Harlan v. Investment Co. Rep. 152]. That constructive contracts are fictions of law must be admitted; also that fictions of law are not recognized beyond the purpose of their existence and then lonly in furtherance of justice. Such fiction was recognized at common law for the purpose of permitting actions to be brought ex contractu where other adequate remedies were not provided. Among the earliest forms of constructive contracts recognized by law were cases where the title to property was in one and the possession in another, but without any right thereto as against the owner. Under such circumstances the law implied an agreement to deliver possession or account to the owner therefor. For the purposes of the remedy, the doctrine of implied promise was applied, with less reason, to liabilities created by statute, even when in the nature of penalties or forfeitures. Under code procedure, Gen. Code 11240, there can be no feigned issue, and there is only one form of action, but that did not change the nature of substantive rights as theretofore recognized. When therefore a right had been recognized in law as contractual, actually or constructively, statutory provisions relating specifically to enforcments of contractual rights being remedial and liberally construed, should include in the interpretation of the word contract, at least such contracts as were then clearly recognized as being constructive contracts, although not in fact contracts. Attachment proceedings being statutory and not only remedial in themselves, but ancillary to an action itself remedial, are necessarily subject to the same. rule, and the use of the word contract in attachment statutes should include constructive contracts. This is no violation of the principle of construction laid down in Hough v. Manufacturing Co. 66 Ohio St. 427 [64 N. E. Rep. 521], where the court in the interpretation of an attachment statute held that a clear omission or mistake of the legislature could not be supplied by construction. This rule as to the interpretation of the word contract in remedial statutes, when attempted to be made applicable to statutory liabilities, has not always been followed; for instance, in regard to the statutory right of set-off, Woods v. Ayres, 39 Mich. 345, and has been rejected as to attachments by a com Hamilton Common Pleas. mon pleas court of this state, Cleveland Gas & Elec. Co. v. Light & Power Co. 8 Dec. 134 (6 N. P. 218), although accepted by another common pleas court in Northern Nat. Bank v. Rolling Co. 2 Dec. 67 (2 N. P. 260). All three of such cases pertain to the enforcement of statutory liabilities, and do not belong to the older class of cases where, independent of any statutory liability, there was a common law liability upon a constructive contract. Among the latter class has always been included the right of the owner to recover money or property, possession of which was unlawfully obtained, Clark v. Johnson, Lofft. C. 756, 759; Mason v. Waite, 17 Mass. 560; Burnham v. Fisher, 25 Vt. 514, unless the owner himself was particeps criminis, as in cases where money was lost by the owner himself in gambling, in which cases he was precluded from recovery, not by reason of the absence of any legal title to the property or the absence of any constructively contractual duty of the winner to pay, but because the unworthiness of the loser stood in the way of his remedy until such bar was removed by statute, Meech v. Stoner, 19 N. Y. 26, 28. When such bar was so removed the constructively contractual right could be enforced even as a set-off under the conditions prescribed by the statute, McDougall v. Walling, 48 Barb. (N. Y.) 364. Even where the statute gives the wife of the loser a right of action for money of the husband lost by him, the statute has been held to be remedial and a proper action ex contractu. Much more so would an action brought by the loser as owner against the winner be regarded as ex contractu. The bar to such action. by the loser being removed by the statute, all the elements of a constructive contract exist and are enforcible by him. As a demand arising on contract, it has been expressly held that an attachment would lie against a nonresident by the superior court of Cincinnati in Baker v. Morehead, 19 Dec. 230 (7 N. S. 384), and in the United States Circuit Court for the northern district of Ohio in Jenks v. Richardson, 9 O. F. D. 188 [71 Fed. Rep. 365; 35 Bull. 120], neither of which cases seems to have been overruled. The fact that the superior force of the statute may create an obligation without regard to the promise by implication as Harlan v. Investment Co. held in regard to the statutory liability of stockholders, Hawkins v. Furnace Co. 40 Ohio St. 507, 515, and that relief may be barred by statutory limitations applicable specifically thereto, or to statutory liabilities generally, nor the fact that when the statutory obligation is of the nature of a penalty or forfeiture it is therefore limited in its enforcement by the limitations applicable specifically to the recovery of penalties and forfeitures, Cooper v. Rowley, 29 Ohio St. 547, 551, does not segregate such obligation for any other purpose from any general class to which it may belong. The motion to discharge the attachment is therefore overruled. BANKS AND BANKING-FRAUD AND DECEIT. [Defiance Common Pleas, October, 1910.] FIRST NATIONAL BANK V. WILLIAM A. KEHNAST ET AL. 1. National Bank Liable for Fraudulent Acts of its Officers Acting Apparently Within the Scope of Their Official Duties. While a national bank cannot engage in any other business than banking, having only such powers as are expressly conferred by its corporate charter and those incidental and necessary to effectuate the express powers, yet a person deprived of his property by reason of the machinations of the officers of such a bank, acting apparently within the scope of their duties, but acting fraudulently, whereby the bank obtained an advantage, may enforce his claim against the bank for damages as for money had and received. 2. National Bank Estopped to Plead Statute of Limitations Against Counterclaim After its Officers Induce Defendants to Forego Threatened Suit and Secure Delay Until Statute Runs Before Bringing its Suit. Where it is averred that the endorsement and guaranty sued on by the bank was fraudulently obtained, by reason whereof the bank secured a benefit, and it is expressly denied that the defendants either authorized the endorsement and guaranty or knew anything about it, the bank is estopped from pleading the statute of limitations against a counterclaim of defendants where the bank's officers, by promises not to sue on the bank's I claim and conduct calculated to induce a reasonable man to forego a threatened suit, secure delay until the statutory period has run against the counterclaim and then sue on the bank's claim. [Syllabus approved by the court.] Defiance Common Pleas. DEMURRER to cross-petition. Julian H. Tyler and Newbegin & Newbegin, for plaintiff. MATHERS, J. The plaintiff brings its action against the defendants to recover on certain promissory notes set out in the petition, aggregating in amount $16,690, which notes it claims were executed by the Nightengale Woolen Mills Company, a partnership, and before they came due were, for valuable consideration, endorsed, transferred and the payment thereof guaranteed by the Defiance Woolen Mills Company, also a partnership composed of the defendants. The defendants, after interposing several defenses, by way of counterclaim seek to recover of the plaintiff the sum of $28, 262.78, which they claim to have lost by reason of certain fraudulent representations and practices on the part of the bank. The bank demurs to the cross petition on the ground that it does not state facts sufficient to constitute a counterclaim, and also because such counterclaim is barred by the statute of limitations. The other grounds of the demurrer challenge the character of the pleadings, but the court is of the opinion that inasmuch as the cross petition is founded upon matters arising out of the transaction, set forth in the petition as the foundation of the plaintiff's case, or connected with the subject of the action, it may be denominated a counterclaim; and the other grounds just referred to are unimportant to determine. The demurrer admits the facts well pleaded. It was contended at the argument that the bank could not be bound in the particulars complained of, which, among others, related to fraudulent representations concerning the character of the Defiance Woolen Mills Company, which company and its property and business the defendants claim were owned by the bank, because the bank had no power to own or operate woolen mills, and that if any fraudulent representations were made the bank could not be bound by them, as the officers of the bank and not the bank itself must have made them and they were outside the scope of the authority of such officers. 1 Bank v. Kehnast. It is true that a national bank can not legally engage in any other business than banking, and that, as was held in California Sav. Bank v. Kennedy, 167 U. S. 361 [17 Sup. Ct. Rep. 831; 42 L. Ed. 198], it is not estopped from asserting that a transaction outside its powers is ultra vires. It was held in Merchants Nat. Bank v. Wehrmann, 202 U. S. 295 [26 Sup. Ct. Rep. 613; 50 L. Ed. 1036], that a national bank can not become the absolute owner in satisfaction of a debt of shares represented by transferable certificates in a partnership formed to purchase, improve, divide into lots and sell a leasehold. So that there may be some doubt whether the bank in this case had the power to take over and continue the business of the Defiance Woolen Mills Company, notwithstanding the statute, U. S. Rev. Stat. 5137, provides that national banking associations may purchase, hold and convey real estate which has been conveyed to them in satisfaction of debts previously contracted in the course of their dealing. For it does not appear that the business of the Defiance Woolen Mills and the property used therein consisted of any real estate; nor does it appear, except inferentially, that the bank took over the business of the Defiance Woolen Mills in satisfaction of debts owing to it which. had been previously contracted. It may be, therefore, that that part of the counterclaim of the defendants which is founded upon the alleged false representations made by the bank concerning the profitable character of the Defiance Woolen Mills, does not afford a predicate for an action, though this point is not now decided, because it is not necessary to decide it in order to determine the question raised by this demurrer, and also because the court will not presume that the bank committed an unlawful act, but on the contrary will assume that it was rightfully the owner of the property referred to and had the power to dispose of it. And if the bank had the power to dispose of it, it would be held to the same rules of good faith with respect to negotiations concerning its disposition that an individual would be. That perhaps it had power to take over the property of the Defiance Woolen Mills Company as security for debts previ 2 Dec. Vol. 22. |