author: Scott, J.

text:
    Peterson v. Roach.
    1. A demurrer to a pleading admits the truth only of that -which is well pleaded. It does not admit the truth of mere conclusions of law, nor of allegation of fact which are repugnant to, or inconsistent with each other.
    2. 'Where a partner borrows money on the credit of his individual note, which is signed also by a surety, such borrowing does not create a partnership debt, though the money be applied to partnership purposes ; and the principal of such surety is the individual partner, with whom he joins in the execution of the note, and not the partners generally.
    Error to the District Court of Defiance county.
    The plaintiff in error filed his petition in the Court of Common Pleas of Defiance county, against William MeCreath and the defendant in error, Andrew Roach. His petition was as follows :
    “ The plaintiff’ says that at the September term of this court, a. ». 1871, in a certain action pending therein, wherein one A. B. Crunkilton was plaintiff and this plaintiff and the said defendant, William McCreath, were defendants, the said A. B. Crunkilton recovered a judgment against this plaintiff, and the said McCreath, for the sum of four hundred and thirty-four dollars and twenty-nine cents ($434.29) debt, and $17.28 cost of suit.
    “ That the causes of action upon which said judgment was rendered, accrued upon two certain promissory notes set forth in the petition in said case (and copies of which are also hereto annexed). One of which was dated on the 3d day of December, a. d. 1870, and the other on the 17th day of December, A. d. 1870, and were executed by the said William McCreath as principal and this plaintiff as surety, to the order of one Asa Toberen. One for the sum of $200, and the other for the sum of $215, payable respectively in sixty and thirty days after date with interest, and which said notes were afterward assigned to said A. B. Crunkilton.
    “ That the said defendants, William McCreath and Andrew Boach, were, at the execution and delivery of said notes, and each of them, partners in business ; and that the consideration for each of said notes was money loaned by the said Asa Toberen to the said defendant, William Mc-Creath, on account of and for the use of the said partnership ; and that the same was in fact used, laid out, and expended in the business of said partnership, and in paying expenses incurred therein by said partners.
    “ That this plaintiff signed said notes, and each of them, at the request of said William McCreath, as surety only, and without any other or further consideration whatever ; and that at the time said money was so loaned said defendant, McCreath, with the consent of said defendant, Boach, had the management and control of the business of said partnership, and the disbursement of its moneys.

      “ That, although said defendant, William McCreath, signed said notes in his individual name, he in fact hired said moneys, and said Toberen loaned (as he then well knew) said moneys on account of said parnership ; and this plaintiff signed said notes at the request of said McCreath, as surety for the said partners, and not for said McCreath individually, and, in signing the same; understood that he was becoming, and in fact did become, surety for said partners jointly, and not for said McCreath as an individual.
    “ This plaintiff further says that the said defendant, William McCreath, is totally insolvent, and that no part of said judgment can be made out of him upon execution, and that the plaintiff has been obliged to satisfy the same, and has in fact satisfied the same. Wherefore he prays judgment,” etc.
    To this petition the defendant, Roach, demurred on the ground that it did not state facts sufficient to constitute a cause of action against him. This demurrer was sustained, and judgment rendered for Roach. On petition in error by the plaintiffs, this judgment was affirmed by the district court; and this judgment of affirmance is now sought to be reversed.

      Henry Newbegin, for plaintiff in error,
    claimed that, as the surety was compelled to pay the debt in question, he had a right, under the circumstances, in equity, to recover it back from the partners. Purviance v. Sutherland, 2 Ohio St. 478; Horsey v. Heath, 5 Ohio, 354; St. Aubyn v. Smart, Eng. L. 5 Eq. 182; Blair v. Bromley, 5 Hare, 542; S. C. on appeal, 2 Ph. 354; Sprague v. Ainsworth, 40 Vt. 47; Smith v. Turner, 9 Bush. 417; Smith v. Robert, 5 T. R. 601.

      H. H. Dodge, J. R. Tyler, and James Murray, for defendant in error,
    claimed that the real question was, does a person who signs the individual note of a partner as surety become a creditor of the firm to the extent that the proceeds of such note are afterward employed for the benefit of the firm? We say not. See 2 Kinney’s Law Compendium, 374 (State Law Library edition), who quotes Bevan v. Lewis, 1 Sim.; Lloyd v. Treshfield, 2 Car. & Payne, 325; Smith v. Graven, 1 Cramp. & Jerr. 500; Jacques v. Marchand, 6 Cowen, 497; Whittaker v. Brown, 16 Wendell, 505; Thorn v. Smith, 21 Wendall, 365; Joyce v. Williams, 14 Wendell, 141; Martelle v. Le Blane, 10 Lou. 557; Pole v.
      Gist et al., 4 McCord, 259; Willis v. Hill, 2 Dev. & Batt. 231; Ethridge v. Binney, 9 Pick. 272; United States Bank v. Winship et al., 5 Mason, 183, 5 Peters (S. C.), 529. See also Nicholls v. English, 3 Brews (Pa.), 260. The case of Salem v. Thomas, 47 N. Y. 15.
   Scott, J.

The sole question in this case is as to the sufficiency of the facts stated in the petition of the plaintiff in the court below, to constitute a cause of action. Was the demurrer to it properly sustained?

The action was brought against the defendants, Mc-Creath & Roach, as partners, to recover a sum of money alleged to have been paid by the plaintiff’ as surety for the firm. This payment is alleged to have been made in satisfaction of a judgment recovered against him and Mc-Creath alone, upon two promissory notes executed by Mc-Creath individually, and by the plaintiff as surety, for money borrowed by McCreath of one Toberin, for the use of the firm. There is no averment in the petition that the money borrowed of Toberin was loaned by him to the firm of McCreath & Roach. On the contrary, the averment is that the money was loaned to the defendant, William McCreath.

It is not alleged that said firm was doing business under the firm name of William McCreath, or that the notes given for its repayment were executed in the firm name. On the contrary, it is averred that “ said defendant, William McCreath, signed said notes in his individual name.” A recovery is not sought against Roach as a dormant or secret partner, who permitted the firm business to be carried on in the sole name of McCreath, while he kept his own connection therewith concealed from the world. So far as appears from the petition, the partnership was open, public, and notorious. And it is not averred that the plaintiff became surety on the notes at the request of the firm, or of Roach, but simply at the request of McCreath.

It is, however, averred that the money, to secure the repayment of which the notes were given, was loaned to MeCreath on account of, and for the use of, the partnership, and was in fact used in the business of the partnership? and that the plaintiff signed said notes at the request of McCreath, as surety for the said partners, and not for said McCreath individually, and in signing the same understood that he was becoming, and, in fact, did become, surety for said partners jointly, and not for said McCreath as an individual.

In so far as these averments may be understood as importing that the loan was made to the firm, or on its credit, and that the plaintiff became surety for the firm, we think they must be regarded as conclusions of law, drawn by the pleader from the facts stated; that is, from the facts that the money was borrowed for the use of the firm, and was, in fact, applied to and used in its business transactions. A demui’rer does not admit the truth of such conclusions. If they are to be regarded as allegations of fact, they are inconsistent with, and are negatived by, the other averments of the petition ; for the notes themselves (copies of which are appended to the petition), in connection with the averments of the petition, evidence a transaction and contract to which the firm was not a party. They show that the moneys were loaned on the credit of notes executed by a single member of the firm, in his individual name, and by the plaintiff' as his surety. They show that if the plaintiff signed the notes as a surety, his sole principal was William McCreath. In the absence of any allegation of fraud or mistake, the plaintiff can not be permitted, by averment, to contradict the plain terms of his own written contract. The notes must speak for themselves, and they purport to be made by, and in behalf of, William McCreath and the plaintiff only.

The questions raised by the demurrer to this petition are, then, as we think, substantially these: Where a partner, on the security of a note signed by him individually and by another as his surety, borrows money for the use of the partnership, and which is, in fact, applied to partnership purposes, does the money so borrowed become a partnership debt ? And if payment of the note be enforced against such surety, does he thereby acquire a right of action against all the partners, as his principals ? Both upon principle and authority we think these questions must be answered in the negative. “ Where one partner borrows money' on his individual credit, and afterward applies it to the payment of partnership debts, or loaus it to the firm, it does not entitle the original lender to consider himself a creditor of the firm, and to enforce payment against them." Jacques v. Marquand, 6 Cowen, 497 (per Sutherland, J., citing Ex parte Hunter, 1 Atk. 223; Parkin v. Caruthers, 3 Esp. 250). The plaintiff here became surety for an individual member of a firm, on an express separate contract made between him and Toberin. If the money borrowed was subsequently applied by MeCreath to the use of the partnership, he, and not Toberin, thereby became the creditor of the firm. Eor moneys procured by MeCreath on his individual credit, and used for the partnership benefit, there can be no doubt that he would be entitled to a credit in his account with the firm, and it would seem unreasonable that the other partner should, besides, be liable to the lender, on a contract to which he was not, even an ostensible party, and of which he may have had no knowledge.

In Bevan v. Lewis, 2 Eng. Ch. 376, it was held that if a partner borrows a sum of money and gives his own security only for it, it does not become a partnership debt by being applied to partnership purposes, with the knowledge of the other partner.

The same was held in Willis v. Hill, 2 Dev. & Bat. 231. So, in a recent case in New York, it was held by the court of appeals, that “where money is loaned upon the promissory note of one member of a copartnership, and upon his individual credit, the fact that the money was applied to the payment of the partnership debts, does not constitute the lender a creditor of the firm. It is only in cases where the name used, and to which credit is given, is that adopted by the firm, and used to designate the partnership, that it is held liable.” Nat. Bk. of Salem v. Thomas, 47 N. Y. 15. See also Emily v. Lye, 15 East. 7. Such, we think, is the well-settled rule where the question arises between the lender and the partnership. And it can not be otherwise where the surety of the borrower is the plaintiff'. His principal can only be one who is liable for the debt. And unless such liability attaches to the partnership, he can not claim that the relation of principal and surety subsists between the partners and himself.

¥e are,-therefore, of opinion that the court of common pleas did not err in sustaining the demurrer to the petition of the plaintiff below, and that its judgment was properly affirmed by the district court.

Judgment of district court affirmed.


source: Caselaw Access Project

author: Johnson, Chief Judge.

license: Public Domain

text:
    Rice v. Railroad Co.
    1. An indebtedness incurred by a married woman, for the benefit of hex-self or her separate property, and upon its credit, and the giving of a note or other obligation therefor, are facts from which a court of equity may imply and enforce a charge against such property.
    2. But axx ixxtexxtion to charge such property, will not be implied, merely from the giving of a note or other obligation by a married woman.
    3. Neither will her separate property be made liable fox- her general engagements, in the absence of a coxxtract valid in law to bind the same, or of such facts and circumstances as make it, as between the parties, just and equitable.
    4. When á married woman subscribes to capital stock of a railroad eorporatioix; by which she agrees to take and pay for a certain number of shares of said stock, but makes default in payment, and action is brought to charge hex- separate property with the amount of such subscription : iHtild, That in the absence of any proof that either party dealt on the credit of such property, equity will nbt imply ox- enforce a chax-go against the samé.
    Error to the District Court of Sandusky county.

      The plaintiff below, a railroad corporation, under the laws of Ohio, brought an action to charge the separate estate of Mrs. Rice, a married woman, upon the following agreement:
    “ We, the undersigned, hereby subscribe for the number of shares of the Columbus, Tiffin and Toledo Railroad Company (each share being fifty dollars) set opposite our names respectively, and agree to pay the same unto said railroad company, as follows: Five dollars on each share shall be payable at the time of making this subscription, and the residue thereof shall be paid in installments not exceeding five dollars per share per month, to such person as may be required by the directors of said company. Conditioned, further, that the railroad line be so located as to permit the depot grounds to be located at or so near the village of 'Woodville as to make it a station on said road of the town of Woodville, in the county of Sandusky, State of Ohio.
    “Woodville, Ohio, May 18th, 1869.
    Names. Number of shares. Amount.
    (Signed) - - -
    “ Mrs. A. Rice. 20 ' $1,000 00.”
    The petition alleges the performance of all conditions precedent on plaintiff’s part, and that Mrs. Rice has failed to pay the several calls on said subscription.
    It is further alleged, at the time said subscription was made, Mrs. Rice was, and still is, the wife of Archibald Rice, and that she then was, and still is, the owner of some $12,000 worth of real- and personal property, which is, with the consent of the husband, who is insolvent, under the sole control and management of the wife, and which she owns in fee simple.

    For the purpose of making said subscription a charge upon this property of the wife, it is averred that the stock was purchased by the wife for her own benefit and that of her separate estate, and to induce the railroad company to construct its road Dear said village of Woodville, in the vicinity of her lands, thereby to enhance and increase their value; and that, at the time she made the subscription, it was understood and agreed by and between the parties that her engagement was made on the faith and credit of her separate estate, and that she intended to and did charge her separate estate and income with the payment thereof.
    The only answer necessary to be noticed is that of Mrs. Rice touching this point.
    She denies that she was the owner of a separate estate, or that said agreement was made on the faith and .credit thereof, or that she intended to or did charge her property with the payment of said subscription.
    Upon the trial, the court, upon the pleadings and evidence, found in favor of plaintiff below, and the amount due, and ordered a certain eighty acres of the land described in the petition to be sold to pay the same.
    Upon the overruling of a motion for a new trial, a bill of exceptions was taken, containing all the evidence.

      John M. Lemmon, for plaintiff in error, urged:
    1. That Mrs. Rice, being a feme covert, could not make such a contract — and no charge was created on her separate estate — and the evidence shows no separate estate. The eighty-acre lot was bought with the joint means of Mr. and Mrs. Rice, and deeded to Mrs. Rice.
    There is no proof that any of the purchase-money was Mrs. Rice’s “ separate means or money.” No gift is shown to her. The evidence wholly fails to show any separate estate.
    See act of March 23, 1866, 63 Ohio L. 47; also S. & S. 389; Logan v. Thrift, 20 Ohio St. 63; Clark v. Clark, Ib. 128; Phillips v. Graves, Ib. 371.
    Mrs. Rice had not legal capacity to make this contract, if she had no separate estate; and if she had, her capacity to contract was limited to contracts “ for improving, repairing, and cultivating ” the land.
    She had no general contracting capacity. 2 Bishop on Mar. Women, § 232; Swasey v. Antrim, 24 Ohio St. 87.
    The married women’s act of 1861, and its amendments. is to be looked to to ascertain the kind of estate Mrs. Rice had, and for the measure of her capacity to contract with reference to it.
    Examination of the statutes cited will show beyond question that Mrs. Rice had no capacity under or by them to make this contract.
    Had she such capacity, or rather had a court of chancery power to charge her separate estate with payments of such obligations? Levi v. Earl, 30 Ohio St. 253; Machir v. Burroughs, 14 Ohio St. 514, are authorities in point. See also Thomas v. Folwell, 2 Whart. (Pa.), 11. Jaques v. M. E. Church, 3 Johns. Ch. 78.
    This contract for shares was not for Mrs. Rice’s benefit, nor for the benefit of her separate estate. It does not appear she had any power given her to charge the estate by any deed. The deed to her was in fact a general deed to her and her heirs in the ordinary form. See, further, 1 Lead. Cases in Eq. (pt. 2), 735, 737 (4th Am. ed.)

      John McCauley, for defendant in error:
    Is this subscription to the capital stock of the railroad company such an engagement or liability as a court of equity will charge upon the separate property of a married woman ?
    The contract itself shows that it was made at "Woodville, Ohio, and it is provided by it that the company -with which the contract is made shall locate the line of its road so near the town of Woodville as to make it a station on the road. This is a condition of the contract. The record shows that Mrs. Rice, when she signed this contract, was the owner of the two tracts of land described in the petition; that she was therefore responsible, and that at the same time her husband was insolvent. These facts show that her contract was taken, rather than that of her husband, because of her ability to pay for the stock, and therefore with reference to and upon the faith of the separate property. The condition in the contract indicates that she had an interest in the location of the road. It is difficult to see what interest she could, have in the location of the road, except as its location might affect the value of her lands; and that therefore the contract was made for the benefit of her property.
    The principles applicable to this branch of the case have probably been fully settled in this court, in the two cases of Phillips v. Graves, 20 Ohio St. 371, and Levi v. Earl, 30 Ohio St. 252.
   Johnson, Chief Judge.

The question for review arises upon the overruling of the motion for a new trial. It is assigned for error that the courts below erred in holding that upon the facts disclosed upon the trial, the real estate of Mrs. Rice was chargeable with the payment of her subscription to the capital stock of the railroad company.

It is conceded that her agreement was void at common law.

Eor the purpose of charging the separate estate, it is alleged that this subscription for stock was made for the benefit of the wife and that of her separate estate, and to induce the railroad company to construct its road near the village of Woodville, near which her lands were situated, and thereby to enhance their value, and that when she made the agreement it was understood and agreed between the parties, that it was upon the faith and credit of her said estate, and also that she intended to and did charge the same with the payment thereof. These material averments are put in issue by the answer of Mrs. Rice, and, as all the evidence is now before us, the question now is, did the court of common pleas and district courts err in charging the property of Mrs. Rice with the payment of this obligation.

There is no conflict in the evidence upon this issue.

Erom the bill of exceptions it appears :

1; That the tract of land upon which the court below charged this debt, was purchased with the joint means of both husband and wife, and by agreement between them the title was taken in the name of the wife.

2. That in 1869, Mrs. Rice, at the request of a Mr. Burns and others, not agents of the railroad company, but who seemed to be acting in behalf of the citizens of "Woodville, who desired to bring their road by their village, made the foregoing subscription on the paper on which there were other subscribers, and delivered the paper to Mr. Burns, subject to certain conditions not necessary to be here stated.

3. That nearly two years afterward Mr. Burns delivered the subscription paper to the directors of the company who accepted it, and thereafter constructed the road according to the conditions of said agreement.

4. That nothing was said by Mrs. Rice, at any time, expressing or indicating an intention to charge her property with the payment for said stock, nor is there any proof, unless it can be implied from the mere act of making the subscription, that she was dealing on the faith or credit of said property, or intended to charge it.

5. Neither is it shown that the company, at the time they received and accepted these subscriptions, or when it built the road, knew that Mrs. Rice was married or single, or that she had any property to charge.

6. Neither does it appear that the company acted upon the credit of Mrs. Rice’s property, either in accepting the subscription or in building the road; nor is it shown that the construction of the road has inured to the benefit of her or her property in any other manner than it did to the public generally.

Upon this state of facts it is quite clear no-case is made for the equitable relief sought.

This is an executory agreement, which is void at- common law.

It does not fall within that class of contracts relating to her separate estate, wjhich a married woman is authorized by the statute to make, “ for labor and materials for improving, repairing, and cultivating the same.” S. & S. 391. No intention to charge the separate estate is expressed in the written contract sued on, nor is there oral proof of such intention otherwise expressed. Neither party acted on the faith and credit of the wife’s property.

The only ground on which this judgment can be supported is to hold that, from the mere fact that Mrs. Rice signed this obligation to take and pay for stock, the court will imply an intention to charge her property, and then enforce that implied intention.

In support of this proposition counsel quote a detached point of the syllabus in Phillips v. Graves, 20 Ohio St. 371, which says that “ such intention to charge may be inferred from the fact that she executed a note or obligation for the indebtedness.”

In thus detaching this point from the context, its scope and meaning is misapprehended.

That was an action to charge a married woman’s separate estate, upon a note given by her for a piano, purchased by her for her own use and benefit, upon the credit of her separate estate, under an agreement made by her when she incurred the debt, that she so charged it with such payment.

The court, without undertaking to say whether a court of equity in Ohio would, under any circumstances, charge the separate estate of a married woman with her general engagements, very cautiously say it will so charge the same with her debts, at least to the extent the same may be incurred for the benefit of her separate estate, or for her own benefit upon the credit of her separate estateand that in such case the intention to charge may be implied from the fact that she gave a note or other obligation for the indebtedness.

This case is not, therefore, an authority for the doctrine that such implication arises in all cases where a married woman makes a contract which is voyl at law, but only in the -special cases named.

Neither is there any conflict between Phillips v. Graves and the case of Levi v. Earl, 30 Ohio St. 147.

' The examination given to the authorities in the last case, makes it unnecessary to repeat them here.

The conclusion there reached was that the jurisdiction of a court of equity over the contracts of married women, and its power to charge her separate estate for the payment of'her obligations, does not depend on the contract, for that is void, nor on the ground that by incurring the obli;gation she thereby, and by way of appointment, charges her estate, but upon the broad principle that courts of equity will give relief against such estates where upon all the facts and circumstances equity and good conscience demand it.

In such cases, the chancellor will not permit a married woman to commit a fraud on another, any more than he would if she were a feme sole.

It was further held in Levi v. Earl, that something more than merely incurring the obligation which the law would create if she -were single is necessary to affect the estate ; that is, equity will not.imply an intention to charge and enforce such implied intention, merely because she has incurred a void contract; and-in order to bind such separate estate by a general engagement, it should appear that it was made by her with reference to and upon the faith and credit of that estate, under such circumstances as make it equitable that such charge should be enforced.

What will, in such cases, -where the obligation is, as in this case, purely executory, constitute good ground for relief, where no direct benefit accrues to the feme covert, or •to her property, must be determined as each case arises.

The case at bar is that of an executory contract to pay for stock in a railroad corporation. There is no intention expressed in the contract, nor proved orally, to charge the separate estate. Neither party dealt or acted upou its credit. It does not appear that either she or her estate has been benefited by the construction of the road, nor that her subscription induced or influenced the company to act otherwise than it would have acted if. it had not been made.

Upon the facts and circumstances of this case, we are clear that there is no ground for the intervention of a court of equity.

Whether this tract of land, which was purchased with the joint means of husband and wife, and the title taken in her name, by agreement between them, is the wife’s separate property; whether there is a difference as to this equitable power to charge the wife’s lands, betwreen the legal estate of the wife, constituting her general property at common law, but made separate property by statute, and that class of property known in courts of equity, before the enactment of the statute, as the wife’s separate estate; and whether it makes any difference whether the intention to charge is expressed in the contract or orally, where such intention can not be implied, are questions mooted in argument, but as they are not necessary to a disposition of this case, they are not considered.

Judgment reversed.


text:
    Manhattan Insurance Company v. Ellis et al.
    1. That the twenty-first section of “ an act for the incorporation and regulation of life insurance” (S. & S. 222), making it unlawful for any agent to act for a foreign insurance company, in the 'transaction of its business, without procuring from the auditor of state a certificate of authority, etc., is a regulation imposed for the benefit of policy holders and others doing business with such company, to be enforced by the penalties provided in said act.
    2. Said section imposes a personal duty on the agent of such company to procure such certificate, and file it with the recorder of the county, and a violation of such duty subjects him to a penalty; but his acts as such agent, within the scope of the authority conferred upon him by the company, are valid and. binding, not only in favor of third persons, but as between principal and agent, notwithstanding his failure to procure and file such certificate.
    3. In an action against such agent and his sureties on a bond given for the faithful performance of his duties, to recover money collected by him within the scope of his agency, and which he has failed to account for, his failure to comply with the provisions of said section is no defense in favor of such sureties.

      Error to the Superior Court of Montgomery county;
    The plaintiff, an insurance company incorporated by tne State of New York, and having its head office there, brought its action against Elias C. Ellis as principal, and John Stroup and others as sureties, upon a bond of which the following is a copy :
    “ Know all men by these presents, that we, E. C. Ellis, of Dayton, county of Montgomery, State of Ohio, as principal, and Messrs. Stroup and Mann, and J. "Wi Darrow, of Dayton, county of Montgomery, and State of Ohio, as surety, are held and firmly bound unto the Manhattan Life Insurance Company, of the city of New York, in the sum of three thousand dollars, for which payment well and truly to be made, we bind ourselves, our heirs, executors, and administrators, jointly and severally, by these presents. Sealed with our seals this 10th day of May, 1870.
    “The condition of this obligation is such, that if the above bounden E. C. JEllis, who has been appointed agent of the said Manhattan Life Insurance Company, shall faith- . fully conform to all instructions, and directions which he, as agent, may at any time receive from the said insurance company; and shall, on the first day ,of each month, and oftener, if required, remit to Lewis Smyidi & Co., who are the general agents of said company, at their office in the city of Cleveland, State of Ohio, all moneys, premium notes, checks, and drafts received by him as such agent, less his proper commissions, together with his full and detailed account of the same, then this obligation to be void, otherwise to remain in full force and virtue.
    “Elias C. Ellis, [seal.]
    “ Stroup & Mann, [seal.] “J. W. Darrow. [seal.]
    “ Signed, sealed, and delivered in the presence of
    “ ¥m. C. Ellis.”
    It is alleged that immediately after said bond was executed, Ellis entered upon his duties as agent for the company, and continued to act as such from May 10,1870, to February 4, 1871, and that during that time he collected and received of the plaintiff’s money, $872.50, which he has failed and neglected to pay over, as required by said obligation.
    An amended answer was filed by the sureties only, alleging the appointment of Ellis as such agent by the general agent of the company at Cleveland, for the county of Hamilton, and that neither said Ellis, though assuming to act during said period, nor did said company for him, at any time procure from the auditor of state a certificate of authority to commence business, nor was such a certificate by either of them filed in the recorder’s office in Hamilton county, wherein the agency of said Ellis was established, as required by section 21 of “ an act for the incorporation and regulation of insurance companies.” S. & S. 248.
    For this reason it is claimed that the acts of Ellis, as agent of said compauy, were unlawful, and that his sureties can not be made liable therefor.
    A demurrer by plaintiffs to this answer was overruled, and exceptions taken.
    A reply was then filed, which denies that said company failed to procure and file in the recorder’s office of Hamilton county said certificate of authority.
    It is also alleged in said reply that prior to March 5, 1870, said company appointed one Ira Lewis, of Cuyahoga county, as its attorney, upon whom process of law could be served, and also appointed one Rollo its agent in Hamilton county, and did, on the 12th of March, 1870, procure and file the proper certificate of authority with the 'recorder of Hamilton county, which contained the name of said attorney and agent, and that the company had in all other respects complied with the requirements of said act.
    It is also alleged that while said Ellis acted as such agent he occupied a portion of the same office with the agent, Rollo; and that all the money so collected by him, arose from insurance procured by other agents before his appointment.

      To this, defendants demurred, and the court sustained the demurrer, and plaintiff excepted.
    An amended reply was then filed, repeating in substance the allegations of the reply, and adding that at the time of issuing said certificate by the auditor of state, he was the agent of the State of Ohio for that purpose, on whom the duty was imposed of determining when foreign insurance companies had complied with the act of April 16,1867, and to issue such certificates of authority, and that as such agent, he so construed said act as to require only one attorney in each state, upon whom process of law could be served, and that the appointment of Lewis, and the filing of said certificate in Hamilton county was iu fall compliance with the requirements of the act.
    It is averred that the company did all that was required of it by said act by the auditor of state, and that due publication was made and filed with him.
    Whei’efore it is alleged that Ellis was the duly authorized agent for Hamilton county.
    A demurrer to this amended reply was sustained, and judgment rendered on the petition and answer, in favor of the defendants, to which exception was noted.
    It is now assigned as error that the court erred in overruling the demurrer to the answer, in sustaining the demurrer to the reply, and to the amended reply, and in rendering judgment for the defendants on the petition and answer.

      Young & Gottschall, for plaintiff in error:
    The court erred in overruling the demurrer to the amended answer.
    1. The bond set out in the petition is the solemn declaration of the parties under seal that Ellis had “ been appointed agent” of the company, and as such estops all the parties from denying such agency; and, if the “ certificate authority ” was necessary to constitute such agency, from denying that it was procured. 8 Pick. 386; 17 How. 437; 14 Maine, 475; 16 Ohio St. 455; 25 Ohio St. 567; Bigelow on Estoppel, 321.
    2. The procuring of a certificate of authority, as provided in Swan & Sayler, 223, § 21, was the personal duty of the agent, and against him alone a penalty is provided for its violation; and it would be unjust to allow him or his sureties to take advantage of his own wrong, so as to protect him from accountability, for moneys received by him as such agent. Washington County Insurance Company v. Colton, 26 Conn. 42-48.
    3. It was not the intention of the legislature to make the validity of the contracts and business transactions of the insurance company dependent upon the procuring of such certificate of authority under this section, but simply to reach and punish the agent who should act for it without having procured such certificate. Insurance Company v. Welsh, 18 Mo. 229; Clarke v. Middleton, 19 Mo. 53.
    This intention must be ascertained by an examination of the statute as a whole, and a comparison of its sections with each other and other statues in pari materia. Harris v. Runnels, 12 Howard (S. C.), 79; Strong v. Darling, 9 Ohio, 201; State v. Battles, 3 Ohio St. 309.
    And, first, the court will mark the distinction between this act, which only prohibits the “ agent ” from acting, and those of June 1, 1865 (S. & S. 232), and April 27, 1872 (69 Ohio L. 155), wherein it is expressly provided that it shall not be lawful for any “ insurance company ” to take risks, transact business, etc.
    A compliance with sections 19 and 20 of this act (S. & S. 222) makes it lawful for an insurance company organized under the laws of another state, or any person for it, whether agent -or otherwise, to do business in this state.
    Having complied with these requirements, such company is as much authorized to do business here as a company organized under pur own laws; and it follows that its contracts are thenceforth valid and binding.
    It is true that the next section (section 21) provides that it shall not be lawful for any agent to act for such company without procuring a certificate “ stating that the foregoing requirements have b.een complied with,” but if it be true that the company itself had complied with these requirements this certificate would add nothing to its powers.

      The fact of such compliance existed without the certificate, and upon this fact is predicated the right of the company to do business in the state.
    4. The money having been actually paid to Ellis, the agent, for the use of the company, the illegality of the transaction of which it is the fruit does not affect the company’s right to recover it out of his hands. Dunlap’s Paley’s Agency (3d Am. ed.), 62; Tennant v. Elliott, 1 Bos. & P. 2; Fanner v. Russell, 1 Ib. 295; German Cong. v. Stegner et al., 21 Ohio St. 488; Anderson v. Moncrief, 3 Desau. (S. C.), 132.
   Johnson, Chief Judge.

The defense, in this case, rests upon the ground, that as Ellis had not been appointed by the company, but by the general agent, at Cleveland, and, as his appointment had not been certified to the auditor- of state, and a certified copy of such certificate filed with the recorder of Hamilton county, as required by section 21 of the act of April 16, 1867 (S. & S. 218), his acts, as such agent, were unlawful, and his sureties are not bound.

The 20th section of said act provided that the company should appoint an agent in each county in this state in which the company has established an agency, on whom process of law can be served. “ And such agent or attorney shall file with the auditor of state a certified copy of the charter of said company, and also a certified copy of the vote or resolution 'of the trustees or directors of said company,” etc.

By section 21 it is provided that: “ It shall not be lawful for any agent to act for any conqpany referred to in the foregoing section, directly or indirectly, in taking risks, collecting premiums, or in any manner transacting the business of life insurance in this state, without procuring from the said auditor a certificate of authority stating that the foregoing requirements have been complied with, and setting forth the name of the attorney of said company, a certified copy of which shall be filed in the office of the county recorder where the agency is to be established, and shall be the authority of such company and its agent to commence business in this state.”

To the defense, founded on this statutory requirement, the plaintiff interposes the following reasons why the same is not sufficient in law.

1. These defendants are estopped from denying the agency of their principal, Ellis, because it is recited in the bond, under their hands and seals, that he “has been appointed agent of said Manhattan Life Insurance Company.”

2. That by the statjite, the duty of complying with section 21 of the act, is a personal duty imposed upon Ellis, and that his sureties on his bond can not take advantage of his neglect to comply with this statutory regulation.

3. That the money having been collected and received by Ellis as such agent, the illegality of the transaction, if it be illegal, of which it is the fruit, does not affect the company’s right to recover on the bond.

In the view we take of this case it is only necessary to consider the second and third of the above points.

By the 23d section of the act, it is provided that: “ It is not lawful for any person to act in this state as agent or otherwise, of any foreign insurance company, until it has deposited with the auditor of state $100,000 in securities of the kind required of domestic companies, and shall have appointed in each county an agent or attorney in which the company has an agency, on whom process of law can be served,” etc.

By section 25 such company shall also file a statement, similar to that required of domestic companies, and it is also made unlawful for any agent or agents, to act for such company, without procuring from the auditor of state a certificate showing that these requirements have been complied with, which certificate shall contain the name of the attorney and shall be filed with the county recorder, etc. An examination of the statement of the case will show that the company had complied with the requirements of this act, so far as to authorize it to transact business'in Hamilton county, by its agent Rollo.

The averment is, that it had furnished the auditor of state with such a statement as was required, and had appointed and certified to him, the attorney in Cuyahoga county, and the agent in Hamilton county, on whom, by law, process could be served, and had received the certificate of authority required by section 23, to authorize it to commence business in Hamilton county.

The only default is in not complying with sections 20 and 21, before recited, as to the authority of Ellis to act as such agent for said county.

By those sections the duty is imposed on “ such agent or attorney, and not on the company, of filing with the auditor of state a copy of his appointment and of the charter, and of procuring from that officer a certificate of authority, etc.

Section 21 makes it unlawful for any agent to act for any company without procuring such certificate.

Clearly these are personal duties imposed on the aigent.

Assuming the proper construction of this act to be that each additional agent of the company in any county where one has already been properly appointed and qualified to act, must also file a certificate of his appointment with the auditor of state, and also a copy of it -with the county recorder, his failure to do so can not invalidate the acts of the company through other lawfully appointed agents in the same county. Neither would the failure of an agent, duly appointed by the company, to comply with sections 20 and 21 render him incapable of binding his principal.

"Without such compliance, his contracts within the scope of his authority would bind the company, notwithstanding this want of authority under the statute.

By the 37th section a severe penalty is imposed on such an agent for violating the provisions of the act, and as section 21 makes it unlawful for him to transact business until the conditions precedent imposed on him are complied with, he is subject to these penalties.

The object sought is to make foreign insurance companies amenable to our laws for business transacted in this state, and to place them on the same footing as domestic companies, and to protect policy-holders and others dealing with the company. 24 Ohio St. 79. This is done by imposing penalties on persons who represent the company.

They are agents to bind the company if it has authority to do business in the state, and having such capacity it can require a bond of such agents for a faithful discharge of their duties.

Compliance with sections 20 and 21, by Ellis, was not a condition precedent to the right of the company to transact business in Hamilton county, for that had already been acquired through their agent, Rollo.

Por these reasons we are of opinion that the sureties of Ellis are liable on this bond, notwithstanding his failure to comply with the statute in question.

Washington Insurance Co. v. Colton, 26 Conn. 46, is an authority directly in point.

By the laws of Pennsylvania, foreign insurance companies were only permitted to transact business in that state upon certain conditions, which were not complied with in respect to the business of an agent who had received and failed to pay over money.

An action on his bond against his sureties was brought for moneys received by such agent, and thie defense there, as here, was that the business was illegal, and the agent was under no obligation to account.

The court held otherwise, saying : “In regard to the neglect of the agent to file a copy of his appointment in the office of the secretary of state, this, by the laws of Pennsylvania, appears to be the duty of the agent himself, and it is quite obvious that it would be unjust to suffer him, or the persons who have become bound for the faithful discharge of his duties, to take advantage of this neglect so as to protect him. from all accountability for moneys received as such agent.”

In Anderson v. Moncrieff, 8 Desau. 125, it was held, that “ an agent employed to sell, and remit moneys, shall not refuse to account on the plea that the act which brought the money into his hands was in violation of law.” And the court will go far to give such construction to the acts of a principal as to prevent them being held to be illegal in such a case.

In Columbus Insurance Co. v. Walsh, 18 Mo. 237, it was held that the failure of the company to comply with the statute of Missouri, which made it unlawful to'transact business in the state without a license, does not make the contracts made by their agents void.

It was an action by the company to recover back from the assured money paid on a loss in ignorance of a subsequent insurance which avoided the policy.

In speaking of the statute requiring a license to do business in the state, the court says: “ These agencies are required to obtain a license, . . . and upon a neglect or failure, the statute makes them liable to a penalty of five hundred dollars; but it does not declare contracts made by them void.”

To the same effect is Clark v. M. & R. Garnishees, etc., 19 Mo. 53.

This statute of 1867 was before the Supreme Court, in Union Mutual Ins. Co. v. McMillen, 24 Ohio St. 67, where the construction then given to it is practically decisive of this case. It is said the object of the act is, not to make the business of life insurance unlawful, but to protect policy holders and others dealing with the company.

It is true that, in that case, the action was on a policy issued by a foreign company, which had failed to comply with this act, and the company sought to relieve itself from liability because the statute had not been complied -with; but the holding is, that the prohibition is against persons acting for companies that have not complied with the requirements, and the intention was to rely on the penalties imposed as sufficient to compel compliance.

Authorities are not wanting apparently opposed to this view, but on examination it is believed they will be found to rest on tbe wording or construction of the statutes under which the cases arise.

In Washington Co. Mut. Ins. Co. v. Dawes, 6 Gray, 376, under a statute of Massachusetts, which prohibits a foreign insurance company from doing business unless certain conditions are eoniplied with, it was held that a failure to comply barred an action on a premium note.

But whatever may be the decisions in other states, as to the effect of a lion-compliance with these statutory regulations, on the validity of the acts of agents of such companies, it is settled by the case in 24 Ohio St., that a failure by agents' to comply with them does not invalidate their acts.

To hold otherwise would enable agents to take advantage of their own wrong.

The receipt of moneys on policies would undoubtedly bind the company as between it and the policy holder, and if he is not accountable, we would have the anomaly of an agent authorized to bind his principal and yet be himself not bound.

Judgment reversed. •

Since this case was decided the Supreme Court has-recognized and affirmed the principle on which this case rests. In Fiegert v. The State of Ohio, not yet reported, it is held, that a county treasurer and his sureties are liable, on his bond, for taxes collected on the duplicate, although the tax was illegal.

Scott, J., did not sit in this case.


author: Wright, J.

text:
    Newton et al. v. Taylor.
    1. A trust raised by implication of law may bo proved by parol.
    2. An implied or constructive trust may be established from tbe acts of a party who lias obtained money upon the faith of hia agreement to buy lands in the name of his wife, and, having bought them, takes the title to himself.
    3. A husband, so receiving money, which would not have been advanced except upon the agreement that it was for the wife’s benefit, and tobe invested in her name, is an agent for the wife, and by taking the deed to himself, under such circumstances, makes himself a trustee ex maleficio.

      4. If the husband is a participant in inducing the purchase for the wife’s benefit, receives the money for that purpose to invest in her name, and then buys for himself, this is such a fraud as will create a trust against him and those claiming under him with notice.
    Error to tbe District Court of Carroll county.
    Keziah Taylor filed her petition in the Court of Common Pleas of Carroll county, against the representatives of Simeon Jennings, deceased, and others, stating that she is the widow of Pirn Taylor, and that about the year 1834, she, by her husband acting as her agent, purchased of Samuel Stokley a tract of land in Carroll county, for $2,000; that her husband’s means were such that he could not pay for said land, and that her brother, Mahlon "Whittacre, advanced $500 to help pay for the same; that it was the understanding between said "Whittacre, plaintiff, and plaintiff’s husband, Pim Taylor, that the deed for the property should he made to plaintiff. Her husband, instead of having the deed so made to her, fraudulently took it to himself. One-half of the land was sold for $1,100, the other half being paid for by the $500 advanced for the purpose hv plaintiff’s brother. Plaintiff’s husband borrowed money from Simeon Jennings, giving sundry mortgages on the property, which plaintiff refused to sign, on the ground that the land belonged to her. Jennings foreclosed the mortgages and bought in the property. Plaintiff says she was feme covert until 1866, and asks that she may recover the land, on the ground that her husband held it in trust for her.
    The answers deny all the allegations of the petition.
    The court of common pleas decided for the plaintiff. On appeal to the district court, that court made a special finding of facts as follows:
    “ That the plaintiff is the widow of Pim Taylor, deceased; that they were married before the year 1832, and during said year and since until his death were husband and wife. That in the year 1832, they then having no real estate, except a small lot and house thereon held in the right of the wife by gift from her father, and it not appearing that she had' any other estate, and they were desirous at that time of purchasing the lands in question, said lands being near to said residence, as a means of securing a homestead farm, that it was ascertained by said plaintiff and her husband that said lands with others hereinafter mentioned could be purchased with the aid of five hundred dollars to be used as an advanced payment, the price asked for said land being two thousand dollars ($2,000). That the said Pim Taylor was of such pecuniary means and credit that, without aid he could not obtain said money nor make said purchase; that it wuis then agreed between said plaintiff and her said husband that she should make application to her brother, Mahlon Whittacre, to advance five hundred dollars for the making of said purchase, upon the terms that if the same was obtained it should be used by said Pim Taylor in the purchase of said lands for said plaintiff, and that when said land was fully paid for, the deed therefor should be taken in her name. That pursuant to said agreement, said plaintiff, in the absence of her husband, applied to her brother for the advance aforesaid for the purpose aforesaid, making known to him the arrangement aforesaid between herself and her said husband, who thereupon did advance to her the said sum of five hundred dollars for the purpose aforesaid, upon the understanding that the same should be reimbursed to him, but upou the further understanding and agreement that-the same should be used as aforesaid, and without other security for repayment than the understanding and agreement aforesaid, and the said purpose and agreement as to-the use of said money being with him an essential part of the inducement to advance said money as aforesaid, without which the same would not have been made. That thereupon plaintiff' delivered said money to her said husband, who received the same with knowledge of the understanding upon which the same was so advanced, and for the purpose of carrying out said agreement; that thereupon said Pirn Taylor proceeded with another brother of plaintiff' to Steubenville, to the owner of said land, one Samuel Stokely, and entered into a contract in his own giame to purchase said lands in controversy, with the other land, viz., the east half of fractional section 2, in township-16, of range 6, at the said price of two thousand dollars. That afterward said Pirn Taylor transferred the portion of said lands last mentioned to Frederick Unkefer, upon his-agreement to pay said Stokely on said contract the sum of eleven hundred dollars, which he, the said Unkefer, did,, and thereupon, in 1834, received from said Stokely a conveyance of the same in part performance on his part of said purchase; that after said purchase plaintiff' mortgaged her house and lot first aforesaid, and raised thereon the sum of two hundred dollars, which was applied in part payment-for said land, and that some village lots were sold off said land and the proceeds applied in payment thereof. And afterward the said lands having been fully paid for, in 1835, the same was conveyed by said Stokely to said Pim Taylor-by deed in fee simple, mentioning no interest of said plaintiff therein. All of which facts, except the said conveyances and mortgage, were found upon parol proof only,, which was offered by the plaintiff'; and to each separate part of which, when so offered, the defendants, by their counsel, objected as incompetent, but the court overruled said several objections and.each of them; to which ruling the defendants, by their counsel, excepted, and no testimony was offered tending in any manner to show that there ever had been any writing establishing any of said facts or in any manner creating any trust in favor of, or ■other legal or equitable estate in said lands in, the plaintiff. That on the 29th day of October, 1842, said Pim Taylor ■executed to said Simeon Jennings a promissory note for the sum of $2,041, payable three years and two months from date, and to secure the same executed to him a mortgage on said premises in controversy, which was not executed by said plaintiff. That the said promissory note was given for an indebtedness accruing at various previous times of sums of which said Taylor had become indebted ■to him as security for others,-and for other moneys loaned to him by said Jennings at several times, and for portions -of which at previous times said Taylor had at different times previous thereto executed mortgages on said lauds, :and to which sums at different times considerable sums of money had been added from time to time as usurious interest, but what amount beyond the amount deducted therefrom in the decree hereinafter stated, the court are not advised. That previous thereto, on the 4th day of May, 1840, said Taylor, with one Seaton and one Craig, was liable to said Jennings for the sum of $875 as sureties for one Roofs, and for said liability, and no other consideration, on said day executed to said Jennings a note for $1,000, payable thereafter, and on the 3d day of November, 1842, gave to said Jennings, in renewal of said note, and for no other consideration, a negotiable note, payable to •said Jennings eighteen months from its date, for the sum ■of $1,216, and interest thereon, and to .secure the same, the .said Taylor, Seaton, and Craig executed to said Jennings a mortgage upon said lands in controversy, and upon other lands of said Seaton and Craig respectively. That on the 27th day of April, 1844, being nine days before the maturity of the same, said Jennings, for the purpose, on his part, among other things, of preventing the said makers from defending against the usurious consideration of said note, transferred said note and mortgage (but without any-written transfer of said mortgage) to one Richard Webb. That said .Webb, in July, 1844, prosecuted a suit to foreclose said mortgage in Carroll County Common Pleas, making said mortgagors and said Jennings, but not the plaintiff, parties thereto. That defense therein was made, .among other defenses by said Taylor, against said $1,216 note as to its usurious consideration as to all amounts, except the sum of $875, with interest thereon from May 4, 1840, but such proceedings were had in said cause that notwithstanding said defense, and notwithstanding such usurious considerations were admitted therein by said Jennings, yet, at the October term of said court, in the year 1846, a final decree was rendered therein, finding in favor of said Webb that there was due from said mortgagors to him thereon the sum of $1,506, and ordering the payment of the same, and in default thereof ordering as hereinafter stated, and finding due to said Jennings upon said note in his favor secured by mortgage on said land in controversy, and dated on the 29th day of October, 1842, hereinbefore described, and which he has set up in said suit, the sum of $2,200 and upward, and finding the same to be a first lien upon the said lands in controversy, and ordering the sale of all of said lands, the proceeds of said land in ■question in this case, to be first applied in payment of the amount found due said Jennings on said note and mortgage on said 29th of October, 1842, and all further proceeds of said lands to be applied, so far as necessary, to the payment of said mortgage to said Webb, the costs of said suit to be .also satisfied out of said proceeds. That subsequent thereto and before -- term of said court in 1847, the lands in •question were sold under said order to said Jennings for less than the amount due him as aforesaid, and that at said term said sale was approved and confirmed and a deed ordered therefor, which was duly made to said Jennings by the proper sheriff in proper form, and said Jennings accepted possession thereunder, said Pirn Taylor with his wife having remained in possession from the date of the-deed to him until said sale and conveyance by the sheriff. And the court further find that at the time of the making of said mortgage on the 29th .day of October, 1842, said-Jennings, by reason of the facts aforesaid in regard to the-origin of said debt and the making of said previous mortgages, and the security of portions of said indebtedness-thereby, and of the nature of .plaintiff’s claim aforesaid, had no such notice of the rights of the plaintiff in said lands as ought to affect his rights to have said mortgage of said October 29, 1842j satisfied out of said lands; but the court find that before his assignment of his mortgage to said "Webb he w'as informed by said plaintiff, and fully understood from her that she claimed said lands to be hers; that she claimed that her husband had no right to have mortgaged the same; that she claimed that he did not furnish the money for its purchase; and she claimed that she had admonished him before any said mortgages had been made; and that she claimed that by reason of her rights in the-same said Jennings could not take the same from her; and the said Jennings had then full opportunity by reason of said claim on her part to have inquired for and learned any of the facts aforesaid in regard to the rights of plaintiff" against said lands; and that the said Simeon Jennings had full opportunity by reason of said information to have caused said Keziah Taylor to be made a party to said proceedings to foreclose at or after the commencement of the same; and the court find from the facts as aforesaid as matter of law, that the purchase of said lands by said Pim Taylor was subject to a trust in favor of said plaintiff', so that the said Pint, on receiving a deed therefor, held the same in the right of his said wife only, and that the same so- continued, the said mortgages and proceedings thereon notwithstanding; and that by virtue thereof and of said purchase by said Jennings, and because of the facts aforesaid in relation thereto, the said land and its proceeds was in the hands of said Jennings, and, as against the plaintiff", a fund for the payment of said debt secured by said mortgage held by him, and, subject to the matters hereinafter stated, so continues to be; that by his use and occupation thereof since, .and by his sales of a portion thereof to bona fide purchasers without notice, he has received considerable sums which ought to be applied in discharge of said mortgage debt, but what amount the court is unadvised. And the court hold .as matter of law that by reason of the matters as aforesaid, .and of the lapse of time since the rendition of said decree, the amount of said debt to said Jennings as found therein .should not be further reduced by reason of any allegation or claim of usury therein, but only by reason of the use mid occupation of said lands by said Jennings, and of the defendants, and the proceeds of any sales thereof by said Jennings in his lifetime, and that an account oughf to be taken for the purpose of determining the amounts aforesaid.
    “ It is therefore ordered, adjudged, and decreed that this ■cause be referred to Elijah P. Grant, Esq., as a referee to take and state an account between said parties, based upon the facts stated in this decree, and upon proof, and the said referee report his proceedings to the next term of the District Court of Carroll county, Ohio, and that he file his account thirty (30) days before the next term thereof, to .all of which findings, holdings, and orders, the defendants by their counsel except, and pray that their exceptions be entered of record, which is accordingly here done in open court.” . . .
    The case involves another point. A number of the defendants were not served with process, and did not appear and answer; they were residents of the state, though not ■of Carroll county. In a publication to make non-residents parties, the names of these individuals were included. They now file cross-petitions in error, and claim that not having been served, not having appeared, and as the publication could not make them parties, a judgment against them was error. They say therefore that the certain judgment, as'well that against themselves, as that against the others, should be reversed.

      F. E. Hutchins, for plaintiff in error.

      Shober & Raley, for defendants in error.

      Kennett & Ambler, for J. H. Jennings, on cross-petition in error.
   Wright, J.

The statement of facts is long and complicated, but we extract this: Mrs. Keziah Taylor brought suit to enforce what she claimed was a trust, existing in her favor, in certain land, held in her husband’s name, at his death. She claims that the circumstances under which, the land was bought create this trust.

Many years ago, in 1832, Pirn Taylor, the husband, was-without means. He and his wife wanted to buy some land. The price was $2,000, a sum that Pirn Taylor could not raise. A payment of $500 could secure the bargain, but the husband had neither cash nor credit to this extent. Under these circumstances, husband and wife agreed that she should get the needed sum from her brother, Mahlon> Whittacre, the land to be purchased for her, and, when paid for, the deed to be taken in her name. Pursuant to-this arrangement, plaintiff did get the $500 from her brother,, advising him of the facts; the understanding being that he was to be reimbursed; that the money was to be used as indicated, this being his sole security for repayment. This understanding and agreement about the purchase of the property was the inducement to the brother to advance-the $500, and without it he would not have made the advance.

Thereupon the husband buys the land. One-half of it is sold, the proceeds going to pay for the purchase of the whole. Some lots, carved out of the purchase and some-property of the wife made further payments, and finally, the property being all paid for, the husband has the deed made, not .to the wife, but to himself. The wife claims-that these circumstances raise a trust in her favor as to this land so taken in her husband’s name, which is half of the-whole original purchase. The facts of the alleged trust-rest in parol merely, and it is claimed they can not be thus proved.

After tbe husband had thus got the deed for the property in his own name, he made two mortgages upon it to Simeon Jennings. The first mortgage was taken without knowledge of the alleged trust, and, as against this, the district court finds the wife has no claim. The second mortgage was assigned to one Webb, with notice of the alleged trust, and as to this her rights are held to be paramount.

It is to be determined whether or not, from the facts found, the alleged trust can be raised in law.

The husband was unable to buy the property. He was unable even to raise the first $500. The wife undertakes to do it. She gets it from her brother upon the understanding that it is to purchase laud in her name. Without this understanding, he would not have advanced it at all, and this understanding is all the security he asks or gets for a repayment. Knowing all this, having been instrumental in bringing it about, for the husband to violate the whole agreement from beginning to end, by taking the deed in his own name, is, to say the least, very like a fraud, both upon his wife and upon her brother.

A trust may arise ex maleficio. In Lloyd v. Spilletts, 2 Atk. 148, Lord Hardwicke speaks of resulting trusts as trusts by operatiou of law, and classifies them : First, where an estate is purchased in the name of one person, but the money or consideration is given by another; secondly, where a trust is declared only as to part, and nothing said as to the rest, what remains undisposed of results to the heir at law. He then proceeds to observe : “ I do not know of any other instance besides these two where this court have declared resulting trusts by operation of law, unless in cases of fraud, and where transactions have been carried on mala fide.” These remarks of Hardwicke are cited in Fleming v. Donahoe, 5 Ohio, 255.

In the report of the same case (Barnardiston’s Chy. 888), the lord chancellor says that the two cases of trusts above alluded to are the only two instances that he remembered of trusts that have been allowed to arise by operation of law since the statute of frauds and perjuries, unless where there has been a plain and express fraud. "Where there has been, a fraud in gaining a conveyance from another, that may be a reason for making the grantee in that conveyance to be considered merely as trustee. Trapnall v. Brown, 19 Ark. 89.

A trust of this kind is a mere implication of law, from the fact of the purchase with another’s money, and the fact of fraud in procuring the legal title.

In Browne on Frauds, § 84, it is said : “ Even where the contract to hold in trust is the means of obtaining the legal title, a case which falls under the third class mentioned by Lord Ilardwicke, the trust is not created by the contract, but results or is implied from the fraud.”

Perry on Trusts, § 166, speaks thus : “ There is another large class of trusts, which arise from frauds committed by one party upon another. Thus, if one party procures the legal title to property from another’, by fraud or misrepresentation, or concealment, or if a party makes use of some influential or confidential relation which he holds toward the owner of the legal title, to obtain such legal title from him upon more advantageous terms than he could otherwise have obtained it, equity will convert such party thus obtaining property into a trustee. If a person obtains the legal title to property by such arts, or acts, or circumstances of circumvention, imposition, or fraud, or if he obtains it by virtue of a confidential relation and influence under such circumstances that he ought not, according to the rules of equity and good conscience, as administered in chancery, to hold and enjoy the beneficial interest in the property, courts of equity, in order to administer complete justice between the parties, will raise a trust out of such circumstances or relations; and this trust they will fasten upon the conscience of the offending party, and will convert him into a trustee of the legal title, and order him to hold it, or to execute the trust in such manner as to protect the rights of the defendant party and promote the safety and- interests of society. Such trusts are called constructive ■trusts.” These trusts the author distinguishes from implied or resulting trusts, which arise from the intention of parties, as manifested in contracts made in good faith, while the constructive trust arises from the opposite of good faith.

Washburn e makes the same classification of implied, resulting, and constructive trusts. 2 Wash. 470.

In the case of Morey v. Herrick, 18 Pa. St. 128, it is said: It is well settled that if one be induced to confide in the promise of another that he will hold in trust, or that he will purchase for one or both, and is thus led to do what he would otherwise have forborne, or to forbear what he contemplated to do in the acquisition of an estate, whereby ■the promissor becomes the holder of the legal title, an attempted denial of the confidence is such a fraud as will operate to convert the purchaser into a trustee ex maleficio.”

Commenting upon this ease, Tiffany & Bullard on Trusts, 189, say: “ The trust in these cases is raised ex maleficio, and is not so much because of the fraud in the original acquisition of the property as in the subsequent refusal to execute the trust.” The opinion, however, of Browne, in his treatise on frauds, seems to be that the fraud which suffices to lay the foundation of a trust is not simply that fraud which is involved in every deliberate breach of contract. There must have been some agency in bringing about the result, without which a mere refusal to perform the trust is not enough. Browne on Frauds, §' 94. And Perry says that the mere breach of a parol agreement will not create a trust. § 215.

Washburne, in discussing this division of implied, resulting, and constructive trusts, speaks of the first two as arising from the act of parties, while the constructive trust is imposed in invitum upon the person who is held as trustee. 2 Wash, book 2, ch. 3, § 2, p. 470 (4th ed.)

And he further observes (p. 482) that the term construc"tive trusts is sometimes used in a sense broad enough to •embrace such as were properly under the head of implied or resulting trusts; and that, properly speaking, constructive trusts are such, as are raised by equity, in respect to property which has been acquired by fraud, or where, though originally acquired without fraud, it is against equity that it should be held by him who has the legal title.

"Washburne also seems to entertain the same opinion expressed by Perry and Browne, that a mere subsequent refusal to do what had been agreed, is not such a fraud as will create a constructive trust. 2 Wash. 479. And a like view is held in Fickett v. Durham, 109 Mass. 423. “In no case will the grantee be deemed a trustee, if he used no fraud or deceit in getting his title, although he verbally promises to hold the land for the grantor.” Minor v. Mitchell, 30 Ind. 234.

■ It may, however, be remarked, that the federal courts go to the full extent of affording relief, even in the absence of proof of express deceit or fraudulent purpose at the time of taking the deed. Russell v. Southard, 12 How. 139, 148. This is illustrated in numerous cases where a party takes a deed, absolute upon its face, but which is really a mortgage, and endeavors to retain property upon which he has advanced a largely inadequate consideration. Edrington v. Harper, 3 J. J. Marshall, 355; Campbell v. Dearborn, 109 Mass. 130.

. It is strenuously argued by plaintiff in error, that the only fraud here alleged or proved, consisted simply in the -fact that Taylor refused to do as he had promised, and that -there was nothing in the inception of the transaction that would bring him within the rule requiring fraud to be shown in his conduct at that time.

But if a party induces or brings about the circumstances-that put him in a position whereby he is able to perpetrate a fraud, and then does perpetrate it, these circumstances-of wrong will create a trust. In Hoge v. Hoge, 1 Watts, 163, the syllabus gives an idea of the facts. “ If a testator be induced to make a devise, by the promise of the devisee that it should be applied to the benefit of another, a trust is thereby created, which may be established by parol evidence ; and this is not contrary to the statute of wills.”

It appeared that John Hoge, the devisee, “ suggested ” to-the testator to devise the property to him, it being intended for the testator’s son, William Hoge. Nothing was said in the will about any trust, but it was sought to be established by parol. Gibson, C. J., says (p. 214): “Undoubtedly every part of a will must be in writing; and a naked parol declaration of trust, in respeqt of land devised, is void.. The trust insisted on here, however, owes its validity, not to the will or the declaration of the testator, but to the-fraud of the devisee. It belongs to a class in which the trust arises ex maleficio, and in which equity turns the fraudulent procurer of the title into a trustee, to get at him; and there is nothing in reason or authority to forbid the-raising of such a trust from the surreptitious procurement of a devisee.” It is further said, in the same case : The question has been, as to the eircumstauces which constitute-such a fraud, as will be made the foundation of a decree. A mere refusal to perform the trust is undoubtedly not enough ; and it seems to he requisite that there should appear to have been an agency, active or passive, on the part of the devisee, in procuring the devise.”

In Devenish v. Baines, Pre. in Chy. (Finch), case 3, a testator intended to will the greater pai’t of his estate to-his godson, and the rest to his wife. The wife persuaded him to give the whole to her, and that she would give the-godson the part designed for him.

The wife refused to let the godson enjoy the estates intended for him, but it was decreed against her on the ground of fraud, saying that a trust of such parol estate might be raised without writing, notwithstanding the statute of frauds.

In Flynn v. Flynn, a man made his will with his wife as-executrix. The son afterward prevails on his mother to-get the father to make a new will, and to name him executor, he promising to be a trustee only for his mother. “ Upon the whole matter,” says the report, “ it appearing to be as well a fraud as a trust, the Lord Keeper, notwithstanding the statute of frauds and perjuries, though no trust was declared in writing, decreed for plaintiff.”

In Sechrist’s appeal, 66 Penn. St. 237, the fifth syllabus is: •“ Where one procures a title which he could not have obtained, except by a confidence reposed in him and abuses the confidence, he becomes a trustee ex maleficio. Beegle v. Wentz, 55 Penn. St. 369.

In Squires’ appeal, 70 [Penn. St. 266, Mrs. Squires, by parol, purchased property. Her agent, Ridgway, who owed her $5,000 was to turn this amount in as the purchase-money, and receive a deed in trust for her. He took an .absolute deed to himself and then denied the trust. He was held a trustee ex maleficio. Woolford v. Herrington, 74 Penn. St. 311; S. C., overruling former, 4 South. Law Rev., 327, June, 1878.

In Rasdall’s Adm’rs v. Rasdall, 9 Wis. 379, the fraud ■consisted merely in a refusal to execute a trust, and this was held not such fraud as would justify the admission of parol evidence of the agreement. And in this case the distinction between fraud in procuring the conveyance and that which arises only from the refusal to execute a parol trust or agreement, connected with a conveyance obtained without fraud, is said to be not only clear upon principle, but is not without'sanction. The ground of the decision is that the conveyance in question was “ without any solicitation or instigation of the defendant.”

It can not be said that Pirn Taylor’s refusal to fulfill his promise is the only ground on which to base the alleged trust. He appears to have been a participant, at least, in bringing about the whole arrangement. He agreed with his wife that the purchase should be made. He agreed with her that she should solicit the loan from her brother. He agreed to take the deed in her name. Unless he had agreed and consented to all this, the loan or advance would not have been made. Certainly, therefore, he induced the result, as the devisee induced the devise which he endeavored to hold as his own. Taylor, therefore, becomes a tr.ustee by virtue of Ms own wrongful acts. . He took in confidence what he could not retain, without bad faith and fraud.

Courts of equity raising a trust by construction in eases of this kind, can do equal and complete justice between parties, though in so doing the relief is founded more upon fraud than upon the idea of trust as generally understood. "When it is said that a person who has defrauded another out of his estate, by misrepresentation or other deceptive practices, is converted by the court into a trustee, and held as such, the expression is used for the purpose of describing-the nature and extent of the remedy against him, and it denotes that the parties defrauded, or beneficially entitled,, have the same rights and remedies against him, as they would be entitled to against an express trustee who had fraudulently been faithless. And though perhaps the matter in question is not, strictly speaking, a trust at all, but a ground of relief based on fraud, courts are agreed in administering the same remedy in a certain class of frauds, as an administration in fraudulent breaches of trust, and the mere name of the thing is not of so much consequence as the achieving the right remedy in the premises. And this arises, says Washburne, from the control which courts of chancery exercise over equitable estates, whereby in cases of fraud, mistake, or the like, they may require a grantee to hold subject to a trust in the nature of a resulting trust. 2 Wash. R. P., book 2, chap. 3, § 2, p. 482 (4 ed.)

In the case of Jenkins v. Eldridge, which was a case where a trust was sought to be raised, Judge Story says that it is a trust of a somewhat novel and extraordinary character, seeming to contain the elements of resulting trust, agency, fraud, and specific performance, and between them all, he seems to find a solid basis on which to rest the decision. This case does not seem to be highly regarded in 1 W. & G. Leading Cases in Eq. 358, 361 (Am. notes).

The principle of agency may be applied to Pim Taylor. Says Perry on Trusts (§ 206), speaking of the duties of am agent, he may be held as a trustee, if he makes use of' his position in any way to obtain a title to himself. “ If he takes a conveyance in his own name, he is a trustee ex maleficio.”

Pim Taylor, when he received this $600, was certainly acting for somebody. It will not do to say that as soon as the wife obtained the loan, and handed it over to him, from that moment it became his personal property, by virtue of his marital rights. Moulter v. Haley, 57 N. H. 184; Hick’s Ex’rs v. Skinner, 71 N. C. 539.

Whether the husband has reduced the wife’s chattels to possession, so as to make them his own, is a question as to the intention of the parties. Houston v. Clark, 50 N. H. 479; Hall v Young, 37 N. H. 134.

Marital rights are not so overshadowing in their extent, nor so indiscriminate in their exercise. The money was advanced by the brother for certain specific purposes. One ■of those purposes was that the husband should not have it, nor any part of it, nor any interest therein. Another was that it should all go for the benefit of the wife, with an ultimate view to security to the lender. Pirn Taylor, therefore, had no right to it in any way, except to do with it as he was directed. When he violates his duties, as he did, he •can not disrobe himself of his character as agent, and the consequences of that character must attach to all his proceedings.

We think that a fair construction of the finding shows that the money was advanced so as to be the money of the wife. This was the object of the brother, in order that the land bought with it might be hers. Because both husband- and wife desired the purchase of the lands, and the loan, •does not tend to show, as seems to be claimed, that the loan was to both. The reverse is true ; the advance was “ to her.” Nor does the fact that'fhe money was to be repaid, or that the brother looked for his security to the agreement, as to the purchase tend to show that the money was not hers. The loan was just as much hers as if it was a gift.

And we think the finding sufficiently shows that the $500 went into'the purchase. The residue of the purchase-money is accounted for, and the full amount, which the decree shows was paid, can not be made up without this sum.

That a trust arising by operation of law may be proved by parol evidence, see Williams v. Van Tuyl, 2 Ohio St. 337; Byers v. Wackman, 16 Ohio St. 450.

We do not think that lapse of time should bar Mrs. Taylor from asserting her rights. She did so shortly after her husband’s death. She wás not bound to do so before, at the risk of creating trouble in her family.

With regard to the cross-petitions in error, the judgments, as to the parties, will be reversed, but the right is not of that joint character that requires reversal as to all. If a party obtains a reversal as to himself, it can not advantage him that there- should be a reversal as to somebody else.

Judgment affirmed as to all except those who were not properly made parties, who have filed cross-petitions in error on that ground.

Day, J., dissented.


text:
    Estabrook v. Gebhart.
    1. In order to take advantage of error in the ruling of the court admitting testimony, the bill of exceptions thereto must be signed and filed as part of the record at the trial term.

      2. If, however, a motion for a new trial is overruled, and a bill of exceptions taken embodying all the testimony and charge of the court, the whole record will be examined to ascertain if the verdict is sustained by the law and the evidence, although the bill was taken at the term when the motion for a new trial was overruled, this being subsequent to the trial term.
    •3. E. contracts with S. to build a house, and 8. contracts with G. to furnish labor and materials. G. refuses to furnish such labor and materials, except upon a promise made to him by E. that ,he himself will pay the bill out of funds coming to S. Held: To be a contract not within the statute of frauds so as to make a writing necessary.

      4. The work being done, and it being agreed by ail that B. should pay G.r who was to give up his claim against S. and look to E. alone for payment; this is such a contract as need not be in writing under the statute.
    Error to the Superior Court of Montgomery county.
    In this case there are three bills of exceptions, the first two of which relate to errors occurring at the trial, with regard to the admission of testimony. The trial was at the March term, 1874, and the bills of exceptions were not filed until May, 1874, after the trial term had closed.
    The third bill of exceptions, though taken at a subsequent term, was upon the overruling of a motion for a new trial. This bill sets out all the evidence together with the charge of the court.
    Erom this bill, it appears that Estabrook, who was defendant below, made a contract with one Showalter to build a house in Dayton. Gebhart was plaintiff below, and his-claim is, in substance, that Showalter wanted him to do certain work on the house, and furnish material therefor. Showalter was irresponsible, and Gebhart would not do as desired, unless defendant, Estabrook, promised to see plaintiff paid out of the moneys which would have been payable to Showalter under the contract. Gebhart says, that without this promise of Estabrook, he would not have done the work or furnished the materials. After the work was done, Showalter, who was cognizant of the agreement between Gebhart and Estabrook, gave Gebhart an order on Estabrook for the amount due. Estabrook said he would not accept the order, not having the money, but that he had not paid Showalter, and there was enough due to satisfy Gebhart’s claim, and he would see it paid when the building was completed. Estabrook repeated his promises and assurances, telling Gebhart that it was no.t necessary to take a mechanic’s lien, as he had agreed to see the amount paid, and would do so as soon as he could borrow the money. Gebhart claims to recover $717.47 and interest.
    These statements are all denied by defendant. He denies having made any promise or agreement of any kind; says he never agreed to pay Gebhart in any way, and is at issue-with plaintiff upon all material allegations.
    In an amended answer, Estabrook sets up the statute of' fraud, averring that the alleged promise was to answer for the debt, default, or miscarriage of the said Showalter, was. not in writing, and therefore void.
    There was testimony on the part of plaintiff tending to-prove his side of the case, and that Estabrook did assume and promise as claimed. There was also testimony on the-part of defendant-, tending to prove his side, and negativeing all the assertions of plaintiff.
    "Whereupon the court charged the jury as follows :
    If the alleged promise of Estabrook amounted simply to-an agreement to answer for the debt of Showalter to Gebhart, it being admitted that there was no contract or memorandum in writing signed by Estabrook to that effect,. Gebhart ‘can not recover. On the other hand, if there was-a new and independent arrangement between Gebhart and. Estabrook by which, for the purpose • of inducing Gebhart to furnish labor and material for his house, Estabrook. promised to pay him for said work out of the funds which,, under the contract, would be coming to Showalter; thatGebhart furnished said work and material relying on this-promise; that he would not otherwise have furnished them ; that Showalter was irresponsible, and assented to the arrangement, it is your duty to enforce this contract, by your-verdict, although it was not in writing.
    Again, even if you find that there was no contract at the-beginning which, under the rule thus given, would hold Estabrook; yet, if after work was done, Estabrook being-indebted to Showalter, an arrangement was made by the consent of all parties that Estabrook should pay Gebhart the amount of his bill furnished under the Showalter contract, Estabrook assuming to pay, and Gebhart giving up-his claim against Showalter and looking alone to Estabrook,. for payment, Estabrook must be held bound by this new «contract, 'though it was not in writing, and must pay the ■debt. This arrangement or contract, to be binding on. Estabrook, must have all the features indicated, the consent ■of all parties and the extinguishment of two debts. Plaintiff is bound to satisfy you by a preponderance of proof that «one or the other of these contracts existed between the parties.
    To which charge, and every portion thereof, the said defendant, by his counsel, their excepted.
    The jury found for plaintiff, Gebhart, in the amount •claimed, and the motion for a new trial having been over-a-uled, a petition in error was filed in the supreme court. ’The alleged errors are:
    1. That said court erred in admitting the evidence offered by said "Willian F. Gebhart, to which said Joel Estabrook •objected.
    2. That said court erred in the instructions given to the jury upon said trial.
    3. That said court erred in overruling the motion for a new trial, filed in said ease by said Joel Estabrook.
    4. That the facts set forth in said petition, filed in said •cause by said "William F. Gebhart, are not sufficient to maintain said action.
    5. That.s|iid judgment was given for said William F. Gebhart, when, according to the law of the land, it ought to have been given for said Joel Estabrook.

      Boltin & Shuck, for plaintiff in error:
    As to whether the promise in question was void, unless in writing, cited: Brown on Frauds, § 197 (2d ed.), 197; 1 Smith’s L. C. (5th Amer. ed.), 381; Rogers v. Kneeland, 13 Wend. 114, 121; Nelson v. Boynton, 3 Met. (Mass.), 395; Mallony v. Gillet, 21 N. Y. 427; Easter v. White, 12 Ohio St. 219; Kelsey v. Hibbs, 13 Ohio St. 355; Stewart v. Campbell, 58 Me. 439; Furbish v. Goodenow, 98 Mass. 297; Plumer v. Lyman, 49 Me. 229; Richardson v. Williams, 49 Me. 558; 1 Parsons on Contracts (5th ed.), 218.

      The giving of the order by Showalter did not operate as an assignment of his claim against Estabrook, if any he had. Harris v. Clark, 3 Comst. 93; Cowperthwaite v. Sheffield et al., 3 Comst. 243; Mandeville v. Welch, 5 Wheat 277; Tiernan v. Jackson, 5 Pet. 580.

      Gunckel & Rowe, and Warren Munger, Jr., for defendant in error,
    claimed that the promise was not within the statute of frauds. Parsons on Contracts (5th ed.), 9; Alten v. Thompson, 10 N. H. 32; Thompson v. Thompson, 4 Ohio St. 133; Bethel v. Woodworth, 11 Ohio St. 393; Swihart v. Shaum, 24 Ohio St. 436; Chamberlain v. Ingalls, 38 Iowa, 300; Blair v. Walker, 39 Iowa, 406; Watkins v. Perkins, 1 Ld. Raymond, 224; Fowley v. Cleveland, 4 Cowan, 423; Nelson v. Boynton, 3 Met. (Mass.), 395; First Baptist Church v. Hyde, 40 Ill. 150; Chitty on Contracts (6th Russell ed.), 559; Mallory v. Gillet, 21 N. Y. 412.
   Wright, J.

The first error assigned is, that in admitting evidence upon the trial, the bills of exceptions purporting to shows these errors were not taken until after the trial term, and can not be considered here.

But counsel for plaintiff in error argue thus: The record ■shows only that the bills were “ filed ”- after the trial term, not showing when they were signed and made part of the record; that, in point of fact, they might have been signed and sealed at the trial term, though not “filed” till afterward, and it must be presumed that things were rightly done.

The exception must be taken at the trial, term, and it is no* exception till “filed” as part of the record. Code, § 294. If, then, not “ filed ” till a subsequent term, it is ■only an exception as of that term.

As to the third bill, however, it is different. That was taken to present alleged error in overruling the motion for a new trial. That error, if any, occurred when the motion was overruled, and the bill is properly taken as of that term. This is settled by the cases, City of Dayton v. Hinsey and P. C. & St. L. R. R. v. Porter, ante, 258, 328.

The first part of the charge relates to the nature of the alleged promise made by Estabrook. The court told the-" jury plainly, that if this promise was merely to answer for Showalter’s debt, there could be no recovery for want of writing; but, if there was a new contract between Gebhart and Estabrook, by which, to induce Gebhart to furnish the labor and material, Estabrook undertook to pay, out of funds which would be coming to Showalter; that Gebhart furnished the work and material relying on this1' promise, which he would not otherwise have done, and that Showalter was irresponsible and assented to this arrangement, then the contract might be enforced.

We see no error in this. In 1 Smith’s L. C. 507, notes to Birkneys v. Damill, it is said, “When it is doubtful whether the sale was made exclusively on the defendant’s credit, the question should be left to the jury.” And in 2 Parsons on Contracts, 11: “ Whether a contract is collateral or original, may be a question of construction, and then it is for the court; but it is often regarded as a question of fact, and then it is for the jury.”

If the jury saw fit to believe the plaintiff’s testimony, they could have found that Estabrook did agree to make the payments, and Gebhart refused to work without this assurance; and, without going into an elaborate discussion of testimony, it seems to us that, though much might be said upon either side, we can not interfere with the verdict on the ground that it is against the evidence. It presents a square conflict between witnesses, and the verdict should have been with that party to whose evidence the greatest credibility attached.

The court further charged, that if the original contract was not made, as Gebhart alleged, yet, if, after the work was done, Showalter being indebted to Estabrook, an arrangement was made, by consent of all, that Estabrook should pay Gebhart, he giving up his claim against Showalter, and looking to Estabrook alone, then Estabrook could be held, although there was no writing. The court further saying that such an arrangement must have the features of ■consent of all parties and the extinguishment of the debts.

This is making a case of novation, and wé can only make the same remarks as those applied to the other branch of the case. The matter was fairly left to the jury, .and the evidence is not such as would authorize us to interfere with their conclusion. We see no error in the other points made.

Judgment affirmed.

Scott and Ashburn, JJ., did not sit.