laws of the State. Neither the incorporators nor the trustees first elected are authorized to adopt a by-law or regulation providing that they shall hold office during life, and in case of vacancy, to fill the same by appointment.

5. Trustees are charged with the duty of faithfully executing the trust which the law and regulations impose on them. They are entitled to a reasonable compensation for the service rendered; but any plan or scheme by which money is collected from members by assessment or otherwise, with a view to their individual profit, and beyond what is necessary to defray the reasonable expenses of executing the trust, is a breach of trust.

6. A certificate of membership in such a corporation by which the member in consideration of his payment of à membership fee, annual dues and a pro rata assessment with his fellow members to pay a sum of money to the family or heirs of a deceased member, in consideration of which the association at his death stipulates to pay to his family or heirs a sum of money, graduated by the number of members in his cla: s, is a contract of life insurance.

7. Such a contract of insurance to pay in case of a member's death "to himself or assignees" "to his estate," "to his executors or administrator," or to any person, whether a relation or not, who is not of his family or heirs, is against public policy, and void.

Judgment of ouster.

OKEY, C. J. took no part in the decision of this case.

111. Hezekiah S. Bundy v. The Ophir Iron Company. et. al. Error to the District Court of Jackson County.

WHITE, J.

A stockholder in a manufacturing corporation endorsed notes of the company in consideration that the payment of the notes should be secured and the endorser protected by mortgage on the property of the company. Through mistake the mortgage was made by the stockholders in their own names instead of in the name of the corporation. A subsequent mortgage was made in the name of the corporation to its creditors and recorded, which, by its terms, was subject, to the first. Held:

1. That the mortgage by the stockholders was a good, equitable mortgage against the corporation, which, independently of our statute, could be enforced against subsequent judgment creditors.

2. That the second mortgage operated to give priority to the first both as against parties claiming under the second mortgage and those claiming liens under judgments subsequently rendered.

An express acceptance of the second mortgage by the mortgagees is not required. The acceptance may be implied from circumstances. Nor is it necessary that all the mortgagees should accept the mortgage; part may accept though others refuse to do so.

Judgment reversed and cause remanded.

Where a contractor for paving a street has failed to perform his contract, so that there is "a substantial defect in the improvement," within the meaning of Revised Statutes § 2289,' and an assessment against the abutting lots has been placed on the tax duplicate, and the county treasurer is taking the necessary steps to sell such lots, under authority of the duplicate, the owners of such property may, in an action against the the treasurer and the municipal corporation, enjoin such proceeding, unless it ap pear that it would be inequitable to do so. Secs. 1777, 1778, Rev. Stats., have no application in such case.

Judgment reversed and cause remanded for further proceedings.

1116. Robert J. Turnbull v. Horatio Page. Error to the District Court of Franklin County. Leave granted to file printed record.

MOTION DOCKET.

No. 106. Joseph A. Treat et al. v. Ransom Cole, Executor, &c. Cole, Executor, &c. Motion for stay of proceedings in cause No. 1211 on the General Docket. Motion granted. Undertaking fixed at $500, conditioned that the plaintiff in error will pay such damages as the defendant in error may sustain by the delay, in case the judgment should be affirmed, and also in that event, that plaintiff in error will pay all costs.

112. Day Williams & Co. v. New York, Pennsylvania & Ohio Railroad Co. Motion to take cause No. 1185 on the General Docket out of its order for hearing. Motion overruled.

113. James Clark v. Margaret Bruce. Motion for an extention of time to print record, &c. Motion granted and time extended for 30 days.

114. Samuel Martin et al. v. E. E. Roney, Auditor, &c., et al. Motion to stay collection of an assessment in cause No. 1059 on the General Docket. Motion granted on plaintiffs executing to defendants an undertaking in $1000, to the approval of the Clerk of the District Court of Brown County conditioned to pay all costs and damages if the judgment should be affirmed.

115. Jacob Counterman et al. v. Trustees of Dublin Township. Motion to take cause No. 1220 on the General Docket out of its order for hearing. Motion granted.

116. Wm. J. Brown v. The State. Motion to take cause No. 1155 on the General Docket out of its order for hearing. Motion granted and cause set for hearing June 21, 1882.

117. John Rathbone et al. v. George H. Frey et al. Motion for stay of execution in cause No. 1210 of the general docket. Motion granted on the execution of an undertaking to be approved by the Clerk of the District Court of Clarke County by plaintiffs in error, for $1,000, condi tioned to prosecute said action to effect and pay all costs and damages that may be adjudged against them in case the judgment is affirmed.

An executory agreement between a manufacturing corporation of this State and one of its stockholders, for the purchase of the stock of such corporation, by the former from the latter, cannot be enforced either by action for specific performance or for damages.

Error to the District Court of Hamilton County.

The original action was brought by plaintiff in error against defendant in error, in the Court of Common Pleas of Hamilton County, and the cause of action was thus stated in the petition:

"The plaintiff states that the defendant is and for several years past has been a corporation, duly incorporated under the laws of the State of Ohio, for manufacturing purposes.

That it has been the custom of said corporation that its officers and others, actively engaged in its service, should be holders of shares of its stock, and upon ceasing to be connected with said company, such persons have been accustomed to sell, and said company to buy their said stock..

That the plaintiff was formerly in the employ of said company as a workman, and that while so engaged he became the holder of shares of the capital stock of said company to the amount, at itspar value, of $3,300.

That having ceased to work for said company, he sought a purchaser for said stock, and offered to sell the same to the defendant for two lots of land, hereinafter described, valued respectively at $1,100 and $700, and the balance of $1,500 in manufactured work to be made by the defendant, at ten per cent. off their bill of prices, to which the defendant assented and agreed, and to carry the same into effect, the plaintiff, on May 28, 1875, caused to be prepared a written contract, which the defendant then duly exe

cuted and delivered to the plaintiff, of which the following is a copy:

"CINCINNATI, May 28, 1875. "For and in consideration of thirty-three shares of the capital stock in the Greenlees & Ransom Company, the receipt whereof is hereby acknowledged, said Greenlees & Ransom Company promise to pay, or cause to be paid, to William Coppin the sum of three thousand three hundred dollars, payable, viz: said Coppin to take a lot of ground, No. 46 on the plat of the Wyoming Land and Building Co's sub-division. of the Burn's farm, Wyoming, Ohio, in part payment, amounting to $1,100.00; also a lot of ground on the north side of Wyoming avenue owned by-Caruthers, and next to Mr. Beeson's house, fifty feet front by two hundred and forty-five feet deep, more or less, for the sum of $700.00; leaving a balance of $1,500.00 to be paid in manufactured work, joist, scantling, etc., the manufactured work at ten per cent. off their bill of prices; the other material at the usual rates; the work and material to be delivered from time to time to him as said Coppin may order it.

"GREENLEES & RANSOM COMPANY.

"By E. P. RANSOM, President." And the plaintiff says that afterwards, in the month of June, 1875, he tendered said shares of stock to the defendant, and offered to transfer the same to it, and demanded performance of said contract, but the defendant refused to accept the same, and refused to convey said lots, or either of them, or to deliver said manufactured goods, although the plaintiff then demanded the same.

Wherefore he 'now brings said stock into Court. and offers to transfer the same to the plaintiff, and prays that the defendant may be compelled to convey said lots by a perfect title, and to deliver said goods, and for such other and further relief as in equity and good conscience he may prove to be entitled to."

To this petition an amendment was afterward allowed and filed as follows:

"And now comes the plaintiff, William Coppin, and by leave of Court files this amendment to his petition herein, and for such amendment says, that the value of said land, and of said building material, was thirty-three hundred

dollar.

That said lots were worth respectively $1,100 and $700, and re-affirming all the allegations of his petition except such as may be inconsistent herewith, prays a judgment for said value of said land and building material, to-wit: the sum of $3,300, with interest from the 28th day of May, A. D. 1875, against the said defendant, and withdraws his prayer for specific performances."

After an issue of fact joined by answer the cause was tried and verdict and judgment rendered in favor of the plaintiff for $3,817.00.

On petition in error, the district court reversed the judgment of the common pleas, and caused it to be certified on the record, "that the judg

ment of the court of common pleas was reversed by this court on the ground that the petition and amendment to the petition failed to show a sufficent cause of action and on the ground that the verdict was contrary to law," and not on the ground that the verdict was contrary to the evidence.

This proceeding is now prosecuted to reverse the judgment of the district court.

MCILVAINE, J

Whether the defendant corporation was bound by its executory agreement with the plaintiff to purchase shares of its own stock under the circumstances detailed in the petition, was, undoubtedly the question upon which the case turned in the district court.

The power of a trading corporation to traffic in its own stock, where no authority to do so is conferred upon it by the terms of its charter, has been a subject of much discussion in the courts; and the conclusions reached by different courts have been conflicting. Of course, cases wherein the power is found to exist by express or implied grant in the charter, furnish no aid in the solution of the question before us, unless the claim of the plaintiff can be sustained: that such power was conferred on the defendant by Section LXVIII of the corporation act of 1852, (S. & C. 301), as amended, which confers on manufacturing corporations the powers enumerated in the 3rd Section of the act, and, among others, the power "to acquire and convey at pleasure, all such real and personal estate as may be necessary or convenient, to carry into effect the objects of the corporation." We think, however, that this claim cannot be maintained. The sole object of the defendant's organization was "for manufacturing purposes," and it cannot be said, in any just sense, that the power to acquire or convey its own stock was either necessary or convenient "for manufacturing purposes."

The doctrine, that corporations, when not prohibited by their charters, may buy and sell their own stocks, is supported by a line of authorities, and prominent among them may be mentioned the cases of Dupee v. The Boston Water Power Co., 114 Mass. 37, and C. P. & S. R. R. Co. v. Marsailles, 84 Ill. 145. But, nevertheless, we think the decided weight of authority, both in England and in the United States, is against the existence of the power unless conferred by express grant, or clear implication. The foundation principle, upon which these latter cases rest, is, that a corporation possesses no powers except such as are conferred upon it by its charter, either by express grant or necessary implication; and this principle has been frequently declared by the Supreme Court of this State, and by none more emphatically than by this court. It is true, however, that in most jurisdictions, where the right of a corporation to traffic in its own stock has been denied, an exception to the rule has been admitted to exist, whereby a corporation has been allowed to take its own stock in satisfaction of a debt due to it. This exception

is supposed to rest on a necessity which arises in order to avoid loss, and was recognized in this State as early as Taylor v. The Miami Exporting Co., 6 Ohio R. 176, and has been incidentally referred to as an existing right since the adop tion of our present constitution. State v. Building Association, 35 Ohio St. 258.

But, however that may be, the right of a corporation to traffic in its own stock at pleasure, appears to us to be inconsistent with the principle of the provisions of the present constitution. Article 13, Section 3, which reads as follows: "Dues from corporations shall be secured by such individual liability of stockholders, and other means as may be prescribed by law, but in all cases each stockholder shall be liable, over and above the stock by him or her owned, and any amount unpaid thereon, to a further sum, ut least equal to such stock." Now, it is just as plain, that a business or trading corporation cannot exist without stock and stockholders, as it is that the creditors of such corporations are entitled to the security named in the constitution. State ex rel Att'y Gen. v. Sherman, 22 Ohio St. 411. The corporation itself cannot be a stockholder of its own stocks within the meaning of this provision of the constitution. Nobody will deny this proposition. And if a corporation can buy one share of its stock at pleas ure, why may it not buy every share? If the right of a corporation to purchase its own stock at pleasure exists, and is unlimited, where is the provision intended for the benefit of creditors? This is not the security to which the constitution invites the creditors of corporations. I am aware that the amount of stock required to be issued, is not fixed by the constitution, or by statute, and also, that provision is made by statute for the reduction of the capital stock of corporations, but of these matters creditors are bound to take notice. They have a right, however, to assume that stock once issued, and not called back in the manner provided by law, remains outstanding in the hands of stockholders, liable to respond to creditors to the extent of the individual liability prescribed. In this view it matters not whether the stock purchased by the corporation that issued it, becomes extinct, or is held subject to be re-issued. It is enough to know that the corporation, as purchaser of its own stock, does not afford to creditors, the security intended. And surely, if the law forbids the organization of a corporation without stock, because the required security is not furnished, it cannot be, that having brought the corporation into existence, it invests it with power to assume at pleasure the identical character or relation to the public, that was an insurmountable objection to the giving of corporate existence in the first place.

Plaintiff in error lays much stress on the averments in the petition, that it had been the custom of the corporation, that its officers and others actively engaged in its service, should be holders of shares of its stock, and upon ceasing to be connected with the company, such persons

had been accustomed to sell, and the company to buy such stock, and that the plaintiff had purchased the stock for the price of which suit was brought while in the employment of defendant.

We cannot see why these averments should take the case out of the general rule.

If it were averred that the plaintiff had purchased this stock from the defendant, or from others under an agreement with the company that it buy the same from him when he quit its employment, or if the contract of purchase by the defendant had been executed, very different questions would arise.

It is not even averred that the plaintiff relied upon such custom either in making the purchase or the sale of the stock; so that in fact he is unaffected by the alleged custom. But if such custom had been relied on by the plaintiff when he purchased the stock, it would not have made the executory contract of the defer 'ant to buy the stock binding, which, without such custom would be void. The usage of a corporation does not become the law of its existence, or the measure of its powers. The general law of the State, of which all persons are presumed to have knowledge, is the source and limit of all its powers and duties, and these cannot be varied either by usage or contract. The doctrine of estoppel has no application in the case. Nor is there any such equity in the case as would have arisen between the parties, in case the contract had been executed.

Judgment affirmed.

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

STREET IMPROVEMENTS-DAMAGE TO PROPERTY-LIABILITY OF CORPORA

TION.

SUPREME COURT OF OHIO.

KEATING V. CINCINNATI.

May 9, 1882.

A municipal corporation in making a street along a hillside, so excavated the ground in the street as to cause the land above to slide and injure the lot of the plaintiff. Held:

1. That the fact that the plaintiff's lot did not abut immediately on the street did not exempt the corporation from liability. Its liability did not depend upon the ownership of the injured property, but upon the extent of the injury of which its removal of the lateral support of the hill was the efficient cause.

2. That the liability extends to damages to buildings as well as to the land in its natural state, where the owner is not chargeable with negligence in making such improvements, and such damages result from want of due skill and care in making the street.

Error to the District Court of Hamilton County. The original action was brought by Edward Keating, to recover the damages he sustained to his premises by the construction of Gilbert Avenue in said city. The plaintiff's lot fronts on the west side of Sixth Street twenty-five feet, extending back towards Gilbert Avenue ninety feet more or less. The petition states that more than twenty-six years since there was erected

upon the front portion of said lot a dwelling house and out houses, to be used as a dwelling for himself and family, and which he has so used and occupied ever since. That in the year 1873, the defendant, in constructing Gilbert Avenue, illegally and wrongfully caused the base of the hillside to be cut away and removed, upon and above which the lot and improvements of the plaintiffare situated, whereby the surface of the plaintiff's lot was made to slip, the support removed injuring the lot, breaking the surface, the foundation walls of his house, and rendering the dwelling and improvements untenable.

The petition charges negligence and want of skill in the original location and grade of the

street and in the execution of the work which caused the injury complained of; and also averred that his improvements were made in good faith and with reference to the grade of the streets and alleys existing at the time, and that he had no reason to expect or apprehend the city would ever cause a cut to be made in the rear of his lot of the nature and character of the one so made.

The answer took issue with the averments in the petition.

On the trial as it appeared by the bill of exceptions, the lot of the plaintiff lies with reference to Gilbert Avenue, thus:

[Here follows a plat showing location of the lot, street, alleys &c.]

It also appeared that the plaintiff bought his lot in 1864; and that it had a house on it, fronting on Sixth Street, erected more than twentyfive years before the action was brought. That the land on which Gilbert Avenue lies had been condemned by the city for the purpose of an avenue in 1869, but that none of the plaintiff's ground was condemned; that Gilbert Avenue was a new wide street projected and laid out in 1869 and ran diagonally to the old established streets and at a different grade; that the plaintiff's lot had been improved in accordance with the established grade of the adjoining streets and used for over thirty years; that without the cutting in the avenue his buildings and lot would have remained undisturbed, and his lot lies fifteen or twenty feet east of the avenue, with a ten feet unimproved alley between, on which his lot abuts at the west end. Gilbert Avenue is built along a hillside; the hill rises to the east so that the plaintiff's lot slopes upward from the avenue; Sixth Street above both and the hill continues to rise until it reaches perhaps a hundred feet above the avenue and the ground falls away westward below the avenue. The bill of exceptions also contains the following statement.

"The plaintiff then gave testimony as to the values and amount of injury, and the reasonable cost of repairng the same, and the values of such improvements as he claimed to be wholly destroyed by the cut and the slip, which amounted in all to $985.00. And thereupon it was agreed between the parties that plaintiff's estimates were reasonable and honest, and neither

It was admitted that the city built no retaining walls opposite any of the property on the avenue at the time in controversy; but that she did subsequently.

in error.

WHITE, J.

The only question in this case is, whether the evidence supports the verdict. The jury was instructed as requested by the defendant; and as the instructions are not set out in the record they must be presumed to have been correct.

It appears from the evidence, that the defendant in excavating for the avenue on the hill side, below the plaintiff's premises, caused damages to his lot as well as to the improvements. The aggregate amount of such damages is stated to have been $985.00; but how much of that sum is attributable to the lot without the improvements, and how much to the improvements is not specifically stated. The jury assessed the damages at $450.00, which was less than half the damages admitted to have been sustained, including the damages to the improvements.

The finding of the jury must be presumed to have been in accordance with the instructions of the court, and may have included only the damages to the lot without reference to the improvements.

The excavation on the upper side of the avenue, opposite the plaintiff's premises, was twelve feet; and the whole surface of the hill moved from a point on sixth street down, passing diagonally under the plaintiff's dwelling, showing a wide opening in the ground.

A. E. Tripp, the city civil engineer testified: "The cut caused the slip, and we did nothing to stop the slip; I saw it at the time. A retaining wall would be the only way to stop a land slide, to put it in by sections as the cut progressed. We made no wall in front of Keating's lot."

A. L. Anderson, who was the city civil engineer at the time of the trial, testified as follows: "The hill is of alternate layers of clay, more or less hardened, and limestone and surface soil, it is the latter that slips on the smooth surface of the former. There is no way to prevent the slipping, except by, a retaining wall or drains on the property, made more cheaply by trenches and drains up the hill itself, dug down to the solid part of the hill so as carry away the water, which causes the surface to slide on the layers of blue clay underneath, as if on glass. It is impossible to foresee the weight of the soil that will slip, so as to know the size of retaining wall required."

This case is governed by the principles settled our own decisions, whatever may have been held elsewhere. In Rhodes v. the City of Cleveland it was held that a municipal corporation, acting within the scope of its powers, was liable for cutting ditches and water courses in such a manner as to cause the water to overflow and wash away the plaintiff's land. In the opinion of the court, the principle of the decision is thus stated: "that the rights of one should be so used as not to impair the rights of another, is a principle of morals, which, from very remote ages, has been recognized as a maxim of law. If an individual, exercising his lawful powers, commits an injury, the action on the case is the familiar remedy; if a corporation, acting within the scope of its authority, should work wrong to another, the same principle of ethics demands of them to repair it; and no reason occurs to the court why the same should not be applied to compel justice from them." 10 Ohio 160. This case was decided more than forty years ago, and has been often approved since. McComb v. Akron, 15 Ohio479; Akron v. McComb, 18 Id. 229; Crawford v. Delaware, 7 Ohio S. 459. See also Pumpelly v. Green Bay Company, 13 Wall 166; and Eaton v. Railroad Company, 51 N. H. 504.

In this state, private property is entitled to the same protection against all classes of corporations as against natural persons, subject to the right of appropriating property to public use upon the terms of making full compensation.

The case under consideration involves no question of inconvenience to the owners caused by the making of a neighboring or abutting public improvement, leaving the corpus of the property intact; but the case is one of the invasion or injury of the property itself; and it can make no difference in principle, whether the property is flooded and the soil washed away, or the property is injured and the soil removed from some other cause. It is the injury to the property that gives the right of action; and the author of it is bound to make reparation.

It is claimed on behalf of the city that as the plaintiff's lot does not abut on the avenue, and as the damages resulted from the removal of the lateral support to the abutting property, the city is not liable. The fact that the property of others intervened between the lot of the plaintiff and the avenue can make no difference. The liability would be the same whether the several parcels were owned by one or by different owners. The liability of the city did not depend upon the character of the ownership of the damaged property; but upon the extent to which its wrongful act was the cause of the damages.

In regard to the buildings and improvements, it may be said that there is nothing in their