Wright v. Snell.

Mrs. Suell cannot now complain, after these judgments have been assigned by the apparent owner to an innocent purchaser, for value, that they were traudulent in their inception, and procured for the purpose of saving her property from such apprehended judgments. A court of equity will leave her in the position in which she placed herself, and will decline to give her relief by setting aside the judgments. She made the notes from which the judgment liens resulted, for the unlawful purpose of placing her property beyond the reach of the law, if these threatened judgments should prove successful. This was against public policy, and a court of equity cannot aid a person under such circumstances. Pride v. Andrew, 51 Ohio St., 405 [38 N. E. Rep., 84]; Brinkhoff v. Tracy, 55 Ohio St., 558, 572 [45 N. E. Rep., 1100]; Kihlken v. Kihlken, 59 Ohio St., 106-120, 121 [51 N. E. Rep., 969]: Trimble v. Doty, 16 Ohio St., 118; McCortle v. Bates, 29 Ohio St., 419 [23 Am. Rep., 758].

As said by Boynton, J., in McCortle v. Bates, supra, "It is one of the oldest rules of the common law, that contracts contrary to sound morals, or against public policy, will not be enforced by courts of justice ex facto illicito non oritur actio; and the court will not enter on the inquiry, whether such contract, would or would not, in a given case, be injurious in its consequences if enforced. It being against the public interest to enforce it, the law refuses to recognize its claim to validity."

It is contended on behalf of defendants, and especially the defendant John Mowery, that he was not a party to these judgments against Mrs. Snell, but afterwards became interested in the property by purchase, and that as such purchaser, he can attack the judgments for fraud, even as against Wright, the assignee of Thomas Mowery; that Wright stands in no better situation in this regard than Thomas Mowery, the assignor.

At the time these judgments were rendered, and up to the time they were assigned by Thomas Mowery to the plaintiff Wright, John Mowery had no interest in this property of Mrs. Snell. So far as he was concerned, he was an entire stranger to the transaction; and when he became concerned by the contract of purchase made June 23, 1894, he knew that the plaintiff Wright claimed some interest in the judgments, as in the contract of purchase, that day made between him and Mrs. Snell, reference is had to these judgments as the contract provides that Wright's interest in the judgments, resulting from the assignment would be deducted from the purchase price. It is only those persons whose rights are interfered with; those who are injured by the transaction alleged to be fraudulent, that have the right to interfere to set it aside. Strangers have no interest, and, therefore, have no right to question its validity. He would stand to the transaction the same as a subsequent creditor in a fraudulent conveyance. He must show actual fraud. Yeend v. Weeks, 16 So. Rep., 165 [104 Ala., 331; 53 Am. St. Rep., 50]. Was Wright an innocent purchaser of these judgments?

First. Was there a consideration for the assignment? The consideration is, that Thomas Mowery was anxious to save his "Baum farm" from foreclosure sale. He was indebted to the plaintiff Wright on two notes; on one of which Mrs. Snell was liable. Wright was unwilling to advance money to Mowery on the "Baum farm," unless he had some additional security for his indebtedness that he held against Thomas Mowery. This situation was known to John Mowery.

Wayne Circuit Court.

In order toaccomplish the end in view, namely, to save the farm, from sale, the agent and attorney of Thomas Mowery, Alfred J. Thomas applied to Wright for a loan by which this could be accomplished. The condition imposed by Wright, upon which he would advance the money, required the payment of $50 cash, and that security be given to him for these two notes. Thomas, as such agent and attorney, proposed to Wright, that Thomas Mowery would assign to him these judgments against Mrs. Snell, which offer was accepted by Wright. The transfer was made, and the sale of the "Baum farm" was prevented.

It is not sufficient on an issue of want of consideration to show that there was no consideration moving to the promisor, unless it precludes the possible fact that there was detriment or loss to the promisee, which constitutes a consideration for a promise as well as a benefit to the promisor.

In the transfer of these judgments there was a benefit passing to Thomas Mowery, by saving his farm from sale, and there was both benefit and possible detriment to Wright, the promisee, by advancing his money, and in getting security for his unsecured notes.

We, therefore, hold, that this transaction shows a sufficient consideration for the assignment, and that we are supported in this by the Supreme Court in Dalrymple, Admr., v. Wyker, Admr., 60 Ohio St., 108 [53 N. E. Rep., 713]; Irwin v. Lombard University, 56 Ohio St., 9 [46 N. E. Rep., 63; 60 Am. St. Rep., 727].

Second. It is contended that the plaintiff Wright knew that Alfred J. Thomas was acting not only for him in negotiating this loan and in the transfer of the judgments, but was also the attorney of Thomas Mowery, and as such attorney of Thomas Mowery, had knowledge of the fraudulent transactions out of which the notes, upon which the judgments were obtained, arose, and that said Thomas' knowledge is chargeable to Wright.

Suppose that A. J. Thomas had such knowledge, is his knowledge chargeable to the plaintiff Wright, simply because he was Wright's attorney in making the transfer of the judgments? In other words, if an attorney has two clients, and there has been a fraud perpetrated upon one client and the attorney participated in that fraud, is it to be presumed in law, in the absence of direct knowledge and notice to the other client, that such client has knowledge of the fraudulent transaction?

If an attorney, while conducting a transaction for his client acquires knowledge, which it would be a breach of professional confidence for him to disclose, and he is subsequently employed by another person, the latter is not chargeable with the knowledge thus acquired and possessed by the attorney. Melms v. Brewing Co., 66 N. W. Rep., 518 [93 Wis., 140, 153; 57 Am. St. Rep., 899, 907].

It is claimed that there is some proof tending to show that the plaintiff Wright had knowledge of said transaction out of which said notes grew. The claim is made from the testimony of Mrs. Hines, who on one occasion was at the house of Mr. Wright, when Thomas Mowery was present. Her statement of the transaction on this occasion on meeting Mr. Thomas Mowery at the door, is as follows: He made the remark that "she was the lady that was at Mrs. Snell's on the occasion that these notes were executed." She was later introduced to Mr. Wright, when some allusion was again made about the notes. Mr. Wright said: "He supposed that was the best thing that she could do.”

It is contended that from this statement of Mr. Wright, it is to be

Wright v. Snell.

inferred that he had knowledge of the fraudulent execution of these notes. We do not think such inference can be fairly drawn from this isolated statement. Mrs. Snell was his debtor, and is it reasonable to suppose that he would engage in a transaction and advance money to the party who was charged with participating in that fraud? And is it reasonable that he would want her property covered up in this way when she was his debtor, as it could be no possible advantage to him?

It is further claimed that Mr. Kean, on the occasion that these judgments were transferred, Mr. Wright referring to the same, remarked, that he did not know whether there was much in the security that he got. Does it necessarily follow from this remark that he had knowledge of the origin of the notes upon which the judgments were taken, and that the transaction was fraudulent in its inception? Such a remark is not unnatural; a party receiving such security may have some doubt how good it is, or how much he may realize from it. But it is sought to give it force simply because he made such a remark, thereby intimating that he had actual knowledge of the fraud, and therefore, had doubts as to what he would realize from it. Looking at the whole transaction and the circumstances surrounding the parties at the time the transfer of the judgments were made, June 22, 1894, we find that there is not sufficient evidence to justify a conclusion, that the plaintiff Wright had actual knowledge of the fraud charged upon Thomas Mowery, Alfred J. Thomas and Mrs. Snell, in the execution of the notes and the judgments and levy thereon, and the purpose for which the same were made.

We come now to the most difficult question in the case, and that is the contention, that when the plaintiff, Wright, took thèse judgments by assignment as collateral security for the loan that he made Thomas Mowery on the twenty-second of June, 1894, for the purpose hereinbefore stated, as such assignee, he is chargeable with the infirmities that existed in the original claim. Of course they do not stand as commercial paper, transferred before due. The contention is, that they are choses in action; and when they were assigned to Wright, although for a full and valuable consideration, yet, they come to him with all the infirmities that could be urged against Thomas Mowery, the assignor.

If they can be so assailed who can do it? Can John Mowery so attack the judgments and assignment?

Between the parties to the judgments, the assignee stands in the place of the assignor with no better rights; but as to the claims of third persons, the purchaser of au equity or a chose in action, stands unaffected by fraud of which he had no knowledge express or constructive. The assignee is not bound or affected by any fraud committed by the original parties to the judgments. 2 Freeman on Judgments, Sec. 428, p. 743; 2 Black on Judgments, Sec. 956, p. 1135; Wright v. Levy, 12 Cal. 257; McCotter v. McCotter, 16 Abb. Pr., 265; Hale v. Bank, 50 Iowa, 642; Starr v. Hoskins, 26 N. J. Eq., 414; Murray v. Lylburn, 2 Johns. Ch., 441, 442; Hendrickson's Appeal, 24 Pa. St., 363; Greene v. Daily, 5 Mason 214; Garland v. Harrison, 17 Mo., 282; Ives v. Addison, 17 Pac. Rep., 797 [39 Kas., 172].

As between John Mowery and the plaintiff, Wright, Mowery being a third party and a stranger to the judgments, the plaintiff takes the judgments free from latent equities that might exist between Mrs. Snell and the assignor, Thomas Mowery; and as between John Mowery, the

Wayne Circuit Court.

plaintiff is not affected by any fraud that may have been perpetrated, unless he has or had actual or constructive knowledge of the same.

How stands the case as between Mrs. Snell, and the plaintiff, Wright? By authorities, supra, she could not complain as against Thomas Mowery, the assignor, for the reason that the transaction between herself and Thomas Mowery was a fraud upon the law and against public policy; and a court of equity will grant her no relief. And another principle of equity arises here. By whose fault or act was it, if either, Mrs. Snell or Mr. Wright is to suffer by this transaction? This fraud of Thomas Mowery and Mrs. Snell as between these parties, in whose favor is the equity?

By whose fault was it that these alleged fraudulent judgments were obtained? By whose fault was it that after the judgments were obtained, that the release or satisfaction is kept off the record? If they were released and not a valid lien upon her property, why does she in her contract with her brother, John Mowery, make provision that the interest of Wright in said judgments shall be retained out of the purchase money by her brother John? These omissions and acts of apparent acquiescence in the validity of these judgments are all chargeable to Mrs. Snell. If she had been vigilant; if she had not given these notes; if she had not kept the release from the record, so that it could have been examined, the plaintiff Wright would have had the means of knowing, that there were no valid judgments or lien against her property. She is estopped from asserting her rights against the plaintiff, and if she is even an innocent party as between her and the plaintiff, she must bear the loss rather than Wright the plaintiff. Under the well recognized rule of equity, that where one of two equally innocent persons must suffer, he who has put it in the power of another to do the injury, must bear the loss.

We have examined all the material facts bearing upon the issues between the parties, and summing them up, as against Mrs. Snell and John Mowery, we hold that these judgments in the hands of the plaintiff Wright, by assignment from Thomas Mowery, are valid as security for the payment of said notes, and being so, the judgment of the court is that the plaintiff is entitled to the relief prayed for in his supplemental petition with costs.

COMMISSIONERS' REPORT-MANDAMUS.

[Fayette Circuit Court, November 23, 1900.]

Summers, Sullivan and Wilson, JJ.

STATE EX REL. CARPENTER ET AL. V. FAYETTE COUNTY (Comr's). 1. PUBLICATION OF COMMISSIONERS REPORT-ITEMS IN Detail.

Section 917, Rev. Stat., as amended 1900, 94 O. L., 000, requiring county commissioners to make out an itemized and detailed report of their financial transactions showing to whom and for what purpose each item is paid, is not suf ficiently complied with where the report sets out amounts in gross, without setting out what the sums were paid for or to whom they were paid as, for instance, payments made to certain boards in gross and without specifying the names of parties to whom paid, or the items relating to expenses in connection with the operation of a court, without giving the amounts paid to each juror, witness, etc.

State v. Commissioners.

2. MANDAMUS LIES IN Behalf of Publishers. Mandamus will lie to compel county commissioners to make the necessary itemized and detailed report of their financial transactions of the preceding year as required by Sec. 917, Rev. Stat., as amended 94 O. L., 000, on the application of publishers of newspapers having the necessary circulation to entitle them to such publication, and as taxpayers. They need not be by a public officer. The publishers of newspapers, have an individual interest, independent of the public, viz., the right to publish the report, and the benefits derived from the increase of the report in that it increases their fees for publication, upon which they are entitled to maintain the action.

Harper & Harper and John Logan, for the relators.

Post & Reid, for defendants.

SULLIVAN, J.

In this case there is a petition for mandamus against the county commissioners to require them to make an itemized and detailed report as provided for in the amendment to Sec. 917, Rev. Stat. The law before amended required the commissioners to make out a detailed report of their financial transactions of the preceding year; and the law as amended in 1900, 94 O. L., 000, provides that they shall make out a detailed and itemized report of their financial transactions, adding that each item must show to whom the money was paid and for what purpose.

The application is made by publishers of newspapers in this county, who aver in their petition that they are such publishers, and that their newspapers have the required circulation to entitle them to the publication of such report, and that by reason of their coming within the requirements they are entitled to the publication of this report. They set up those facts in their petition, and also the further fact that each of the plaintiffs are taxpayers and are therefore entitled to have a writ issue as against the commissioners to require them to perform their duty as under this amended statute.

The writ asked for is a peremptory one.

The prosecuting attorney of the county presented two objections to the issing of the writ: First, that the report did comply with the statute, substantially so.

Second, that this action could only be brought by a public officer. Now, as to the first objection, as to the issuing of the writ: It is true that the cost and expense to the county would be very much increased by the preparation of a report that is now claimed by the petitioners under this amended act; and while several items of this report probably comply with this provision, we think there are others that do not; for instance, the item of payment to the city board of equalization, and to the decennial board of equalization; now the amount paid by the commissioners in each of those cases is put in in gross and the names of the parties to whom the money is paid are omitted from report; it would seem clear that there was a failure to comply with this section. It requires that the parties to whom the money is paid shall appear upon this report. In those instances, I think possibly it would appear sufficiently clear what it is paid for, and yet there is, possibly, some question about that; as where they incurred expenses of any character peculiar to the necessary performance of their duty, it would be necessary to itemize under that head. Take, for instance, the item of money paid to witnesses and jurors, and other incidental expenses in connection with the operation of a court: Now, a strict application of this statute