Case Name: The Union Central Life Insurance Company v. Sutphin
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1880-01
Citations: 35 Ohio St. 360
Docket Number: 
Parties: The Union Central Life Insurance Company v. Sutphin.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 35
Pages: 360–365

Head Matter:
The Union Central Life Insurance Company v. Sutphin.
"Where, in an action involving several issues of fact, the finding is in favor of the defendant on all the issues, when it should have been in his favor on one only, it is error for the court, on motion therefor, to refuse to set aside the finding on the issues so erroneously determined, where the effect of the judgment rendered on said issues is different from what it would have been if only rendered on the issue rightly determined, and where said judgment may prove prejudicial to the plaintiff.
Error to the District Court of Butler county.
The original action was brought by the plaintiff in error against the defendant to foreclose a mortgage executed by the defendant to the Home Mutual Life Insurance Company, to secure the payment of his promissory note for four hundred dollars, payable on demand to the Home Mutual Company, and given for a balance due for shares of the company’s capital stock. The note was indorsed by George L. Masters. The plaintiff sued as assignee of the mortgage debt. The condition of defeasance contained in the mortgage was as follows:
“ Provided, nevertheless, that if the note for the sum of four hundred dollars, bearing date of November 21, 1867, signed by Carlton W. Sutphin and George L. Masters, and payable to the said Home Mutual Life Insurance Company, on demand, shall be paid, with interest, within sixty (60) days after such doihand is made by the auditor of the State of Ohio, for the said Home Mutual Life Insurance Company, then these presents shall be void."
The petition alleged demand of payment of the note by the state auditor more than sixty days before suit. As a sixth defense to the action, the defendant set out an agreement with the agent of the plaintiff, that, in consideration of the assignment by the defendant to the plaintiff of twenty-five shares of the capital stock of the Home Mutual Company, the defendant’s liability on said note and mortgage should cease, and the same be surrendered to him. He further alleged on his part performance of said agreement.'
This agreement the plaintiff by his reply denied.
There were three other defenses interposed, and the cause, on appeal*, was submitted to the district court, which gave judgment, as follows: “ By consent of parties, the cause is submitted to the court to be tried upon the issues made by the pleadings, and the court having heard the evidence adduced and arguments of counsel, and being advised in the premises, does find upon said issues in favor of the defendant, and that plaintiff is not entitled to any of the relief prayed for in its petition. It is therefore ordered and adjudged by the court, that the petition of the plaintiff be, and the same is hereby dismissed.”
A motion for a new trial on the ground, among others, that the decision of the court was not sustained by the evidence, was overruled, and bill of exceptions setting out all the testimouy taken, and made a p>art of the x’ecord. No evidence was given at the trial that any demand of payment of said note was made by the auditor of state, or by the plaintiff, before the action was brought. The testimony on the issue joined on the sixth defense above stated was in substance, as follows :
The defendant, Sutphin, testified: “I was a stockholder in the Home Mutual Coxnpany. I had five hundred dollars stock. Dr. Peck, vice-president of the Union Central Company, came to me after the transfer to the Union Central, and asked me to surrender my said stock. He represented that I would get back my notes and a part of the money I had already paid, and be released froxn all obligations. I then transferred my stock to the Union Central, and delivered it to him upon this understanding.”
Dr. Peck, on being called by the plaintiff,.testified as . follows:
“I reside in Hamilton. I was vice-president and also 'agent of the Union Central Company in 1871-4. I went to Middletown soon after October, 1871, to procure the surrender of the stock of the Home Mutual. The object in ■getting the stock was to control the Home Mutual Company. We procured enough to control it. I did hot represent to Sutphin that he would' not have to pay his notes. I told him that he would be released from the liabilities of the Home Mutual Company, which were heavy, and which he was liable for as stockholder to an amount equal to the amount of his stock. I explained the nature of the agreement between the two companies fully. I had a copy of it with me.”
N. "W. Harris, vice-president of the Home Mutual, testified that the company, at the date of the transfer of its-assets to the plaintiff, was insolvent.
It appeared from the books of the Home Mutual Company, that, on June 13, 1871, the following preamble and resolutions were adopted:
“ Whereas, By continued heavy losses which the company lias sustained; the recent act of the Michigan legislature, requiring a deposit of $50,000 in United States or state bonds, in order to enable the company to continue to do-business in that state; the raising of the valuation on policies in this state from four and a half to four per cent., and 1 hereby impairing or reducing the capital of the company nearly $50,000, it has become necessary that some action shall be now had, or some new method adopted in order to enable the company to continue in business and entitle-it to the confidence and respect of the community; therefore,
“Resolved, That the board of directors now present to the-stockholders of the company the alternative either to pay in an amount in cash equal to fifty per cent, of the amount of the reduced certificates of stock held by them respectively, or to pay fifty per cent, on their respective certificates of reduced stock to some person who will assume and take their place in the company, and return to them their notes and mortgages, now on deposit at Columbus with the state auditor, upon the receipt of the fifty per cent, of their said certificates of reduced stock, and thereby release them from all further liability.
“Resolved, That in the opinion of the board of directors,, should the stockholders fail to comply with either of the foregoing alternatives, the only course then left to pursue will be to re-insure its policies on the most favorable terms, and wind up its affairs and business, which will, in the opinion of the board, not only take the full amount of the-notes and mortgages on deposit with the state auditor, but will require from the stockholders the payment of an additional amount.”
Not securing under these resolutions a sum sufficient to relieve its necessities, the Home Mutual Company, on the 13th day of October, 1871, assigned and transferred all its assets and property to the plaintiff, under and by virtue of the contract, a copy of which is set out in JShrman’s case, ante 324.
The note and mortgage in controversy were and remained with others, on deposit with the superintendent of insurance, until January 3, 1874, when the same were reassigned to the Home Mutual Company by that officer. This is substantially all the evidence bearing on the alleged agreement to surrender to the defendant his note and mortgage.
Matthews, Ramsey & Matthews, for plaintiff in error.
Thomas Millikin, and C. D. Robertson, for defendant in error.
[Counsel in this case submitted briefs making substantially the same argument as is reported in the Ehrman case, ante 324. — Rep.]

Opinion:
Boynton, J.
It appears from the transcript of the journal entry, that the court, upon the trial, found the issues, five in numbef, in favor of the defendant. The issues joined, with the exception of the one arising upon the sixth defense stated in the answer, and the reply thereto, were of the same character, and gave rise to the same questions of law as those in Ehrman's case, ante 324, and the case of the present plaintiff v. Curtis, ante 343.
It follows, from what was there held, that the motion to set aside the findings should have been granted, and the judgment placed solely on the finding that the action was prematurely brought, unless it can be supported by the finding under the issue joined on the sixth defense. Eor if the judgment is permitted to stand on the findings, as made, and should it be pleaded in bar to a subsequent action on the mortgage, great injury might result to the plaintiff, by giving to the defendant the benefit of a judgment or finding which ought not to have been in his favor.
In respect to the question arising on the sixth defense, we are satisfied that the alleged agreement of the plaintiff, through its agent, Dr. Peck, to surrender the note and mortgage to the defendant in consideration that he assign his stock in the Home Mutual Company to the plaintiff, was not established by the proof. The weight of the evidence, we think, was clearly the other way. All the evidence given by the defendant in support of the agreement alleged to have been made was, that Dr. Peck represented to him, in case he would transfer his stock in the Home Mutual Company to the plaintiff he would get back his note and a part of the money he had already paid, and be released from all obligations ; and that upon that understanding he transferred his stock to the plaintiff. This alleged representation Dr. Peck, in his testimony, denied, but admitted that he told the defendant that he would be released from the liabilities of the Home Mutual Company, which were stated to be large, and which, to an amount equal to his stock, the defendant was liable for as a stockholder. He further testified that he fully explained to the defendant the nature of the agreement between the two companies. That this explanation was given, and that the defendant was well informed of the natufe of the transaction between the two companies is not disputed. That he was aware of the insolvency of the Home Mutual Company, and of his consequent limited liability as a stockholder for its debts admits of no doubt. The sum then due on the note was nearly equal to the face value of the stock, while the stock itself was entirely worthless. Again, it is not unreasonable to suppose that the plaintiff, in assuming, as by the contract of October 13, 1871, it did, the liabilities of the Home Mutual Company, it intended to employ the assets received as a fund from which, to the extent they would go, to pay off and discharge the liabilities thus assumed.
The note and mortgage, from aught appearing, were permitted to remain for several years in the possession of either the superintendent of insurance or the plaintiff, without being called for or demanded, a fact entirely inconsistent with the claim that the surrender was agreed upon, as claimed by the defendant. . These facts and the inferences arising therefrom, in connection with the denial of the fact, by Ur. Peck, that such agreement was made, we think, were clearly sufficient to overcome the testimony of the defendant, and to entitle the plaintiff upon that issue-to a finding in its favor.
Judgment modified.