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by proof that is clear and satisfactory upon every point essential to title by gift.

Appeal from Chancery Court, Greene County; Hugh G. Kyle, Chancellor.

Suit by Edgar R. Allen and others against G. S. Hays and others. From the decree, certain of the parties appeal. Affirmed.

Epps & Young, of Jonesboro, and W. H. Piper, of Greeneville, for Allen and others. Shoun & Trim and Susong & Biddle, all of Greeneville, for Hays and others.

WILLIAMS, J. This is a controversy involving the distribution of the estate of Dr. M. F. Jeralds, a leading physician of Greene county, who died in January, 1913. There

were two executors of his estate. One of

these, Allen, filed the bill of complaint against the other, Dr. G. S. Hays, and other defendants, for the purpose, among others of calling Hays to account for the amount of certain notes executed by one C. A. Johnson to Jeralds and secured by a mortgage on real estate.

The defendant executor defends on the ground that, though he had collected the notes, that fact preceded the death of Jeralds, and that the latter had long prior to the date of collection given the notes to him, G. S. Hays, to be held as a gift to Gerald Hays, the son of Hays, who married a daughter of testator.

The money, along with other funds belonging to Hays personally, was lent by Hays to one Shanks; the sum in solido being represented in a note payable to Hays himself, without any definition in the note or in the mortgage securing it of any trust, as to any portion of it in favor of the boy, Gerald.

(Thomp. Shan. Code, § 3516a48), which is as follows:

"Where the holder of an instrument payable to his order transfers it for value without indorsing it, the transfer vests in the transferee such title as the transferer had therein, and the transferee acquires, in addition, the right to have the indorsement of the transferer. But, for the purpose of determining whether the transferee is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made."

But this section clearly contemplates the making of proof of a transfer. Swanby v. Northern State Bank, 150 Wis. 572, 137 N. W. 763; Kiefer v. Tolbert, 128 Minn. 519, 151 N. W. 529; Crawford, Neg. Ins. Law (4th Ed.) § 49, p. 91.

Further, such transfer must be one for

value; and it is not claimed that value supported the claimed gift of the notes in ques

tion.

The above-quoted section does not have any bearing upon the matter of presumption. We need not determine whether, under the rule of construction expressio unius, section 16 of the act (Thom. Shan. Code, § 3516a15), which does deal with the matter of presumptions, shows that no such presumption obtains, in this phrase:

session of a party whose signature appears "When the instrument is no longer in the posthereon, a valid and intentional delivery by him is presumed until the contrary is proved."

Pretermitting that question, is there such a presumption at common law against the payee?

In Roy v. Duff, 170 Iowa, 319, 152 N. W. 606, which arose after the passage of the Uniform Act in that state, it was said respecting the presumption existing against the payee of such a note:

The complainant executor's theory is that "This title is presumed to continue until it the fund collected by Hays came into the is shown to have been divested, and we take it hands of the latter as a personal representa- paper, without indorsement, where there is no to be the rule that the mere possession of such tive of Jeralds and should be accounted for evidence of a consideration paid, and no eviaccordingly. dence of delivery except possession, is an inThis opinion concerns the question wheth-sufficient showing of the passing of ti tle to the defendant. # * The mere possession of a er or not a parol gift of the Johnson mort-negotiable promissory note or any negotiable gage notes by the grandfather to defendant instrument, the title to which passes under the Gerald Hays is established.

The proposition advanced by counsel of Hays and Gerald Hays is that the possession of the notes raises a presumption of title, and that proof of possession along with testimony showing that Hays asserted at various times that the possession held by him was for his son, in explanation thereof, made a sufficient case, at least prima facie, to entitle the possession to be maintained until the contrary is established.

[1] It becomes material, therefore, to inquire whether, since the notes which were payable to order, but not indorsed by Jeralds, the payee, such a presumption of ownership arises from possession.

The defendant seeks to buttress the claim to a presumption of title, arising from possession of the notes, by referring to section 49 of the Negotiable Instrument Law

law merchant by indorsement and delivery, is not prima facie evidence of ownership as against the payee. The absence of the indicia of ownership is wanting, and mere possession does not supply this."

In an earlier case, Tuttle v. Becker, 47 Iowa, 486, it was said that, if possession is prima facie evidence of ownership, then the thief or wrongdoer would have the owner at a serious disadvantage.

Gano v. McCarthy, 79 Ky. 409, was a contest between one claiming a note under voluntary gift alleged to have been made by the deceased payee and the latter's adminis trator. There was no indorsement of the note, but it was in the claimant's possession. The court said:

"The mere fact of possession upon such a state of facts, was not prima facie evidence of of the note, or a verbal sale of it, by the inownership. There might have been such a gift testate to his niece, as to prevent a recovery

being a part of the costs of defense, and the expression "at its own expense" meaning practically the same as "at the cost" of the insurer. 2. INSURANCE 513-LIABILITY INSURANCE EXTENT OF LIABILITY "MONEYS EXPENDED IN DEFENSE."

by his personal representative, is not doubted; but such a defense must be sustained by the proof, and the law will not presume the existence of such facts from the mere possession of the note by the claimant as will deprive the owner of title. The presumption is that the title and right of possession is with the original Under such policy, where an appeal was owner, and the burden is on the claimant to taken from a judgment recovered against insurshow that his possession is rightful. ed on the claim for personal injuries, the insurIt would be an easy matter to deprive the owner was liable for the interest accruing on the er of his property, if in such a case he were re- portion of the judgment for which it was liable; quired not only to make his action good by such interest coming within the term "moneys showing title in himself, but must, in some other expended in said defense," which by the policy manner than the exhibition of his title, negative were to be excluded from the limitation of liathe idea that the possession of the defendant bility. is wrongful."

*

See, also, Robertson v. Dunn, 87 N. C. 191; Vastine v. Wilding, 45 Mo. 89, 100 Am. Dec. 347; Bausman v. Kelley, 38 Minn. 197, 36 N. W. 333, 8 Am. St. Rep. 661.

[2] The case in hand is yet stronger against the presumption. The notes' proceeds were found at the death of Jeralds in the hands of Hays as one of his executors, we think must be the legal effect of the transactions, nothing else appearing. The presumption in such case is that the notes, unindorsed when collected, were yet the property of the payee. See note, 50 L. R. A. (N. S.) 588.

Where, therefore, as here, the claim of the alleged donee, the child of the defendant executor, may arise out of the fact that his father had opportunities as personal representative to come into possession of the notes and their proceeds not only is the burden of proof on the claimant but he must overcome that presumption by proof clear and satisfactory upon every point essential to title by gift. Reading Trust Co. v. Thompson, 254 Pa. 333, 98 Atl. 953.

Without meaning to impute wrong to the defendant executor, or to intimate that the record indicates any degree of unfaithfulness to his trust, we hold, as did the chancellor, that the competent proof fails to show that the notes passed as a gift inter vivos to Gerald Hays.

The chancellor's decree on this and the other matters in contest being correct, it is affirmed. Costs of the appeal will be paid one-third by defendants and two-thirds by complainant.

CASEY-HEDGES CO. v. SOUTHWESTERN
SURETY CO.

Appeal from Chancery Court, Hamilton County; W. B. Garvin, Chancellor. Suit by the Southwestern Surety Company From against the Casey-Hedges Company. a decree for complainant, defendant appeals.

Affirmed.

Sizer, Chambliss & Chambliss, of Chattanooga, for Casey-Hedges Co. Martin & Trimble, of Chattanooga, for Southwestern Surety Co.

GREEN, J. This suit was brought to recover a balance alleged to be due complainant on an employer's liability policy. There was a decree for the complainant below, from which defendant has appealed.

The complainant is a manufacturer in Chattanooga, and in 1912 obtained a liability policy from the defendant covering accidents to complainant's employés, which policy will be more particularly referred to later.

One J. R. Oliphant, an employé of the complainant, sustained certain injuries in the course of his work alleged to have been due to complainant's negligence, and brought suit for $25,000 damages in the District Court of the United States. Notice of this suit was given to defendant surety company, and the defense thereof was conducted jointly by the complainant and the surety company. There was a judgment in the District Court for $6,000. A writ of error was sued out in the name of the complainant, and the case carried to the Circuit Court of Appeals, where the judgment of the trial court was affirmed. 228 Fed. 636, 143 C. C. A. 158.

An effort was made to obtain a review of the case on certiorari, which was denied by the Supreme Court of the United States. Meanwhile an execution issued and was lev(Supreme Court of Tennessee. Feb. 11, 1918.) ied on property of the complainant to sat1. INSURANCE 513–LIABILITY INSURANCE isfy the judgment in favor of Oliphant and EXTENT OF INSURER'S LIABILITY "AT his costs and interest on said judgment pendITS OWN EXPENSE." Under a policy insuring against loss from ing the disposition of the writ of error by claims for personal injuries, limiting the insur- the Circuit Court of Appeals. This execuer's liability on account of one accident to $5,- tion was paid off by the complainant. 000, and reserving to the insurer the right to assume the management and defense of suits The surety company paid to the Caseyfor such injuries, and providing that when it Hedges Company the sum of $5,000, but deassumed such defense it would defend at its nied liability for any part of Oliphant's costs own expense, the moneys expended in such de-recovered, and for any part of the interest fense not to be included in the limit of liability previously fixed, the insurer was liable for tax- which had accrued on the judgment of the able costs in addition to the $5,000; such costs District Court.

This bill was filed to recover the amount dertaking therefore on the part of a liability of Oliphant's costs and interest on $5,000 of company to defend a suit at its own cost or the judgment. at its own expense binds such company for

The policy issued by the defendant sure-the payment of court costs, even though such ty company insured the complainant herein against

"loss and expense arising from claims upon the assured for damages on account of bodily injuries accidentally suffered or alleged to have been suffered during the period of this policy by any employé of the assured by reason of the prosecution of the work described herein."

costs exceed the maximum liability of the company for damages on account of an accident. Such costs are part of the cost of defense.

[2] This proposition is not very seriously controverted by the defendant in this case. The principal controversy is with reference

Another provision of the policy is as fol- to the defendant's liability for any part of lows:

"The company's liability on account of an accident to one person is limited to $5,000." There is a provision with respect to notice of accidents, and then appear these clauses: "If a claim is made on account of an accident, the assured shall give like notice thereof; and the company at its own expense will settle or contest the same."

"If a suit is brought on account of an accident, the assured shall forward immediately to the company or to its duly authorized agent every process and paper served on him. The company at its own expense will settle or defend said suit, whether groundless or not; the moneys expended in said defense shall not be included in the limitation of the liability fixed under this policy. The assured shall not assume any liability nor interfere with any negotiations for settlement of any legal proceeding, nor incur any expense, nor settle any claim except at his own cost without written consent of the company."

The contention of the defendant is that the extent of its liability, according to the terms of this policy, is $5,000, which sum it has paid, and that it cannot be held for anything else except "moneys expended in said defense." It is insisted that the costs and interest herein sued for are not included in the phrase, "moneys expended in said defense," and are not a part of the expense of defending the suit.

[1] Most of the liability policies which have come under our notice provide for the defense of suits against the assured "at the cost" of the liability company. In this policy the insurer reserves the right to defend such suits "at its own expense."

There is some effort on the part of counsel to distinguish between the meaning of these two phrases. We are not able to take such distinction. The phrases are practically equivalent.

It has been held in a few cases that this undertaking to defend at its own cost did not bind the insurer for the taxable costs of the case, but that the language referred merely to such costs as attorney's fees, stenographer's charges, and the like. National Provident Worsted Mills v. Frankfort, etc., Ins. Co., 28 R. I. 126, 66 Atl. 58; Munro v. Maryland Cas. Co., 48 Misc. Rep. 183, 96 N. Y. Supp. 705.

We think the weight of authority is now to the contrary. See cases collected in note to Etna L. Ins. Co. v. Bowling Green Gaslight Co., 150 Ky. 732, 150 S. W. 994, as re ported in 43 L. R. A. (N. S.) 1128. An un

the interest which accrued on the judgment of the District Court.

It may be conceded that the greater number of adjudicated cases construing policies such as the one under consideration hold that interest on a judgment accruing during the time that an appeal therefrom is pending is not a part of the costs and expenses of the litigation in such a sense that it may be allowed in excess of the stipulated indemnity. Davison v. Maryland Cas. Co., 197 Mass. 167, 83 N. E. 407; Munro v. Maryland Cas. Co., supra; National, etc., Worsted Mills v. Frankfort, etc., Ins. Co., supra; Coast Lumber Co. v. Etna Life Ins. Co., 22 Idaho, 264, 125 Pac. 185, and other cases collected in notes Ann. Cas. 1914D, 1067, and 43 L. R. A. (N. S.) 1128.

The question is undecided in this state, and with due deference we think that the view announced in the cases just cited is too narrow, and we are not inclined to follow these authorities.

Under the stipulations of the policy the insured has no control of the course of the litigation after the liability company undertakes the defense. Any interference on the part of the assured may forfeit his rights under the policy. He has no voice whatever in determining the propriety of an appeal. It would seem, therefore, that interest accruing during an appeal on so much of a judgment as the insurer was liable for should be borne by the insurer. To that extent the appeal is prosecuted for the benefit of the insurer.

It is said, however, that the whole matter rests in the domain of contract, and that it is competent for the parties to agree that the liability of the insurer shall be so much and no more. This is undoubtedly true, and the question should be determined on the contract made between the parties.

In the contract before us the insurance company undertook to respond to the extent of $5,000 for damages sustained by the assured on account of bodily injuries suffered by the insured's employé. The insurer also reserved the right to assume the management and defense of any suits brought to recover such damages against the insured, and, when it assumed the defense, undertook to defend at its own expense-the moneys expended in such defense not to be included in the limit of liability previously fixed.

The insurer not only agreed to reimburse

the insured to the extent of $5,000 for loss | peal has nothing to do with who shall pay this sustained for damage claims, but also stipulated that it would conduct any suit, the defense of which it undertook, at its own expense.

The expense of the latter undertaking, therefore, is expressly excluded from the limitation of liability for damages on account of the accident.

Is the interest on that part of a judgment for which the insurer is ultimately liable, accruing during the prosecution of an appeal, taken at the instance of the insurer, a part of the expense of the litigation or of the defense?

interest, but if it did, the parties would be on an equal footing, because the insurance company also had the use of the $5,000 during the appeal. It is simply a question of which one should bear this item of expense, and we think the insurance company should."

In the case before us the writ of error seems to have been sued out with the consent of the insured. Both the insurer and insured joined in the prosecution of this writ of error in the Circuit Court of Appeals. The judgment affirmed was for $6,000. The insurer was liable for $5,000, or five-sixths of this judgment. The insurer is here seeking a recovery of five-sixths of the interest accrued and paid by it.

The chancellor pronounced a decree in favor of the complainant for the costs and fivesixths of the accrued interest paid by it, and this decree will be affirmed.

We think it is. The interest on a judgment during such period is fixed by law. It applies to every case and is taxed on every judgment which is not reversed in the appellate courts. It is incident to every appeal and part of the expense of every unsuccessful appeal. The prosecution of an appeal or a writ of error is a part of the defense, and expense so incurred is an expense of the defense. We can see no rea-(Supreme Court of Tennessee. Feb. 11, 1918.) son for excluding such an item from the ob- 1. CERTIORARI CO MOOT CASE COSTS ligation of the policy to reimburse the assured for "moneys expended in said de

fense."

Such interest is commonly taken into consideration by counsel along with costs in advising about the propriety of appellate proceedings, and is reckoned as a possible expense of litigation.

This is the result reached by the Kentucky Court of Appeals in Etna Life Ins. Co. v. Bowling Green Gaslight Co., supra. Such also appears to be the opinion of the Circuit Court of Appeals for the Sixth Circuit in New Amsterdam Cas. Co. v. Cumberland Telephone & Telegraph Co., 152 Fed. 961, 82 C. C. A. 315, 12 L. R. A. (N. S.) 478. See, also, the dissenting opinion in Saratoga Trap Rock Co. v. Standard Acc. Ins. Co., 143 App. Div. 852, 128 N. Y. Supp. 822.

Responding to one of the arguments advanced by the courts disallowing a recovery of interest under such circumstances, the Kentucky court said:

STATE ex rel. JONES et al. v. HOWARD.

-MERITS.

bility of officer to hold office, the Supreme Court
On certiorari bringing up question of eligi-
will consider the case, though term of office has
expired where matter of costs remains to be ad-
judicated and this depends on the merits.
2. JUDGES 4-COUNTY COURT-CHAIRMAN

-QUALIFICATIONS.

Under Const. art. 6, § 1, vesting the judical power of the state in the Supreme Court and other courts, and "in justices of the peace,' court to be called the county court is establishThomp. Shan. Code, § 221, providing that a ed in each county, composed of the magistrates, section 5992, providing that the county court consists of the justices of the county, and section 493, providing that every county is a corporation, and the justices of the county court are the representatives of the county, no one is eligible for the office of chairman of the county court who is not a justice of the peace of 3. STATUTES

the county.

188-CONSTRUCTION.

Courts have no right to give to statutes a meaning not deducible from the unambiguous language used.

Certiorari to Court of Civil Appeals.

Quo warranto proceedings by the District Attorney General in the name of the State, on the relation of B. D. Jones and others, The Court of Civil against Joe J. Howard. Appeals reversed the decree of the Chancellor dismissing the bill, and defendant petitions for certiorari. Decree of Court of Civil Appeals affirmed.

"An attempt, however, is made to distinguish between the items of damage and cost and the items of interest, and the argument is made that as the assured had the use of the $5,000 during the appeal, and as this use was worth the interest, therefore, this should not be accounted an expense, as the assured did not lose anything by paying the interest. But this argument overlooks the fact that the assured had to pay to the claimant the interest it now demands, and unless it recovers it from the insurance company, it will be out this item of expense incurred by the litigation. If the insurance company had paid the $5,000 when the judgment was rendered in the lower court, at which time the claimant first became entitled to interest, that would have ended its liability under the policy. But this it refused to do, and now, FENTRESS, J. This is a quo warranto unless it pays the interest that accrued on this proceeding, instituted by the District Attor$5,000 after that time and pending the appeal, the assured will lose it. The fact that the as-ney General, in the name of the state, upon sured had the use of the $5,000 pending the ap- the relation of B. D. Jones and other citi

ex

McCroskey & Peace, of Madisonville, for State rel. B. D. Jones and others. Lindsay, Young & Donaldson, of Knoxville, and M. F. Valentine, of Madisonville, for Joe J. Howard.

This provision is taken from section 402 of the Code of 1858.

a

zens and taxpayers of Monroe county, against the defendant, Howard. The bill alleged that Howard had been elected chairman of [3] Thus it is repeatedly declared that the the county court of that county for the year county court is composed of the justices, and 1915, and that he was not eligible for the that they are authorized to act for the counoffice because he was not a justice of the ty. The statutes do not mention other perpeace; and furthermore that he had been sons, and the courts have no right to give guilty of maladministration of its duties, to the statutes a meaning not deducible from and should also, on that account, be removed. the unambiguous language used. So it is we Defendant demurred to so much of the are of the opinion that no one except bill as alleged that he was ineligible to fill justice of the county has the right to particithe office. The chancellor sustained the de-pate in any of the functions of that court. murrer, and upon the final hearing dismissed Of course, we are not to be understood as the bill, and the relators appealed to the holding that a county judge may not be lawCourt of Civil Appeals. That court revers- fully appointed by the Governor, or elected ed the decree of the chancellor, upon the by the people, under statutory authority, alground that defendant was not qualified to though such judge is not a justice of the hold the office, and entered a decree direct-peace. ing that he be removed.

The defendant filed his petition here for certiorari, and insists that he was not disqualified to hold the office because he was not a magistrate. The writ was granted pro forma by this court.

[1] While the term of office which the defendant was filling has long since expired, nevertheless the matter of costs remains to be adjudicated, and this depends upon the merits of the case.

[2] We are of the opinion that no one is eligible for the office of chairman of the county court except a justice of the peace of the county.

After the adoption of the Constitution of 1834 there was passed by the General Assembly "An act to reorganize the county courts in this state." Acts 1835-36, c. 6. Section 1 of this act provides:

"That hereafter there shall be established a court in each and every county in this state, to be held by the justices of the peace thereof

to be called the county court."

The substance of this section of the above

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act appears in Code 1858, § 127, as follows:
"A court is established in each county of this
state, composed of the magistrates
for the despatch of probate and other business
intrusted to it, to be called the county court."
Thomp. Shan. Code, § 221.

The contrary has been frequently held. Redistricting Cases, 111 Tenn. pp. 277-281, 80 S. W. 750, and authorities cited. We could rest the decision of this case upon the above statutes; however, no one has the authority to act as chairman of the county court, except a justice of the peace, for the reason that by the Constitution (article 6, § 1) it is provided:

"The judicial power of this state shall be vested in one Supreme Court, and in such circuit, chancery and other inferior courts as the Legtablish; in the judges thereof, and in justices islature shall from time to time, ordain and esof the peace. The Legislature may also vest such jurisdiction in corporation courts as may be deemed necessary. Courts to be holden by justices of the peace may also be established."

It has been repeatedly held by this court that the chairman or judge of the county court is a judicial officer. Ledgerwood v. Pitts, 122 Tenn. 606, 125 S. W. 1036; Johnson v. Brice, 112 Tenn. 67, 83 S. W. 791; State v. Leonard, 86 Tenn. 485, 7 S. W. 453; State ex rel. v. Maloney, 92 Tenn. 62, 20 S. W. 419; State v. McKee, 8 Lea, 24; State ex rel. v. Glenn, 7 Heisk. 472. The law has

imposed upon him the duties of the quorum By Shannon's Code, § 6006, it is pro

court.

vided:

"The chairman of the county court shall attend at the courthouse of his county on the first

By section 5992, Thomp. Shan. Code, it is Monday of every month, and shall exercise all provided:

"The county court consists of the justices of the county. It is divided into a quarterly and monthly court, the first being held by all or such number of the justices necessary to transact business, the latter by the chairman or judge of the county court. No discontinuance of process, or any matter or thing depending in said court, shall be produced by a failure to hold court at any regular session."

This provision of the Code is based upon Acts 1794 (N. C.) c. 1, § 44; Acts 1835, c. 6, § 1; Acts 1838, c. 135; Acts 1875, c. 70; also Code 1858, §§ 4179, 4180, 4186.

It is also provided by Thomp. Shan. Code, § 493, as follows:

"Every county is a corporation, and the justices in the county court assembled are the representatives of the county, and authorized to act for it."

jurisdiction heretofore exercised by the quorum courts; and shall, on said first Mondays and such subsequent days as may be necessary, attend to all matters and adjudicate and determine all questions and do all other acts and things the quorum courts could do."

The powers of that court are defined by Thomp. Shan. Code, § 6027 et seq., and are paraphrased in the opinion of this court in Johnson v. Brice, 112 Tenn. 67, S3 S. W. 791. It will be observed that these duties are

entirely of a judicial character, and it has been so held by this court. Johnson V. Brice, 112 Tenn. 59, 83 S. W. 791; Murray v. State ex rel., 115 Tenn. 303, 89 S. W. 101,

5 Ann. Cas. 687.

Thus it is seen that both under the Constitution and under the statute law of the state the defendant is not eligible for the

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