author: Judge Collett

text:
    Oliver Ormsby’s Adm’rs v. Bakewell and Johnson.
    In chancery, a party having such an actual interest in the suit as that the-whole defense must be made through him and his transactions, and who may be subject to a decree for costs, can not be examined as a witness. Arbitrators are constituted by the parties, chancellors, judges, and jurors; and have jurisdiction of the law and of the fact. Their award is final, and’ can not be impeached for error. Nothing but fraud, in the parties or in the arbitrators, can be alleged to avoid it.
    It is allowable for arbitrators, after hearing the parties and their proofs, to meet for consultation and decision, without giving either party notice of such meeting.
    This is a suit in chancery, brought from Hamilton county.
    On April 22, 1828, Bakewell and John H. Page, the agent of Ormsby, entered into an agreement in writing, by which it was-
    agreed that Bakewell should, from time to time, for one year from the making of the agreement, furnish to Page funds to purchase-wheat to be manufactured in Ormsby’s steam mill at Cincinnati, for Bakewell; that Page should purchase the wheat, and for every five bushels, Bakewell should have a barrel of superfine flour — Bakewell to pay for manufacturing in proportion to the-price paid for the wheat. When wheat cost fifty cents a bushel, he paid sixty cents a barrel for manufacturing ; as much less than-fifty cents as should be paid per bushel for wheat, so much more-should be paid per barrel for manufacturing. The wheat in the mill, *when the contract was made, was to be manufactured. No other wheat but that purchased for Bakewell was to be manufactured by the mill during the year, unless for the owners of the-wheat, and for the owner not more than five thousand bushels, for which Bakewell was to be allowed twelve and a half cents for' every barrel so manufactured, and twelve and a half cents per barrel on all flour retailed at the mill for Ormsby within the year. Bakewell from time to time delivered to Page, the agent of Ormsby,. money to purchase wheat, and Page, as the agent of Ormsby, from time to time delivered to Bakewell flour under this contract, until the latter part of December, 1828, at which time it was agreed-by them that no more money should be advanced by Bakewell, and that the party’s rights under the contract should be such as-they would have been, had that been the end of the year for which the contract was made. In April next after, the parties differing :as to the amount which Ormsby should pay to Bakewell, in consequence of their transactions under the contract, referred their ■controversy to the arbitration of Charles W. Gazzam, William. Hartshorn, and Calvin Washburn, who awarded that Ormsby •should pay Bakewell seven thousand five hundred and eight dollars and sixty-three cents and costs of arbitration.
    Bakewell recovered a judgment in the court of common pleas for this amount, on the award, which has been affirmed in the ■Supreme Court. Ormsby has paid forty-five hundred dollars on this judgment, with an understanding that it should not affect this .suit, the object of which is to be relieved against this award and judgment.
    The bill charges, among other things, that this contract was made with reference to the wheat crop of 1828; that the mill at the time was out of repair; that Bakewell agreed to lend to Page, agent of Ormsby, one thousand dollars on interest, to be applied to repairing the mill; that Page would not have made the agreement with Bakewell as he did, had he not understood that Bake-well would advance the loan of one thousand dollars; that Bake-well advanced one thousand dollars on April 24,1828, which being considered the loan, was applied to repairs, as follows: Four hundred and forty-seven dollars and seventy-two cents, 30th .June; eleven hundred and sixty-five dollars on the 31st day of July; thirty-seven hundred and forty dollars and sixty cents on 31st August; forty-three hundred dollars on 30th September; seventeen hundred and fifty dollars and seventeen cents on 31st ■October; one thousand dollars and thirty-five cents on 30th November; and fifteen dollars and eighty-eight cents on the 31st December, amounting to thirteen thousand four hundred and fourteen dollars .and seventy-two cents; that large quantities of wheat were purchased by Page for Bakewell before the 8th September, at which time the weevil appearing in the wheat, ^Johnson, a dormant partner of Bakewell, refused to .advance funds to Page, and directed him not to buy wheat, in consequence of which contracts for wheat were abandoned, and no purchases made until the latter part of September, when Bakewell advanced funds, and directed purchases to be made; •wheat was not then to be had to keep the mill employed longer "than to January 1, 1829; when, by mutual consent, the contract was abandoned; that grinding for Bakewell commenced about the 1st of August; that the mill could manufacture about three 'hundred and fifty barrels per week, but it did not do so; that in August five hundred and six barrels of flour were delivered to Bakewell at the mill; in September three hundred and fifty; in October nine hundred and twenty-five; in-November three hundred and seventy; in December and the following months seven hundred and twenty-three;'that nine hundred and forty-nine barrels more should have been delivered, of which five hundred and thirty-seven should have been delivered in the first three months, and four hundred and twelve in the last two months; these nine hundred and twenty-nine barrels at three dollars and. ten cents per barrel amount to twenty-nine hundred and twenty-one dollars and eighty-four cents, which, with the one thousand dollars borrowed of Bakewell, is the sum paid by Bakewell to Page, and not invested in wheat; but that if the nine hundred ■and forty-nine barrels were estimated by the average price of flour at the mill in August, September, October, November, and December, 1828, it would not be more than thirty-six hundred and ninety-one dollars, which, added to the one thousand dollars and interest, the complainant would have paid for peace; that Bake-well demanded fifty-five hundred dollars, which complainant refused to pay, and they then agreed to refer the controversy to the said arbitrators; that on April’ 6, 1829, the arbitators and parties met. Hartshorn, one of the arbitrators, produced a submission bond for signature, which was executed. The arbitrators then heard the statements and allegations of the parties, and adjourned to the 8th of -. The complainants were notified that Hartshorn was sick, and that the arbitrators would not meet on that day; that the arbitrators, without giving complainant any notice of their meetings, afterward met on the 11th, secretly, and without hearing any testimony, even as to the value of flour, and made up their award; that the complainant remained in ' Cincinnati with his testimony as to the value of flour, and as to the loan of the one thousand dollars, and other matters, and wished to adduce it, but was prevented by not receiving notice of the meeting of the arbitrators; that Hartshorn ascertained the price of flour by conversation with the defendants and others not under oath, and renorted it to the other arbitrators, on which report they acted in fixing the amount of the award, taking the-highest *prices, and that they did not consider the one thousand dollars as loaned; that Hartshorn is somehow related to Johnson, and is under many obligations to him, which complainant did not know until after the award was made; that the award is unjust, and was produced by partiality in the arbitrators, or' the fraudulent practices of the defendants.
    Bakewell’s answer denies that the award is unjust, or that it was produced by fraud, or that the arbitrators were either of them partial ; it admits the meeting of the 6th of April, and that Hartshornproduced the submission bond for the parties, which was signed, and states that Page’s account of the money received by Bake-well, and of flour delivered by him to Bakewell, was laid before-the arbitrators, showing a balance of three thousand nine hundred and nine dollars and forty-four cents in favor of Bakewell, and was admitted by the parties to be correct, and that the only difference between the parties was, whether Ormsby should pay this sum with interest (which he offered to do), or the price of flour under the contract, as was claimed by Bakewell; that it was agreed by the parties that the average price of wheat was fifty cents per bushel; that the whole case was submitted to the arbitrators at their first meeting ; that the arbitrators, if they wished testimony as to the evidence, were to call on Ormsby’s miller ; no other testimony was spoken of; that the loan of the one thousand-dollars was not urged by Ormsby, but it was admitted that the three thousand nine hundred and nine dollars and forty-four cents had been paid on the wheat contract; that after the adjournment of the arbitrators at their first meeting, Bakewell received no notice from, nor had he any communication with the arbitrators,, until after they had made their reward ; that the arbitrators ascertained the value of flour by examining the books of flour dealers in Cincinnati. It is admitted by this answer that Bakewell' knew that the mill wanted repairs, but denied that any money was loaned by Bakewell to Page for the purpose of making repairs, or for any other purpose. It states that Bakewell advanced' money, when called on, to purchase wheat; that in September, 1828, he was absent fifteen days, and that while he was absent money was refused to be advanced, and purchases were not made for a short time; that he believes this was done at the instance of the miller, and for the benefit of the complainant; the weevil was then greatly injuring wheat in the mill, and throughout the whole country ; that at this time Page had one thousand five hundred dollars of Bakewell’s money uninvested: that had the money ^advanced been invested in wheat, after crediting Ormsby with the flour delivered by him, there would have been in the mill about eight thousand five hundred bushels of wheat at the end of the year 1828 ; that the suspension of the purchase, the weevil in the wheat, and what related thereto, was submitted to the arbitrators ; that on December 25, 1828, it was agreed that no more money should be advanced, and that the contract should remain as though that was the end of the year; that Bake-well does not know how much flour the mill would manufacture in a given time; that he would gladly have received it faster than he did ; that the meetings of the arbitrators were not secret; that they did not adjourn to hear testimony ; that there has been paid on the award, without prejudice, four thousand five hundred dollars ; that in making the award the arbitrators charged him twice with seven hundred and fifty-six dollars and-sixty cents, the price of manufacturing, and thus reduced the award so much too low, that after the award was made, he, for peace, offered to take five thousand five hundred dollars in full payment; that soon after the contract was made, Johnson, the defendant, became interested in it, and now has the whole interest.
    Johnson’s answer does not vary materially from that of Bake-well. #
    Page, the agent of Ormsby, testifies that when the contract was made with Bakewell, he did not know that Johnson was concerned in the business ; had he known that he was, he would not have made the contract; that he made it believing that Bakewell would not take advantage of his inexperience; that when he made the contract the mill was out of repair; to repair it cost more than one thousand dollars; that he asked a loan of that sum of Bakewell to be-laid out in repairs; that he thought Bakewell would let him have it, and a few days after the contract was made, he asked Bakewell for a part of the sum and was surprised that he refused it; that he did not mention the subject again until he mentioned it to Ormsby in the winter or spring after; that if Bakewell had told him he would not lend him the money, he would not have entered into the contract; that the-repairs were not completed until July. In the latter part of July grinding was commenced for Bakewell, and continued, with occasional interruptions, for the purpose of repairing the mill; that in July and August he purchased considerable quantities of wheat for Bakewell; that in September, Johnson, whom he knew as Bakewell’s agent only, refused to advance money to purchase wheat, ^assigning as a reason, that the wheat on hand was injured by the weevil; he did not say that the money before advanced had not all yet been invested ; that had he said so, an examination would probably have been made, and the money raised; that on the return of Bakewell, he immediately advanced funds to purchase wheat; that in September large quantities of wheat could have been purchased at a price within the contract; that the suspension of purchasing wheat injured the mill, for the farmers had understood that purchases would be made during the whole season % at the mill. In November wheat was at fifty-six cents per bushel, and raised to a dollar, and that a quantity could have been had at this price if the contract had admitted of it; that it was the wish of Ormsby that the deponent and Templeton, .the miller, should be examined before the arbitrators; that he ■was notified once or twice to attend their meetings, and once not ■to attend, as one of the arbitrators was sick. After the award '•was made, the deponent told the arbitrator, Gazzam, that he had no notice of the meeting of the arbitrators, and' Gazzam expressed (Surprise that notice had not been given.
    Templeton, the miller, testifies that in September, 1828, the •weevil injured the wheat in the mill so much that six or seven .bushels were necessary to make a barrel of superfine flour. He ■■told .this to Johnson, and advised the purchase of wheat to be suspended; that Bakewell was then away and Johnson directed the purchase to be suspended,'and that during the suspension large .■•quantities of wheat were offered for sale at the mill; that the mill could manufacture between forty and fifty barrels of superfine (flour per day; that Ormsby requested him to be ready to testify before the arbitrators, but he was not called upon.
    The depositions of the arbitrators were taken. They all agree that the only controversy between the parties before them was, whether Ormsby should pay to Bakewell the money he had received of him, with interest, and for which Bakewell had not •received flour, or should account to Bakewell for flour under the contract. Washburn testifies that the admitted balance was thirty-nine hundred and nine dollars forty-four cents; that the arbitrators had not time to determine the whole matter at their first meeting, and adjourned; that there was delay caused by the sickness of Hartshorn ; that after the arbitrators had settled the principles on which they would award, he heard, in some way, that ^Ormsby wished to have witnesses examined, and that they were not examined because the matters that it was suggested they would prove could not affect the award. Hartshorn ascertained from the merchants and dealers the price of flour at the time it should have been delivered under the contract.
    Hartshorn testifies that the arbitrators met three times; their first meeting was to hear, the second to fix the principles, and the third to make the award. He supposed, at the first meeting, they had got all the testimony either party wished introduced. The weevil was mentioned, and the suspension of the purchase of wheat, he thinks, mutually beneficial; that, before the award was made, something was said about other testimony, and that it was thought not to be material to either party; that in making up the award the arbitrators, estimating wheat at sixty-two cents per bushel, found Ormsby indebted twelve hundred and sixty-one barrels of flour; that this should have been delivered, at the rate of two hundred barrels every two weeks, from the time of making the last delivery, and charged this at the average market price, at three several periods, viz: six dollars forty-three cents per barrel; that he ascertained the prices from merchants, in Cincinnati, dealing in flour at the time; that the prices of the different merchants varied but a few cents, and they took the lowest.
    Gazzam testifies that Ormsby relied, before the arbitrators, on the disastrous grain season, the refusal to advance money, and spoke also of the weevil; that no witnesses were heard by the arbitrators, nor does he know that the parties were expected to be again before them; that the arbitrators adjourned, to meet again, at the time Hartshorn was sick, and no meeting could' then take place, of which fact deponent thinks he notified Ormsby, as Hill, his clerk, testifies. He thinks that the arbitrators considered themselves authorized to act after the first meeting; that no witnesses were examined before the arbitrators; that, either before or after the award was made, Ormsby said that he had important testimony; that had he supposed that there was testimony which would affect the interest of either party, he would have been for hearing it; that he did not take a leading part in making the award,hut that he examined the principles and the calculations, and does not remember any positive objection that he had to either; that he is a dealer in flour. 'It is proved by other witness, that in October, 1828, flour was selling in Cincinnati at three dollars eighty-seven cents and four dollars per barrel; in November at upward of five dollars; in ^December at five dollars fifty cents; in January, 1829, at five dollars eighty-seven cents and six dollars; in February and March at seven dollars; April, six dolara and upward.
    ARGUMENT.
    V. Worthington, for complainant:
    The deposition of Mr. Bakewell is considered by us as inadmissible. The contract was made with him, the award rendered in his favor, and the claim of Johnson is, and must be made through him. It seems to us to be a most extraordinary position to assume, that a contracting party can divest himself of his interest, so as to make himself a competent witness to enforce his own contract, or to obtain damages for the breach of it. We concur generally, that one defendant may be a witness for his co-defendant, where he has no interest in the matter to which his testimony is applicable. 2 Johns. Ch. 550, 614; 6 Johns. Ch. 201; 1 Johns. 556, 557; 1 Atk. 451; 2 Ves. 223, 284; 3 Johns. Ch. 371-612; 3 Atk. 401; 1 Amb. 592; 3 Johns. Ch. 95; 2 Ves. 219, 629; 2 Ves. & Beam. 401; 10 Johns. 119; 15 Johns. 223; 2 Stark Ev. 766, n. 1, and 783, n. 1; 6 Peters, 57; 7 Cranch, 206. Yet we apprehend it can not be assumed that a contracting party can assign the contract, and then offer himself as a witness to sustain a contract that must be derived through him. It is true, Mr. Bakewell says he has no interest in the event of this suit, and let it go as it may, he will not be affected thereby; yet he forms a link in the chain, without which it could not be enforced. Take this very case, for a better one can not be presented for illustration. Bakewel! procures a contract with Ormsby for the manufacture of flour; in the latter part of December, 1828, he terminates it, and insists on damages; procures an arbitration and an award, that is said by his adversary to have been obtained by undue means. In this situation, ho was incompetent to sustain the award ; so he knew and must have been advised. He has a secret partner, sells to him, and then presents himself as a witness to sustain the award. Can it be tolerated? Upon principle it is wrong. It opens the door too wide for the fraudulent devices of the human heart, and presents too much temptation to human frailty to be sanctioned as a fixed principle in a system of wise jurisprudence. It is as near as can be, if it be not giving testimony in one’s own case; it is sustaining one’s own acts to the full amount transferred, and who can be so unbiased *as not to lean to sustain a claim to which he has asserted] a right, and which he has passed into the world as bona fide and true. It is upon this ground we think the testimony of this witness ought not to be received. 6 Peters, 51; 1 Term, 296 ; 8 Peters, 12.
    The inquiry is, can the chancellor set aside the award made between Ormsby and Bakewell upon the case as now presented? The rule upon this subject, as we understand the law, is this : the chancellor will set aside an award for extrinsic causes, not apparent upon the face of the award, such as misbehavior, fraud, corruption, partiality, or mistake in the arbitrators. 1 Swift’s Dig. 471 ; 1 Saund. 327, 328; 1 Atk. 64; 1 Day, 130, 153; 2 Wilson, 148; 8 East, 344; 3 Atk. 494, 644; 2 Day, 553; 1 Dall. 83; 2 Johns. 62 ; 3 Johns. 367; 9 Johns. 39; 1 Conn. 569; 17 Johns. 405; Kyd on Awards, 332, 347, 350; 2 Atk. 304; 3 P. Wms. 361; Ambl. 245; 6 Ves. jr. 70; 2 Ves. jr. 315; 5 Yes. jr. 846; 9 Yes. jr. 67; 1 Wash. 14, 158; 1 Johns. Ch. 101; 2 Johns. Ch. 339, 551. It is also equally true that if no time or place is designated in the submission, it is the duty of the arbitrators to appoint a time and place, and give a reasonable notice to the parties. 1 Swift’s Dig. 489; 8 Peters, 178; Kyd on Awards, 95, 330 ; 3 Atk. 497, 530; 1 Saund. on Plead, and Ev. 227 ; 1 Conn. 498. Also, in the admission of testimony, the arbitrators should be governed by the same general rules as courts of law. Swift’s Dig. 467. When arbitrators have promised to hear witnesses, but afterward make their award without hearing any, the award has been set aside for fraud and corruption. Kyd on Awards, 346 ; 2 Vern. 251. So when they received testimony, where they had notified the parties they wouLd hear no more. 6 Yes. jr. 60. So when they promised to make their award not till after a certain event, but made it before. Kyd on Awards, 346, 347. So when they excluded the parties, and examined the witnesses separately. 1 Dall. 83. So when the necessary time to produce witnesses was refused. 4 Dall. 272. And it is said that, without collusion or gross misbehavior, a material' mistake in point of fact, an erroneous statement of an account, even a plain mistake of law coupled with other circumstance, are grounds for an examination of the proceedings of arbitrators in *a court of equity ; from the result of which, the award may be partially affected in a greater or less degree, and sometimes totally set aside. Kyd on Awards, 350; 2 Vern. 750 ; 3 Atk. 494, 644.
    N. Wright, for defendants:
    Every presumption of law and fact is in favor of the award. The party who would set it aside takes the burden of proof; and more especially because he has resorted to a tribunal of his own creating, to men with whom he has once declared- himself satisfied; also, because, in all amicable adjustments, many things are always conceded by a tacit assent; forms are not relied upon; parties put their cases on the grounds which they consider just; they pass over many technical objections which lawyers might take, in their' own views of right and wrong; they know, between themselves, what they have considered their. mutual rights, how they have acted, and what grounds of reliance they have given to each other; and in submitting cases in their own way, before a spirit of litigation has arisen between them, they are much more likely to submit a case according to real simple equity and justice.
    If a party was required in any particular, to sustain an award prima facie by affirmative proof, the consequence would be, that in all those cases of mutual confidence and understandings, no award could be sustained ; because, especially after a lapse of time, no proof could be given of such tacit understandings.
    In all cases, the party who alleges misconduct or fraud must prove it, and that unequivocally; for the acts of persons are to be reconciled with honesty of purpose, if possible.
    The party who alleges wrong, injustice, or unfairness, in the decisions of an arbitrator, must not only prove it, but must also prove that the same matter, which he now complains of, was submitted to the arbitrators, and unfairly decided on, by them; that is, he must show that he took before the arbitrators the objection which he now takes, and on that objection there was an uniair decision. It is entirely irrelevant for the complainant now to show a state of fact, on which the decision of the arbitrators would be wrong, unless he show that he also presented a like state of fact to the arbitrators. For he can not come here for relief, because he neglected *to present his case fully before the arbitrators; or because he then thought the justice of the case required only one particular view of it, though he is now so excited with the spirit of litigation, that he can see justice in the grounds of resistance — his relief must depend on the fraud or misconduct of the arbitrators; not upon his own néglect or even want of skill in managing his case. Even in case of a trial by jury no new trial is granted, because the party put his defense upon one ground, when he might have taken some other, which, possibly, might have given him a better chance.
    Awards are set aside in chancery, “ only for corruption, partiality, or gross misbehavior in the arbitrators, or some palpable mistake of the law or fact.” Herrick v. Blair, 1 Johns. Ch. 102.
    They will not be set aside, because new evidence is discovered or that a more perfect rule of justice might have been adopted, but only for mistakes on their own principles, or fraud or misbehavior in the parties. Atlee v. Ramsey, 1 Conn. 571.
    Not for mistake or error in judgment. There must be corruption or gross mistake.
    Nor for under or over valuation, if there is no fraud or misconduct. 1 Mad. Ch. 30; Knox v. Symonds, 1 Ves. jr. .369; Underhill v. Vancordtlant, 2 Johns. Ch. 361; 17 Johns. 416.
    It is said in several cases, that mistake of the arbitrators may be made a ground of setting aside an award. The meaning of this is explained in 1 Conn. 571, (above). If the arbitrators make a mistake on their own principles, that is, by a miscalculation, or the like, produce a result different from what they intend, there may be relief, and it is most usually granted (where it can be), not by setting aside the award, but by rectifying it according to its intention. As to any other mistake, such as a mistake in judgment, or rather an error in judgment, it is no ground of setting aside the award. If the arbitrators themselves will come forward and say, that they have made a mistake, and produced a result different from what they intended, it is a different matter. But errors in judgment and wrong conclusions of fact from the proof, are no grounds of objection, except-as evidence of fraud or corruption.
    One point a good deal canvassed in the books is, whether an award can be set aside because arbitrators have erred in the law. All the cases, old and new, agree thus far, that if “matters 'of law are expressly referred to the arbitrators, it is no objection to the award that those matters are wrongly decided; and if they are nol expressly referred, but those matters are complex and doubtful, or blended with fact, the result is the same. Ching v. Ching 1 Madd. Ch. 79; 6 Ves. 282; 1 Johns. Ch. 226: Jackson v. Amble, 14 Johns. 103.
    But there are dicta, which seem to indicate that an award might be set aside, merely because the decision was against law. This, I think, not to be sound law.
    A reference of a case to arbitrators, without any restrictions or reservations, submits the law to their decision just as positively as the facts. No case can be decided without deciding some principle of law as well as fact; and when two men agree that a third shall decide it, what is the meaning of this agreement if it does not cover the whole case? There is no superior tribunal to decide the law for them, and the agreement is a perfect nullity if it does not cover the whole case. It seems to me the merest nonsense that ever was uttered to say that an unqualified agreement to refer a case does not include a reference of the law. Will it, then, be contended that a man is not competent to agree to abide by a wrong decision of the law ? It might as well be contended that he is not competent to give away an article of property that belongs to him. If the cases are properly examined I think it will be found that this, as a general principle, is not sustained by ■ authority. It is too absurd on the face of' it. A gross error in deciding the law has been used as an evidence of corruption; where the arbitrators have intended to follow the law, and by mistaking it have produced a result different from what they intended, so that they would themselves certify that the result was not what they designed; where the terms of the submission contained some restriction in this respect, in these, and perhaps other cases, a wrong decision of law has been made the turning point in setting aside an award.
    •So in ordinary references of proceedings pending at law or in chancery, an error in law is a ground of setting aside a report; but these are a totally different class of cases.
    Judge Story, in Kline v. Catara, 2 Gall. 61, obviously lays down the correct principle in such cases, viz: That a general submission refers both the law and the fact to the arbitrators, and their decision thereon is conclusive. If the ^intention is to restrict the arbitrators in this particular, it must be so expressed in the terms of the submission.
    It is said that BakewelPs deposition is inadmissible. It is of very little importance whether it is read or not; but I take it that it comes within the rule. He has parted with all his interest without recourse, and having no interest in the event of the suit, it is no objection in chancery that he is a party, although he may, perhaps, be made liable for costs. 2 Johns. Ch. 350, 614; 3 Johns. Ch. 201, and other cases cited by complainant.
    Hammond, in reply:
    By the terms of the contract no specific time of delivering the flour was fixed. It was to “ remain in the mill, if so required.”
    The wheat purchased was to be purchased for Bakewell. When so purchased it remained in the mill at his peril. This, I think, is the fair interpretation of the contract.
    Two events not contemplated by the parties occurred:
    Weevil in the wheat in September,
    And a great rise of price in November, continuing until the contract would expire.
    In consequence of the first, and not apprehending the other, the money advanced was not invested in wheat as advanced, and in December it became a ruinous contract to Ormsby, if he should proceed to make purchases. It was then agreed to settle and adjust the contract as if it had run its entire term. What, then, was BakewelPs claim against Ormsby? The decision of this question settles the whole case. Can there be any doubt what that claim was? It was, then, to demand his flour, or the price of it.
    The wheat was to be purchased and manufactured progressively; the flour was to be progressively delivered. &uch is the import of the contract — so the parties interpreted it. Money was advanced from month to month; flour was delivered in parcels from time to time. Bakewell had a right to have his flour that he might take advantage of the market. He could fix its price upon Ormsby by requiring the flour to be then delivered. If he did not make this requisition, and the price of flour fell, it was his loss ; if it raised it was his gain. On the 25th of December this was BakewelPs right Ormsby could not say, in answer to his demand, I *will deliver your flour on the 1st of April. Had flour fallen on the 20th of January to three dollars and ten cents, Bakewell never would have consented to the rule for fixing the price assumed by the arbitrators. It would have been obviously most iniquitous as to him. In a change of circumstances it can not be just as to Ormsby.
    Both parties agree that a new arrangement of the contract was made on the 25th of December. Bakewell states that “ it was to remain and be settled up as of that date, in the same manner as if that had been the end of the year.” What would have been Bakewell’s rights at that period ? Yery clearly, for all flour not delivered on the 22d of April, its market price on that day. Can anybody believe, that with the clear profit of his contract in his hands, on the 25th of December, he intended to give it up, for what might be its value on the 22d of April following? It is but to state the proposition to demonstrate its unreasonableness.
    If the contract was put an end to, on the 25th of December, it fixed the rights of the parties as of that day. If it remained in force, it left the parties to stand upon their rights under it. Suppose it to remain in force, and that no demand of the flour was made 25th of December. What wore Bakewell’s rights? Nothing more than to receive the flour when demanded, or its price at the time of demand. No demand was ever made, with a view to fix the price, or to l’eceive the flour. The arbitration was commenced before the contract ended. By what rule would the damages be ascertained, supposing the contract in force ? To convert the flour into money in Ormsby’s hands demand must be made, and this is not pretended. There is yet, then, no cause of action. None of the parties or arbitrators acted upon this principle. And this shows that all considered the contract at an end December 25. The consequence has been already stated.
    The award assumed that the balance of money unaccounted for, December 25, should be reduced into flour at three dollars and ten cents per barrel, and thus made due at that day one thousand two hundred and sixty-one barrels of flour. It then assumed that two hundred barrels of this flour should be delivered every two weeks; thus running the delivery through the months of January, February, and March, and into April; and then charges Ormsby with an.average price. Now it is most clear that this could not be correct if the contract remained in force, because the rights of the parties Hriust be fixed by their own acts, and Bakewell did nothing to fix his rights, upon the basis assumed in the award. It is equally clear that if the contract was given up, the rights of the parties were fixed by that fact, and could not be affected by subsequent events. The assumptions upon which the award was based shows that the parties and the arbitrators proceeded on the hypothesis that nothing was to be done by either party after December 25. This fact established, and the controversy is settled. Bakewell’s rights were then fixed, and his claim to compensation must be settled accordingly.
   Judge Collett

delivered the opinion of the court:

The objection to the deposition of the defendant, Bakewell, we think, is well taken. It is true that Bakewell states, in his deposition, that he is not interested; but he transacted almost the whole business. Johnson was known in the transaction, to Page, as Bakewell’s agent only. Bakewell made the contract, advanced the money, received the flour, submitted the controversy to the arbitrators, and managed it before them in his own name. The award was, that the money be paid to him. Johnson was not interested when the contract was made. Bakewell is not a mere formal party, he is not a mere trustee; but he is charged with fraud in every important transaction leading to the result that the bill prays against. Against him, relief is prayed ; and he might, in this suit, be subjected to the costs of this suit, the suit at law, and of the arbitration. To prevent plaintiffs at law from fraudulently making the defendant’s witnesses parties to the suit, when no evidence on the trial is given against a defendant, a verdict may be taken for him, and he may then be sworn as a witness for his co-defendant; for the same reason a defendant in chancery, improperly so made, may be examined for his co-defendant, and so may one who is a mere trustee or formal defendant. 2 Stark Ev. 766 ; 2 Madd. Ch. 145. But when he is the all-important defendant, charged with actual fraud and misconduct throughout the whole transaction, and, if he is not interested, has reaped the whole fruits of his misconduct, and may still be liable for more than the costs of the suit, he can not testify for his co-defendant. 3 Johns. Ch. 612.

The view which we take of this case renders it necessary to decide whether a party can have relief against an award, after a judgment has been obtained against him thereon at law. *Persons have a right to settle their own controversies on any terms they please ; and it is their duty to settle them, if they can do so, without too great a sacrifice. They have a right to refer their controversies to arbitration, on such terms' as they can agree upon. By a reference such as is made in this case, the arbitrators are authorized by the parties finally to settle their controversy; and they are necessarily authorized to determine on all the incidental questions, whether of law or fact, that may arise in the investigation of the case. They aré constituted by the parties, chancellors, judges, and jurors for the determination of the controversy. Whenever a court is given jurisdiction of a cause, with it is impliedly given the right to do all things, and to decide all questions, necessary to the right and just determination of that cause.

Arbitrators are generally chosen because of their character for integrity and practical knowledge of the business out of which the controversy arises. They accept the appointment, not for gain, but to reconcile their contending acquaintances with each other; to prevent a protracted, vexatious, and expensive litigation. The proceedings of such judges, so constituted by the parties accepting the appointment, as they generally do, from motives of kindness, useful as they are, by speedily, cheaply, and, in general, rightly determining the controversy, ought to be favorably viewed by the courts, and should not be disturbed, unless it is made clearly to appear that they have not regarded the principles of natural justice in hearing the partios, or giving them an opportunity of being heard; or that they were partial, or corrupt, or were imposed on by fraud; or that they have made a plain mistake in carrying- out the principles they had settled. 2 Johns. Ch. 361-367; 17 Johns. 416; 2 Pet. Cond. 461-466; Davy’s Ex’r r. Fowe, and note, Kyd, 330, 331; 1 Dallas, 161, 162; 2 Bibb, 456-459.

At the first meeting- of the arbitrators, the parties appeared before them.. The account kept by Page, Ormsby’s agent, of money received of and flour delivered to Bakewell, was produced and admitted; from which it appeared that Bakewell advanced to Page three thousand nine hundred and nine dollars and forty-four cents more than he had received flour for. This sum, with interest, Ormsby wished- to return to Bakewell. Bakewell was not willing to receive it, and insisted on having the value of the flour which had been produced, had this sum been vested in wheat, and the wheat manufactured ^according to the contract. This was the only difference between them. They produced no witnesses; each urged his pretensions on the arbitrators. Ormsby relied upon the wheat crop being injured by the weevil, and the refusal of Johnson to advance money; Bakewell relied on the contract. After the parties had been heard, the arbitrators adjourned over to another evening, to agree upon the principles on which they would award. They believed they had got the whole case. Bakewell so understood it. He never afterward had any notice of the meetings of the arbitrators, nor was he before them. So he states in his answer. One of the arbitrators gave Ormsby notice that they would not meet at the time appointed for their second meeting. He received no notice of any subsequent meeting.

After the parties have been heard fully, and the arbitrators have the case, it is no objection to the proceedings of the arbitrators that the parties have not notice, or do not attend their meetings, for the purpose of consulting with each other. The presence of the parties, at the consultation, would not usually be desirable or expedient. Where there is but one arbitrator, after he has heard the parties and got the case, if he has doubts, or calculations to make, he will take time, make up his opinion, either at home or abroad, and make his calculations and his award, whenever it best suits his own convenience; but where there are several arbitrators, they would come together to converse, consult, and calculate.

In the present case, after the arbitrators had settled the principles on which they would award, some of them heard that Ormsby wished' his witnesses examined. They did not hear them, because they thought it would not vary their award. They must have known what he wished to prove, from having heard his statements and remarks when the case was submitted. The weevil in the wheat, the suspension of purchase, while the wheat was receiving injury in the mill, they had taken as facts, and had come to the conclusion set forth in the award. Hartshorn says, that he thought the suspension mutually beneficial. When Ormsby submitted his case to the arbitrators on the mutual statements of the parties, it does not appear that there was the least disagreement as to facts. He gave them the right to decide without further hearing. When he afterward changed his mind, he should have gone to the arbitrators, and insisted on having his *witnesses heard. Had they then refused, the testimony being relevant, I know not but that their reward would be relieved against. But here is no offer and rejection. He changed his mind, but never came to the arbitrators and told them so. He had the benefit of the testimony, for the arbitrators took his statements as facts,. If it had been intended that the parties should again be before the arbitrators, why was not Bakewell notified ? Arbitrators, as well as other judges, should be circumspect, and do or say nothing that would lead to a suspicion of their honesty or impartiality. It would have been better, in the present case, had Hartshorn not drawn the submission bond, and had the arbitrators hunted up Ormsby, notified Bakewell, and heard Ormsby’s witnesses. It would have been more satisfactory to him. But we see nothing in these things which would justify us in setting aside this award. As to the value of the flour, the case went to the arbitrators without any evidence or agreement as to this; flour was high, and fluctuating in price from day to day; at what price it should be fixed depended on the time or times the arbitrators determined it should have been delivered. The arbitrators were all dealers in flour in Cincinnati, and this was probably the reason that this part of the case was left in the situation it was. What could they do, but fix it from their own knowledge, and, if they thought proper, by an examination of the books of dealers in flour at the time? It is often the case that, from the want of evidence as to value, juries have to determine it from their own knowledge. Arbitrators and judges state their cases to friends in whose judgment and integrity they have confidence, that they may aid them in coming to a more satisfactory conclusion. 2 Johns. 353; Kyd, 95 ; 1 Dall. 161, 162.

This is a very hard case on Ormsby. The award is much higher than the sum Bakewell agreed to take. The arbitrators may have erred in determining that Ormsby should pay the value of flour, and not return the money advanced, with interest; they may have erred in fixing the times at which the flour should have been delivered, and in the value of flour at those times; but these were the matters submitted to them for determination. We see a want of circumspection, but not a want of integrity, or a departure from those rules which natural justice required should be observed in hearing and determining the case. 2 Johns. Ch. 358, 361-363; Kyd, 330.

The bill must therefore be dismissed.


source: Caselaw Access Project

author: Judge Wood :

license: Public Domain

text:
    *William W. Simmons v. The State.
    In a prosecution for forgery, the person whose name is charged to he forged is a competent witness to prove that fact. It is not necessary for the prosecution to call the alleged subscribing witness.
    Reserved in the county of Richland.
    The plaintiff was indicated for forgery. The forged instrument is set out, in the indictment, in hcec verba:

    “ One year after date, I promise to pay William W. Simmons, or bearer, one hundred dollars, for value received, with interest from date. September 13, 1833. One hundred dollars.

      “Attest: Abijah Simmons. Otho Simmons.”
    The plaintiff being arraigned on said indictment, plead not guilty, and was tried, convicted, and sentenced to imprisonment in the penitentiary.
    The counsel for the plaintiff have assigned for error: 1. That the court of common pleas erred in permitting the said Otho Simmons to swear that he did nob sign the note, without first calling the subscribing witness, or accounting for his absence. 2. That said court erred in permitting the said Otho Simmons to testify, as a witness, on said trial. 3. That said court erred in not calling on the subscribing witness to said note, to prove whether the signature thereto, purporting to be his, was spurious or genuine.
    Coffinbery and May, for plaintiff.
    McLaughlin, prosecuting attorney, for the state.
   Opinion of the court, by

Judge Wood :

The 'bill of exceptions shows that the facts assumed in the several assignments of error occurred on the trial, although the evidence was objected to by the plaintiff’s counsel. The court of common pleas are supposed to have erred, and we are called upon to reverse their proceedings.

The first inquiry, in the order in which the several questions are presented in the record, is, whether the person whose name is forged is a competent witness to prove the forgery, without the subscribing witness is first called, or his absence accounted for?

The reason of the rule requiring the execution of deeds and other instruments to be proved by the subscribing witnesses, as given in the books, is, that they are presumed to be better acquainted with the circumstances that transpired at the time; *and not only so, but, by selecting them as witnesses to their transactions, the parties mutually agree to resort to them for the proof, and, unless these channels are closed by events not within the control of the parties, through them the evidence must be adduced. This rule was departed from in Hall v. Phelps, 2 Johns. 451, which was a case on a note; but it is now well settled, whatever may be the instrument. Hagland v. Sebring, 2 South. 103; Henry v. Bishop, 2 Wend. 575; Zerby v. Wilson, Pet. Cond, 462.

But to what class of cases is this principle to be applied ? Certainly not to the one now before us. In a case arising between the parties to such an instrument, having a subscribing witness, and where the obligor, being interested, is excluded from testifying, the rule is a good one, which requires such witness to prove its execution. The' person whose name is forged, can not be supposed to have selected a subscribing witness to prove that he executed an instrument, and the circumstances attending the execution ; because the very fact of forgery proves that he had no knowledge of the making of it. When the obligor is competent, he must be the best witness of which the case will admit; and the subscribing witness need not, in such case, be called, for ratione cessante, cessat ipsa lex.

2. Was the supposed maker of this note a competent witness, od the trial, to prove the forgery?

In England, formerly, on a conviction for forgery, the forged instrument was condemned, and ordered to be destroyed; hence a party who would, if the instrument had been genuine, have had an interest in its destruction, either because he would have been liable on it, or because it would have barred his claim against another, was regarded as a competent witness, since the proof against him, at all events, was rendered much more difficult by a conviction. 2 Stan. Ev. 581. The objection to competency, has survived the practice on which it was founded; and the rejection of witnesses on this ground has been considered an anomaly, for it is certainly irreconcilable with the general principles now established on the subject of interest. Id. 581. In note 1, it is said, on the same page, that the English rule that excludes a party whose signature is alleged to be forged, from testifying in support of an indictment for the forgery, is adhered to in Connecticut, Yermont,. and North Carolina; but in New Hampshire, Massachusetts, and Pennsylvania, he is held to be ^competent, as in other analogous cases. In New York, in 1794, the English rule was adopted; but, in The People v. Howell, 4 Johns. 296, Chief Justice Kent says: “Since that time, the question of interest in a witness has-been examined and defined with more precision, both in England and New York, and the exclusion of the party in the case of forgery has become an anomaly in the law of evidence; and it would seem to be fit ánd proper that the rule should no longer he applied.”

Different decisions have been made, it is said, in different circuits in this state; and to produce a uniformity of decision on a question so important to the administration of criminal justice, consistent with the general analogies of the law, it is necessary the case should be determined in this court.

The rule which rejects the supposed obligor as incompetent to testify, is condemned by both Starkie and Phillips. However it may be elsewhere, in this state the supposed maker has no interest in the event of the prosecution for the forgery of the instrument. The instrument is, in no event, destroyed. If sued on such note, the person whose name is forged could not avail himself of a conviction, produced in whole or in part by his own testimony, to avoid its payment. The conviction would be no bar to such suit. 2 Stan. Ev. 184.

We are, therefore, of the opinion that the person whose name is forged is a competent witness to prove the forgery.

3. Was it error in the court of common pleas, that it did not direct the subscribing witness to be called, to testify whether the note was genuine or a forgery ?

This point is easily disposed of. It is no cause for error, that the court did not direct other testimony to be called. It was optional with the state to improve all or only a part of its witnesses, at its pleasure; and if the plaintiff in error were desirous of availing himself of the evidence of the subscribing witness, and if there were such a person in esse, the law had provided the means by which such testimony could be obtained.

The judgment of the common pleas is affirmed, with costs.


author: Judge Lanr

text:
    *Thomas Murdock and others v. Ratcliff, Cathcart, and Tiffany.
    A ¡ease of lands for ninety-nine years, renewable forever, is a chattel that, upon the owner’s decease, passes to his executor or administrator as any other chattel interest.
    This is a suit in chancery, reserved from, the county of Butler.
    The case shows that Andrew Murdock, deceased, devised to his wife, Mary Murdock, after his debts and one legacy were paid, “ all the residue of his estate, real and personal, to hold during the period of her natural life.” He died possessed of personal property, and of a leasehold interest of ninety-nine years, renewable forever, in a lot of land owned by the Miami University, leaving his wife and Ratcliff his executors. Mary Murdock, the widow and executrix, possessed the property after the death of her husband, and intermarried with Cathcart, who died. Cathcart has conveyed the leasehold interest to Tiffany. The plaintiffs being the brothers and sisters of Andrew Murdock, and his next of kin, •seek by this bill an account from Ratcliff of his settlement of the personal estate; and averring their title to, and possession of the leased lot, to which they say Cathcart and Tiffany pretend some right, they ask the court, under our statute, to quiet them in their possession against these claims.
    The answers of Cathcart and Tiffany admit the facts stated in the bill, and rely on the title to the land made by a conveyance from Cathcart to Tiffany.
    The defendant, Ratcliff, shows a due administration of all' the estate of the decedent and a settlement with the court. He denies ever intermeddling with the leasehold property.
    Woods, for plaintiff:
    The cause is submitted to the court upon the bill and answers. The complainants contend that Mary Murdock had by the will but a life estate in the personal property and land, and that after her decease the complainants, as heirs at law of said Andrew Murdock, are entitled to the estate, real and personal.
    It is presumed it will be admitted that the devise'in this case would pass nothing but a life estate, if the land in question is an estate of inheritance. The complainants contend that the land held under the Miami University is inheritable, and passes to the heirs as an estate of inheritance. ^Section 10 of the act to establish the Miami University,7 Ohio L. 184, provides that “the tenants or lessees shall enjoy and exercise all the rights and privileges which they would be entitled to enjoy and exercise did they hold the lands ,in fee simple, any law to the contrary notwithstanding.” Since the passage of this act, the lands held under the university have been considered as estates of inheritance; they are never sold or transferred by administrators; partition is made of them as of other real estate among the heirs of the deceased owner.
    If it be personal property, or only a chattel real, the law is settled that a life estate may be granted to one person and a devise over made to another; or if no devise be made of the residue of the interest, it will go to the representatives of the personal estate or to the heirs at law.
    This point was expressly decided by his honor, Judge Collett, in the ease of William Leigh et al. v. William Smith, in Butler common pleas, in a case which was warmly contested. The deceased, in that case, held lots in New York for a term of years, on ground rent, on which he had erected buildings. He devised all his money, bonds, property, and effects to his widow during her natural life. The widow sold the leases and collected the bonds, and with the money purchased land in the name of William Smith, her second husband.
    Judge Collett held the land in the hands of Smith after her decease liable to the heirs for the- money, with interest, from her decease. This case is referred to, not as a binding authority, but to show what the decision has been on a similar question. . See 1 Roberts on Wills, 431; 3 Merivale, 194; 5 Johns. Ch. 21, 342.
    It is too well settled to be now questioned that the intention of the testator must prevail. See 4 Kent, 519-522. Can it be doubted, in this ease, that the testator intended to only give a life estate? He expressly devises “to his wife, Mary Murdock, the residue of his estate, both real and personal (after the payment of debts and the legacy to Lucinda Lee), to have and to hold the same during the term of her natural life.” What can be more plain and direct than the expression by those words to give a life estate only ? The testator treated the farm in controversy as real property, and he expressly gives it, with his personal property, to his wife during 'her life. If he had intended to give her a greater interest than a life estate, the latter clause of the,sentence is not only unnecessary, but is utterly inconsistent with such an intention. Unless inhere is some binding authority or principle-which is imperative upon the court, it will not, it is confidently believed, set aside the will of the testator and wholly disregard • the intention which he has clearly expressed.
    Tange, for defendants:
    It is contended by the defendants, first, that the leasehold interest, held by Andrew Murdock at the time of his death, and -which is described in the bill of the -complainants, is not an eS: tate of inheritance. The heirs can not take by descent; such estates must go to the executors as personal chattels. See 6 Durnford & East, 289-292, 'where such an estate is devised to A. and the heir$ of his body with remainders over; A. may dispose of the whole and defeat the remainders by any conveyance during his lifetime; or he may do the same by his will alone. See the same case above noted. Mary Murdock, therefore, had the power, at any time during her widowhood, to dispose of, for her own proper use, the estate in question, and after her intermarriage with ■James Cathc-art, one of the defendants, the same power vested in him' as husband. In the chattels real of the wife, present and vested, an interest of the nature of the joint tenancy of the husband and wife is created by the marriage, and is a consequence of their legal unity, but subject to alienation by the husband in his lifetime. See Toller on Executors, 212; Plowd. 418; 2 Black. Com. 435. In case the wife die before the husband, all the chattels real of the wife, in which there exists a present actual and vested interest, become absolutely and entirely his own by survivorship. And that, too, without taking out letters of administration to her. Toller on Executors, 216; Coke upon Littleton, 300 ; Com. Dig., Baron and Feme, E. 2; Roll. Abr. 345.
    In the present case the executors of Andrew Murdock were chargeable with the payment of the debts and legacy of Lucinda Lee, which was to come out of the estate, after which the residue was given and devised to Mary Murdock, she being appointed executrix, and herein would be entitled to the absolute interest in the estate so devised. 4 Durn. & E. 89. Without this, however, I presume it would not be denied but that Mary Murdock was entitled, under the *will of her husband, to the absolute interest in the personal effects of the deceased, after the payment of the debts and legacy aforesaid. A leasehold interest has been uniformly decided to be personal property, although it may contain a .stipulation that it shall be renewable forever, 5 Ohio, 207; and it would be going too far to say that “a life estate may be granted to one person, and a devise over made to another; or if no devise be made of the residue of the interest, it will go to the representatives of the personal estate, or to the heirs at law.’ Where the use or usufruct only is devised, the power of the devisee, over the property devised, may be thereby restrained; but 'to disregard the distinction between a devise of the usufruct and a devise of the chattel itself, would seem, to my mind, preposterous. Be this as it may, however, the authorities referred to by the counsel for the complainants, in 5 Johnson, only serve to confirm me more strongly in the opinion that this action can not be sustained as against the present defendants; that should the complainants have a remedy at all, they should seek that remedy in .a different way.
    It is presumed that it will not be denied that in limiting a. devise as to estates clearly of inheritance, much slighter circumstances or less expressive language would be regarded as suf-^ ficient than would be required in those cases where the law is less favorable to a devise over, or to a descent of the residue of interest. The complainants, in order to show that the estate in question is inheritable, and passes to the heirs of an estate of inheritance, have cited section 10 of the act to establish the Miami University. 7 Ohio L. 184. Certainly it was never intended by the legislature, in using the language therein expressed, to alter the long-established law and usages upon that subject, by enlarging the quantity of interest, or changing the rule by which that interest should be acquired, held, or disposed of. It would be more reasonable to suppose that the language of the law referred to was intended rather to guard the civil rights of the occupant, by affording to him all the privileges as a citizen which the possessor of a freehold estate could enjoy; In this light can the case only be regarded.
   Judge Lanr

pronounced the opinion of the court:

The plaintiffs, claiming to be the heirs of Andrew Murdock, *inheriting his realty, pretend to be entitled, in that character, to an account and distribution of the personal estate; and while they ask the account against one defendant, they pray to be quieted in their possession against the others. The bill is objectionable for its multifariousness, as it attempts to combine in' the same suit claims against different classes of defendants, between whom subsists no privity.

But, passing over this objection, their rights to the personal-property have no existence upon this state of facts. The plaintiffs are the brothers and sisters of the decedent, and in the absence-of legitimate issue, inherit his real estate ; but as he died without children, the law (Stat. of Ohio, ch. 29, p. 236, sec. 28) gives the whole of the personalty to the wife. Whatever, then, be the deficiencies of the administrator, the plaintiffs have no interest in calling him to an account.

Their right to the college lot depends on the character of the estate which Andrew Murdock held in it; if it be not inheritable, their possession ought not to be protected. It was a lease upon an annual rent for ninety-nine years, renewable forever. We know that such interests are usually treated as fees simple by the holders; that in case of death, they are ordinarily transmitted to the heirs as realty, without being accounted for by the administrator ; that the law requires them to be appraised as real estate-in sales under execution (Stat., ch. 29, p. 103, see. 19); that such interests are liable to dower (29 Stat. 250, sec. 1), and, perhaps, it might be expedient for the legislature to make them inheritable; but no proposition has been better settled, from the earliest days of the common law, than that a lease, of whatever duration, is. but a chattel. In the absence of legislation, it only remains for us to follow the current of authorities. 3 Ohio, 465; 4 Ib. 207.

The only statute we find upon this subject is contained in the “ act to establish the Ohio University.” 6 Stat. of Ohio, 188, see. 10. Which declares that the tenants or lessees shall enjoy and exercise all the rights and privileges which “ they would be entitled to enjoy, did they hold their lands in fee simple;” a provision designed, in our opinion, to secure to the tenants civil and political privileges; not to change the quality of their estates.

Counsel have argued this ease upon another hypothesis; taking the lease to be a chattel, as the testator gave it to his *wife for her life only; what remains after her life is not disposed of by will, but reverts to the testator, to be distributed by his representatives. This doctrine, when applied to chattels real, seems, countenanced by the books. 6 Cruise, 287 ; 1 P. Vms. 666 ; 1 Salk. 278; But our view of the case renders a decision unnecessary; if the estate of the widow was for life only, and a reversion substituted in the executors of the testator, subject to distribution, she was the executor and the distributee, and entitled to such reversion, and her rights became absolute, since the estate for life and the reversion met in the same person.

Bill dismissed.


author: Judge Lane

text:
    Lessee of Mickey v. Henry Wintrode.
    This was an action of ejectment, brought in Richland county, and reserved for decision in bank, upon the following facts:
    In 1814, Daniel Mickey received from the register of the Virginia military school ■ district a lease for the southwest quarter section three, range twenty-two, for ninety-nine years, renewable forever. In 1828, he died in possession, leaving his widow, Elizabeth, and ten children, of whom the lessor of the plaintiff is one. The administrator of Daniel Mickey caused the lease to be inventoried and appraised as personal property, and set it out to the widow as a part of her share in the personal estate. Her interest is now held by the defendant. The plaintiff brings this suit, claiming the lease to be an estate of inheritance, coming to him by descent. ■
   Judge Lane

pronounced the opinion of the court;

We have investigated the governing principle of this case during the present term, in the case of Murdock et al. v. Ratcliff et ah, and in holding leases of this nature to be personal property, and not inheritable, we deny the right of the plaintiff.

Judgment for defendant.


author: Judge Hitchcock

text:
    *State of Ohio v. Commercial Bank of Cincinnati.
    The charter of the Commercial Bank of Cincinnati is so framed that no tax amounting to more than four per cent, upon the dividends, can be levied upon the bank or its business.
    Reserved in the county of Hamilton. -
    This is an action of debt, brought by the State of Ohio against the defendants to recover the amount of tax due upon dividends, declared on July 1, 1833, and January 1, 1834.
    The case was submitted to the court, on an agreed statement of facts, substantially as follows, to wit:
    The defendants declared a dividend of twenty-five thousand dollars, on July 1, 1833, which was duly certified to the auditor of state, who thereupon drew upon the defendants for five per cent, on said dividend, amounting to twelve hundred and fifty dollars. The defendants paid upon this draft one thousand dollars, being four per cent, on the dividend, and refused to pay the balance, amounting to two hundred and fifty dollars.
    On January 1, 1834, another dividend was declared of twenty-two thousand six hundred and thirty dollars, which was also certified to the auditor of state, who thereupon drew for eleven hundred and thirty-one dollars eighty cents, being five per cent, on the last-named dividend. This draft was presented to the defendants for payment on March 17,1834, who refused to pay the whole amount, but offered to pay at the rate of four per cent, on said dividend, or four-fifths of the last-named sum, which was refused.
    Should the court be of opinion that the Commercial Bank is liable to pay five per cent, tax on its dividends, then judgment is to be entered in favor of the plaintiff for the sum to bo computed as follows, to wit: two hundred and fifty dollars, with interest, fi’om November 12, 1833; together with eleven hundred and thirty-one dollars eighty cents, with interest from March 17,1834, .and costs of suit.
    Should the court be of opinion that the bank is liable to pay only four per cent., then judgment is to be entered in favor of the plaintiff for the sum of nine hundred and five dollars and forty-four cents, with interest thereon from the rendition of the judgment, without costs.

      Tan Matee, for plaintiff.
    *N. Weight, for defendant, cited 4 Wheat. 518; 2 Kent Com. 244; Ang. on Cost, 503 ; 4 Ohio, 432; Ang. on Cost, 265.
   Judge Hitchcock

delivered the opinion of the court:

On March 12, 1831, the legislature of the state, by an act entitled “ an act to tax bank, insurance, and bridge companies,” 29 Ohio Stat. 802, levied a tax of five per cent, on the dividends of all such companies, and prescribed the mode in which the tax should be collected. The course pursued in this case is in conformity with that law; and the Commercial Bank of Cincinnati is within the provisions of the act as much as any other bank in the state, unless there is some principle of law which will operate to except it. To this law we see no objection ; for although it has been doubted by many, whether the legislature have the power •to tax private corporations, unless the power is reserved in the act of incorporation, we entertain the opinion that where there is no contract to the contrary, they do possess this power, and have an undoubted right to tax banking companies as to them may seem proper. And this opinion is in accordance with that of the Supreme Court of the United States, as expressed in the ease of Providence Bank of Rhode Island v. Billings and Putnam, 4 Pet. 515.

But the counsel for defendants contend that the Commercial Bank is, by its charter, exempted from the operation of this law. This bank was incorporated on February 11, 1829, 27 Ohio Stat. 72. In section 6 of the act of incorporation, it is provided, among •other things, “thatthe State of Ohio shall be entitled to receive four per cent, on all dividends made by said bank;” and that the demand and payment of this amount shall be made agreeably to the provisions of the act passed February 5, 1825, entitled “ an act to amend an act entitled an act to incorporate certain banks therein named, and to extend the charters of existing incorporated banks, passed February 23, 1816.” This act of February 5, 1825, although entitled “ an act to amend the act entitled an act to incorporate certain banks,” etc., was, it is believed, the first law of the state, levying in terms a tax upon banks — and, in truth, this act could hardly be said to do this. Previous to this time, a portion of stock had been, or ought by law to have been, set off to the state in each of the banks as a bonus. By this act, however, *this bonus was relinquished to the banks, upon condition “ that each bank wishing to avail itself of the provisions of this act, shall pay to the State of Ohio ten per cent, upon all dividend® made by such bank, after the acceptance of the charter or extension thereof, under the act of which this is an amendment, and previous to the passage of this act, and four per cent, on all dividend® that shall hereafter be made by such bank, until otherwise provided by law.” Next follows a clause reserving to the legislature-the right of levying a tax either upon the capital stock or dividends of said bank, such as might be deemed reasonable and proper. The reservation of this power shows conclusively, that, in the opinions of those who enacted the law, without such reservation' the power could not be exercised.

This law was in fo.rce at the time of the incorporation of the Commercial Bank, and in requiring of this bank the payment of four per cent, on its dividends, it was, in that respect, placed upon the footing with the other banks then in operation. It was probably the intention, as is suggested by plaintiff’s counsel, to grant to it no greater privileges, nor subject it to any heavier burdens than were enjoyed by, or imposed upon those institutions. But the clause in the amendatory act, reserving to the state the power of taxation, was omitted in the act to incorporate the Commercial Bank. The only reference made in that act is for the purpose of prescribing the mode of enforcing the payment of this four per cent., and so far, and for this purpose, that act may be considered as constituting a part of the act of incorporation.

On January 31,1831, the act of incorporation was amended, the bank not having before that time come into operation, but still no change is made in that feature, which relates to the four per cent, or the power of taxation. 3 Chase’s Stat. '2065. On January 15, 1833, the capital stock of said bank was authorized to be increased to an amount not exceeding one million of dollars, “ which stock shall be subject to all the regulations, restrictions, and limitation® provided for in the act establishing the said bank.” 3 Chase’s Stat. 2077.

On March 12, 1831, the act to tax “ bank, insuranco, and bridge companies,” was passed, and the question to be determined, is, whether that act can be so construed as to extend to the Commercial Bank. As already remarked, this bank is within the general provisions of this act. But it is ^contended by the defendants’ counsel, that, owing to the peculiar features of the act of incorporation, this general law for taxing banks, etc., can not ba brought to operate so as to collect the percentage prescribed from this particular bank.

We take it to be well settled that the charter of a private corporation is in the nature of a contract between the state and the corporation. Had there ever been any doubts upon this subject, those-doubts must have been removed by the decision of the Supreme-Court of the United States in the case of Woodward v. Dartmouth College, 4 Wheat. 518. Powers once granted can not be revoked; nor can any material change be made in such act of incorporation unless by the assent of the corporation themselves. Hence it is-customary in -the legislation of this state, to reserve the power of change or alteration, where it is desirable that such power should-remain in the state.

The mere fact of incorporation, however, does not exempt the-body incorporated from taxation. And, in our opinion, a corporation may be taxed in its business and property with as much-propriety, at least, as may an individual, unless there is something in the act by which it is constituted which exempts it from this-burden. So far as respects the property of the Commercial Bank,, there is no pretense that it is exempted from taxation. If it have lands, or houses, or personal property, which would be taxed in the-hands.of an individual, the same property may be taxed when belonging to the bank.

The clause in the charter which is supposed to exempt the Commercial Bank from the payment of.a tax upon its business similar' to that paid by other banks, is that which has been already quoted : “The State of Ohio shall be entitled to receive four per cent, on all dividends made by said bank.” Now, let ús for a moment examine this subject, considering the charter as a contract, and ap-. plying to it the ordinary rules of construing contracts.

The general assembly propose to confer upon such persons as-shall become stockholders in the bank certain powers and privileges. They propose to confer upon them all the privileges of banking. . But, as these privileges are valuable to the recipients, it-seems to be but right and proper that a suitable return should be-made for the benefit received. Therefore the legislature impose-upon the corporators, in their corporate capacity, the condition! that they shall pay to the state four *per cent, on their dividends, and they reserve to themselves no right to change these ■terms. The only consideration required, the only consideration to be paid, is this four per cent. In other words, the general assembly say to such persons as may take the stock, you may enjoy the privileges of banking if you will consent to pay to the State ■of Ohio, for this privilege, four per cent, on your dividends as they •shall, from time to time, be made. The charter is accepted, the •stock is subscribed, and corporation pays, or is willing to pay, the •consideration stipulated, to wit, the four per cent. Here is a contract, specific in its terms, easy to be understood. Privileges are proffered for a certain and definite consideration to be paid; and •those privileges being accepted, the payment of the consideration •can be enforced. After a contract, similar to this, between individuals, where one undertook to convey any interest to another for a definite consideration, and the conveyance is made and accepted, it will not be pretended that anything more than the definite consideration can be recovered. But á contract between the .state and individuals is as obligatory as any other contract. Un-til a state is lost to all sense of justice and propriety, she will scrupulously abide by her contracts, more scrupulously than she will •exact.their fulfillment by the opposite contracting party.

As here was a contract between the state and the corporators of •the Commercial Bank, in their corporate capacity, that the latter .should enjoy certain privileges, in consideration of certain payments to be made, any law requiring the payment of a greater .amount varies this contract, and impairs its validity. Section 10 of the first article of the constitution of the United States .'provides, that no state shall pass any law impairing the obligation of •contracts; and section 16 of article 8 of the constitution of Ohio, that “ no ex post facto law, or law impairing the valdity of contracts, ¡shall ever be made.” A law, then, made in express terms, and for the avowed purpose of collecting a greater tax than four per cent, upon its dividends, from the Commercial Bank, would be in contravention of both these constitutions, and could not be enforced, unless we adopt the principle that an unconstitutional legislative ■enactment is a binding law of the land ; unless we adopt the principle that the law-making power is above the constitution under which it acts; unless, in fact, we adopt the principle, that, in this country, where we boast of constitutional *and limited governments, legislative supremacy is co-extensive with parliamentary omnipotence. If a law, such as is above referred to, could not be-enforced, certainly a law which purports to tax banks generally, without specifying this bank particularly, can not be extended by , construction to operate upon this bank, but must be so construed as to exclude it.

It may be thought that, inasmuch aá there is no clause in the' charter expressly limiting the power of taxation, therefore that power may be exercised to any discretionary extent. But such seems not to have been the understanding of the general assembly. In the act of February 6,1825, which required of the several banks which should comply with its requisitions, to pay four per cent, upon their dividends into the state treasury, it was doomed necessary to stipulate expressly, that the legislature should have power to levy an additional tax. This could not have been necessary, except upon the hypothesis, that, upon the relinquishment, by the' state, of the stock by her held in the banks, upon the consideration of the payment of the two and the four per cent, would be such a contract as would prevent her from subsequently levying any additional tax, unless the right so to do was expressly reserved* There is not, however, any such reservation in the act incorporating the Commercial Bank of Cincinnati.

On March 3, 1834, the Clinton Bank of Columbus was incorporated (32 Local Laws, 419). In section 6 of the act of incorporation, provision is made that five per cent, on its dividends shall be paid into the state treasury, and lest this should operate as a restriction upon further taxation, it is provided in section 16, that nothing contained in section 6 shall be so construed as to prevent the legislature from increasing the tax, provided that the said tax shall, at no time, exceed the tax upon.the other banks of the state? except the Commercial and Franklin Banks of Cincinnati. The Clinton Bank is referred to as one among many others, containing the same, or a similar provision. Why is the exception made as to the Commercial and Franklin Banks? But one answer can be given, and that is, that the general assembly supposed that the rate to be paid by these banks was fixed in their charters, and could not be changed by legislative enactment. The rate is fixed, although there is this difference between the two institutions, the ^Franklin Bank is required to pay five per cent upon its dividends, while the Commercial pays but four. The reason for this difference probably is, that when the Franklin Bank was ■chartered, the other banks of the state were taxed five per cent. For it is not to be supposed that either of these institutions were peculiar favorites with the general assembly, or that it was intended to distinguish them from other similar institutions; although owing to some unknown circumstance, they have obtained an advantage which can not be taken from them by legislative authority, -or by any decision of the court.

Although there is not any express stipulation in the charter, restricting the power of the legislature to tax, there is a provision ■equivalent thereto. The price at which the privileges granted are to be enjoyed is fixed at four per cent, on the dividends; and this fixing of the price precludes the idea that any more onerous condition shall be imposed.

Another view may be taken of the case, which goes to strengthen the positions already assumed. This bank, by its charter, is bound to pay into the state treasury four per cent, on its dividends, as they are made. Suppose the legislature reduce the tax upon banks to two or three per cent., or suppose they should entirely repeal the law taxing banks, etc., still the Commercial Bank would be bound to pay the four per cent. Its charter would remain the same, and its liabilities would not be altered. If, then, a repeal ■of the law taxing banks would not operate to the advantage of this institution, certainly a general law increasing the tax ought not to operate to its injury.

Upon the whole, a majority of the court are of opinion that the Commercial Bank of Cincinnati is not within the operation of the law to tax banks, insurance, and bridge companies, and that no greater tax than four per cent, upon its dividends can be collected.

Judgment will be entered in favor of the plaintiff for nine hundred and five dollars and forty-four cents, without costs.

Judge Collett dissented.


author: Judge Wood:

text:
    *The State of Ohio v. Neil and Moore.
    'The act of the general assembly of the state, exacting toll upon passengers carried by mail stages on the Cumberland road, in Ohio, is constitutional.
    The action is brought to recover of the defendants, who are mail contractors, certain amounts of toll claimed by the plaintiff to be imposed by the laws of the state on passengers in coaches, .in which the defendants conveyed the United States mails.
    The general assembly, on February 4, 1831, passed an act providing that, whenever the consent of Congress should be obtained to that act, the governor should be authorized to take the National road under his care, and erect toll gates, and collect tolls at a certain rate therein specified; with a proviso, that no toll should be •collected for the passage of any stage coach conveying the United States mail, or horses bearing the same. Section 15 provides that it shall be lawful for the general assembly, at any future session, without the consent of Congress, to change, alter, or amend said act, but no alteration shall be made so as to reduce or increase the rates of toll established below or above a sum necessary to defray the expenses incident to the preservation and repair of said road, to the erection of toll gates thereon, and for the payment of the fees or salaries of the superintendent, the collector of tolls, and such other agents as might be necessarily employed in the prosecution and repair of the road, according to the true intent and meaning of the act.
    An amendatory act was passed on June 14, 1832, with the same clause of exemption from the payment of tolls; and a third statute of March, 1834, declares it to be the duty of every stage driver to repeat at each gate, to the keeper, the number of seats occupied in such stage or coach, and to pay at the rate of four cents for each seat so occupied.
    The declaration avers that a large number of passengers so occupying seats passed the toll gates on said road, and that a large sum of money is due the plaintiff therefor, under the provisions of said law, to wit: the sum of twelve hundred dollars.
    To this declaration the defendants demurred specially, and assigned for cause:
    1. That it did not appear by what authority the plaintiff assessed the tolls in the declaration mentioned. 2. That the act of assembly was not fully set out, and no profert of it *made. 3. That the act imposing the toll is unconstitutional. 4. That it did not appear that the gate keepers demanded the tolls, or that-the stage drivers refused to give an account of the passengers.
    McMahan aud Kennon, for the plaintiff.
    Goodenow and Peck, for the defendants.
   Opinion of the court, by

Judge Wood:

The counsel of the defendants appear to abandon the two first causes assigned, as they do not discuss them in the argument, and the other will, therefore, only be noticed by us. First, then, is the act of the general assembly, imposing this toll, unconstitutional ? Or, in other words, is it a tax on the coach itself, calculated, in its consequences, to impede or obstruct the conveyance of the United States mail? We hold the negative. The coach, the horses, the drivers, and the proprietors, are exempted in express terms. But it is said that contracts for the transportation of the mail were made in reference to the conveyance of passengers. Such may have been the case. The postmaster-general is not authorized, however, to make any contract exempting passengers,' either in coaches or on foot, from the payment of toll. His contracts can. extend only to the mail and the mode of its conveyance. The defendants have the right to the road secured to them by the acts of Congress and of the assembly, free from toll, for such carriages, horses, and attendants as may be necessary to enable them fully to comply with their contracts; but when they attempt to go beyond this, and resort to means to increase their profits not necessarily connected with their contracts, they, like others, are rightfully subjected to the inconvenience of paying the toll which the-convenience of a good road imposes. The proposition can not, we think, be maintained, that passengers are necessary for the conveyance of the mail; and if they are not, a tax on them is, in no light in which the subject can be viewed, a tax on the coach itself, nor calculated in its consequences to impede or obstruct the transportation of the mail.

2. Should the declaration aver that the gate keepers demanded the toll, or that the stage drivers refused to give an *aecount of the passengers ? The act of March 1,1834, provides that there shall be charged and collected, and it shall be the duty of each gate keeper to demand and receive, for the passing such gate, four cents for every person occupying a seat in any mail stage; excepting drivers, agents, and proprietors. The opinion that a demand was necessary must have arisen from the language of this section, but it appears to us only to be directory to the keeper of the gate. It is his duty to make a demand; but suppose he does not, is not the toll collectible? We think it is. But if he make such demand, it does not follow that it must be averred in the declaration and proved on the trial, for the very next section of the act provides that the stage drivers shall report at each gate, to the keeper, the number of seats occupied, and shall pay at the aforesaid rate, and in default thereof, the keeper shall charge the proprietors at the rate aforesaid. Con'strue both, these sections together, and there is a complete legal liability bypassing the gates, without the number of passengers reported to the keeper and paid for by the driver, and a demand is unnecessary. The demurrer is sustained.