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make investments and generally to discharge the duties of the board of directors, but not to incur debts except for current expenses, unless specially authorized."

The mortgage referred to was executed by J. Frank Walton as a member of the executive committee, Joseph S. Neave not signing, but appearing as the mortgagee.

This suit is brought by the Ohio Valley National Bank to foreclose the mortgage. The assignee of the Iron Company files an answer in behalf of himself and the creditors of the Iron Company, attacking the mortgage on the grounds that the same is a preference not authorized by law, and insisting that to be a valid preference in favor of the bank the mortgage must operate, first, as a validly executed and formal mortgage of the corporation, duly recorded; or, second, as an equitable mortgage which can be sustained as a valid and subsisting lien on the property.

As to the first ground of attack made by the assignee, we are of the opinion that the executive committee had the simple power to incur debts for the current expenses of the business of the company for the convenient carrying on of the same, and although a part of or all the money borrowed of Mr. Neave went into the current expenses and may have been authorized, the mortgaging, the conveying or transferring the property of the company by the, executive committee, was certainly not intended by the constitution of the company as it is here quoted. It is claimed that the action of Mr. Walton as a member of the executive committee, or as president of the company, was ratified at a meeting of the board of directors in August, 1891, whereby the action of the executive committee in agreeing to give Mr. Neave the mortgage was approved, and in November, 1891, by another meeting of the board of directors in approving the minutes of the August meeting. It appears that the August meeting consisted of three directors, J. Frank Walton and Joseph F. Neave, and Halstead Neave by proxy; there was, therefore, plainly no meeting, no quorum competent to ratify the execution of the mortgage, for the authorities hold that a director can not vote at a meeting of the directors, by proxy, are numerous. The effect of the November meeting in approving the minutes of the August meeting, was not, as claimed, an approval of the unauthorized act of the president, J. Frank Walton, in executing the mortgage; it was an approval of the correctness of the minutes, or an approval of the form of statement of previous proceedings.

We are of the opinion that there was want of power in the executive committee to execute a mortgage for current expenses, and further, that the acts of Walton, either as executive committeeman or as president, were not legally ratified.

As to the second claim of the bank, that an equitable mortgage should be established as a subsisting lien upon the company's property, on the ground that there was at least an agreement and understanding that a mortgage was to he given, we are inclined to hold that equities existing between the original parties to a contract for the mortgage in question can not now be set up against a statutory assignee for the benefit of creditors. "Unaffected by statutory proceedings an agreement in writing for a mortgage is a valid contract, fixing a specific lien upon the property agreed to be mortgaged, and will be specifically enforced by a court of chancery against the party and all subsequent purchasers from him with notice, as well as against any general assignment, either voluntary or by operation of law for the benefit of creditors." See Bloom

Superior Court of Cincinnati.

382

v. Noggle, 4 Ohio St., 45; Betz v. Snyder, 48 Ohio St., 492, and citing Bloom v. Noggle as authority for the statement that an assignment for the benefit of creditors under our statutes operates as a conveyance, and not a mere power, and that the assignee is bound to recognize only such mortgages as appear to have been duly executed and afterwards recorded in the recorder's office of the county at the time of the assignment. See, also, Hanes v. Tiffany, 24 Ohio St., 249; Blandy v. Benedict, 42 Ohio St., 295.

While there may have been an agreement in existence, or an equitable right to a specific lien, at a time prior to the assignment, between the company and Mr. Neave, as original parties, yet as the statute invested the assignee with the legal title of the property for the benefit of the company's creditors, he is not now subject to prior existing equitable considerations between the original parties.

The assignee is entitled to the relief prayed for, and plaintiff's petition is dismissed.

SMITH, J. and HUNT, J., concur.

Champion & Muir, and Herbert Jenney, for plaintiff.

Stephens, Lincoln & Smith, and Jones & James, for Charles Hoeffinghoff, assignee.

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[Hamilton Common Pleas, April Term, 1893.]

JOSEPH HELFINGER V. CHARLES WOLFF.

The ancestral or inheritable quality of inherited property is not changed or the descent broken and a new fountain of inheritable blood created by the owner conveying away, and immediately receiving back the naked legal title without consideration, though for the sole purpose of breaking the descent.

Martin Helfinger bought a piece of city property, and on his death, childless and intestate, his wife inherited it from him in fee.

She married the defendant Chas. Wolff, and afterwards. in 1887, conveyed the property without consideration to L. J. D., who, on the same day, reconveyed it to her, both deeds containing a general warranty.

She died childless and intestate, and her husband claims the fee as her heir, while her brothers and sisters, and her first husband's brothers and sisters, claim the fee under Rev. Stat. sec. 4162, subject to Chas. Wolff's dower.

The above statement is disentangled from a complicated state of facts as being all that bears on the only legal question doubtful enough to be worthy of report.

BATES J.

The question is whether a woman, the owner of property acquired by descent, by conveying it without consideration to one who immediately reconveys to her, thereby interrupts the course of descent and becomes a new fountain of inheritable blood as a taker by purchase under the last deed.

The deed of L. J. D. was clearly not intended to give him anything but a naked legal title in trust to reconvey. No motive appears unless it

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be an intent to break the course of descent. Mrs. Wolff still retained the entire equitable title, and had there been a statute of uses in Ohio, and the use been expressed in the deed, the statute would itself have executed the use at once by giving her the legal title again.

For the husband it is urged that no one is an ancestor except one from whom the estate immediately came, citing Patterson v. Lamson, 45 Ohio St., 77, and that the last deed alone is to be looked at so that there is no ancestor in the case. Also that Mrs. Wolff could have altered the descent by a will leaving the property to the husband as against those of the blood of the ancestor. She could effectuate the same intent and convert her title from an ancestral to a title by purchase by a deed such as that to L. J. D., and the intent should be respected.

After a diligent search I can find but one case like this, and its result is contrary to the conclusion I have reached. In Nesbitt v. Trindle, 64 Ind., 183, T's estate descended one-third to his wife in fee, and it was set off to her. She then became engaged to marry N, and conveyed the property to L. without consideration, in order to enable herself to sell or dispose of it as she chose, and then married N.; the deed recited a consideration of $100, and contained a warranty, but no money passed. Within a month L. reconveyed to her, without consideration, and in pursuance of the understanding between them. This was held to vest it in her by a new title, on the ground that she had a right to convey with or without a consideration; that her motives were not material, and not a fraud on her children; that she did so dispose of it, and subsequently acquired it by a new title, and after that did not hold it by virtue of the previous marriage, but by the new title, and her husband, therefore, and not her children by the first husband, inherited from her.

In so far as this holds that if an heir parts with property absolutely, and then re-acquires, he holds as a purchaser, it is undoubtedly correct. Thus, if an owner mortgages his property, and then conveys to the mortgagee in fee, who afterwards, on being paid in full, reconveys, the owner is in of a new title, for he had parted with the legal and equitable estates. Doe ex dem. Harmon v. Morgan, 7 Term Rep. (D. & E.), 103.

That the course of descent is controlled by the legal title in determining whether property is ancestral or not, is true, and our Supreme Court has twice so stated. But this can not mean that the nature of the last deed is not to be examined, but only that it is not to be contradicted, for otherwise the unintended result would follow, that if Mrs. Wolff had happened to select a parent instead of L. J. D. as the conduit of her transfer, the last deed to her being on its face, a deed of gift, would have put the inheritance into such of her heirs as were of the blood of such grantor. The legal title was distinctly held not to control in Bond v. Swearingen, 1 Ohio, 395; Douglass v. McCoy, 5 Ohio, 522, (though these decisions were scarcely put on the right ground, and should have been, because the equitable title would not merge in the legal as against incumbrancers on the equitable.) Other cases will occur where the nature of the last transfer is examinable to determine the inheritable quality of the estate; thus, if it be found to be a mere partition deed, the ancestral character of the estate remains. See Conkling v. Brown, 8 Abb. Pr. N. S., 345; Tabler v. Wiseman, 2 Ohio St., 207; McBain v. McBain, 15 Ohio St., 337; Hershizer v. Florence, 39 Ohio St., 516, 525; Farmer's, etc., National Bank v. Wallace, 45 Ohio St., 152; 168; Avery v. Atkins, 74 Ind., 283 Yancey v. Radford, 86 Va., 638; Davis v. Agnew, 67 Tex., 206; and that, too, in face of the fact that generally in this country title, and not seizin,

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makes the inheritable quality in land; Thompson v. Sanford, 13 Ga., 238; Hillhouse v. Chester, 3 Day, 166. It is no answer to say that partition stands on its own ground because it affects possession and not title, for the fact remains that the courts look through and beyond the deeds, and thus ascertains their nature, namely that they were mere partition deeds. If a man makes a trust deed to secure a debt, and dies, and the land is sold, the surplus proceeds descend as realty. In re Thompson's estate, 8 Mackey (Del.), 536.

So, where the ancestor devises to the heir an estate of the same quantity and quality that he would have inherited from the testator, the worthier means of coming to the estate prevails, and the heir is deemed in by the descent, and not by the will. See for example: Clerk v. Smith, Salk., 241; Smith v. Trigg. 8 Mod., 23; Barnitz v. Casey, 7 Cranch, 456, 464; Phillips v. Dashiell, 1 Har. & J. (Md.), 478; Gilpin v. Hollingsworth, 3 Md., 190; Buckley v. Buckley, 11 Barb., 43; Hoover v. Gregory, 10 Yerg., 444; for, as was said in the much argued case of Pibus v. Mitford, Ventr., 372, and quoted in 1 Ohio, 395, 411, “a man cannot either by conveyance at the common law, or by limitation of uses, or devise, make his right heir a purchaser."

The rule that the legal title controls the course of inheritance merely signifies that the equity doctrine, which follows land or money whatever form it takes, is not applied to uphold a descent. See Armington v. Armington, 28 Ind., 74, Hence, if the title comes to one in two separate streams, legal and equitable, of co-extensive quality, the legal absorbs the equitable and governs the descent. Goodright. v. Wells, Dougl., 771, (decided in Lord Mansfields time.) is the leading case, and though the point there was a dictum, it has been followed (except in Bond v. Swearingen, supra,) ever since. In that case S. bought and paid for an estate, but died before conveyance to him, leaving his estate by will to his wife, in trust to bring up their son, and then to convey to him. The vendor of the land conveyed the fee to the wife. Thus the son derived the equitable estate ex parte paterna, and the legal fee ex parte materna; it was held that the legal and equitable estates were merged in the son, because he could not hold the legal estate in trust for himself as owner of the equity, and on his death the estates would not open to revive the trust so as to make the maternal heirs hold in trust for the paternal line. This doctrine was followed in Selby v. Alston, 3 Ves. Jr., 339; Wade v. Paget, 1 Bro. C. C., 363; Inre. Douglas, 28 Ch. D., 327; Nicholson v. Halsey, 1 Johns. Ch., 417; Shepard v. Taylor, 15 R. I., 204, and on rehearing, 13 Atl. Rep., 105; Hopkinson v. Dumas, 42 N. H., 296.

The doctrine of Goodright v. Wells, though orginated with doubts, tallies perfectly with the fundamental theory that equity has in reality no jurisdiction in rem, and can not confer a true ownership, and the so called equitable title is merely a personal claim against the holder of the legal title, with whom the real ownership resides, (Langdell Eq. Pl., sec. 184); hence the legal title controls the descent where it is not merely attendant on a term, and it will be observed that the doctrine of that case applies to the union of independent coextensive streams derived from separate sources, and not where the owner himself separates the legal and equitable titles by his own act.

As to what shall be a purchase to break a descent, the common law is complicated and perplexing, as will be seen by the examples in the note to Wandell's Blackstone, Vol. 2, p. 240. He says, among other things,

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however, that a mere release to uses did not interrupt the inheritable quality of the estate. In Coke, Litt., 13a, it is said: A man "seized on the part of his mother maketh a feoffment in fee to the use of him and his heirs, the use being a thing in trust, and confidence shall ensue the nature, of the land, and shall descend to the heir on the part of the mother." In Harris v. Bishop of Linclon, 2 Peere Wms., 135, 137, it was held that "one seized in fee as heir of the mother's side, levies a fine and declares the use to himself in fee; this is the old use, and no diversity between an express declaration of use and one implied. The refusal to distinguish between an express and implied use was also held in Godbold v. Freestone, 3 Lev., 406, and in Abbot v. Burton, 2 Salk, 590. In the latter case, J S., seized a parte materna, covenanted to levy a fine to A and B to the use of them and their heirs, to the intent that a common recovery should be suffered against said conusees to the use of J. S. for life, then several intermediate remainders, and remainder to his right heirs. After the remainders were over, the heir of J. S., a parte materna, took as against the general heir, "though the conusees had a seizin in fee of the estate and use vested in them by fine for a special purpose, and in strictness the estate passed, yet upon consideration of the whole conveyance, the estate did originally move from J. S., who was the conusor of the fine ** * the heir ex parte materna shall have, it being the ancient use. "So much as remained unlimited should result to the conusee and his heirs and not to the conusor, in whom in the estate was not vested with a purpose to create in him any interest, but in order to forward and complete the conveyance of the conusor's estate."

If the fee is granted or devised in trust for purposes which fail, the heir takes the inheritable residuary equity by descent. Thus, in Hucheson v. Hammond, 3 Bro. C. C., 128, a lady conveyed an estate which came to her ex parte materna to trustees to such uses as she should direct, with remainder to her own right heirs. Among the uses were the payment of certain legacies which lapsed by the death of the legatees in her lifetime. The descent was held not to be broken by the uses, for the undisposed of use retained by her was the old use which came back to her with the quality of descent (maternal), and went to the heir with the same quality; and in Buchanan v. Harrison, 1 Johns. & H. 662, on a devise to trustees, one of whom was the heir on trust subject to prior estates for conversion for purposes void for remoteness, the heir takes the equitable reversionary interest as part of the old use, and it descends to him as such, and does not merge in the legal interest devised to him as trustee so as to breed the descent, and constitute him fresh stock.

And the general rule is that land ordered by will to be converted into money, is deemed to be for the purposes of the will, and if these are disappointed, descends as realty, 4 Ired. (N. Ca.), Eq., 320; 9 S. & R., 424; 20 Pa. St., 515; Roy v. Monroe, 47 N. J. Eq., 356.

The above cases, therefore, would seem to warrant the holding, that although where the legal and equitable title come from independent sources, the legal title will control, and where the owner of both estates parts with the entire interest and reacquires it, as in the Indiana case, where there was an intent to convert the estate into money, he is in as a purchaser. Yet, where, as in our case, one owning both the legal and equitable estates by descent, momentarily parts by her own act with the mere technical legal title, retaining the entire beneficial interest, which, standing alone, would have descended as ancestral, thus creating a mere dry trust, which is held to her unqualified use, the immediate

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