Dr. Blunder is a good doctor and his treatment must therefore have been the correct thing. The visible results of the blunder, manifest in the crippled condition of a plaintiff, ought indeed to have weight as against such barren and selfish theories. This much we think our correspondent will concede, outside the rulings in Haslet v. Byles.

ASSIGNEE-ATTACHMENT-ALLOWANCES.

SUPREME COURT OF OHIO.

JAMES G. MILES ASSIGNEE OF ISAAC T. MCLAIN,

v.

B. W. SIMINGTON ET AL.

A. assigned all his property to M. for the benefit of his creditors, having previously executed a mortgage on certain real estate to B, which real estate and certain personal property, the sheriff, at the suit of S., had seized in attachment and was in possession of at the date of assignment. By agreement between the parties, M. converted the attached property into money and held the proceeds to await the result of the attachment suit. The real estate was sold for less than the mortgage debt, and the attached personalty for less than the judgment subsequently recovered by S. In his account in the probate court, M. charged himself with the proceeds of the sale of the attached property and also other funds received by him as assignee; and credited himself with expenses paid in preserving and selling the attached property and in resisting the attachment suit.

Held, 1. It was proper for the assignee to account in the probate court for all moneys which came into his hands, as woll the proceeds of the attached property as other funds.

2. As against the proceeds of the attached property, expenses incurred in resisting the attachment suit were not proper allowances.

3. Whether such,expenses should be allowed the assignee out of other funds in his hands, depends on the fact whether they were reasonably and in good faith incurred for the benefit of the general creditors.

4. The expenses in preserving and selling the attached property should be paid out of the proceeds of such property.

5. The expenses (including commissions), of selling the mortgaged property should be paid out of the proceeds of the real estate so mortgaged.

Error to the District Court of Morrow County. The questions, in this case, arise on exceptions to the report of the assignee filed in the probate court.

In July, 1877, Isaac T. McLain, assigned all his property to plaintiff in error, for the benefit of creditors, to be administered under the statute in such case made and provided.

Previous to the assignment the assignor placed a mortgage for five hundred dollars on certain real estate in favor of William McLain, and B. W. Simington had seized the same parcel of real estate and certain personal property, including a board yard in attachment and the sheriff by virtue of the writ of attachment was in possession of the property seized at the date of the assignment..

By a written contract between the attachment creditor, the assignee and assignor, the attached property was delivered to the assignee to be converted by him into money, and the pro

ceeds held to await the event of the attachment suit. This suit was determined in favor of the

attaching creditor. The attached property was sold by the assignee, the real estate was sold for less than the mortgage debt, and the balance of the attached property for less than the judgment recovered by the attaching creditor.

In accounting in the probate court, the assignee charged himself with the proceeds of the sale of all the attached property, and also with other funds which came into his hands as assignee separately. He credited himself with certain expenses paid in preserving and selling the attached property, also certain expenses incurred and paid in defending and resisting the attachment suit.

Exceptions were filed by the attaching creditor and other creditors, and on appeal to the court of common pleas, the exceptions to the matters of credit above stated were sustained. In the district court, the judgment of the common pleas was affirmed.

A. K. & J. C. Dunn and F. K. Dunn for plaintiff in error.

Dalrymple & Powell for defendant in error.
BY THE COURT.

1. It was proper for the assignee to account in the probate court for all moneys which came into his hands, as well the proceeds of the attached property, as other funds. 2. As against the proceeds of the attached property, expenses incurred in resisting the attachment suit were not proper allowances.

3. Whether such expenses should be allowed the assignee out of other funds in his hands, depends on the fact whether they were reasonably and in good faith incurred for the benefit of the general creditors.

4. The expenses in preserving and selling the attached property should be paid out of the proceeds of such property.

5. The expenses (including commissions), of selling the mortgaged property should be paid out of the proceeds of the real estate so mortgaged.

Judgment reversed and cause remanded to court of common pleas.

[This case will appear in 38 O. S.] FIRE

INSURANCE- PREMIUM- PAY-
MENT BY NOTE.

SUPREME COURT OF OHIO.

OTIS B. LITTLE,

บ.

THE EUREKA FIRE AND MARINE INSURANCE COMPANY.

April 25, 1882.

A policy of insurance, having one year to run, was delivered to the insured, without payment of the premium agreed on. In a few days, the note of the insured at Fixty days was accepted for the premium, which was not paid at maturity, and remained in the hands of the insurer. After this, and within a reasonable time before the loss, the insurer cancelled the policy, and notified the parties interested therein of such cancellation, and credited on the note, a sum less than the pro rata proportion of the unearned premium.

The conditions of the policy provided, that it was not to be binding until actual payment of the premium, and that the insurance should be terminated at the request of the insured, in which case the company was to retain only the customary short rates for the time the policy was in force, also that the company right, at its option, terminate the insurance upon giving notice to that effect, and tendering a pro rata proportion of the premium for the unexpired term. Held: 1st. That by delivering the policy without actual payment of the premium, and by taking a note of the assured for the same, the com pany waived the condition that the policy was not binding unless the premium was actually paid. 2d. On failure of the assured to pay the note, the company might, on giving reasonable notice thereof before the loss, exercise its option to cancel the policy. 3d. As the note was past due and in the hands of the company at the time of such cancellation, it was not necessary to tender back the pro rata proportion of the unearned premium in cash, nor to credit the same on the note. The note was thereafter subject to such credit.

Error to the Superior Court of Cincinnati.

The action was brought by Otis B. Little to recover under a policy of insurance, made in the name of Little, Carson & Bro., for a loss by fire"loss, if any, payable to the Charter Oak Life Insur ance Company, of Hartford," to whose rights the plaintiff claimed to be subrogated.

The conclusion reached by the court upon one of the many questions presented, is fatal to a recovery; therefore, such only of the facts as present this question will be stated.

May 17, 1869, the defendant, The Eureka Fire and Marine Insurance Company, in consideration of a premium of $112.50, insured certain property for Little, Carson & Bro., for one year, loss, if any, payable to the Charter Oak Life Insurance Company.

The premium not being paid at the time, note was taken on the 26th of May following, by defendant for the amount, payable in sixty days

from date.

This note was not paid at maturity, and remained unpaid in the hands of the defendant at the commencement of the action and was treated as worthless, The makers were, shortly after it fell due, adjudged bankrupts, and were, at the time of its maturity insolvent. No offer to pay this note was ever made.

Among the conditions of the policy are these: "5. No insurance, whether original or continued, shall be considered binding until the actual payment of the premium."

(The words 'actual payment' are italicised in the policy.)

"6. The insurance may be terminated at any time at the request of the insured, in which case the company shall retain only the customary short rates, for the time this policy has been in force, and the same may at any time be terminated at the option of the company on giving notice to that effect, and tendering a pro rata proportion of the premium for the unexpired term thereof."

The note became due July 28th, 1869, and on the 9th of September following, the defendant, in a letter to Little, Carson & Bro., called their attention to the 5th condition above, and notified them that it was in force, and on the same day cancelled the policy and credited $75.00 on

the note, as the pro rata share of the unearned premium for the remainder of the year. This credit is some two or three dollars less than the pro rata proportion of the unearned premium, if. the fractions of the months of May and September be not counted as a month.

Verbal notice of this cancellation was also given to all the parties interested in this policy, and in the property insured, in a short time thereafter, and some two months before the loss.

Upon this state of facts, the court charged the jury:

"That, if, after the said insurance was effected, the said William and Robert Carson, instead of paying the premium due therefor, gave their promissory note, payable in sixty days, which was received by the said defendants for and on account of said premium, and was held by them until after it became due, and is now held by them, and was never in any way used by them, and is now brought here into court, and if, after the said note became due, the said William and Robert Carson, and the other parties interested in the said insurance, had notice that the said note had not been paid and neglected to pay the same, and thereupon, and within a reasonable time before the fire, the defendants elected to cancel the same, and gave the said parties reasonable notice before the fire that the policy was cancelled, then the plaintiff cannot recover."

Also, that in case of non-payment of said note, or for any other reason, defendants elected to end the risk, and did so, nothing more was required of them, than to notify the insured within a reasonable time before the fire."

foregoing facts and instructions, is the object of To reverse a judgment for defendants on the the present petition in error.

It is assumed for the purposes of this case, that the plaintiff is entitled to be subrogated to the Charter Oak Insurance Co., and to recover on this policy, if the same was not legally terminated upon the loss.

JOHNSON, J.

* *

This policy was delivered and took effect May 17th, and by its terms was good for one year unless sooner terminated in accordance with its terms and conditions. On its face, the premium was payable in cash, and one of the conditions was, that "no insurance * shall be considered binding until the actual payment of the premium." By the delivery of the policy without such payment, and by taking a note of the insurer, nine days thereafter, payable in sixty days, this condition was waived and the policy was in force, notwithstanding this condition, until lawfully cancelled, under this or some other condition contained therein, or under the option reserved in the sixth condition.

The note not being paid, and its makers being insolvent, the company, after waiting some forty-five days, cancelled the policy, and notified the insured and the Charter Oak Co. and others interested of the fact. This was in September. In December the loss occurred. This policy was good for one year, unless terminated lawfully.

The 6th condition, provided that the insured might terminate the insurance at any time on request, in which case the company should retain only the customary short rates for the time the policy had been in force. This is an unqualified right reserved to the insured to terminate the policy at any time during the year for any cause. If the premium had been paid in cash, the insurer would have been compelled to refund the unearned premium, after charging for the time the policy was in force at the customary short rates. As a note had been given, and was still in the hands of the payee, the insured could have terminated the policy by paying or tendering the amount due, at short rates, and demanding a return of the note, but as no payment had been made, no money had to be returned by the insurer under this clause. This right to terminate the policy was mutual. The company reserved the option to at any time put an end to the policy; "on giving notice to that effect, and tendering a pro rata proportion of the premium for the unexpired term thereof." In case the premium had been actually paid for the year, the pro rata share thereof from September 9th to the end of the year, must have been tendered back before this option could be exercised. In the present case, no money had actually been paid. The company still held a past due note for the premium, on which there was due the amount earned to the date of cancellation. It was claimed, and the evidence tended strongly to support that claim, that this note was not collectible. The company credited $75 on the note, being the amount of the unearned premium, if the pro rating is computed by months, and if the fraction of May, 14 days, and of September, 9 days, are counted as a month, but if the pro rating is by days, that amount is too small by two or three dollars.

On this state of facts, the court in effect charged that it was not necessary to tender back the cash for the unearned premium, nor was the right to cancel defeated by a failure to credit the exact amount, or indeed any amount.

In this we concur. The effect of taking the note, was to give the policy life, notwithstanding the 5th condition, but it did not divest the company of its right reserved in the 6th condition to terminate the insurance at any time, on giving notice, and in case the premium had been paid, tendering back the unearned proportion thereof.

As nothing had been paid, nothing was to be tendered back. The only duty imposed on the company, when the premium had not been paid was, to give notice in reasonable time before the fire. This the jury found was done.

The contract of insurance is a contract of indemnity upon the terms and conditions specified in the policy. The insurer undertakes for comparatively small premium, which good faith requires should be paid, to guarantee against loss or damage, upon the terms and conditions agreed upon, and upon none other. He may, therefore justly insist upon the fulfillment of those terms.

We cannot make a new contract for the parties. Good faith is the life breath of the contract. The payment of the premiums is an essential element of the contract, to enable the company to meet its obligations. Whatever may have been the right of the company before the maturity of this note, to terminate the insurance for other causes, we think it clear, that after the note became due and was not paid, this option might be exercised upon giving reasonable notice thereof before the loss occurred.

Again it is said, the amount credited on the note was too small. Concede this, the note was part due, and had not been negotiated. In any action brought thereafter for the earned premium, the correct credit could have been computed and allowed. This note was subject to such credit, in whoseever hands it should be found.

Judgment affirmed.

[This case will appear in 38 O. S.]

CONVEYANCE IN FRAUD-MORTGAGE

ATTACHMENT-EQUITIES.

SUPREME COURT OF OHIO.

SHORTEN V. DRAKE ET al.

April 18, 1882.

1. Where a debtor purchases real estate and causes it to be conveyed to his wife in fraud of his creditors, a bona fide mortgagee from the husband and wife, will not be affected by the fraud.

2. The possession of the husband and wife at the time of taking the mortgage will not charge the mortgagee with notice of the fraud; nor will he be affected by notice of levies made upon the property as that of the husband subsequent to the conveyance to the wife.

3. The levy of an order of attachment, in the absence of process of garnishment, has no greater operation than the levy of an execution.

4. Where, in a court of equity the fund in controversy is held for distribution, and the equities of the respective claimants are equal in point of merit, the distribution will be ordered according to the maxim, qui prior est tempore potior est jure.

Error to the District Court of Hamilton County.

This case was before this court at a former term and is reported in 34 Ohio State 645, under the name of Shorten v. Woodrow. In that case the judgment below was reversed and the cause remanded for the ascertainment of the priorities of liens upon the premises in controversy in the case and for distribution of the proceeds of the sale of such premises. Upon the trial of the case for that purpose, in the superior court, upon the answer and cross petition, and supplemental answer and cross petition of Samuel Shorten and his amended answer and cross petition, the answer of Alexander McMillan, and Eleanor, his wife, and the amendment to their amended answer and cross petition, and the answer of said Shorten thereto, the answer and cross petition of William S. Grant, administrator of Samuel Grant, deceased, and the proof and exhibits submitted by the. parties, in addition to the findings of fact reported in 34 Ohio State 645, that court found: That said Sargent and wife

continued to occupy said premises until the sale in this suit; that the judgment in favor of Samuel Grant was based on an indebtedness of said Sargent occurring prior to the said conveyance to Drake, and that at the time of the making of the mortgage hereinafter mentioned by said Sargent and wife to Shorten, the said Shorten had actual notice of the levying of said execution on said premises as the property of said. Sargent; that the order of attachment in the suit of McMillan and wife against said Sargent, was grounded on the statement verified by affidavit, that Samuel A. Sargent had property and rights which he concealed for the purpose of defrauding his creditors, and that the indebtedness in said action sued upon arose and was a subsisting cause of action in 1864. At the time of the making of the mortgage by Sargent and wife to Shorten, hereinafter mentioned, the said Shorten had actual notice of the levying of said attachment on said premises, as the property of said Sargent. And as to the Sargent mortgage that court found as follows:

That on the 4th day of January, 1872, the said

Sargent and wife executed, in due form of law, a mortgage deed to Samuel Shorten of the premises in controversy to secure the payment of a debt therein mentioned, which said mortgage was recorded on the day last mentioned; that at the time of the giving of said mortgage the said Shorten was the owner of certain promissory notes given to him by the said Sargent for money loaned to him by the said Shorten; that on giving of said mortgage the said Shorten surrendered said notes to said Sargent and received in lieu thereof, from said Sargent, the notes described in said mortgage; that at the time of the making of said mortgage the notes, first held by said Shorten, were due and the amount due thereon was the full amount mentioned in said mortgage, and that by the giving of said mortgage to said Shorten the time for the payment of the amount due, from the said Sargent to the said Shorten, was extended by the said Shorten, and that at the time of receiving the mortgage said Shorten did not in fact have notice, that said conveyance from Clarke to Drake' was made or received in the manner and with the purpose and intent therein set forth, but that the said Shorten at the time of the taking of said mortgage deed believed Mrs. Sargent to be the bona fide owner of said premises described in said mortgage deed.

As conclusion of law from the facts, the superior court found, that McMillan and wife by reason of said attachment acquired a lien on the premises in controversy prior to the claims of all other defendants except Steele, who was a prior lien holder, and ordered that the unpaid balance of the proceeds of the sale of the premises be distributed as follows: 1st. To the payment of the unpaid costs; 2nd. To Steele the sum of $1.500, with interest from October 27, 1873; 3d. The remainder to McMillan and wife.

On error to the district court, that court af

firmed the judgment of the superior court, as to Shorten, and reversed it to William Grant, and ordered that out of the proceeds of the property there be paid, 1st. All unpaid costs except those adjudged against Samuel Shorten. 2nd. To the payment of the judgment in favor of George W. Steele. 3rd. To William Grant the amount of his judgment. 4th. The balance to Alexander McMillan and wife.

This proceeding is on the petition in error of Samuel Shorten and the cross-petition of Alexander McMillan and wife, prosecuted to obtain the reversal of the judgment of the district

court.

WHITE, J.

This case was before this court at a former term, and is reported in 34 Ohio S. 645. It was then held that the conveyance from Clark to Drake, and the subsequent one from Drake to Mrs. Sargent are not within the operation of Sec. 17 of the act regulating the mode of administering assignments in trust for the benefit of creditors, as amended February 12, 1863. S. & S. 397; 1 Sayler 354. The judgment of the court below

was reversed and the cause remanded for distribution of the proceeds of the sale of the property.

The question now before the court is as to the respective rights on distribution of Grant, a judgment creditor, whose judgment was recovered March 8, 1870, and execution levied April 12th, following; McMillan and wife, attachment creditors, whose attachment was levied May 27, 1870; and Shorten, a mortgagee, whose mortgage was executed by Sargent and wife January 4, 1872, and recorded the same day.

1. As to the priority of the mortgage. At the time of taking the mortgage the legal title was held by Mr. Sargent, and the findings show that the mortgagee had no notice of any fraud or infirmity in it. The mortgage is supported by a valuable consideration passing at the time of its execution, and the mortgagee took it, as is said in the finding, believing "Mr. Sargent to be the bona fide owner of said premises described in said mortgage."

The mortgagee therefore stands on the footing of a bona fide purchaser for value of the legal title, and is entitled to be protected as such.

This position of the mortgagee is sought to be impugned on two grounds; (1) that Sargent, the judgment debtor, was in possession at the date of the mortgage, and that the mortgagee was chargeable with notice of such possession; (2) that he had notice of the levies of the execution

and of the attachment.

As to the first ground. The possession of Sargent was not adverse to the title in his wife, but consistent with it, and in the absence of fraud, his possession was referable to his marital rights in her property. The notice cf possession with which the mortgagee was chargeable was the possession as it existed at the time of taking his mortgage, and not as it may have ex