Case ID: ohio-st_2/html/0133-01.html
Source: Caselaw Access Project
Author: {"author": "Thurman, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Trustees of Cuyahoga Falls Real Estate Association v. McCaughy and others.
    Retrospective laws that violated no principle of natural justice, hut that, on the contrary, were in furtherance of equity and good morals, were not forbidden by the constitution of 1802. The cases below named are followed and approved: Lewis, Trustee of'Mechanics and Traders’ Bank, v. McElvain, 16 Ohio, 347; Johnson v. Bentley, 16 Ohio, 97 ; Bartholomew v. Bentley, 1 Ohio St. 86; and Kearney v. Buttles, 1 Ohio St. 372. See also Acheson v. Miller, decided at the present term.
    i:'The act entitled “ an act to provide for the settlement of the affairs of the Cuyahoga Palls Eeal Estate Association” (43 Ohio L. 223) did not contravene the constitution of 1802.
    This was a bjll of review, originally filed in the court of common pleas of Medina county. The defendants to the bill of review demurred to it, and the court of common pleas sustained the demurrer, and dismissed the bill.
    An appeal being taken to the district court, the cause was there reserved for decision in this court.
    The decree sought to be reversed was one dismissing a bill, filed by Samuel McClure and Ira Loomis, trustees of the Cuyahoga Falls Eeal Estate Association, against Eobert J. McCaughy, Henrietta McCaughy, "William Turner, Birdsey Booth, and Grant B. Turner. The sa'id Loomis having since died, Henry 'W’etmore was appointed trustee by the court of common pleas of Summit •county, and is, with McClure, complainant in the bill of review.
    The bill was filed under the authority of an act, entitled “ an act to provide for the settlement of the affairs of the Cuyahoga Falls Real Estate Association, 43 Local Laws, 222, by which, among other things, it was enacted that the complainants, as trustees for the creditors generally, of said association, should be authorized to commence and prosecute in any and all courts of competent jurisdiction, either at law or in equity, all such suits and proceedings, as might be necessary and proper to collect all bonds, bills, mortgages, or other evidences of debt, heretofore executed or given by any individual or company to said association, or to any of the-members or officers thereof, for the use or benefit of said association, and to distribute the funds arising from said suits among the several creditors in proportion to their respective demands; and that, in the prosecution of said suits, it should not be lawful for the defendant or defendants to plead, set up, or insist in defense, that the notes, bonds, bills, or other .written evidence of such indebtedness, were void, on account of their being contracts against or in violation *of any statute law of this state, or on account of their being contrary to public policy.
    The bill represents that on or about the 17th of April, 1838, Robert J. MeCaughy and others (whose names are unknown to-complainants), proprietors of real estate, formed a voluntary association in the village of Cuyahoga Falls, by the name aforesaid, “ for the purpose of creating a circulating medium for the convenient transaction of business amongst themselves—consisting of orders of various denominations, which were distributed among the members of said association, in the proportion of one dollar-in said orders for two dollars in real estate; that MeCaughy received $50 in the orders aforesaid, April 17,1838, and, in consideration of $1 and certain benefits, etc., McC. and wife conveyed to the then trustees of said association, as security for the payment of the amount of said orders, together with said McCaughy’s proportion of incidental expenses and of all losses actually sustained, by the association,'certain premises described in the bill; that McCaughy’s proportion of said losses and expenses is $300; that, the association did business for about two yeai’s, and until about. $10,000 of its orders had got into circulation and into the hands-, of innocent bona fide holders, now the creditors of the association— “ when,” says the bill, 11 in consequence of the fraudulent refusal' of the said Robert J. MeCaughy and other members of the association to pay the amounts due from them respectively, said association ceased to redeem its outstanding orders, and the. same-remain still outstanding and unpaidthat the trustees, who are made defendants, being the said Turner, Booth, and Turner, have neglected and refused to enforce the collection of the duos of said association, or to take any other steps to close up its affairs; that the association as such is wholly insolvent, etc.
    For the reasons shown in the opinion of the court, it is unnecessary to set forth the formal parts and particular allegations of the bill. It is only necessary to add that the object *of the bill is to compel the payment of the $50 borrowed in orders, and the $300, being McOaughy’s proportion of expenses and losses.
    
      S. W McClure, for complainants.
    
      C. T. Mills, for defendants.
   Thurman, J.

The main question in this case is, whether the act of the general assembly of March 4,1845, entitled “ an act to provide for the settlement of the affairs of the Cuyahoga Falls Real Estate Association ” (43 Ohio L. 223), contravened the constitution of 1802.

An act precisely similar in principle was held to be constitutional in the case of Lewis, Trustee of the Mechanics and Traders’ Bank of Cincinnati, v. McElvain, 16 Ohio, 347, and we see no reason to depart from that decision. Retrospective laws that violated no principle of natural justice, but that, on the contrary, were in furtherance of equity and good morals, were not forbidden by the constitution of 1802. So it was held in the case above cited, and, in our judgment, the decisions in Johnson v. Bentley, 16 Ohio, 97; Bartholomew v. Bentley, 1 Ohio St. 37, and Kearney v. Buttles, Id. 262, rest upon this principle. And at th'e present term it was distinctly affirmed in Miller v. Acheson. Now there was nothing in equity or good morals to render the mortgage in question void. If it ever was void, it was so only because a statute, founded upon principles of public policy solely, declared it so. That policy was a matter of public concern, and the general assembly has seen fit to change it. Under these circumstances, we do not see that the defendant should be permitted to roly upon it. We do not favor retrospective laws, and think they are wisely prohibited .by the new constitution; but they were frequently sustained under the former constitution, and have also been sustained by the highest courts of other states, and by the Supreme Court of the United States.

Some of the averments in the original bill are possibly too general, and it might have been better to make all the members *of the association defendants, or show some sufficient excuse for not doing so, but no special demurrer, or demurrer for want of parties, was filed, and the objections, if they existed, ought not to have prevailed upon general demurrer. We are of opinion that the court erred in sustaining the demurrer and dismissing the bill, and its decree is therefore reversed.