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An examination of the cases cited will show that the reason for the rule applied to the contracts of surety companies does apply with equal force to the contract of a person who is surety for a corporation in which he owns stock. The corporation is a distinct legal entity, and the benefits which may accrue to a stockholder from a loan of money to the corporation are indirect and incidental merely in proportion to the stock owned by him at the time of the loan.

ment of the principal debt, but the finding | 683, 126 S. W. 768, Ann. Cas. 1912B, note at here shows that an indorsement was made on page 1087. the note showing that on December 31, 1909, interest was paid to January 5, 1910. This clearly shows that the payment of interest in advance was not made or received by mistake. It is also apparent from the finding that there was no agreement or understanding between the principal debtor, and his creditor to the effect that the latter's right to sue should not be suspended during the time for which interest was paid in advance. Under such circumstances the right of the principal to sue on the note was suspended from the time the interest was paid until the 5th of January, 1910. During that time the sureties were deprived the right of paying the note and bringing suit against the principal.

[4] It is stated in the tenth finding that at the time the note in suit was extended, John F. Beyer, Christian C. Beyer, and J. Edward Beyer were each the owner of $100 of the capital stock of the Winona Assembly and Summer School Association, and that John F. Beyer was at that time a member of the board of directors of that corporation. It further appears from this finding that the money borrowed on the note was used for the benefit of the corporation, and that there was no change in the financial responsibility of the principal maker of the note between December 31, 1909, and January 5, 1910. behalf of appellants it is claimed that the facts thus stated takes the sureties in this case out of the class in whose favor the rule

On

Little authority can be found bearing directly on the question here presented. The rule has been thus stated:

"As the promise of a shareholder to pay a debt of another, it entitles the promisor to all debt of the corporation is a promise to pay the the rights and remedies of a surety as to extensions and renewals of credits not authorized by him." 10 Cyc. 651.

The case of Home Nat. Bank v. Waterman, 134 Ill. 461, 29 N. E. 503, cited to sustain the text, seems to support the rule stated, as does also the case of Pelton v. San Jacinto Lumber Co., 113 Cal. 21, 45 Pac. 12. The later case of First National Bank v. Livermore, 90 Kan. 395, 133 Pac. 734, 47 L. R. A. (N. S.) 274, sustains the position of appellants holding that a principal stockholder who signs a note with a corporation intending to be bound only as surety is not entitled to the same liberality of treatment which the law accords to a volunteer surety, and that where such a corporation is granted an extension of time he did not consent to such extension, is not for a consideration, the stockholder, although

of strictissimi juris is applied and places them in a class of sureties which cannot in-released, unless he suffered some injury

therefrom.

The principal authority cited in support of the Kansas case is that of Richardson v. Draper, 87 N. Y. 337. In that case ten persons who were the principal stockholders and promoters of a business corporation jointly guaranteed bonds issued by the corporation and secured by a mortgage on its property. The court held that these guarantors did not stand in the position of volunteer sureties, and were not entitled to all of the rights and remedies which the law accords to such. Amer-remedies The court said:

voke that rule in their favor for the reason that they have a beneficial interest in the contract upon which they are sureties. The trend of modern authority is to distinguish between contracts of suretyship entered into by individuals through friendship or other similar motives, and like contracts made by corporations organized for the express purpose of acting as surety for a consideration. The rule of strictissimi juris is applied to the former, but not to the latter. Young v. American Bonding Co., 228 Pa. 373, 77 Atl. 623; United States Fidelity Co. v. Poetker, 180 Ind. 255, 102 N. E. 372.

Appellants assert that the same rule should be applied to the contract of an individual who is surety of a corporation of which he is a stockholder that is applied to the contracts of surety companies whose business it is to act as surety for a compensation. It must be borne in mind, however, that the business of these corporations closely resemble that of insurance, and their contracts are treated and construed as contracts of indemnity, rather than suretyship. Atlantic, etc., Co. v. Laurinburg, 163 Fed. 690, 90 C. C. A. 274; Philadelphia v. Fidelity, etc., Co., 231 Pa. 208, 80 Atl. 62, Ann. Cas. 1912B, 1085; Boppart v. Illincis Surety Co., 140 Mo. App.

"Here the joint guarantors owned nearly all of the stock of the corporation. They, with other persons interested in the corporation, desired that it should commence the business for which it was incorporated. It may be presumed that the purpose was to make profit for the benefit of the stockholders. No benefit to the corporation as an abstract entity, apart from its stockholders, could have been contemplated. ** Therefore in guaranteeing the bonds the obligors did not act as mere sureties; they were seeking a benefit for themselves in promoting an enterprise in which they were largely interested. Whatever would benefit the com pany would benefit them. They were acting to put profits in their own pockets, and by means of the guaranty they actually obtained for their corporation the land donated and the $150,000. Under such circumstances the equities of the obligees and that attaching to the estate of the deceased obligor are not equal; that is, the equi

ty of the estate to be discharged from liability | suspended upon the filing of an approved apis not so strong as the equity of the respondents to be paid out of the estate."

In this case, as in the Kansas case, it appeared that the corporation for whose debt the stockholders were surety was one engaged in conducting business for profit, and that the sureties as stockholders were largely interested in the success of the corporation. Even though the rule announced in the Kansas case may be properly applied to the facts there shown, its application certainly must be limited to the stockholders of corporations organized and conducted for business and profit, and who for that reason have a financial interest in the success of such corporation.

In this case it appears from the special finding that the sureties on the note in suit each owned one share of stock of the par value of $100 in the Winona Assembly & Summer School Association, but it does not appear that such corporation was engaged in a business enterprise conducted for the purpose of making profit for the stockholders.

[5] Lastly it is asserted on behalf of appellant that the special finding shows an acknowledgment of liability and a promise to pay the debt by the sureties. If after time has been given the principal, such as would entitle the surety to his discharge, the surety, with full knowledge of the facts, but without any new consideration, promises to pay the debt, he will remain liable therefor. Brandt, Suretyship & Guaranty, § 381.

peal bond in amount equal to that required of such receiver, the filing of an approved appeal bond in an amount less than the receiver's bond does not require a dismissal of the appeal, although it does not suspend the authority of the receiver.

[Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. § 2279; Dec. Dig.

489.]

2. RECEIVERS 35(1)—APPOINTMENT WITHOUT NOTICE-SUFFICIENCY OF APPLICATION. Under Burns' Ann. St. 1914, § 1288, providing that receivers shall not be appointed without appearance by or notice to the adverse party, except upon sufficient cause shown by affidavit, the mere verified statement of opinion as to the necessity of appointment without notice is not sufficient, but the pertinent facts showing such necessity must be set forth.

[Ed. Note.-For other cases, see Receivers, Cent. Dig. §§ 54-57, 59, 60; Dec. Dig. 35(1).j

3. RECEIVERS 40-APPOINTMENT WITH-
OUT NOTICE-HEARING-EVIDENCE.
On the hearing of the application for the ap-
pointment of a receiver without notice, the only
evidence admissible is the verified complaint and
the accompanying affidavits.

[Ed. Notc.-For other cases, see Receivers,
Cent. Dig. §§ 64-67, 71; Dec. Dig. 40.]
Appeal from Superior Court, Vigo County;
Fred W. Beal, Judge.

Application by James G. Matheny against the General Motors Oil Company for the appointment of a receiver. From an interlocutory order appointing a receiver without notice, the defendant appeals. Reversed and remanded, with instructions to set aside such appointment.

Davis, Bogart & Royse, of Terre Haute, for appellant. Duvall & Whitaker, of Terre Haute, for appellee.

[6] In this case, however, the finding fails to disclose an acknowledgment of liability and promise to pay the debt. Three letters are set out in the finding written to the debt- SPENCER, J. Appellee, as a stockholder or by one of the sureties, in which he asked in appellant company, instituted this action that he be given time to consult with the to procure the appointment of a receiver principal and also with his brothers, who were cosureties, and in which he expressed the hope that Dr. Dickey, who represented the principal debtor, would "get the matter in shape satisfactory to all concerned." The writer also stated in these letters that he had arranged for a meeting of the sureties and Dr. Dickey, and that he wanted to see the matter arranged some way and would do all he could to bring it about. The statements contained in these letters do not amount to a promise by the sureties to pay the debt. The court did not err in its conclusions of law.

Judgment affirmed.

(185 Ind. 114)

therefor. His complaint charges, in substance, that appellant is a corporation engaged in the buying and selling of petroleum and all of its products; that it is indebted to divers persons in the total sum of $3,000 and is without sufficient property with which to meet such indebtedness; and that for the best interests of appellant, and all of its creditors, stockholders, and officers, a receiver should be appointed to take charge of its business, to reduce its assets to money, and to make a just distribution of the same among the creditors. The complaint further avers "that an emergency exists for the immediate appointment of a receiver without notice, that the giving of notice would cause irreparable injury to plaintiff before notice could be given and a hearing had thereon,"

GENERAL MOTORS OIL CO. v. MATHENY. and concludes with a prayer for the appoint(No. 22772.) (Supreme Court of Indiana. June 22, 1916.) 1. APPEAL AND ERROR 489-DISMISSAL SUFFICIENCY OF BOND APPOINTMENT OF RECEIVER WITHOUT NOTICE.

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ment of such receiver. The complaint is verified by a general affidavit on the part of appellee "that he is the plaintiff in the aboveentitled cause, and that the facts stated in Under Burns' Ann. St. 1914, § 1289, prosaid complaint are true in substance and in viding that on appeal from an order appointing fact." On this showing the trial court apa receiver the authority of the receiver shall be pointed a receiver without notice to appel

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

lant, and from the interlocutory order mak-, security, in the form of an appeal bond, is ing such appointment this appeal is prose-substituted for another, the receiver's bond, cuted.

Appellee has filed a motion to dismiss the appeal on the ground that the same has not been perfected in full compliance with section 1289, Burns 1914, which provides that: "In all cases hereafter commenced or now pending in any of the courts of this state, in which a receiver may be appointed or refused, the party aggrieved may, within ten days there after, appeal from the decision of the court to the supreme court, without awaiting the final determination of such case; and in case where a receiver shall be or has been appointed, upon the appellant filing an appeal bond with sufficient surety, in such as may have been required of such receiver, conditioned for the due prosecution of such appeal, and the payment of all costs or damages that may accrue to any officer or person by reason thereof, the authority of such receiver shall be suspended until the final determination of such appeal."

pending a determination of the legal questions presented by the appointment. There can be no doubt that under such circumstances the amount of the appeal bond is to be determined by the amount of the bond required of the receiver.

It is equally evident, however, that the statute will authorize an appeal from such an order in cases where the defendant does not demand a return of his property pending the litigation. The court may then use its discretion in fixing the amount of the bond, and the order may be reviewed without disturbing the possession or control of the receiver. In this case the bond was given as required, and although it did not, in law, operate to suspend the authority of the receiver, the appeal is properly perfected, and the The record in this case shows that in ap-motion to dismiss is therefore overruled. pointing the receiver to take charge of appellant's business the trial court ordered:

"That before entering upon the duties of his trust, the said receiver shall execute his bond to John F. Joyce, the clerk of this court, in the sum of $1,900, with at least two (2) freehold sureties approved by this court, conditioned for the faithful discharge of his duties as such receiver."

Four days after the appointment of the receiver appellant entered its objections to such appointment and appealed from the adverse ruling of the trial court. The amount of the appeal bond was fixed by the court at $1,200, and a bond in that sum was duly executed and approved; but it is appellee's contention that, as the receiver's bond was fixed at $1,900, the appeal bond, under the statute, should have been in the same amount in order properly to perfect the appeal.

[1] Conceding that statutory requirements for the perfecting of an appeal in a special proceeding must be strictly followed, we cannot agree that there has been any violation of that rule in this case. Section 1289, supra, is section 254 of the act of 1881 concerning procedure in civil cases (Acts 1881, p. 240), and is to be construed as in pari materia with sections 632, 655, and 656 of the same act, which, in effect, authorize a trial court, in the absence of special provision to the contrary, to fix the amount of the bond in appeals from interlocutory orders. So construed, section 1289 permits an appeal "in all cases where a receiver shall be or has been appointed," but requires the filing of a bond "in such sum as may have been required of such receiver" only where it is desired to suspend the authority of that officer. It is clearly one purpose of the statute to provide a method whereby an appeal may be prosecuted from an order appointing a receiver receiver under under circumstances which will permit the defendant to retain possession of his property and at the same time protect the plaintiff as fully as he would have been protected by the receivership. One

[2, 3] In considering the appeal on its merits an extensive review of the authorities is unnecessary to make clear the error of the trial court in appointing a receiver without Section 1288, Burns notice to appellant.

1914, expressly provides that:

"Receivers shall not be appointed, either in term or vacation, in any case, until the adverse party shall have appeared, or shall have had reasonable notice of the application for such appointment, except upon sufficient cause shown by affidavit."

On the hearing of an application for the appointment of a receiver without notice, the only evidence admissible is the verified complaint and affidavits filed therewith (Marshall v. Matson, 171 Ind. 238, 245, 86 N. E. 339), and for that reason "the particular facts and circumstances rendering such summary proceeding necessary should be set forth in the application, and a mere statement of opinion as to such necessity, even though made under oath, will not justify a departure from the established rule requiring notice of the application." High on Receivers (4th Ed.) § 113. See, also, Ryder v. Shea, 183 Ind. 15, 19, 108 N. E. 104; Continental Clay, etc., Co. v. Bryson, 168 Ind. 485, 488, 81 N. E. 210; High on Receivers (4th Ed.) §§ 111, 112.

The showing made in the case at bar is clearly insufficient to warrant the appointment of a receiver without notice, and the action of the trial court cannot be sustained. The interlocutory order appointing a ceiver without notice is reversed, with instructions to set aside such appointment.

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of the constitutional limit, abutting property | not collectible from the city for that reason. owners who are liable for their proportionate Under such circumstances, the contractor assessment for such improvement cannot enjoin the collection of such assessment, although the was entitled to recover the part of the cost city's proportion was void and uncollectible. of said improvement payable by the abut[Ed. Note.-For other cases, see Municipal ting owners. Cason v. City of Lebanon Corporations, Cent. Dig. § 1253; Dec. Dig. (1899) 153 Ind. 567-576, 55 N. E. 768, 771. 536.] No error being presented, the judgment is

Appeal from Circuit Court, Henry County; affirmed. Fred C. Gause, Judge.

Action by the South Park Floral Company against the City of New Castle, Indiana, and others. Judgment for defendants, and plaintiff appeals. Affirmed.

Forkner & Forkner and Albert D. Ogborn, all of New Castle, for appellant. Barnard & Brown and Brown & Morris, all of New Castle, for appellees.

ERWIN, J. Appellant brought this action to enjoin the city treasurer from selling or offering certain described property for sale to pay for certain street improvement assessments, and to recover back to the appellee city certain funds misappropriated in paying certain assessments against the city for such improvement and to have the contract for the improvement declared null and void. Appellant's complaint set out the facts of the letting of the contract by the city, its completion, the making of the assessments by its officers, the payment, by diverting the funds from one account to another, of the assessment against the city by the city, the fact that at the time the city approved and accepted the improvement it was then indebted above the 2 per cent. constitutional limit, and that appellant's property is liable to be sold to pay the assessment of benefits made against appellant's property. The demurrers of the various defendants were sustained by the trial court, and on appellant's failure to plead further judgment was rendered in favor of appellees. The only question presented arises on the ruling of the court upon the various demurrers for want of fact.

The only question presented by brief of appellant is whether the complaint states facts sufficient to authorize an injunction against the collection of assessments against the property of appellant by reason of the city exceeding its constitutional limit by reason of the contract. It contends that the city had no power to enter into the contract for the improvement of the street, it already being indebted beyond its constitutional limit and beyond all current levies and funds on hand, and that, as the city had no power to make the contract of further indebtedness, the contract was void, and neither city nor property owner can be compelled to pay the assessments.

The contract for the construction of the improvement was not invalid, although the city's part of the expense may have created an indebtedness beyond its constitutional limit, and therefore void as to the city and

(185 Ind. 269)
EVANSVILLE & S. I. TRACTION CO. et al.
*
v. KNIGHT. (No. 22842.) *

(Supreme Court of Indiana. June 22, 1916.)
STREET RAILROADS 98(6)-CROSSING-COL-
LISION BICYCLE CONTRIBUTORY NEGLI-
GENCE.

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Contributory negligence of a bicycle rider, killed at intersection of streets in a collision with side of a flat car pushed by a motor, held established as matter of law by the facts, undisputed or specially found, as to the sounding of gong on car, opportunity to see it, and speed of car and bicycle.

[Ed. Note.-For other cases, see Street Railroads, Cent. Dig. § 207; Dec. Dig. 98(6).] Appeal from Circuit Court, Warrick County; Ralph E. Roberts, Judge.

Action by Rosalie Knight, administratrix, against the Evansville & Southern Indiana Traction Company and another. Judgment for plaintiff, and defendants appeal. Transferred from Appellate Court under Burns' Ann. St. 1914, § 1405. Reversed, with instructions.

Robinson & Stilwell, of Evansville, for appellants. Union W. Youngblood, of Boonville, Phelps F. Darby, of Evansville, and N. Powell Taylor and Gibney Oscar Letcher, both of Henderson, Ky., for appellee.

ERWIN, J. This action was brought by appellee against appellant for wrongfully causing the death of appellee's decedent. The cause was tried upon the second, third, and fourth paragraphs of the complaint. From a judgment on the verdict of the jury appellants prosecute this appeal. Each appellant assigns errors separately. The Evansville & Southern Indiana Traction Company assign errors on the ruling of the court on the demurrer to the second, third, and fourth paragraphs of the complaint, and the ruling of the court on its motion for a new trial. The Public Utilities Company assign errors on. the ruling of the court on its demurrer to the fourth paragraph of the complaint, and the ruling of the court on its motion for a new trial. Appellants have filed a joint brief and under "Points and Authorities" have designated 26 separate propositions.

It is averred in the several paragraphs of
complaint that appellant ran its car "against
and upon" appellee's decedent, thereby caus-
ing his death.
ing his death. We have examined the evi-
dence in this cause, and the undisputed facts
as shown by the testimony of all the wit-
nesses are as follows: That decedent was
riding a rubber tire bicycle east on Sycamore

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
*Rehearing denied.

street, between the center of the street and the south curb line, and was approaching Third street, and a motor car with a flat car in front was going north on Third street and approaching Sycamore. Both streets are brick. A collision between the decedent and the car occurred at the intersection of the two streets. The decedent was not struck by the front end of the flat car. When the cars stopped the decedent was under the front of the motor car. None of the wheels passed over his body. Sycamore street, exclusive of sidewalks, at the intersection of Third street is 40 feet 8 inches wide, and its total width is 61 feet 4 inches, and Third street is the same width. From a point opposite the center of the Sycamore street entrance to the Vendome Hotel to the west curb line of Third street is 65 feet. From the south curb line of Sycamore street to the center of the front entrance to the Vendome Hotel is between 45 and 50 feet. The Vendome Hotel stands at Third and Sycamore and abuts Sycamore street on the south and Third street on the west. The hotel has a clear glass front on each street, the bottom of the clear glass being 4 feet 8 inches above the surface of the sidewalk; the top of the clear glass is about 11 feet above the sidewalk. The sidewalks on both sides of the hotel are 9 inches above the brick street at the curb, and the surface of the street is a little higher in the center of the street than at the curb. The car tracks are in the center of Third street. The motor car had brakes and a gong, and the two cars were coupled about 4 feet apart and could not be coupled any closer and make the turns at street corners. The decedent was not afflicted with any physical infirmity, and his eyesight and hearing were both good. The decedent and the cars were traveling at about the same rate of speed. The gong was sounded on the motor car as it approached Sycamore street. When a person in the roadway in Sycamore street reached the west line of Third street he could see a car approaching the crossing a block away. The top of the flat car extended about half as high up as the motor car. A person in Sycamore street opposite the hotel entrance could see through glass fronts of hotel and see the upper half of an ordinary car on Third street about half a block from Sycamore. The cars were not running at a dangerous and excessive rate of speed, nor at a rate of speed in violation of any city ordinance. That the decedent ran into the flat car. No witness testified that the front of the flat car struck the decedent, but all agree that he collided with the side of the car; but the witnesses do not agree as to the place on the side of the flat car where decedent's bicycle first struck. These facts are substantially found by the jury in its answers to interrogatories. In addition the

jury found that decedent struck the car of appellant near the center of the car.

We are of the opinion that the undisputed facts in this case, and the answers of the jury to the interrogatories propounded, establish as a matter of law that appellee's decedent was guilty of negligence contributing to his injury and death, and no right of action lies; and hence the evidence is not legally sufficient to sustain the verdict. Meyer v. Manhattan Ins. Co., 144 Ind. 439, 43 N. E. 448; Korrady v. Lake Shore, etc., Ry. Co., 131 Ind. 261, 29 N. E. 1069; Pennsylvania Co. v. Meyers, 136 Ind. 242, 36 N. E. 32.

Judgment reversed, with instructions to the court below to sustain appellant's motion for a new trial.

(185 Ind. 495)

PITTSBURGH, C., C. & ST. L. RY. CO. v. PENCE. (No. 22815.)*

(Supreme Court of Indiana. June 20, 1916.) 1. RAILROADS 309-OPERATION-DUTIES TO TRAVELERS-CARE REQUIRED.

It is the duty of railroad companies in the operation of their roads to use ordinary care to avoid injury to persons or property at highway crossings.

[Ed. Note.-For other cases, see Railroads, Cent. Dig. § 981; Dec. Dig. 309.] 2. RAILROADS 344(1)-ACTIONS-PLEADING -SUFFICIENCY.

A complaint alleging that plaintiff's property was on defendant's track at a highway crossing, and could not be removed before arrival of a train, that defendant's servants in the exercise of ordinary care could have seen the property two or three minutes before hitting it, and in time to have stopped the train, but negligently failed to do so, and that plaintiff warned with lighted lantern 40 rods from the highway, sufficiently charges the railroad with actionable neglect of a particular duty to plaintiff. Cent. Dig. § 1107; Dec. Dig. 344(1).] [Ed. Note.-For other cases, see Railroads, 3. RAILROADS 338-OPERATION-CARE REQUIRED CROSSING ACCIDENTS.

Even though plaintiff may have negligently got his traction engine on a railroad right of way, where it could have been seen in time to stop the train, and plaintiff gave warning 40 rods from the crossing by swinging a lighted lantern, which was disregarded, a subsequent duty devolved on the railroad to avoid injury to the property, and it was liable if it failed to do so.

CARE

[Ed. Note.-For other cases, see Railroads, Cent. Dig. §§ 1096–1099; Dec. Dig. 338.] 4. RAILROADS 344(1) OPERATION REQUIRED CROSSING ACCIDENTS. One whose property is damaged in a railroad crossing accident may recover notwithstanding his original contributory negligence in placing his property on the track, if the complaint alleges sufficient facts to warrant application of the last clear chance doctrine.

[Ed. Note. For other cases, see Railroads, Cent. Dig. § 1107; Dec. Dig.

344(1).]

5. RAILROADS 309-OPERATION-CARE REQUIRED-CROSSING ACCIDENTS.

It is the duty of those running a locomotive to exercise ordinary care in looking ahead to discover persons or objects on the tracks at

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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