By that section, it was provided that An action shall be deemed commenced within the meaning of this title, as to each defendant, at the date of the summons which is served on him, or on a co-defendant, who is a joint contractor, or otherwise united vn interest with him.”

If the defendants not served within the three years were united in interest with their co-defendants who were served within that time, then the action is to be deemed commenced as to all, otherwise it is only commenced as to those served. If we were of opinion that there was no unity of interest, still the action was commenced as to those served, and the court erred in holding it had no jurisdiction over the parties served. It obtained jurisdiction over the case and the parties served, but whether it could proceed to judgment, would depend on the question whether the other parties were necessary. If they were, the court would decline to proceed until they were before the court; but if it did proceed, the judgment would be voidable, and not void, for want of jurisdiction. Douglas v. Massie, 16 Ohio, 271.

We are of opinion, however, that there was such a unity of interest between defendants served and those not served, as to prevent the statute of limitations running as to all.

The controversy related to the distribution of a fund arising from a sale of the land. The administrator held this fund in trust for the parties entitled thereto. He is charged with col- , luding with his co-defendants John and Mary Sidener, Jr., to defraud the estate. Mary Sidener and her vendees are claimants of this fund, setting up their equities thereto. A judgment in her favor is against the claims of the administrator and these judgment creditors, and they are all united in interest in the judgment rendered in their favor sustaining the demurrer to the cross-petition filed February 20, 1871.

It :s to their interest to maintain the judgment of the common pleas, holding that the answer and cross-petition did not entitle Mary Sidener to any relief. They are so united that it would be impossible to render any judgment against Hawes, administrator, which would not affect the rights of his co-defendants, the judgment creditors. For this reason, we think the proceeding in error was commenced within the time, service having been made on the administrator within the three years, the time then allowed for commencing such action. Buckingham v. Commercial Bank, 21 Ohio St. 131.

II. It is also assigned as error, that the court of common pleas erred in ordering and in confirming the sale.

At the time this was done, the amended answer and cross-petition of Mary Sidener had not been filed. The petition on its face was sufficient, if true, to authorize an order of sale. In the original answer and cross-petition the validity of the debts alleged in the petition were not disputed.

The only defense then before the court was, that the estate had been fully administered in Kentucky, and that this land had been sold and conveyed by the heir with the consent of the Kentucky administrator, and the proceeds applied to preferred debts.

This sale by the heir was no bar to a judicial sale to pay valid debts of the ancestor. The creditors had the right to a public sale, under an order of court.

This the court ordered, reserving all rights and equities arising on distribution.

As the pleadings then stood, there was no error in ordering the sale.

III. Again, it is urged that there is no special finding of the truth of the allegations of the petition, as a predicate of such an order.

The action came under the provisions of the code, and was in a court of general jurisdiction. It will therefore be presumed that such proof was made as will support the judgment, the allegations of the petition being sufficient to warrant the judgment.

The judgment of the district court dismissing the petition in error is reversed, the judgment of the common pleas sustaining the demurrer of February 20, 1871, overruled, said demurrer is overruled, and cause remanded to the common pleas for further proceedings on said answers and cross-petitions.


source: Caselaw Access Project

author: White, J.

license: Public Domain

text:
    The State v. Kiesewetter.
    1. Under section 700 of the Revised Statutes, prior to its amendment March 18, 1881, patients, after their admission into the asylums of the state for the insane, were clothed at the expense of the state. Since the amendment, the expense of furnishing such clothing is, under section 031, chargeable on the estates of the patients or on those who would be legally bound to furnish it, if they wore not in the asylum.
    2. If the duty of supplying patients with clothing, as required by section 631, should not he performed, the remedy, in such case of failure, is for the institution to furnish it under section 632; and for the amount so furnished, it is to be reimbursed as therein provided.
    Mandamus.
    This proceeding is instituted by the attorney-general on the relation of E. J. Blount, the steward of the Columbus asylum for the insane, one of the benevolent institutions of the state, located in Franklin county, against Emil Kiesewetter, the auditor of said county, to compel him to' pay certain accounts presented to him by the said steward, under section 632 of the Revised Statutes. These accounts consist of the expenses incurred by said steward in furnishing the necessary clothing to persons admitted into the institution from said county, and paid for out of the appropriation for the current expenses of said institution. The accounts run from January 27, 1880, to Decernber 29, 1881, and were duly authenticated and presented to the defendant for payment, which payment he refused to mate.

      George K. Nash, attorney-general, for the state.

      W. J. Clark, prosecuting attorney, for defendant.
   White, J.

The decision of this case depends on the following provisions in title Y. of the Revised Statutes in relation to the benevolent institutions of the state.

“ Section 631. All persons admitted into any institution, except as otherwise provided in chapters relating to particular institutions, shall be maintained at the expense of the state, subject only to the requirement that they shall be neatly and comfortably clothed, and their traveling and incidental expenses paid by themselves, or those having them in charge.”

“ Section 632. If there be a failure in any case to pay incidental expenses, or furnish the necessary clothing, the steward or other financial officer of the institution is hereby authorized to pay such expenses and furnish the requisite clothing, and pay for the same out of the appropriation for the current expenses for the institution, keeping and reporting a separate account of the same. The account so drawn up, signed by such officer, countersigned by the superintendent, and sealed with the seal of the institution, shall be forwarded to the auditor of the county from which the person came, who shall pay the amount of said bill out of the county funds to the financial officer of the institution, to be audited to the current expense fund, and said auditor shall then proceed to collect the same, in the name of the state of Ohio, as other debts are collected.”

“ Section 700. Each county is entitled to send patients to the asylum of the district in which said county is situated, in proportion to the population of such county:” . . . All persons who have been, or may hereafter be admitted into either of the asylums for the insane belonging to the state, shall be maintained therein at the expense of the state.” . . .

The section last named ivas amended March 18, 1881, so that the last clause above quoted reads as follows: “ All persons who have been, or may hereafter be admitted into either of the asylums for the insane, belonging to the state, shall be maintained therein at the expense of the state, except as provided in section six hundred and thirty one of this title of the Eevised Statutes.”

In title five the benevolent institutions of the state are classified; and a chapter is devoted to prescribing rules for the government of each class. Chapter one, in which are sections 631 and 632, applies to all the institutions without reference to the class to which they belong, except as is otherwise provided in chapters relating to particular institutions. Chapter nine relates to asylums for the insane, and section 700, which is found in that chapter, prior to the amendment of March 18, 1881, made special provision for clothing the patients admitted into such asylums, by declaring that they should be maintained therein at the expense of the state.” The maintenance thus provided included clothing as well as other necessaries. Section 706 prescribes with what clothing a patient shall be supplied at the time of his admission, and requires the probate judge, if such clothing is not otherwise furnished, to supply it, and pay for it in the mode prescribed out of the county treasury. Where, therefore, prior to the amendment of March 18, 1881, of section 700, a patient had been admitted into an asylum for the insane, properly clothed, subsequent clothing was furnished at the expense of the state; and sections 631 and 632 did not apply to such clothing. But the effect of the amendment of section 700 was to bring asylums for the insane within the operation of these sections.

Several objections are urged on behalf of the defendant against the allowance of the writ for the payment of the expenses incurred for clothing since the amendment.

It is claimed that the clothing which the persons admitted into the institutions or those having them in charge is required to furnish, under section 631, refers only to such clothing as they are required to have at the time of their admission.

We cannot assent to this claim. It seems plain to us that the obligation imposed by this section for the supply of clothing to persons admitted into the institution continues as long as they remain in it. And in the case of patients in an asylum for the insane, such expenses are chargeable on their estates or on those who would be legally bound to furnish such clothing if they were not in the asylum. If the duty thus imposed by section 631 should not be performed, the remedy in such case of failure is found in section 632, which is the mode adopted in the present case for reimbursing the institution.

It is also claimed that this construction of the statute brings it in conflict with section 1, article 7 of the constitution, which declares that institutions for the benefit of the insane, blind, deaf and dumb, shall always be fostered and supported by the state; and be subject to such regulations as may be prescribed by the general assembly.”

The answer to this objection is that the provision of the constitution is not self executing, and that the mode in which such institutions are to be fostered and supported is left to the discretion of the general assembly. That discretion has been exercised in the passage of the statute now under consideration.

There are other objections which we deem unnecessary to notice, further than to say that they are not well taken.

As to the clothing furnished by the state prior to the amendment of section 700, the writ is refused; and as to that subsequently furnished a peremptory writ is awarded.


author: Okey, O. J.

text:
    Railway Co. v. Henderson.
    1. Where the superintendent of a railroad company has made an order as to the management of a particular train, which order will be reasonable or unreasonable according to the circumstances under which it is to be enforced, the question whether in any particular case such order is to be deemed reasonable or unreasonable is a question of mixed law and fact, to be determined by the jury under proper instructions.
    2. Where an action is brought against a railroad company by one of its employees to recover damages for personal injuries sustained by the enforcement of an order made by the superintendent of the company, as to the management of a particular train, which order was unreasonable, and the enforcement of the same was dangerous to such employee, the fact that the negligence of a fellow-servant of the injured person, while executing such order, contributed in producing the injury, affords no defense to the action.
    Error to the District Court of Harrison County.
    Henderson brought suit in the Court of Common Pleas of Harrison county against the Pittsburgh, Cincinnati and St. Louis Railway Company. He was a laborer in the 'employ of the company upon a construction train which was on the main track of the railroad, in a deep rock cut, upon a heavy curve in the road. While he and the other laborers were at work loading the train with gravel, a freight train which was on its regular time was run into the construction train without warning of any sort, and by the wreck which resulted from the collision, Henderson was driven . against the rocks, two or three of his ribs were broken, his shoulder was dislocated, and he was permanently injured. The action was brought to recover damages for the injuries, and in the court of common pleas there was a verdict and judgment in his favor for $3,000, which judgment was affirmed in the district court, and this petition in error was filed to reverse the origiual judgment as well as the judgment of affirmance. The record contains all the evidence.
    Construction trains have no place on the schedule or timetable, and by the printed rules of the company it is required that they shall be kept oat of the way of all regular trains, freight as well as passenger, clearing their time at least ten minutes, and it is the duty of the conductor of the construction train to observe the time of all trains and-obey the rules. This rule, however, may be suspended as to freight trains by special order of the superintendent of the railroad company, whenever he sees fit to do so, in which case it is the duty of the conductor of the construction train, where such train is being loaded on the main track, to keep the train in its place and send a man with a proper signal to notify approaching freight trains.
    In this instance the superintendent'had made such special order, and the conductor of the construction train, keeping his train on. the track, had sent a flagman to notify the approaching freight train; but the flagman performed his duty so negligently and improperly that the engineer of the freight train understood his acts as an order to go ahead and not stop. The engineer says the flagman stood several yards from the railroad track, holding the flag down at his side with one hand and making motion with the other as for a forward movement. In this way the injury was occasioned, without any negligence on -the part of the plaintiff. It would have taken six minutes to move the construction train to a side track from the place where it stood on the main track.
    Barrett was superintendent of the company. He testified : ££ There are general printed rules for all trains, made in order to promote the safety of persons and property. I establish these printed rules. I am the superior officer for that purpose on this division. I give special orders and private instructions, as I think necessary, to annul or disregard the general rules. . . . They áre not printed. . . . Construction trains cannot occupy the main track without special instructions. It is the duty of the conductors of construction trains to protect their trains. I gave special order, which, annulled the general rule as to construction trains, allowing them to stand on the track until the arrival of the freight trains, by sending back a flagman to notify approaching trains. I give special orders to construction trains where to work, and direct them -by special orders from time to time, by telegram or otherwise.”
    Lowen was boss of the laborers employed on the construction train. He hired and discharged the men and regulated the time and manner of working. He had authority to require that' the train should be moved, as he might direct, with reference to the work, but it was no part of his duty to observe the time of approaching trains, that matter being confided exclusively to the conductor. He was in the caboose until the freight train was within a few feet of the construction train, and barely escaped serious injury, but several persons beside Henderson were injured.
    In the amended petition the negligence of the superintendent, “ boss,” and' the conductor of the construction train, is stated, and the answer is a denial.

      J. Dunbar, for plaintiff in error :
    The duty implied as incident to the employment, and the question whether the special order was reasonable, were questions of law. 5 Ohio St. 567; 43 Ill. 421. The exception to the charge was sufficient. 10 Ohio St. 226; 29 Ohio St. 452; 32 Ohio St. 415.

      J. M. Estep, for defendant in error:
    Negligence is for the jury. 8 Ohio St. 580; 13 Ohio St. 66; 23 Ohio St. 10; 24 Ohio St. 639, 668 ; 28 Ohio St. 23; 31 Ohio St. 480; 32 Ohio St. 66; 35 N. Y. 10 ; 58 N. Y. 455 ; 77 N. Y. 72 ; Shearman and R. on Neg. § 11. Rules must be reasonable. Shearman & R. on Neg. § 93; 36 Ohio St. 226. Negligence complained of is negligence of company. Shearman & R. on Neg. § 89; 33 Ohio St. 468; 73 N. Y. 40; 81 N. Y. 206 ; 42 Md. 117, 136; 6 Bing. 716. Employee takes no risk of negligence of company. Ib.; 3 Ohio St. 201; 31 Ohio St. 287; 17 Ohio St. 197; 36 Ohio St. 221; Shearman & R. on Neg. §§ 5, 10, 89; 73 N. Y. 40 ; 53 N. Y. 553. Exceptions to charge in gross and hence insufficient. 25 Ohio St. 584; 30 Ohio St. 105; 32 Ohio St. 77; 21 Wall. 158.
   Okey, O. J.

Where a servant sustains injury by the negligence of his master, the master is liable in an action by the servant for damages. A breach of duty by the master is not one of the risks which one assumes on entering upon the employment of another. This breach of duty may consist in employing other servants who are incompetent, in providing unsafe machinery and structures, in failing to notify the servant of peculiar dangers known to himself but not to the servant, or in needlessly placing the servant in a place of danger.

As corporations act only through agents, it sometimes becomes important to determine what persons stand in such relation to it as that their negligence shall be deemed the negligence of the corporation, or, as sometimes expressed, who is to be regarded as merely a servant of the corporation, and who is in legal effect master. Upon this subject the cases are by no means in harmony (Pierce on Rail. ed. of 1881, 367; 2 Thompson on Neg. ch. 20; 11 Reporter, 42, 207, 591; 21 Am. L. Reg. 76), but it is unnecessary to enter upon any extended examination of them. No doubt can be entertained that one standing in the relation to the company sustained by Barrett, being the superintendent of the company, and clothed with power, at his own discretion, to make and suspend rules to regulate the running of all the trains on the road, is to be regarded, in a case of this sort, as in legal effect the master. And where one so in legal effect master, makes special order with respect to the management of a particular train, which is, under the circumstances, unreasonable, and by the execution of such order, a servant of the corporation, himself without fault, is injured, it will be no answer to the action of the injured party against the corporation to say, that the immediate cause. of the injury was the negligence of a fellow-servant of such injured party in the execution of the unreasonable order. Chicago, &c. R. Co. v. McLallen, 84 Ill. 109 ; Chicago, &c. R. Co. v. Moranda, 93 Ill. 302; Hough v. Railway Co., 100 U. S. 213; Fuller v. Jewett, 80 N. Y. 46; Smith v. Oxford Iron Co., 42 N. J. L. 467; Ohio & M. R. Co. v. Collarn, 73 Ind. 261; Patterson v. Pittsburgh, &c. R. Co., 76 Pa. St. 389; Cumberland, &c. R. Co. v. State, 44 Md. 283 ; Ford v. Fitchburg, &c. R. Co., 110 Mass. 240; Berea Stone Co. v. Kraft, 31 Ohio St. 287; Lake Shore, &c. R. Co. v. Lavalley, 36 Ohio St. 221.

Whether a rule of a railroad company is or is not a reasonable rule, is in many cases a question of law; but in this case it cannot be affirmed as matter of law that the special order made by superintendent Barrett was reasonable. On the contrary, whether such order was reasonable or unreasonable was a question of mixed law and fact proper for the determination of the jury, in view of the circumstances under which the order was to be executed, and upon proper instructions as to the law. The jury found that the order was unreasonable, under the circumstances, and we are not prepared to say that the finding was wrong.

Objection is made that the court permitted the petition to be amended after the evidence was closed, and also permitted the jury, after the verdict was announced, to retire for the purpose of correcting it. Rut these matters rested in the discretion of the court, which seems to have been exercised in furtherance of justice. And as to the request to charge and the charge given to the jury, the exception was general and not specific, and, looking to the whole record, we cannot say the action of the court was so prejudicial to the company, in any respect, as to afford ground of reversal.

Judgment affirmed.


author: Longworth, J.

text:
    Railroad Co. v. McMillan.
    1. In an action against a railroad company, to recover damages for killing live stock, the plaintiff must prove affirmatively that want of ordinary care on the part of the company or its employes caused the injury.

      %■ Such inference does not arise from the mere fact that the animal was killed.
    Error to the District Court of Harrison County.
    John McMillan plaintiff below, brought an action against the Pittsburgh, Cincinnati & St. Louis Railway Company, defendant below, to recover damages for the negligent killing of a mare. The evidence showed that the mare escaped from her pasture on the night of July 6, 1872, and wandered upon the railway track. During the night a rain fell, and in the morning the hoof-marks showed that the mare had galloped on the track a distance of about forty rods, to a point where she was found dead, having been struck by the engine of a passing train. There was some slight evidence tending to show that the night was dark and foggy. The railroad company introduced no evidence to explain or account for the killing. The jury returned a verdict in plaintiff’s favor, and judgment was entered thereon, which judgment was affirmed by the district court. It is claimed here, among other things, that the verdict was not sustained by sufficient evidence.

      J. Dunbar, for plaintiff in error.

      J. M. Estep, for defendant in error.
   Longworth, J.

This court held in Ruffner v. C. H. & D. R. R. Co., 34 Ohio St. 96, that no inference of negligence on the part of a railroad company arises from the mere fact that injury results from a fire caused by sparks from a passing locomotive; and in Railroad v. Lawrence, 13 Ohio St. 66, it was held that want of ordinary care must be proved affirmatively to authorize the recovery of damages for live stock killed by a train of cars. The rule is well settled that in such case the mere fact that the animal has been killed, will not warrant a presumption of negligence on the part of the employes of the company. Even in those states wherein statutes have been enacted, providing that proof of killing shall be of itself sufficient to cast upon the company the burden of proving that proper and ordinary care was used,.the courts have said that, but for such statutes, the rule would have been otherwise. 78 Ky. 621; 36 Ark. 152; Pierce on Railroads, 428.

In the ease before uc, we are asked to say that the evidence showing that the mare ran a distance of forty rods in front of the engine, was sufficient to authorize the jury to find that the engineer must have seen her, and could have stopped his engine within that distance; there being also evidence in the case tending to show, that within such distance the heaviest freight train could be stopped. We should agree to this proposition, were there anything to show that the engineer did see the animal, or might have seen her, had he exercised proper care in running his engine, in time to have avoided the injury; but upon this point the evidence is absolutely silent. Perhaps such inference might be authorized, had the accident occurred in broad daylight; but how dark or foggy this night was, the jury could not know.

Indeed, it may be true that the mare had galloped along the track some time before she was killed. In the total absence of evidence upon a material fact, the jury were not warranted in guessing that negligence caused the injury.

Judgment reversed.


author: Johnson, J.

text:
    Sims v. Street Railroad Co.
    1. By the Revised Statutes, section 3248, the powers, business and property of a corporation having a capital stock, must be exercised, conducted and controlled by its board of directors, who are duly elected and qualified ; and a court of equity will not, on the application of a stockholder, interfere with its management and control of the corporate business, while acting within the scope of its authority, unless they are guilty of a breach of trust to the injury of such stockholder.
    2. This principle is applicable to the action of the board of directors, in receiving subscriptions for that portion of the authorized capital not taken before the corporation was organized, where it will promote the objects of tlife corporation. A subscription for such stock made by one member of the board, with the consent of the others, and payment of the par value thereof, when the transaction is free from fraud, and is beneficial to the corporation, will not be set aside at the instance of a stockholder, when no action has been taken to withhold such slock from subscription or sale.
    3. The exercise, in good faith, by the council of a city or village, of the discretion vested in it by section 2505 Revised Statutes, as corrected, (77 Ohio L. 42), to grant permission to any corporation, company or individual, owning or having the right to construct a street railroad, to extend its track, where the council may deem such extension beneficial to the public, will not be interfered with by the court.
    4. A street railroad corporation, which owns or has the right to construct a street railroad within a city or village, may, with the permission of the council of such city or village duly granted, extend its track beyond the termini named in the certificate of incorporation, subject to the provisions of section 2505 of the Revised Statutes as corrected (77 Ohio L. 42).
    5. The corporate power to make such an extension, is conferred by statutes under which the company is incorporated and is acting. The ordinance granting permission to extend the track, is not an act conferring corporate powers. It is merely a permit to the corporation to exercise the corporate powers conferred by general law, therefore such an ordinance is not an act conferring corporate powers, which is prohibited by article 13, section 1, of the Constitution of Ohio.
    Appeal. Reserved in the District Court of Cuyahoga County.
    The Brooklyn Street Railroad Company was incorporated August 25, 1869, under the act of April 10, 1861 (58 O. L. 66), and the amendatory and supplementary acts. The authorized capital stock was $30,000. It was organized October 5, 1869, with a board of five directors. Its purpose was, as found by the court, to construct a street railroad from a point in the village of Brooklyn, a suburb of the city of Cleveland, through a portion of Brooklyn township, into said city, along Pearl street to its intersection with Lorain street, where it would meet and connect with the West Side Street Railroad, for the carriage of passengers from points along its line to Superior street and the public square in said city, which was the ultimate destination of most of the passengers coming into the city. This was to be done by carrying them over its own line to its northern termination, where it met the West Side road; “thence by way of the West Side Street Railroad or otherwise to Superior street and the public square, which are the ultimate destination of most of the passengers on said road.”
    The road was completed to its connection with the West Side road prior to December 1, 1870, and until November 1, 1880, it was operated under a lease, by the West Side Street Railroad Company, as a part of its continuous line to the village of Brooklyn. At the expiration of this lease, the Brooklyn Street Railroad Company resumed possession, and have since operated the same.
    At the time the road was completed in 1870, about $21,000 of the capital stock had been subscribed and paid in. Repeated efforts had from time to time been made by the directors, to place the residue of this stock, prior to 1877, but without success except in small amounts, so that in January, 1881, there remained $8,250 of the stock untaken. At this time the matters in controversy arose. The board of directors, then, as theretofore, consisted of five stockholders, one of whom, Tom L. Johnson, was president. They decided that it was for the interest of the company to dispose of this residue of the capital stock, and to extend its line of road from its existing northern terminus, along Pearl street, over the viaduct to Superior street and the public square. They were proceeding to take the necessary steps to that end, when the plaintiffs, as stockholders, commenced this action to enjoin them, and also to enjoin the city of Cleveland, also a defendant, from passing an ordinance granting permission for such an extension. The prayer of the petition is, to enjoin the board from issuing certificates of stock for this $8,250, to said Johnson, on the ground that the action of the board, in allowing him to subscribe and pay for this stock, was in fraud of the rights of the stockholders; also to enjoin the board from taking any steps, or instituting any proceedings, to obtain the right to use the track of the West Side Street Railroad Company, from Peai’l street to a connection with Superior street and the public square, and also to enjoin the city of Cleveland from passing an ordinance granting permission for such an extension. • The grounds alleged for this relief arc, that it would injuriously affect the interest of the stockholders, was a fraudulent plot or scheme to promote the interest of said Johnson, and was without authority of law. Issue was joined upon these allegations, and upon appeal to the district court a special finding of fact was made, and the case was reserved for decision to this court.
    From this finding and from the pleadings, it appears that all efforts to place this unsubscribed stock had proved unsuccessful, that the company was largely in debt, and was, by the action of the West Side Street Railroad, cut off from a connection therewith at Lorain street over its track to the center of the city. That at a board meeting held January 15, 1881, at.which all the members, except one, was present, said Johnson proposed to take this $8,250 of unsubscribed stock at par, to be paid for by him, partly in a debt owing to him by the company, partly in property, and partly in his note. This offer was accepted by the other three directors present, he subscribed and paid for the same, as proposed, and shortly thereafter paid his note in cash. The findings of the court negatives all allegations of fraud in this transaction, and finds that it was in good faith; that the consideration received was of the full value of the par amount of' said stock, and that the property and money received was necessary for the uses of the company. It further finds, that the right of the company, if it can be lawfully acquired, to run its cars to Superior street and the public square, on the track of the west side road from Lorain street to the viaduct, and beyond, will be highly advantageous to the Brooklyn street company, and to the public, and that there is no practicable route for such an extension, except on and along said West Side track.
    From the pleadings it appears, that the company had taken steps to authorizing such an extension, had acquired the necessary consent of property owners, and had petitioned the council for permission to make the same, by using the the track of the West Side company for that purpose. It further appears that two ordinances were pending before the city council, in each of which it was proposed to grant such permission, on condition only that the right to use the track of the West Side Street Railroad Company should first bo acquired by consent of said corporation or by lawful appropriation.

      E. Sowers and R. P. Banney, for plaintiff:
    Corporations have only such powers as the act creating them confers. Straus v. Insurance Co., 5 Ohio St. 59; 36 Ohio St. 326.
    1. We insist that all street railroad corporations organized after April 10, 1861, and before the late revision, were organized under the act of April 10, 1861, and the acts amendatory and supplementary thereto, and that the act of May -1, 1852, relating to railroad corporations, has since then had no application to street railroads except as to those sections thereof which by express reference are made part of the law relating to street railroads. Inasmuch as the law referred to has prescribed what shall be done in order that cars may be run continuously over tracks of street railroads situated as these tracks are, no other method than that prescribed can be pursued. If the law contemplated the acquiring the right in such case by a proceeding to appropriate a right of way, or to acquire it by contract, a grant of power sufficient to attain this end would have been given. That it prescribes one method in sucli a case, and makes no provision for any other, is a clear indication that the method provided is the only one that exists. We conclude, then, that before' the revision the Brooklyn Street Railroad Company had no legal right to operate a street railroad beyond the places fixed as its termini in its certificate of incorporation. The Revised Statutes make no change. The sections of the Revised Statutes applicable to street railroads are sections 2501 to 2505 inclusive, and sections 3437 to 3443 inclusive. The subdivisions relating to consolidation, sections 3379 and 3392, made so by reference thereto, and chapter 1, sections 3232 to 3269 inclusive. These sections embrace the whole body of the law relating to street railroads, as it existed before the late revision ; they now embrace, with the amendment of section 2505 (77 Ohio L. 43), the whole of the law of the state respecting street railroads, now in force. Has the Brooklyn Street Railroad Company the corporate power to acquire the right of way over the track of the West Side Street Railroad Company by appropriation, or by contract ? Can it acquire this right in either of these ways ? We say, no. The right of eminent domain is a sovereign power, and is acquired only by express grant. Has this power been granted ? We think it has been granted in a very limited degree, and for clearly defined purposes. That the grant of the power of eminent domain to a corporation is to be strictly construed apj>ears from the following authorities: Moore v. Little Miami R. R. Co., 17 Ohio R. 350, 351; Railway Co. v. Daniels, 16 Ohio St. 396.
    2. The directors have no right to engage in a new enterprise or authority to bind the dissenting stockholders. To do so would impair the obligation of a contract and vested right of property. Const. art. 11, § 28; Ireland v. Turnpike Co., 19 Ohio St. 369 ; Keen v. Johnson, 9 N. J. Eq. 401; Zabriskie v. Railway Co., 18 N. J. Eq. 178; 11 Ga. 438; 31 Pa. St. 317; 10 Ohio St. 57.

      3. We claim that the council of the city of Cleveland cannot enlarge the corporate powers of this street railway company, nor impose new and additional burdens in the nature of corporate rights, privileges and duties upon it.
    4. The directors had no right to sell to one of their own number the untaken stock. It is the right and privilege of the stockholders. Field on Corp. §§ 109, 155; Gray v. Bank, 3 Mass. 364; State v. Bank, 10 Ohio, 92; Atkins v. Albree, 12 Allen, 359; State v. Page, 48 Vt. 266; Railway Co. v. Allerton, 18 Wall. 233; Eidman v. Bowman, 58 Ill. 444; 18 Ohio St. 183; 36 Ind. 60; 4 How. 503; Railway Co. v. Blaikie, 1 McQueen, 461; Coal Co. v. Coal Co., 16 Md. 456; 30 Barb. 553.
    That a shareholder may bring an action to restrain a corporation from acts which are in violation of its original purpose and object, is well settled. Dodge v. Wooley, 18 How. 331, 336, 341-343; 22 N. Y. 258-9, 275, 291-297; Bradley v. Ballard, 55 Ill. 413; 6 Eng. L. & Eq. 106, 107; 13 Eng. L. & Eq. 506 ; 9 N. J. Eq. 401; Stevens v. Rutland & B. R. R. Co., 29 Vt. 545.
    We would call attention to the fact that one of the declared purposes of the corporators in building the Brooklyn Street Railroad was to connect at its northern- terminus with the West Side Street Railroad or some other street railroad on Lo rain street. We submit that this is a clear indication that tha original corporators never designed to operate a street railroad beyond the northern terminus of the Brooklyn Street Railroad We also insist that the increase of population along the line of its road, and the building of the viaduct, can have no effect on the corporate powers of the company. We suggest that the finding of the court that it would be highly advantageous to the company and the public served by it to extend its operations, is not relevant to any issue in the case, and is entitled to no weight in determining the corporate powers of the company upon a question arising upon the contract between the company and its stockholders.

      Adams & Russell and C. L. Holtze, for defendant:

      The directors had a right to sell the untaken stock to Mr. Johnson. Rev. Stat. § 3248; 1 Disney, 84; 3 Fairfield (Me.), 354; 3 Vt. 159 ; 42 Vt. 128 ; Field on Corp. §§ 237, 241, 242. Payments for stock-subscriptions may be made in labor, materials furnished, chocks, promissory notes, bonds and mortgages, provided such payments are the equivalents in value of cash for the stock at par. Ridgefield & New York R. R. Co. v. Beach, 43 Con. 86 ; Am. Railway Rep. 18, with collection of authorities in note, pages 44,45 ; 1 Disney, 84; and the above case of Beach v. Smith, 30 N. Y. 116; 6 Jones Law, 82; 41 Penn. 54; 30 Barb. 246; 11 Wis. 306-334; 16 Ind. 46; 35 Ala. 33 ; 27 Penn. 413 ; 28 Penn. 31S ; 21 Vt. 30 ; 45 Cal. 306 ; 33 Ind. 490 ; 29 Conn. 84; 2 Met. (Ky.) 219; 31 Ill. 490 ; 21 Wend. 211.
    It is denied by certain of its stockholders that the Brooklyn ‘Street Railroad Company has the corporate capacity to become vested in any manner with the right to extend the running of its ears, beyond the corner of Lorain and Pearl Streets; because it is alleged, that was its terminus as fixed in its certificate of incorporation, at a time when the law of the state applicable to and controlling such matters (statute of 1861, 58 Ohio L. 66,) provided for just such a fixing of terminus at a fixed and designated mathematical point, and did not provide for any extension beyond such designated point. And this may be admitted at. true.
    hTow let us suppose the conclusion follows and is true, that the Bi ooklyn Street Railroad Company cannot now lawfully acquire the right to extend the running of its cars ; and what is the situation'(

    As the Riooklyn Company cannot extend the running of its cars, neither any person, partnership, company nor corporation other than it can accomplish the extension, for the grant of power on which we rely to sustain our right to lawfully acquire the right to extend (§ 2505, R. S. as amended, 77 Ohio L. 43), expressly gives to corporations owning street railroads the same rights and powers as to extensions as natural persons or co-partnerships in like circumstances can exercise.
    Hence '.upon -our supposition we are brought to the conclusion that the "West Side Street Railroad Company, which is owned by the principal plaintiffs in this suit, owns and holds as against the Brooklyn Company and the world an exclusive permanent monopoly of the street-car carrying trade in Pearl street, from Lorain street to the viaduct, upon the viaduct, and on Superior street to the public square, so far as all passengers are concerned, whose route to or fro leads into the territory traversed by the present track of the Brooklyn road, because Pearl street, between Lorain and the viaduct, is the only practicable street-car approach from Lorain street corner to the viaduct.
    The question whether the defendant corporation can lawfully acquire the right to run its carsbeyond its originally designated terminus, must be decided by the interpretation and application of the statutes. Rev. Stats. §§ 2505, 3437, 3438, 3439, 3440, 3443.
    Our contention is that these statutes, and inore especially the first part of section 3438, Revised Statutes, clearly give to all street railroad corporations of Ohio, the right lawfully to extend their tracks and operation, upon the terms and conditions imposed, when the municipal council concerned shall, by ordinance, confer such right.
    We contend that it is not, and ought not to be, in the legal power of a minority of its stockholders, interested tenfold in its rival, to prevent it from exercising its franchise to extend its operations within the precise scope and line of the purpose for which it was ineor]3orated.
    As supporting this contention, we cite the court to Sprague v. Illinois River R. R. Co., 19 Ill. 174; Penn. & Ohio Canal Co. v. Webb, 9 Ohio, 136; Stewart v. The Little Miami R. R. Co., 14 Ohio, 353.
    That the franchise or property of one railroad company may be used by another, in all cases where the property of an individual might be, see 35 Mich. 265; 15 Am. Railway Rep. 317; and authorities there cited; 19 Am. Law Reg. 765 ; 72 N. Y. 330 ; 5 C. E. Gr. (N. J.) 66 ; 62 N. Y. 183, 184; 63 N. Y. 326.
   Johnson, J.

The plaintiffs, as stockholders in the Brooklyn Street Eailroad Company, seek equitable relief against the action of its board of directors. They ask : 1. To enjoin the board from issuing to defendant Johnson certificates of stock for $8,250, subscribed and paid for, and to declare said contract of subscription void.

To enjoin the city of Cleveland from passing an ordinance granting to said company permission to use the track of the "West Side Street Eailroad to extend its line to the business center of the city.

To enjoin the directors from taking any steps, or instituting any proceedings to obtain the right to such use, or to make such extension.

Are the plaintiffs entitled to an injunction against the issue of this stock, and to have the contract of subscription therefor declared void ?

The authorized capital was $30,000, of which all had been subscribed and paid for except $8,250. Eepeated efforts had been made by the board to place this stock, but with little success. The books for the subscription of stock had been formally opened by the incorporators and most of the stock had been subscribed and paid for after the organization of the company, and while these books were in the possession and under the control of the directors. They had never been closed by any action of the board, or of the stockholders.

The financial condition of the company was such, that additional capital was necessary. The directors allowed defendant Johnson to subscribe and pay for this untaken stock, at its par value. It is not claimed that it was worth more than par. Indeed, from the allegations of the petition it was worth much less.

The consideration received was of the full value of said stock. The property and money received was necessary and, proper for the use of the company. In short, the transaction was bona fide and beneficial to the company. The contention is, that it was unauthorized, and therefore, that the contract was void. In this we do not concur.

This was not an increase of capital stock, beyond the amount authorized by the certificate of incorporation, hence the numerous authorities cited as to the power of the board to increase the capital stock, or to dispose of increased capital, do not apply. This stock was part of the authorized capital, which each subscriber for stock and each holder of stock had expressly agreed should be taken at par, at an open public subscription. Each stockholder took his stock, knowing that others, to the full amount of the authorized capital, could be associated with him in the business of the company.

Before the organization the incorporators are authorized by statute, to open books, receive subscriptions and the first payment thereon, and give notice for the election of directors. They are empowered to place all the authorized capital. After the directors are elected and qualified, “the corporate powers, business and property,” of the corporation, “ must be exercised, conducted and controlled by the board of directors (Rev. Stafc. 3248). What power and control the stockholders, in their capacity as such, in a stockholders’ meeting duly held, may exercise over the business of the corporation, and over tbe board of directors, we need not determine, as, in the case a,t bar, they have taken no action.

The books for tbe subscription of stock were opened by the corporators. Neither stockholders or directors had ordered them closed. If the stockholders had the power to dispose of this unsubscribed stock, they never sought to exercise it.

In the absence of such action of the stockholders as would control the directors (if any such could be taken), the right to place the unsubscribed stock vested in the board of directors. They represented the corporation in all its business affairs, and were authorized to transact all the corporate business within the scope of its authority. In the exercise of these powers, the directors are at all times subject to the equity jurisdiction of the courts, on the application of a stockholder or a minority of stockholders, to restrain all breaches of trust, or the exercise of powers not delegated to them, to the 'injury of stockholders.

If, however, the directors, who are presumed to represent the will of the majority, act within the scope of their powers, their will must govern in the absence of fraud or breach of trust. Dodge v. Woolsey, 18 How. U. S. 342 ; Ware v. Grand Junction Co., 2 Russ. & M. 470 ; Gifford, v. N. J. R. Co., 10 N. J. Eq. 171; Stevens v. Rutland & B. R. R. Co., 29 Vt. 545 ; Bissell v. M. S. & N. J. R. R. Co., 22 N. Y. 258; Kean v. Johnson, 1 Stock. Ch. 401; Field on Corporations, §§ 141, 142.

Applying these principles to the case before us, we hold : 1st. That the act of disposing of this stock at par, for a full and valuable consideration, zvas not in excess of the powers intrusted to the directors: and 2d. That the transaction being free from fraud and beneficial to the company, it was not such an abuse of the trust reposed in the board as warrants the •interference of the chancellor’.

The objection made, that Johnson was the president of the board, and that his associates could not dispose of this stock, is not well taken. The majority of the board, excluding Johnson, agreed to this contract. At most it was voidable, and not void. If in all respects fair and beneficial a court of of equity will not avoid it. It being within the scope of the powers vested in the directors, in the absence of any controlling action by the stockholders, the contract to dispose of this stock to a director or stockholder, if made in good faith, and if beneficial to the company, will not be set aside at the instance of a minority of stockholders. In such a case there is not such an abuse of corporate power, nor exercise of powers not granted, as will authorize the intervention of the chancellor. Smith v. Skeary, 47 Conn. 47.

II. As to the prayer for an injunction against the city of Cleveland.

All the city is asked to do, or proposes to do, is to grant permission to the Brooklyn Street Railroad Company the privilege of occupying certain streets, and to use the track of another street railroad company for its contemplated extension. The city does not propose, if it has the power, to invade or interfere with the private rights of the West Side Street Railroad Company to the exclusive use of its track. The permission to occupy the street and to use this track, is upon the express condition that the company acquire of the West Side Cornpany by mutual consent or by appropriation, whatever property rights the "West Side Company have therein. The statute vests iu the city council the power to grant the use of the streets to any street railroad company, if beneficial to the public. A court of equity will not interfere with the exercise of this discretionary power in the absence of facts showing fraud or bad faith. State ex rel. v. Gas Co., 37 Ohio St. 45.

III. Should the company be restrained from taking any steps, or instituting any proceedings to acquire the right to extend its lines and use the track of the West Side Company for that purpose 2

If it can be lawfully done the finding of the court is, that it will be highly beneficial to the company. The right to the relief prayed for, depends, therefore, on the underlyingquestion, has the corporation the power to make the proposed extension % All questions of fraud, or of injury to the stockholders, are eliminated.

This corporation was incorporated and organized under the act of April 10, 1861 (58 Ohio L. 66), and acts amendatory and supplementary thereto. The certificate was dated August 25, 1869, and the organization was perfected by the election of directors October 5,1869.

Section 1 of the act of 1861 prescribes the minimum number of natural persons required to form a corporation, and describes the manner of executing the certificate, and states what it shall contain. It must specify, (1) “ The name assumed by such company ... (2) The name of the street, alley or avenue, with a description of the locality tihereon of each terminus of said road, and the names of the streets, alleys and avenues or other public grounds through which such road shall pass.”

Section 2, among other things, provides “ that- when the foregoing provisions have been complied with, . . . such corporations shall be authorized to construct, operate and maintain a street railroad ... on the streets, alleys or avenues . . . specified in the certificate . . . between the points of termini named in the certificate, and transport thereon passengers and their packages and baggage.”

Section 5 required the consent of the city council to be first obtained before a street railroad could be commenced or constructed. This section was repealed by the act of May 27, 1866 (63 O. L. 55; S. & S. 137, 138), and sections 1 and 2 of the latter act were substituted. Section 1 of this act provided that no street railroad should be constructed or commenced until the consent of the council be obtained, and authorized the council to agree upon the terms and conditions upon which the street should be occupied.

Section 2 requires the council to prescribe by ordinance the terms and conditions upon which the streets and avenues of the city may be occupied by street railroads.

Up to this time, there was no authority vested in the city council to allow street railroad companies to extend their tracks beyond the limits named in their certificate of incorporation.

May 7, 1869, an act supplementary to the act of March 27, 1866, was passed, which in terms authorized such an extension (66 0. L. 140). It reads as follows: “It shall be lawful for the council of any city or incorporated village to grant permission by ordinance to any person or company, owning, or having the right to construct, any street railroad, to extend tliew track on any street or streets where, the said council shall deem such'extension beneficial to the public. And when any such extension shall be made, the charge for carrying passengers on any street railroad so extended, and its connections made with any other road or roads, by consolidation, under existing laws, shall hot be increased by such extension or consolidation.” This power of extension under this act was in addition to the power to consolidate under section 4 of the act of 1861. This right of extension was, by the act of April 10, 1867 (64 O. L. 122; S. & S. 138), so enlarged as to provide that thereafter any road constructed in a city or village, may be extended without the limits thereof, along the public roads, provided the proper authorities consent, &c.

The certificate of incorporation was taken out after the supplementary act of May 7, 1869, was in force. That act'was as much the law governing the corporation as the act of 1861. When this company became incorporated in August, 1869, it was empowered, to exercise all tbe powers and enjoy tlie franchises granted by the act of 1861, and by the amendatory act of 18G6, and also by the act supplementary thereto, of 1869. The franchises granted by this supplementary act are as much a part of its chartered powers and privileges as those embraced in the original act. Its language is unmistakable. It shall be lawful for the council to grant permission by ordinance, to any person or company owning or having the right to construct any street railroad, to extend their track,” &c.

Section 5 of the act of 1861, and sections 1 and 2, of the act of 1866, did not authorize the council to permit an extension, but only to permit the use of its streets. As sections 1 and 2 of the act of 1861 limited the operations of the company to the termini named in the charter, so the permission granted to use the streets of the town or city, was by necessary implication limited to the same streets prior to the supplementary act of 1869. Sections 1 and 2 of the act of 1866 did not confer corporate power, but only authorized the council to grant permission to exercise the corporate powers conferred by sections 1 and 2 of the act of 1861, to wit, the right, with such permission, “ to construct, operate and maintain a street railroad, .... between the points of termini named in the certificate.”

The powers and franchises acquired by a certificate of incorporation in August, 1889, embraced not only those conferred by the acts of 1861 and 1866, but the additional franchise, if the corporation owned or had acquired the right to construct a street railroad, of extending its track, subject to the provisions of sections 4 and 5 of the act of 1866.

It is contended that this supplementary act of 1869 is to be construed as authorizing such permission within the termini named in the certificate, and as limiting the corporation to the streets named in its certificate. This view is untenable. Sections 1 and 2 of the act of 1866 authorized permission in such cases. The supplementary act of 1869 was unnecessary for that purpose, and in that view a work of supererogation. To give it any force or effect we must regard it as giving to such corporations, with the permission of the proper authorities, the right to extend “ their track,” beyond the termini named in the certificate of incorporation, if the company already owns a road or has acquired the right to construct one.

It follows, that such an extension is no violation of the contract with stockholders, as among its powers and franchises to which they agreed is that of extending its track. Sprague v. I. R. R. Co., 19 Ill. 174.

Again, it is said the act of 1869, so construed, is in violation of art. 13, § 1, of the constitution. “ The general assembly shall pass no special act conferring corporate power.” It is said that, if the legislature cannot by special act confer corporate powers, it cannot vest in city councils the power by ordinance to do the same thing.

The vice of this argument is the assumption that an ordinance granting permission for such an extension, confers corporate powers. It only permits the exercise of such powers as are conferred by the statute. If such an ordinance confers corporate powers, then also does a like ordinance under sections 1 and 2 of the act of 1866, which provide that no sti’eet raih’oad shall be constructed in any street, withoxit permission first being granted.

Neither statute authorizes the city council to confer corporate power. They vest in the city the right to grant or refuse to street railroad corporations permission to construct or extend their tracks, under the corporate power acquix-ed by their certificate of incorporation. For obvious reasoxxs we have confined this discussion to the acts under which this company wras incorporated. It is now governed by the provisions of the Revised Statutes. These will be found in sections 2601 to 2506, and sections 3437 to 3443.

So far as the questions involved in this case are concerned, these provisions are in substance and legal effect the same as the original acts.

~We conclude, that the Brooklyn Street Railroad Company, being the owner of a sti’eet railroad, has the corporate power to extend its track, with the permission of the city coxxxrcil. As the exercise of this power1, if it can be legally done as contemplated, will be highly beneficial to the corporation, there is no ground for the interference of a court of equity at the instance of stockholders.

It is said, that one street railroad corporation cannot condemn a right to use in common the track of another like corporation. This question is not properly before ns. It can only arise when the parties fail to agree and when proceedings are instituted for that purpose. It will then be a question between the two corporations. If such right does exist, the plaintiffs cannot complain, as the court finds its exercise will be highly beneficial to them. If it does not exist, the West Side Street Railroad Company can have ample protection, without the aid of the plaintiffs.

Judgment accordingly.