on his previous death, shall be given upon the books of the company, without any surrender of the policy." The defendants admit that the policy was duly assigned to J. W. Gaff & Co., but they say that the assured, Leander W. Rasdal, having failed sometime during the year 1881, or having ceased, during the year 1881, to pay his premiums, and having at the time paid up three full years' premiums, that they thereupon credited him upon their books, under this second provision of the policy, with the equitable amount, to-wit, about the sum of $500. And it will be noticed that in this provision of the policy, there is no provision for the surrender of the policy upon such default in payment and such termination of the policy, while in the first provision, that is that which gives him certain rights after the payment of two years' premiums, it provides that the policy must be surrendered in order to entitle him to it. And they virtually confess judgment in favor of the plaintiff in this case for some $515, but deny any further liability upon the policy.

The reply to this defense, out of which the controversy in this case mainly grows, is set out in the petition in the case, and it is this: Plaintiff avers in the petition among other things, that at the time the policy was assigned, it was consented to in writing by the company, which, as I said, it adınitted in the answer. The plaintiff says that sometime after the assignment of the policy, that is, in July, 1880, the policy then being in the possession of the Mill Creek Distilling Co., as is claimed, as trustees for the firm of J. W. Gaff & Co., that is to say, the Mill Creek Distilling Co. having the policy for the purpose merely of settling up the business of James W. Gaff & Co., which was in some way complicated with the Mill Creek Distilling Co., wrote this letter to Henry Austie, the secretary of the company:

"CINCINNATI, July 21, 1880.

"Henry Austie, Esq., Secretary of Pennsylvania Mutual Life Insurance Company, Philadelphia, Pa.:

"DEAR SIR: We hold in trust policy No. 23,057, for $5,000 in Pennsylvania Mutual Life Ins. Co., of Philadelphia on the life of Mr. Leander W. Rasdal of Macon, Georgia, and we would be gratified if you would advise us the amount of the next payment and when it is payable. Should Mr. Rasdal fail to pay premiums when due, please notify us, as we do not wish the policy to lapse, and will pay premiums in case Mr. Rasdal fails to do so. Your attention and early reply will greatly oblige,

Yours very truly,

MILL CREEK DISTILLING CO.,
Koehler."

they say that in answer to this letter they received this (the letter head is upon the heading of the Penn. Mutual Life Ins. Co.):

"Gaff & Co., Cincinnati, Ohio:

"PHILADELPHIA, July 27, 1880.

"GENTLEMEN: The premium on policy No. 23,057, in this company, on the life of L. W. Rasdal, will be due August 30th next. The insured has up to this time promptly paid the premiums. If he should fail to do so, you will be notified. The amount of the next quarterly payment will be $32.83.

And the claim of the plaintiff is, in substance, that by reason of that letter the defendants are now estopped from setting up the default of Rasdal in payment of premiums and the termination of the policy.

The question is as to the effect of this letter. First, was the secretary authorized to bind the company by this letter; and in the second place, if he was so authorized or not, what is the construction to be put upon the letter?

A deposition was taken pending the suit, in order to introduce certain rules and regulations of the company, and by these rules and regulations it appears, in substance, that the secretary is not authorized to make contracts, of this character at least, for the company. And it is claimed, that inasmuch as this was a purely mutual company, the plaintiff as the assignee of Rasdal, was bound to know the rules and regulations of the company, and was bound thereby; in other words, was bound to know that the secretary of the company could not bind the company to the extent, at least, of making a new contract; for, if the letter is to be construed as the plaintiff claims it, it in effect makes a new contract. That is to say, as the plaintiff claims, this letter was a promise to them to advise them whenever Rasdal should fail to pay the premiums upon the policy, and further, to hold the policy, keep it alive, or some way to hold it until the assignee, J. W. Gaff & Co., might pay the premiums upon the policy and revive it. Necessarily, as will be seen from the position of the parties, some time must elapse after a default upon the part of Rasdal for the payment of premiums, before the information could be communicated to J. W. Gaff & Co., and they in turn make such communication as they pleased to do to the Penn. Mutual Life Ins. Co. Rasdal was a resident of Macon, Georgia. The policy was issued to him The Penn. Mutual had its office in Philadelphia, Pa., and J. W. Gaff & Co., had their office in Cincinnati, Ohio.

It is claimed by the defendant, however, that admitting that the secretary wrote this letter, and admitting, so far as they are willing to admit, that he had authority to write the letter, that a fair and proper construction may be put upon the letter consistent with the contract between the parties and the obligation upon the company, and that is this: It will be observed by the second clause set out in the answer of the company, that with relation to the policy it provides that after two years, upon surrender of the policy, the assured may then have credited up to him an equitable amount-that this letter may be construed to mean fairly that J. W. Gaff & Co. desired to avail themselves of that privilege; in other words, that it was nothing more than an agreement upon the part of the secretary that upon failure of Rasdal to pay the premiums, that he would then notify J. W. Gaff & Co., so that they might upon surrender of the policy be credited with an equitable amount upon the books of the company; for if Rasdal failed to pay his premiums after two years and before the expiration of three years, and the policy was not surrendered according to the terms of it, the policy would be wholly void and there would be no credit to be given to Rasdal or to Gaff & Co., as assignees, upon the books of the company.

First, as to the effect to be given to this letter: we think that it needs neither argument nor authority to sustain the position, that the secretary of the company, under its by-laws, could not make a new contract for the company. The president and actuary of the company are authorized to issue policies countersigned by the secretary only; but if this letter of the secretary meant anything at all other than what I have already spoken of, that is, giving Gaff & Co., the privilege of surrendering the policy and being credited with an equitable amount, then it meant to make a new contract, that is to say, that the company would

310

Gaff v. Life Insurance Co.

hold the policy a sufficient time after having received advice from Macon, Georgia, that the premiums had not been paid, for Gaff & Co., to pay the premiums, which would be wholly inconsistent with the provisions and terms of the policy. It could not possibly be done within a reasonable time. Now, that certainly would be a new contract, and just as certainly the secretary was not authorized to make such a contract. If, then, he had no authority to make such a contract, we see no difficulty in putting upon the letter the construction which I have just indicated, and that is that he had in his mind this second clause in the policy, and only proposed, in writing that letter, to give Gaff & Co., the benefit of such second clause.

Another objection might be made to the letter, although we do not think it necessary to urge it here, and that is that if it was intended by this letter to make a new contract between the company and J. W. Gaff & Co., there was no consideration for such contract; and there must be some consideration; not only some consideration, but some tangible consideration, for such a new contract as this would have been, if this letter is to be enforced against the company according to the construction put upon it by the plaintiff.

There is yet another objection to the recovery of the plaintiff upon this. It appears that in the first place, the policy was procured to be taken out by an agent of the plaintiff who was selling their products through that part of the South, and for whom, virtually, Rasdal was a sub-agent. It appears from the testimony, that Rasdal by that means had become indebted to a considerable amount to J. W. Gaff & Co., and that this agent of Gaff & Co. took out the policy, or had it taken out, for the purpose of protecting Gaff & Co. In the summer of 1882, this same agent, who was still in the employ of either J. W. Gaff & Co. or the Mill Creek Distilling Co., who for purposes of this action are the same parties, both as claimed by the plaintiff and admitted by the defendant, was in Macon, Georgia, and made inquiry in regard to the policy, went to the agent to whom Rasdal was accustomed to pay his premiums, and the agent then stated to him that Rasdal was in default for premiums about a year, but that he was endeavoring to collect the premiums from him. Now, we think that under the terms of the policy that was a fair and reasonable notice in accordance with the provisions of the letter, if the letter is to be construed against the company, that Rasdal had failed to keep up his premiums. There is no positive testimony upon that point, but we think it highly probable that the agent furnished J. W. Gaff & Co., or the Mill Creek Distilling Co., with this information. But whether that be so or not, it is only one of the incidents in the case, showing, as we think, the construction which is to be put upon the letter.

It seems that sometime after this, whether J. W. Gaff & Co., or the Mill Creek Distilling Co., had learned through the agent or not does not clearly appear from the testimony, learning Rasdal was in default for payment of his premiums, on January 4, 1883, they wrote to the Penn. Mutual Life Ins. Co., as follows:

"Pennsylvania Mutual Life Ins. Co., Philadelphia, Pa.

"GENTLEMEN: You are aware that we hold by assignment, dated December 17, 1877, and entered on your records December 20, 1877, in book 2, page 501, policy numbered 23,057, on the life of L. W. Rasdal, and we have but lately learned that the premiums for the past year or two have not been paid. We had and have relied on the agreement and promise contained in your letter to us of July 27, 1880, to notify us of any default in the payment of premiums, so that we could in such case

see to the payment. We desire, of course, to keep the policy in force, and will thank you to advise us of the arrears of premiums and we will pay or remit in any way you suggest. We can pay your agent in this city, or to your agent in Macon, Georgia, or will remit directly to your office, as you desire. Also please advise how we shall make the future remittances; that is, for the premiums hereafter maturing. We understand that the assured is now in excellent health, though this is an immaterial circumstance to the matter in hand. Please let us hear from you promptly, and oblige,

Yours respectfully.

J. W. GAFF & Co., per HUBBELL.” Hubbell was the agent who in 1882 visited Georgia and obtained the information I have spoken of.

In answer to this the Penn. Mutual Life Insurance Co. wrote: "January 12, 1883-Messrs. J. W. Gaff & Co., Cincinnati, O.—Gentlemen:-Delay in replying to your favor of the 4th inst. has been caused by the pressure of business" etc. Then they go on to repeat substantially all that had been done in the matter and in closing the letter say: "Should you desire to revive the policy for the original sum, this can be done on furnishing us an examination of Mr. Rasdal, to be approved by our medical director, and on payment of the past due premiums with interest. Yours respectfully." Signed by vice-president of the company.

It appears in the testimony indirectly that Rasdal was not in the excellent health that J. W. Gaff & Co. supposed him to be at this time, supposing that they had any information on the subject; and no re-examination was furnished. The defendants admit that the premiums were tendered to them, but they say that no re-examination was furnished to them, and that the tender of the premium without the re-examination was a vain thing; Rasdal died on March 10, 1883.

The case, we think, stands substantially upon these clauses in the policy which have been set out in the answer of the defendant, and which, in our opinion, furnish a complete and sufficient defense. The letter written by the secretary of the company to Gaff & Co., was, we think, without authority to make any new contract at least, and in no way alters the condition of the case. We think that the judgment of the superior court should be affirmed.

Moulton, Johnson & Levy, for plaintiff in error.
Sayler & Sayler, for Insurance Company.

340

INVESTIGATION OF MUNICIPAL OFFICERS.

[Hamilton Common Pleas.]

†HENRY MUHLHAUSER V. JAMES C. MORGAN ET AL.

Section 1686, Rev. Stat., empowering a committee of either branch of the common council to compel the attendance of witnesses for the purpose of investigating charges against officers, does not authorize one branch of the council, of its own volition, to investigate, but the whole council must first provide by ordinance when and how a particular committee must investigate before a witness can be compelled to attend the investigation.

On the nineteenth day of August, 1887, the board of councilmen of the city of Cincinnati adopted a resolution reciting that, Whereas it has come to be a matter of public notoriety that serious irregularities have

This judgment was affirmed by the Circuit Court.

existed in the management of the workhouse, etc., Resolved, that a committee of five be appointed by council to investigate such charges, etc.; and be it further Resolved, that such committee is empowered to examine such witnesses as may be necessary and employ such assistance as may be required to effect a speedy and thorough investigation.

Under this resolution on the twelfth day of September, 1887, the defendants, caused a subpoena to be issued requiring the plaintiff to attend as a witness on the thirteenth day of September; he refused to attend as a witness and thereupon on the fourteenth of September, 1887, compulsory process was ordered by said committee to compel his attendance before them at 7:30 P. M.

On this state of facts the plaintiff filed a petition for an injunction to restrain the defendants from compelling his attendance, and from ordering his arrest and imprisonment for refusing to attend. A temporary restraining order was allowed and a motion was filed to dissolve the restraining order, and also a demurrer to the petition. The case was then submitted upon its merits on the motion to dissolve, and on a demurrer to the petition, when the court rendered the following decision.

ROBERTSON, J.

As these questions present themselves to my mind, their solution. turns on the construction of sec. 1686, at least so far as to obviate the necessity of deciding any other point in the case. Section 1686 provides that "For the purpose of investigating charges against members or other officers of the corporation, or such other matters as it may deem proper, the council of any branch thereof, or any committee of the members of either, shall have power to issue supœnas or compulsory process to compel the attendance of persons and the production of books and papers before the council or either branch thereof, or any committee of the same, and shall have power to provide by ordinance for exercising and enforcing this provision."

Prior to the passage of this act, that is, prior to the amendment of the old sec. 95, neither council nor any branch of it had power delegated to them to issue compulsory process. They had authority to make any investigation they chose, but not to issue compulsory process. The legislature changed that section, extending their power, giving them the power of a court in regard to issuing process and enforcing the attendance of witnesses, and if necessary to commit to jail.

Now, if as contended by the city, the exercise of this power required no act on the part of council precedent to the exercise of it; if the legis lature intended to vest that power immediately and directly in council, and each and every existing committee of council (because the statute would so read), then any of these committees may, of their volition, go to work and investigate charges about any matter specified in the act.

If such was the intent of the legislature, that each of these committees should be erected into courts of justice, my impression is, that they would not have deemed it necessary to provide that the council should have power to "provide by ordinance for the exercise or enforcement of this provision." In other words, it is clear that the passage of an ordinance authorizing the exercise of this power is precedent to their right to exercise it, or the right of any committee to exercise it. The legislative intention, undoubtedly, was not to leave this extraordinary power in the boards, but to leave it to the whole council to provide when and how a particular board of the council and what board of the council,