(66 Ohio St. 246)

HUSTON v. TRAVELLERS' INS. CO. (Supreme Court of Ohio. April 22, 1902.) ACCIDENT INSURANCE POLICY-RESTRICTION AS TO MOVING TRAINS-CONSTRUCTION OF CONTRACTS.

An accident policy contained this exception: "This insurance does not cover entering or trying to enter or leave a moving conveyance using steam as motive power." The insured was walking along a railroad track, the ground being slippery and icy, when a freight train overtook him, going slowly, and it occurred to him that he would step on the caboose and ride, and as he was about to step on, but before he had touched the car, he slipped and fell, and his left foot was crushed by the hind wheels. Held, that what he did after the purpose to step on the car caused him to change his conduct from that of walking along the track to that of making preparation to step on the car was within the exception, whether he had caught hold of the car or not.

(Syllabus by the Court.)

Error to circuit court, Summit county. Action by one Huston against the Travellers' Insurance Company. Judgment for plaintiff was reversed by the circuit court, and plaintiff brings error. Affirmed.

The action was brought by the plaintiff in error, also plaintiff below, against the insurance company to recover one-third part of a $5,000 accident policy, the injury caused by the accident having resulted in the amputation of the left foot of the plaintiff. The material facts are that he was walking along the west side of the track of the Erie Railway at Akron, going north, about 7 o'clock in the evening of January 21, 1897, when he was overtaken by a freight train going in the same direction, a little faster than he could walk, and as the caboose was nearing him he looked around, and it occurred to him that he would step onto the caboose and ride up to Exchange street and step off, and as he was about to step on, but before he had taken hold of the caboose in any manner, but while he was expecting to do so, he slipped and fell, the ground being icy, and in falling his left foot got under the rear wheels and was crushed. The policy contained the following: "This insurancè does not cover * ** violating law; voluntary exposure to unnecessary danger; entering or trying to enter or leave a moving conveyance using steam as a motive power; being in or on any such conveyance not provided for the transportation of passengers; being on a railway roadbed." The court charged the jury as follows: "If he intended to take this car, and had started to reach it, and before actually reaching the point where he could enter, and had not taken hold of or was clinging to the car in any manner or attempting to enter it, but slipped upon the ground in such a manner that his foot was crushed by the wheel of the passing car, he would not be within the terms of this exception." The jury returned a verdict in favor of the plaintiff, a motion

for a new trial was overruled, and judgment entered upon the verdict. Proper exceptions were saved wherever necessary. The circuit court reversed the judgment on the ground that it regarded the above charge as erroneous. Thereupon the plaintiff came here, seeking the reversal of the circuit court and an affirmance of the common pleas.

Musser & Kohler and F. H. Waters, for plaintiff in error. Allen & Cobbs, for defendant in error.

In

PER CURIAM. The part of the charge complained of was erroneous, and the circuit court was right in reversing the judgment of the common pleas. While the meaning of such clauses in an accident policy should be construed with fair strictness against the company, there should be no strained or unnatural construction put upon the acts of the insured to save such acts from coming within such exceptions. this case the plaintiff was walking along the railway on slippery, icy ground, and it occurred to him that he would step upon the caboose, and he thereupon acted upon that intention, and changed from walking along the track on the slippery ground to making preparation to step on the caboose, and from the moment that he so changed his conduct of walking along the track, and took on the conduct of attempting to step on the caboose,-that is, of trying to enter the caboose,-and whatever he did in his preparation to so step upon the caboose, was an act in trying to enter it, and was within the exception, whether he had then taken hold of the car or not. The getting into position on a slippery place to grab hold of the caboose as it would come along by his side would be more likely to cause a fall than the taking hold of the handle bars of the caboose itself. With this view of the law, it will be seen, not only that the reversal was right, but that several other parts of the charge were wrong.

(Supreme Court of Ohio. May 13, 1902.) ACCOUNTS - ASSIGNMENT - ACTION BY ASSIGNEE-CHAMPERTY.

1. A contract by which several accounts against the same debtor are assigned by the holders to another, termed a "trustee," for the purpose of having the same prosecuted for collection by suit or otherwise, and the proceeds, after payment of costs and fees of the trustee for prosecuting the action, to be paid to the assignors in proportion as the claim of each may bear to the whole sum recovered, does not constitute such assignee the real party in interest within the purview of section 4993, Rev. St., so as to enable him to maintain an action in his own name upon such accounts;

effort to collect fails he loses compensation for the work done and the costs made by him, and the other parties to the contract, if bound by the result, lose their entire clains. If he succeeds he gets only compensation for his professional labor with immunity from costs, and they get the whole of what remains. It may be admitted that the plaintiff is a party in interest, but it seems hardly reasonable to assume that, in this situation, the plaintiff is the real party in interest, and we are of opinion that he is not. We are aware that the tendency of some courts has been to uphold actions, brought upon negotiable instruments, transferred for collection only, on the ground that the plaintiff is the real party in interest, and that there are some authorities which point to that conclusion. Indeed, it may be admitted that the trend in some of the code states is in that direction. But we have found no case which goes to the extent of holding that an assignment of an open account for the mere purpose of collection, one which gives the assignee a contingent interest only, constitutes him the real party in interest within the meaning of the statute. Can this contract be regarded as one made for the benefit of another? We think not. The language implies that that other must be a third person. Here the contract, by its terms, is for the benefit of the person who is making it, and indeed it is but justice to say that the learned counsel for the defendant in error do not insist that it is such contract. Is it, then, the creation of an express trust within the meaning of the statute? True, the language of the paper evinces an intention to create a trust. It uses the word "trustee." It points out the persons, the property, and the purpose. But what warrant is there for saying that this statute can mean that an express trust can be created for the purpose only of collecting an account? The controlling rule, given as the general rule at the beginning of the chapter, is that a suit to collect such choses in action must be prosecuted in the name of the real party in interest. We have found that, as we believe, by no fair test can Ginn be regarded as the real party in interest. If this conclusion be right, is it conceivable that, having prescribed this as the controlling rule, the lawmakers would proceed, in a cognate section, to authorize an exception which would practically nullify and take away the plain, beneficial rule thus established? And of what avail would be a requirement such as is here provided if its manifest purpose could be defeated by a paper such as forms the basis of the action in the case below? We conclude that the claim of an express trust cannot in this case be maintained, for it is a settled rule that a valid trust cannot be founded upon a contract in contravention of the general policy of the law. Hill, Trustees, 45; Lewin, Trusts, 19; Prosser v. Edmonds, 1 Younge & C. Exch. 481. And we conclude further, that, in order to constitute the party

a trustee of an express trust within the meaning of section 4995, the right and duty to bring an action must be incidental to other powers and duties under the assumed trust, and the authority not confined simply to the bringing of an action to collect the subject of the contract which purports to create the trust, and pay the net proceeds over to the assignor. Such a contract is rather one of agency; it is not one which creates an express trust within the meaning of this statute. It is to be observed, also, that these eight creditors were not joint owners of all the claims, but were several owners, each of his own. Neither had any interest in the claim of any other, nor were the claims connected with one another. Each rested on its own peculiar facts. The parties could not, therefore, have joined in one action in their own names. Why should they be permitted, by agreeing to create a joint trustee, to collect their several claims in one suit? The transaction bears the appearance of an effort to evade the statute regulating the joinder of causes of action. Possibly, under the condition of the pleadings, this is not a fatal objection, but it is, after all, not without weight. We have not overlooked the case of White v. Stanley, 29 Ohio St. 423. The material question involved there was the right of the plaintiff to maintain the action in his own name. The syllabus states the case thus: "The debtor of a bank of which A. was cashier transferred a negotiable note, in payment of his indebtedness, to A. by special indorsement, and thereupon the bank, to enable A. to bring suit thereon, assigned its interest in the note to him. Held, that A. might maintain an action in his own name, notwithstanding he may be accountable to the bank for the proceeds when collected." The indorsement was in the usual form, and directly to A. individually, not as cashier. His legal title did not, therefore, at all depend upon any assignment from the bank; that ceremony was quite beside the question, and was wholly unimportant. It is observed by McIlvaine, J., in the opinion, that "whatever the rule may be in a case where an indorsement of a negotiable instrument is made for the mere purpose of collection, it is quite clear that this is a very different case." And manifestly this was correct. It is true that the opinion sustains the right of the plaintiff to maintain the action on the provisions of section 27 of the Code, now section 4995. But it is clear that the conclusion reached and the judgment rendered by the court may rest, beyond any question, upon the provisions of the act of February 20, 1820, known as the "Negotiable Instrument Act" (Swan & C. St. 862), now section 3172, Rev. St., which in terms gives authority to the indorsee of any such instrument to institute and maintain an action upon it in his own name. See, also, Nichols v. Gross, 26 Ohio St. 425.

But there is another difficulty with the case

of the plaintiff below. As before stated, his case rests wholly on the written contract introduced by him in evidence. Prior to its execution he had no connection with the assignors, and had been in no way instrumental in the creation of their claims. That paper contemplates, nay, it provides for, the prosecution for collection of the several claims against Brown. It purports to sell and assign the claims to Ginn. The prosecution was to be in his name, and the suit was so brought. Such prosecution made him liable for the costs. He was, in that situation, bound to pay them, and if he was the owner of the claims no one else was liable in any event. The distinct provision is that the costs and attorney's fees are to come out of the recovery. That is, the second parties are not to pay them. So that, by the terms of this agreement, the attorney was to prosecute an action in his own name, at his own risk and expense, and receive his compensation out of the recovery, thus purchasing disputed claims and stirring up litigation. Again, if this paper affected the object, and was a real transfer of these accounts to the attor ney, the several parties of the second part thus parted with all right to control the litigation or to compromise it without the consent of the attorney, and this inability was made doubly so by the fact that no one of the second parties had any sort of interest in the portion of the demand which rested upon the services of any other. Upon all the authorities such an arrangement is champertous, and will not be maintained by the courts. See Stewart v. Welch, 41 Ohio St. 483; Pennsylvania Co. v. Lombardo, 49 Ohio St. 1, 5, 29 N. E. 573, 14 L. R. A. 785; Reece v. Kyle, 49 Ohio St. 475, 31 N. E. 747, 16 L. R. A. 723; Railway Co. v. Volkert, 58 Ohio St. 362, 50 N. E. 924. So that if the agreement vested in the attorney the legal title to the accounts, so as to constitute him the real party in interest and thus enable him to bring an action in his own name, such action cannot be maintained because against public policy, while if he is not, within the meaning of section 4993, the real party in interest, the case would fail for that reason. Other errors are assigned, but they are, in view of the conclusion announced, unimportant.

It follows that the judgments below are erroneous. They will be reversed, and the petition of plaintiff below dismissed. Judgment accordingly.

BURKET, DAVIS, SHAUCK, and PRICE, JJ., concur.

(66 Ohio St. 255)

HUNT v. BODE.

(Supreme Court of Ohio. May 13, 1902.) WAREHOUSE RECEIPTS-TRANSFER-PLEDGEASSIGNMENT OF PLEDGOR-FRAUD

ULENT CONVEYANCE.

1. A written pledge or transfer of an interest in warehouse receipts, or choses in ac

tion to secure a debt, is valid, without actual or manual delivery, where such receipts or choses in action are being held by another creditor on pledge as collateral security for a loan of money made by him to the same pledgor, or transferror, the second pledge or transfer being equivalent to actual delivery of the property pledged or transferred; and a request by the pledgor or transferror to his first pledgee that when his debt is paid he deliver the collateral to his other creditor constitutes sufficient possession of the collateral by such other creditor.

2. If the pledgor or transferror file a deed of assignment within 90 days after making such pledge or transfer to secure the second creditor, the same will not be deemed and held to be fraudulent and void as to the assignee under the provisions of section 6343, Rev. St., unless the pledge or transfer was in contemplation of insolvency, or with a design to prefer one or more creditors to the exclusion in whole or in part of others, or with intent to hinder, delay, or defraud creditors. (Syllabus by the Court.)

Error to circuit court, Hamilton county.

In the matter of the insolvency of H. F. Stothfang. August Hunt, a creditor, appeals from an allowance by Bode, assignee of claims of Henry Dieckmann. Affirmed.

The controversy between these parties was first litigated in the court of insolvency of Hamilton county, and from its judgment and orders an appeal was taken to the court of common pleas, where the case was tried by that court on an agreed statement of facts, from which statement it appears that H. F. Stothfang prior to April 16, 1898, had for several years been indebted to one Dibowski, for borrowed money, in the sum of $1,000, for which he held the promissory note of said H. F. Stothfang. On April 16, 1898, Stothfang paid to Dibowski the interest due, and gave a new note for the principal sum, due in one year, signed by himself, F. H. Stothfang, and Louisa Stothfang, and before delivery it was indorsed by defendant in error Henry Dieckmann. This note was not paid when it matured, and, after being protested for nonpayment, Dibowski threatened to bring suit against the makers and indorser; and to prevent suit against him, and to take up the note on which he was liable as indorser, by a mutual arrangement between all the parties, defendant in error Henry Dieckmann, in satisfaction of the former note, gave his individual note to Dibowski for the $1,000, due one year after date, with 6 per cent. interest per annum, and secured its payment by mortgage on real estate. This note and the mortgage are dated May 12, 1899. As a consideration for the giving of said note and mortgage by Dieckmann to Dibowski, H. F. and F. H. Stothfang, executed and delivered to Dieckmann the following instrument: "$1,000.00. Cincinnati, May 12th, 1899. One year after date we promise to pay to Henry Dieckmann or order one thousand dollars, for value received, payable at the Atlas National Bank, with interest at six per cent. per annum; having deposited or pledged as