author: Nichols, J.

text:
    L. B. Smith, Inc., Appellant, v. Aetna-Standard Engineering Co., Appellee.
    (No. 3253
    — Decided July 28, 1949.)

      Messrs. Mitchell, Mitchell S Reed and Messrs. Smith, Ristig & Smith, for appellant.

      Messrs. Harrington, Huxley é Smith, for appellee.
   Nichols, J.

This action is in this court on appeal on questions of law by plaintiff from a judgment in favor of defendant in the Common Pleas Court of Ma-honing County, the action being one for damages for breach of contract. A jury was waived and the cause submitted to the court.

The material allegations of plaintiff’s petition are:

“2. That the said plaintiff on December 1,1945, submitted to the defendant its written purchase order for ten (10) Ross fork lift trucks, which purchase order was acknowledged and accepted by the said defendant by its written general order dated December 6,1945.
“3. That the said plaintiff has since the above date demanded delivery of the said ten (10) trucks and has at all times been fully prepared to make payment therefor in conformity with the terms of the said purchase order and general order, but the said defendant has refused to make delivery of the ten (10) trucks, and still refuses so to do, to the damage of the said plaintiff in the sum of $18,359.60, for which sum, and costs, it prays judgment.”

Allegations of the answer are as follows:

“For its answer the defendant admits that on or about December 1, 1945, the plaintiff submitted its written purchase order for ten (10) Ross fork lift trucks as alleged in said petition and admits that the receipt of the said purchase order was acknowledged by this defendant; admits that since the said date plaintiff has demanded delivery of the said trucks and admits that the same have not been delivered, but denies that the failure to make such delivery resulted in damage to this plaintiff to the extent set forth in its petition.
“2. Further answering this defendant says that the said ten (10) Ross fork lift trucks which constitute the subject matter of this action were not manufactured by this defendant in its usual course of business but were manufactured for the United States Government for war purposes under contract with the quartermaster department of the Government, and under and by virtue of the terms of a special permit secured by the United States Government from the original manufacturers of the Ross lift trucks and the holder ■of the original patents for such manufacture.
“3. This answering defendant further says that upon the termination of the said contract by the quartermaster department of the United States Government the said Ross lift trucks became part of surplus inventory under the terms of the Contract Settlement Act of 1944 and as such this answering defendant held only a special and limited title to the said equipment, in that it could only be disposed of as provided in the terms and provisions of the said act and the joint termination regulations issued thereunder.
“4. Further answering, this defendant says that after the issue of the said purchase order by the plaintiff herein and its acknowledgment by the defendant, a duly authorized officer of the quartermaster office of the United States Army, under authority of the Contract Settlement Act of 1944 and his general power as an army officer during the war period, ordered that said trucks be delivered to an agency of the Reconstruction Finance Corporation and that such act on the part of the authorized officer precluded delivery of the said trucks to the plaintiff as contemplated by its purchase order.
“5. Further answering, this defendant says that the plaintiff herein at the time of submitting to this defendant the said purchase order was fully aware that the defendant was without authority to sell said equipment except as provided by the terms of the said Contract Settlement Act of 1944 and regulations issued thereunder and was aware that the said Ross lift trucks were subject to the decision of the duly authorized officers of the United States Government with respect to their final disposition.
“6. Further answering, this defendant says that there has been no failure at law on its part as alleged by plaintiff, in that the said purchase order was at all times subject to the limitation of ownership of the defendant and the authority of the United States Government with respect to disposition of war material. ’ ’

Plaintiff’s demurrer to the new matter set up in defendant’s answer having been overruled, the plaintiff filed its reply in which it admits the allegations contained in paragraphs two and three of the answer, but says:

“* * * it is not informed as to the allegations in paragraph four of the answer as the same are peculiarly within the knowledge of the defendant, but plaintiff denies that said allegations, if true, constitute a defense to plaintiff’s petition for the reason that the authority of the quartermaster office of the United States Army to dispose of said ten Ross fork lift trucks, ceased and terminated upon the defendant’s acceptance of the plaintiff’s order, by virtue of a specific provision of the regulations- promulgated under the Contract Settlement Act of 1944, to wit:
“ ‘432.4. Revocation of war contractor’s authority. The contracting officer may at any time revoke or restrict the authority of a war contractor to make or approve sales and retentions of contractor inventory. The revocation or restriction will not operate retroactively. ’
“Plaintiff therefore denies that the defendant was precluded from delivering the' aforementioned trucks to this plaintiff by an order of an officer of the United States Army issued to the defendant following its acceptance of plaintiff’s order.
“In reply to the allegations contained in paragraph five of the defendant’s answer, plaintiff denies that following the defendant’s acceptance of the plaintiff’s order, said Ross trucks were subject to the decision of the duly authorized officers of the United States Government with respect to their final disposition. Further replying, the plaintiff says that the Contract Settlement Act of 1944 and the regulations promulgated thereunder specifically authorized and empowered the defendant to irrevocably consummate sales or enter into contracts to sell the said Ross trucks on the same terms as the sale to this plaintiff; that the defendant representing itself to have the authority to sell said trucks as provided in said act and regulations, induced this plaintiff, which relied on the defendant’s representations, to offer to purchase said Ross trucks; that the defendant, while continuing to represent itself to have the right to sell said trucks, unconditionally accepted the plaintiff’s offer, and that there is no provision in the Contract Settlement Act of 1944 or the regulations which, under the circumstances set forth above, excuses and relieves the defendant from responding in damages to the plaintiff for defendant’s failure to comply with the terms of said offer and acceptance.
“Plaintiff denies the allegations contained in paragraph six of said answer.”

The trial court first overruled the demurrer of plaintiff to the so-called new matter set up by defendant in its answer. •

' Except as to the amount of damages, such answer was in effect a confession of plaintiff’s right to recovery, and the new matter pleaded was in avoidance thereof. In passing upon such demurrer the trial court properly considered the same in the light of the Contract Settlement Act of 1944 and regulations adopted pursuant thereto. The question then presented was no different from that arising upon the final hearing upon the pleadings and evidence, from which that court found, in part, as follows:

“The defendant, under contract with the United States Government, manufactured for it under its special permit, for war purposes, 10 Ross fork lift trucks. On termination of the contract, these trucks became surplus inventory under the Contract Settlement Act of 1944. Plaintiff submitted its written purchase order to defendant for said trucks, which order was acknowledged in writing by the defendant. Immediately thereafter and before delivery of the trucks, an officer of the quartermaster department, the contracting agency, ordered on behalf of the United States the delivery of these trucks to another agency of the Government and this was done. For the foregoing reason the demand of the plaintiff for the delivery to it of said trucks has not been complied with by the defendant and damages are asked by the plaintiff for said failure.”

Such findings are supported by the evidence and admissions in the pleadings and are not contrary to the manifest weight thereof. Under authority of the Contract Settlement Act of 1944 and regulations issued thereunder, both the quartermaster department, designated as “contracting agency,” and the defendant, designated as “war contractor,” were concurrently endeavoring to sell or dispose of such trucks, as war surplus inventory, in accordance with authority granted to each. As found by the trial court and admitted in the answer of the defendant, immediately after the defendant in writing had accepted the written proposal of plaintiff for the purchase of these trucks, the quartermaster department, acting on behalf of the United States Government, ordered the delivery of such trucks, together with eight other trucks of like kind and manufacture, and being all such trucks remaining as surplus inventory, to another agency of the United States Government, to wit, the Reconstruction Finance Corporation, and thus made it impossible for defendant to make delivery under its contract with defendant.

Assuming, as did the trial court, that a valid contract of sale had been entered into between plaintiff and defendant before the quartermaster department ordered the trucks delivered to another agency of the Government, such contract embraced, however, within its legal terms, though not specifically referred to therein, all the provisions of the Contract Settlement Act of 1944 governing the disposition of surplus inventory, both parties having with knowledge dealt with the same as war surplus inventory and not in the usual course of trade. See 9 Ohio Jurisprudence, 416, Section 189.

One of the sections of the Contract Settlement Act of 1944, relied upon by the trial court, to wit, section 12 (e), provides as follows:

“Notwithstanding any other provisions of law, but subject to subsection (h) of this section, the contracting agency concerned or the director, or any Government agency designated by him, on behalf of the United States, may, by the exercise of any contract rights or otherwise, acquire and take possession of any termination inventory of any war contractor, and any materials removed by the Government or stored for its account under subsections (c) and (d) of this section, whether or not such materials are finally determined not to constitute termination inventory.”

The balance of the section provides for compensation to the contractor and has no bearing upon the question before the court. Subsection (h) referred to also has no bearing on the question before the court in that it simply provides that subsection (e) is no limitation upon the War and Navy Departments to exercise their power of acquisition of property.

By the embodiment of this provision of the law in the contract between plaintiff and defendant, defendant’s right to demand delivery of the trucks was subject to the right of the contracting agency on behalf of the United States to take possession of these trucks, known by the parties to be termination inventory, “notwithstanding any other provisions of law.”

Counsel for plaintiff have strenuously urged that these trucks lost their character as “termination inventory” as soon as defendant accepted its proposal to purchase them. We conclude, however, that the trucks remained termination inventory until they were actually removed from the possession of the war contractor, and until which event they were subject to the right of the contracting agency, as provided in section 12 (e), supra. Otherwise, the provisions of such section would be meaningless, since it is clear that at all times previous to complete disposition by the war contractor the contracting agency had full authority to dispose of termination inventory, “notwithstanding any other provisions of law.”

This position is strengthened by the further regulations as follows:

“432.3 General Bestrictions on War Contractor’s Authority. The authority of a war contractor to dispose of contractor inventory or to authorize or approve a disposition by a subcontractor is subject to the following general restrictions, in addition to the restrictions specifically set forth in this section IV.
“(1) Any applicable Government restrictions upon the disposition of secret, confidential, or restricted material, or existing contract provisions regarding the disposition of material under the contract, or any restriction on the disposition of material subject to a lien, shall govern such disposition, notwithstanding the provisions of this regulation.
“(2) The contracting officer may require cmy item of contractor inventory to be transferred to the Government. He will do so in the case of critical items or other items which the Government wishes to acquire for production or supply purposes. * * *” (Italics supplied.)

The act discloses a plan for concerted action by the contracting agency and the war contractor for disposition of war surplus assets to the best interests of the Government and the hastening of the reconversion of a manufacturing plant, such as defendant’s, to peacetime production, the war contractor’s authority being restricted to sales of surplus inventory for not less than the cost which the Government would otherwise be liable under its contract. There is no evidence that defendant profited in the least from the fact that these trucks were ordered transferred by the contracting agency to another agency of the Government, although in argument it is intimated by counsel for plaintiff that defendant failed to remonstrate or interpose any objection to such transfer with the intent thereby to curry favor with the contracting agency. If the trial court was right in its view of the law, we fail to see how any remonstrance or objection by the war contractor to the action of the contracting agency could have prevented or hindered the transfer of the trucks by the contracting agency. The authority of the contracting agency under the section of the act above quoted being clear and there being no evidence that defendant in any manner induced such action, these trucks were manufactured for the Government and were the property of the Government, subject to disposition in the manner provided by the act.

Under authority of the Contract 'Settlement Act of 1944, joint termination regulations were issued by the duly authorized agencies of the different departments of the Government.

By regulation 432.3 (2), issued under- authority of the act, the defendant was authorized to make sales of termination inventory at cost, subject, however, to the restrictions set forth in the act and regulations. Construing the provisions of the act and regulations as a whole, what appear to be conflicting regulations can be harmonized by holding that the authority of the defendant contractor was subject to the paramount right of the Government to take these trucks. This the plaintiff must be held to have had knowledge of and consented to when dealing with property constituting termination inventory.

But it is urged by counsel for plaintiff that regulation 432.4 specifically provides that any revocation or restriction of the war contractor’s authority will not operate retroactively. Such regulation reads as follows :

“Revocation of War Contractor’s Authority. The contracting officer may at any time revoke or restrict the authority of a war contractor to make or approve sales and retentions of contractor inventory. The revocation or restriction will not operate retroactively. The contracting officer may cancel such revocation.’’

We hold this regulation has no application to the situation presented here. There was no revocation or restriction attempted to be made by the contracting officer on the general power of the war contractor to dispose of surplus inventory. Here the contracting agency took possession of termination inventory of the war contractor under the express provisions of section 12 (e) of the act, which provisions override and control all other provisions of law, as well as all regulations promulgated pursuant thereto.

Other regulations adopted for the purpose of carrying out the purposes of the act, and relied upon by plaintiff, are as follows:

“432.2 War Contractor’s Authority, where Title is in the Government.
“(1) Where Government-owned material or material acquired or produced under a cost-plus-a-fixed-fee war contract or other war contract which provides that title to it shall vest in the Government, is in the possession of the war contractor, he may dispose of it in accordance with this regulation * * (Italics supplied.)
“442 Retentions and Sales at Cost.
“(1) War contractors may retain or sell any contractor inventory at cost, without the approval of the contracting officer or the next higher tier contractor. * * *” (Italics supplied.)

Like all other regulations, the last quoted are subject to the specific authority of the contracting agency to acquire and take possession of any termination inventory, under section 12 (e) of the act.

A reasonable construction of the act and regulations adopted pursuant thereto commands the holding that these trucks remained “termination inventory” subject to disposition by the contracting agency, at least until the physical removal thereof from the custody of the war contractor by delivery to a buyer. Such construction will not do violence to any of the seemingly contradictory provisions of the regulations adopted under authority of the act.

Upon termination of the war, army officers had been sent into the factory of defendant to take charge of the disposition of these trucks, which had become surplus because no longer needed in the prosecution of the war. The officers were stationed in the factory of the defendant and constituted an agency of the Government, designated “contracting agency.”

We think it proper to say here that under the Uniform Sales Act, in force in Ohio, where authority of an agent to sell specific property of his principal, in a deliverable state, is unrestricted, the property in the-goods passes to the buyer when an unconditional contract to sell is made, but the Uniform Sales Act does not prevent a provision in the contract of sale, made; by an agent for his principal, whereby the property in the goods is not to pass to the buyer if seized by the Government before delivery to the buyer, and such condition may be either expressly written in the contract or incorporated therein by operation of law. Such is expressly provided in Section 8399, General Code, by the use of the words, “unless a different intention appears.”

After considering all the errors assigned by plaintiff, we conclude there was no error in the proceeding of the trial court, and that its judgment must be affirmed.

Since the contract between plaintiff and defendant embraced and included within itself the provision of section 12 (e) of the act, making delivery of these trucks to the plaintiff subject to the right of the contracting agency of the Government to acquire and take possession of them, it is unnecessary to discuss the law governing cases where an unconditional contract of sale has been entered into and fulfillment by one party has been made impossible by the intervention of something not provided for in the contract.

To any who may be interested reference may be had; to the authorities cited in the opinion of the trial court, to wit, London & Lancashire Indemnity Co. of America v. Bd. of Commrs., Columbiana County, 107 Ohio St., 51, 140 N. E., 672; Omnia Commercial Co., Inc., v. United States, 261 U. S., 502, 67 L. Ed., 773, 43 S. Ct., 437.

See, also, Columbus Ry., Power & Light Co. v. City of Columbus, 253 F., 499.

Judgment affirmed.

Phillips, P. J., concurs.

Buckley, J., dissents.


source: Caselaw Access Project

author: By the Court.

license: Public Domain

text:
    The State, ex rel. Boyd, v. Industrial Commission of Ohio.
    (No. 4085
    — Decided January 20, 1948.)

      Messrs. Harrison, Thomas, Spang enter g S Hull and Mr. Michael S. Cerresin, for relator.

      Mr. Hugh S. Jenkins, attorney general, and Mr. R. Brooke Allow ay, for respondent.
   By the Court.

This cause is submitted on demurrer by the Industrial Commission of Ohio, respondent, for the reason that the amended petition of relator fails to state a cause of action against the respondent.

The amended petition alleges that William M. Boyd, relator, is a citizen of the state of Ohio and a taxpayer in the city of Cleveland, state of Ohio, and that he brings this action on his own behalf as a citizen and a taxpayer and for and on behalf of all other citizens and taxpayers of this state.

Relator says further that the respondent is the duly appointed, qualified and acting board, charged with all the rights, duties and responsibilities of the Industrial Commission under the statutes of Ohio. The amended petition alleges further it is the duty of the respondent under the statutes of Ohio to collect certain premiums from each employer of three or more employees, the same to be paid into a state fund. The relator alleges further that the respondent has failed, neglected and refused to perform its duty with respect to the premiums required to be paid by a certain class of employers, to wit, those employers who are engaged in using the highways of the state of Ohio for commercial hauling of freight.

After alleging further no adequate remedy at law, the relator prays that a writ of mandamus may issue and that the respondent may be commanded to proceed forthwith with the collection of the premiums due from such companies.

One of the questions raised by the demurrer is whether the relator has an interest in the relief which he has demanded. The respondent is contending that the relator has no interest within the meaning of Section 12287, General Code. This question has been decided by our Supreme Court in the case of Brissel v. State, ex rel. McCammon, 87 Ohio St., 154, 100 N. E., 348, the third paragraph of the syllabus of which states:

“In a proceeding in mandamus where the relief sought is the enforcement of a public duty by a public officer or board, it is sufficient to sustain the right of the relator to maintain the suit, that he show that he is a citizen and as such interested in the execution of the laws. ’ ’

The amended petition sufficiently sets forth that the collection of the assessments enumerated is a public duty of the respondent. This same rule has also been announced in State v. Brown, 38 Ohio St., 344; State v. Tanzey, 49 Ohio St., 656, 32 N. E., 750; State, ex rel. Downing, v. Powers, 125 Ohio St., 108, 180 N. E., 647; and State, ex rel. Walls, v. Wallace, 138 Ohio St., 410, 35 N. E. (2d), 167.

We are, therefore, of the opinion that the relator has an interest in this action within the meaning of Section 12287, General Code.

It is contended further by the respondent that the amended petition does not seek the performance of any specific act or acts by the respondent. We are not in accord with the conclusion of demurrant that the amended petition seeks only to compel a general course of official conduct. The amended petition asserts that a class of employers, which is specifically defined, is amenable to the law and should contribute to the workmen’s compensation fund, and that in contravention of respondent’s specific obligation it has not required such employers to contribute. Whether this pleading would have been good against a motion to make definite and certain is not before us. We are satisfied that upon the averments of the amended petition as they now appear, the relator would be permitted to introduce in support of his case proof of specific incidents wherein the respondent is remiss in failing to compel contribution to the fund.

The amended petition is good as against general demurrer, and the same is overruled.

Demurrer overruled.

Wiseman, P. J., Miller and Hornbeck, JJ., concur.


text:
    The Liberty Folder Co., Appellee, v. Anderson et al., Appellants.
    (No. 145
    — Decided March 21, 1949.)

      Messrs. Pickrel, Schaeffer & Ebeling, for appellee.

      Mr. Sidney G. Kusworm, Mr. D. F. Mills, Mr. Rod

      ney R. Blalte, Mr. Robert D. Touvelle and Messrs. Myers & Myers, for appellants.
   By the Court.

This cause is submitted on motion of defendants, appellants herein, for an order of diminution of the record. It is claimed that the bill of exceptions which has been filed, through accident or error, does not contain all the evidence submitted to the trial court on the matters at issue to be presented to the reviewing court. This claim is not disputed. Whether the bill is complete will be determined by the trial court.

The court orders the bill of exceptions remanded to the trial court for any correction which the trial court considers proper. Section 11572-a, General Code.

Judgment accordingly.

Miller, P. J., Hornbeck and Wiseman, JJ., concur.


text:
    Philadelphia National Ins. Co., Appellee, v. Scovanner, Appellant.
    (No. 7119
    — Decided July 11, 1949.)

      Messrs. Doyle, Tomlin dt> Doyle, for appellee.

      Messrs. Pogue, Helmhols, Culbertson & French, for appellant.
   By the Court.

TMs is an appeal from a judgment by tbe Municipal Court of Cincinnati, in favor of an indemnitor that had paid the damage, less $25 as provided in a deductible clause of an insurance policy, resulting from a collision between two automobiles. At the close of the plaintiff’s evidence, the defendant announced that he rested, and, thereupon, the plaintiff moved for an instructed verdict. On this motion, the court withdrew the case from the jury and entered judgment for the plaintiff.

Early in the proceedings in the trial court, the defendant raised, by demurrer, the issue of a defect of parties, in that the insured was a necessary party, because of the provision in the policy whereby the insured agreed to bear the loss up to $25. This claim was maintained throughout the proceedings in the trial court, and is urged here as a ground of reversal. We think the point is well taken.

The plaintiff paid $25 less than the total damage. The insured then executed a “subrogation receipt” reciting “In consideration of such payment the undersigned hereby assigns and transfers to the said company all claims and demands against any other party, person, persons, property or corporation arising from or connected with such loss or damage, and the said company is hereby subrogated in the place of and to the claims and demands of the undersigned, against said party, person, persons, or corporation, to the extent of the amount above named, and the said company is hereby authorized and empowered to sue, compromise or settle in his name or otherwise to the extent of the money paid as aforesaid.”

The “subrogation receipt” was executed in pursuance of a provision in the policy that “In the event of payment under this policy, the company shall be subrogated to all the insured’s rights of recovery therefor against any person or organization, and the insured shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights.”

The meaning of the language is not entirely free from doubt and under such circumstances it must be construed most strongly against the insurer. Following that rule, we must conclude that the claim was assigned to the extent only that the insurer had paid and as that was less than the total damage, the claim was split and the part in excess of the payment by the insurer was retained by the insured. It is manifest from the language that the only thought of the parties was to secure reimbursement to the insurer of the amount of its payment and not that it would derive a profit by performing its obligation under the policy. Perhaps a provision in the policy for an assignment of the total claim against the third person would be supported by a sufficient consideration. It would seem that such a provision should be in clear and unmistakable language.

In City of New York Ins. Co. v. Tice, 159 Kan., 176, 152 P. (2d), 836, 157 A. L. R., 1233, an identical provision in a policy was assumed to' provide for a subrogation to tbe extent only of the payment by the insurer leaving the insured still the owner of the deductible sum of $50.

It is our conclusion that there was a defect of parties, and that the court erred in overruling the defendant’s demurrer.

Another error assigned is that the court erred in discharging the jury and entering judgment for the plaintiff. We are of the opinion that this point also is well taken.

While the defendant introduced no evidence, it cannot be said that the plaintiff, on whom the burden of proving negligence rested, had proven as a matter of law that the defendant was negligent, and that no inference of contributory negligence could be drawn from its evidence. The evidence presents a dim picture of what transpired. It does not clearly appear that defendant entered the intersection against the traffic light. Nor is it clear that the plaintiff’s assignor exercised his senses and acted as a reasonably prudent person should under the circumstances.

Por these reasons, the judgment is reversed, and the cause remanded for further proceedings according to law.

Judgment reversed.

Ross, P. J., Hildeerant and Matthews, JJ., concur.


author: Doyle, J.

text:
    Rubber Corp. of America, Appellee, v. Tanney-Costello, Inc., Appellant.
    (No. 4057
    — Decided January 18, 1950.)

      Messrs. Buckingham, Doolittle & Burroughs, for appellee.

      Mr. George B. Wells and Mr. Charles F. Scanlon, for appellant.
   Doyle, J.

The Rubber Corporation of America sued Tanney-Costello, Inc., upon an account for a claimed balance due arising out of a contract of sale of a quantity of polyvinyl chloride (rigid reground) to the defendant.

Defendant by amended answer alleged that .the material delivered did not correspond to the description and furnished samples, and that it had rescinded the transaction. In addition, it, by amended cross-petition, sought damages for loss of profit (waived on opening statement), cost of freight, and reasonable charges for storage.

The plaintiff’s reply denied the allegations in the amended cross-petition, and, while admitting that defendant refused to accept the goods, and offered to return them, denied a breach of warranty and a rescission of the sale.

The ease was presented to a jury in the Court of Common Pleas of Summit County. A verdict was returned in favor of the defendant on the petition, and in favor of the defendant on the amended cross-petition, but with no damages assessed. Plaintiff then filed a motion for judgment non obstante veredicto, asking for the full amount claimed for the reason that “notwithstanding its [the defendant’s] ostensible effort to rescind and claim that there was a breach of warranty, the defendant, inconsistently with plaintiff’s ownership of the goods, attempted to resell them as its own, thereby waiving any right to rescind.”

This motion was sustained, and judgment was rendered for the plaintiff and against the defendant for the full amount sought — viz., $4538.30, with interest at 6% from February 23, 1947. The defendant’s amended cross-petition was dismissed.

The trial court’s ruling is explained by its opinion filed with the papers in the case. The opinion reads in part:

“The plaintiff’s motion for judgment notwithstanding the verdict calls upon this court to determine whether or not the defendant’s conduct in attempting to sell the rigid reground polyvinyl chloride constitutes a waiver of its right to rescind.
‘ ‘ The undisputed evidence shows the following facts. The defendant purchased said material from plaintiff, under a contract (exhibit No. 5) dated January 15, 1947. This merchandise was actually received by the defendant in Akron on or about February 25, 1947. On February 26, 1947, the defendant wrote the plaintiff (exhibit 13) that it found that the shipment was not according to the contract, but that it would advise the plaintiff more definitely as to the acceptability of the merchandise after canvassing its customers for their reaction.
“Then, for a period^ of about two weeks, the defendant proceeded to offer the material for sale to its customers.
“On March 7, 1947, the defendant sent plaintiff a telegram (exhibit 7) rejecting the material ‘based on our customers’ reports.’ No chemical analysis was made of this material until June, 1947, at a time subsequent to the commencement of this law suit.
‘ ‘ The defendant buyer cannot be deemed to have ‘ accepted’ the goods until it had a reasonable opportunity of examining them, for the purpose of ascertaining whether they conformed to the contract (Section 8427, General Code).
“However, ‘the buyer is deemed to have accepted the goods * * * when the goods have been delivered to him, and he does any act in relation to them which is inconsistent with the ownership of the seller * * *.’ Section 8428, General Code.
‘ ‘ The sale, or attempted sale, of nonperishable goods, by a buyer, has been determined as being an act in relation to the goods, inconsistent with the ownership of the seller. Such an act or acts on the part of the buyer constitute an acceptance.
< < # $ #
“The defendant’s conduct in offering the goods for sale was not a reasonable exercise of its right to test the quality of the goods. In fact, a sale or an attempt to sell, by the buyer, successful or otherwise, fixes no competent standard for determining whether the original seller had complied with the warranties attending that sale.
“The defendant, having ‘accepted’ the goods, with knowledge that they were not according to the terms of the agreement, is precluded from rescinding the agreement, under the express provisions of Section 8449, General Code.”

The sole question before this court in the appeal on questions of law from the judgment of the court below is whether the acts and conduct of the defendant constituted, as a matter of law, an acceptance of the goods in question. If they did, the judgment must be affirmed. If they did not, the court erred and the judgment must be reversed.

In the trial, it was established that the plaintiff is a manufacturer of rubber and plastic articles. The defendant is a dealer in scrap rubber and plastics. Vinyl chloride is a chemical compound of carbon, hydrogen and chlorine. Polyvinyl chloride is a polymerization of vinyl chloride, which, when plasticized with other materials, forms a plastic which may be rigid or nonrigid. Polyvinyl chloride, rigid reground, is a plastic scrap. This is the material which formed the subject matter of the contract of sale.

There is conflicting evidence as to whether the material actually shipped corresponded to the specifications of the order. The jury, while rendering a verdict for the defendant on the plaintiff’s petition, also answered the following interrogatory, as shown at the end thereof:

“Do you find by the greater weight of the evidence that all the goods shipped by the plaintiff, Rubber Corporation of America, to the defendant, TanneyCostello, Inc., corresponded with the description in the contract and the samples submitted?

Answer: “No.”

It appears in the evidence that on the day following the unloading of the shipment by the defendant, the said defendant transmitted the following letter to the plaintiff:

“February 26, 1947.
( i # * #
“We have just received the shipment of rigid reground polyvinyl chloride, and find that there is some material contained therein which is not like the sample we purchased.
“To make ourselves perfectly understood here, we send you herewith a part of the original sample on which we made the purchase which is designated by the letter ‘A.’
“The material contained in the enclosed sample designated by the letter ‘B’ represents a substantia] quantity which we have received. It appears likely there is about 37 drums of this material which we temporarily declare to be objectionable.
“However, we will take this up with our customer; and if it is acceptable to them, we, of course, will be pleased to accept it from you as a good delivery. We just want to get on record immediately that there might be some objection.
“We will let you know promptly after we have had our customer’s reaction.”

Subsquent to the sending of this letter, the defendant submitted samples of the material to several of its customers, presumably for the purpose of determining whether the material was of such quality as could be sold in the trade to such customers. Finally, on March 7, 1947 (several days after the letter of February 26, 1947), the following telegram was sent by the defendant to the plaintiff:

“Two of our customers’ reports show, the material is contaminated and not usable. Therefore we must reject this portion of the shipment and ask that you give us shipping instructions.”

Now, as stated before, is it proper to say that this conduct of the defendant constituted, as a matter of law, an acceptance of the goods?

Resorting to the statute, we find the following in Section 8428, General Code:

“Acceptance, when complete. The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him, and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them.” (Italics ours.)

The words “inconsistent acts” under the statute do not present an inflexible rule. Whether an act or acts of a purchaser are inconsistent with the ownership of the goods in the seller, depends upon the circumstances shown to exist. When salient facts are not in controversy but different inferences may be drawn from them by the exercise of sound judgment, there is usually presented a case for the jury.

From the evidence in the case under consideration, there are many reasonable inferences which could be drawn from the facts. Consideration should be given to the nature of the respective litigants’ businesses, the course of dealing between the parties, and the nature of the goods sold, as well as to the language employed by them in the course of their dealings. The fact that the buyer was a dealer in scrap whose business was to sell to others rather than a processor of articles made out of plastics, could be considered in determining the fact of whether its conduct was inconsistent with ownership in the seller.

It is impossible to set forth the many different ways in which acts of acceptance indicating ownership in the buyer may be exercised by the said buyer. Ordinarily, if the goods are used in a manner which is proper only on the assumption of the buyer’s assent to be the owner, such use would be, under the statute, a use “inconsistent with the ownership of the seller.”

In this case, it is the conclusion of the members of this court that there is presented a question of fact for a jury to determine as to whether, under all the circumstances, including the correspondence between the parties, the type of business in which each party was engaged and the relationship between them, and the submitting of samples of the goods for the purpose of inspection and perhaps inducing a sale, the acts and conduct of defendant were inconsistent with the plaintiff’s ownership, constituting an acceptance thereof by defendant under the provisions of the statute; and, that it was error for the court to decide the question as a matter of law.

The judgment will be reversed and the cause remanded for a new trial, for the purpose of having this question of “acceptance,” as well as the other questions in the litigation, passed upon by a jury under proper instructions.

Judgment reversed and cause remanded.

Stevens, P. J., and Hcjnsicker, J., concur.


author: Stevens, P. J.

text:
    Greenvale Homes Corp., Appellee, v. Marting, Trustee, et al., Appellants.
    (No. 4072
    — Decided December 7, 1949.)

      Mr. M. S. Rewgley, for appellee.

      Mr. William J. Whelton, for appellants.
   Stevens, P. J.

This cause is before this court as an appeal on questions of law and fact. The petition is for a declaratory judgment. These facts are not in dispute:

Plaintiff (appellee) is the holder of the title to lot No. 431 in the P. T. McConrt Allotment of the city of Akron, which it acquired by purchase from Robert B. Romweber, who in turn purchased said lot at auditor’s sale of forfeited lands on July 23, 1947. Said Romweber received a deed for said lot from C. L. Bower, county auditor, dated July 24, 1947, which deed was duly entered for record on August 8, 1947, and thereafter was recorded in Volume 2392, page 349, of the Records of Deeds of Summit county, Ohio.

The defendants (appellants), E. L. Marting, trustee, and John R. Carkuff, were, respectively, owner of said premises, and holder of a mortgage upon said premises, at the time of the forfeiture thereof to the state and the sale of said lot by the auditor.

The proceedings leading up to the forfeiture and sale of said land were defective in the following particulars:

The notice provided for under Section 5704, General Code, was not complied with in the following respects:

The delinquent tax list, the making of which preceded the forfeiture of title to this property, was published in the Summit County Democrat, a Democratic newspaper of general circulation in Summit county, which publication appeared in the issues of May 3,1944, May 17, 1944, May 24, 1944, and May 31, 1944. In two of these issues, only a partial list of names was published, from the beginning of the alphabet to the names beginning with the letter “L” in one issue, and the remainder of the alphabet in the succeeding issue.

At the end of the notice in which the first portion of the alphabet appeared, the closing words of the form of notice set out in Section 5707, General Code, to wit, “and notice is hereby given that the whole of such several tracts, lots or parts of lots, will be certified for foreclosure by the county auditor pursuant to law, or forfeited to the state, unless the taxes, assessments, penalties and interest are paid,” were not included in the advertisement.

However, at the end of the alphabet in the succeeding issues, these words were inserted.

Publication was also made in the Akron Beacon Journal on April 17, 1944, and May 1, 1944. Each of these publications carried the complete list of names. However, at the end of the publication of April 17,1944, the closing words of the statute above set forth did not appear. In the publication of May 1, 1944, they did, however, appear.

The notice of hearing prescribed by Section 5718-lb, General Code, was published in the Akron Legal News and in the Akron Beacon Journal. These publications were regular in all respects, although they were not made in newspapers of opposite political faith. The hearing and the entry of the decree, both as provided for in Section 5718-lb, were in strict conformity to statute.

In accordance with the decree of forfeiture, the lot in question was offered for sale, and sold to plaintiff’s predecessor in title. There was no defect or irregularity in the sale proceedings subsequent to the decree of forfeiture.

The deed from the county auditor was regularly executed and delivered, and had been on record in the office of the county recorder for more than a year at the time of the filing of this action.

The petition prays:

“1. That the court declare that under Section 5718-lc of the General Code of Ohio the Court of Common Pleas acquired jurisdiction to pass upon all steps taken prior thereto in connection with the procedure relating to the forfeiture of land and to determine the sufficiency and validity of all acts, proceedings, advertising and other steps relating thereto, and that the finding and judgment of the court rendered pursuant to said section constituted a valid final judgment, subject only to the right of appeal.
“2. That this court declare that Section 5762-1 is a statute of limitations and constitutes a bar to any attack upon a title acquired by a purchaser at tax foreclosure or forfeiture sale, Avhether such attack be based upon the question of jurisdiction or otherwise, and for such other and further relief as to the court may seem just and equitable.”

Answers were filed by the defendants, wherein each of the defendants admitted the facts as stated in plaintiff’s petition, and each of said defendants then prayed:

“1. That the court declare that failure to comply strictly with the provisions of Sections 5704 and 5718-lb of the General Code of Ohio with respect to advertising constituted the failure to comply Avith mandatory provisions of law and therefore deprived the court of jurisdiction to declare a forfeiture of the land.
“2. That the court declare 5762-1 is limited in its application. to omissions, defects, etc., of a procedural nature, and has no application to and does not constitute a bar to asserting a defense or cause of action based upon the lack of jurisdiction of the court to declare a forfeiture, and that this section does not therefore bar this cross-petitioner from asserting his right to recover said property * *

These pleadings, and the stipulation of facts in conformity to the allegations of the pleadings, raise the following questions:

1. Did the failure to comply strictly with all the provisions of Sections 5704, 5707 and 5718-lb, General Code, in the respects above set forth, deprive the Court of Common Pleas of jurisdiction to enter a decree of forfeiture ?

2. Is the limitation of actions to question or defend a tax title, provided by Section 5762-1, General Code, applicable to irregularity, informality or omission in that portion of the procedure antecedent to the declaration of forfeiture?

Section 4, Article IY, of the Constitution of Ohio, provides that jurisdiction of the Common Pleas Court, and the judges thereof, shall be fixed by law.

Section 5718-la, General Code, as enacted effective August 11, 1943, provides:

“After such, list of omitted lands has been prepared by the county auditor, the prosecuting attorney, in the names of the members of the board of revision, shall prepare and file an application in the Common Pleas Court of such county. Lands which have been previously omitted and forfeited to the state and are not disposed of may be included in the application. The application shall recite the date or dates on which such board met to consider the list of delinquent lands, the action taken by such board with respect to such lands, and such other facts as may be pertinent; it shall conclude with a prayer asking for an order fixing a day for the hearing of objections to the action of such board and * * * forfeiting such lands to the state of Ohio. The list of omitted lands may be incorporated in or attached to such application and such application need not be verified.”

Section 5718-15, General Code, as enacted effective August 11, 1943, provides:

“Upon the filing of such application the court shall fix a day for the hearing of objections to the action of the board of revision in making such list of omitted lands and shall order the clerk of the court to cause notice of the time and place of hearing, together with a list of such, omitted lands, to be published once a week for two consecutive weeks in two newspapers as provided in Section 5704 of the General Code. Proof of such publication shall be filed with the clerk of court and by him preserved as part of his records. The list as published shall contain the names of the owners, as found on the auditor[ ’] s duplicate, of such lands at the time they were omitted, a description of the property as it appears on the tax list and the amount of taxes, assessments and penalties due at the time of omission. The legal notice shall be in substance as follows:
“notice op lands to be porpeited to the STATE OP OHIO
“The following is a list of lands, lots and parts of lots upon which the taxes, assessments, etc., have been certified delinquent for two years:
“(Here insert the list)
“Such lots and lands were omitted by the county board of revision from foreclosure proceedings. The owners, mortgagees, lienors and any other persons having or claiming any interest in such lands, lots or parts of lots, will take notice that the court has fixed the date of..........(time)..........at.......... (place)..........when objections to the action of the board of revision will be heard. Written objections may be filed prior to that date. If no valid objections are presented as to any of said lands the action of the county board of revision will be confirmed and said lands ordered forfeited to the state of Ohio to be sold pursuant to law.”

Section 5718-lc, General Code, as enacted effective August 11, 1943, provides:

“At the time appointed for such hearing, the clerk, at the designated place, which shall be in open court, shall present to the court the written objections that have been filed. The court shall also inquire from any of the persons attending such hearing whether any of them desire to present oral objections. If there are no objections, the court shall examine into the proceedings affecting such lands, both prior and subsequent to the filing of the application. If it appears that such proceedings were regular and in conformity with law, the court shall so find and such finding shall not be collaterally attacked. The court shall thereupon confirm the action of the board of revision and shall order such lands forfeited to the state of Ohio. Such lands shall thereupon be forfeited, to the state of Ohio and disposed of as provided by Chapter 15 of this Title. If there are objections the court shall inquire into their merit, after ordering oral objections to be reduced to writing. Witnesses may be called and testimony introduced and the hearing may be adjourned from day to day. The burden of proof shall be upon the objectors. At the conclusion of such hearing, if the court finds that as to some of the lands legal objections have been proven, it shall order such lands stricken from the omitted list and re-entered upon the tax duplicate. If the court determines that no legal objections have been proven, it shall order such lands forfeited to the state of Ohio. A list of the lands so forfeited shall be certified by the clerk of courts to the county auditor.
“If a person making objection shall fail, his costs shall be assessed against him. All other costs of such proceeding, including the cost of publication, shall be certified by the clerk of courts to the county commissioners of such county and shall be paid by them out of the general fund.
“The term ‘legal objections’ as used in this section shall mean any one or more of the following:
“1. That the taxes or assessments, penalties and interest have been paid.
“2. That the lands or lots are not properly listed.
“3. That the proceedings to omit such lands or lots from the foreclosure list have been irregular.
“4. That the lists provided for in Sections 5704 and 5718-16 of the General Code have not been published according to law.
“Any party against whom a decision is rendered shall have the same right of appeal as in other civil actions. ’ ’

The above constitutional provision has been stated by the Supreme Court of Ohio to mean that the jurisdiction of the Court of Common Pleas was to be fixed by statute. Allen v. Smith, 84 Ohio St., 283, 95 N. E., 829, Ann. Cas. 1912C, 611.

Pursuant to the provisions of Section 4, Article IV, of the Constitution of the state of Ohio, the Legislature has, by the words contained in Section 5718-lc, conferred upon the Common Pleas.Court the jurisdiction to examine and pass upon the regularity of proceedings both prior to and subsequent to the filing of the application under Section 5718-la by the prosecuting attorney. This jurisdiction is conferred directly by the Legislature. It does not attach by virtue of the' prior proceedings, but is independent thereof, and for the purpose of enabling the court to inquire into and determine the legal sufficiency of those proceedings.

Section 5718-lc defines what are “legal objections” as used in this grant of jurisdiction to the Common Pleas Court, and the irregularities shown by this record to have occurred antecedent to forfeiture are such as, under the statute, would have furnished a basis for the interposition of legal objections on the part of an objector. However, such irregularity, omission or informality not having been utilized as the basis for objection to the finding of the court, that finding, when entered, became a valid, subsisting judgment, not subject to collateral attack, and by law subject to appeal as in other civil actions. No such appeal has been taken from the judgment here under consideration.

It should be here noted that Section 5704, General Code, provides; 1 ‘ * * * it shall be mandatory upon the county auditor to cause a list of the lands on such delinquent land list and duplicate to be published twice,” etc., and further, “* * * * it shall also be mandatory upon the county auditor to cause a display notice of the forthcoming publication of the delinquent land list and duplicate to be inserted once a week,” etc.

In that portion of Section 5704 which provides for the omitted matter hereinabove set out, there is no such provision with reference to the act there enjoined being mandatory. We therefore hold that the portion of Section 5704, concerning which the omission occurred, as set out in the form contained in Section 5707, is a directory and not a mandatory provision of that section of the Code, and its omission from the advertisement is not such an omission as deprived the Court of Common Pleas of jurisdiction to pass upon the legality, sufficiency and validity of the proceedings antecedent to forfeiture.

Upon the question of publication, Section 5704 provides :

‘ ‘ * * * It shall be mandatory upon the county auditor to cause a list of the lands on such delinquent land list and duplicate to be published twice, within sixty days after the delivery of the duplicate to the county treasurer, in two newspapers of opposite politics in the English language published in the county and of general circulation therein.”

There follows the provision as to the display notice hereinbefore set forth.

The statute continues:

“A newspaper independent in politics shall be considered to be a newspaper of opposite politics to a newspaper of. designated political affiliation.
“Where there is no newspaper of designated political affiliation published in such county then publication of such notice and delinquent land lists shall be made in two newspapers independent in politics published in such county and of general circulation therein. * * * Publication of delinquent land lists may be made by a newspaper in installments, providing the complete publication thereof is made twice during the said sixty day period. * * * ”

The publication of the delinquent tax list was made in the Summit County Democrat, a Democratic newspaper of general circulation in Summit county, and in the Akron Beacon Journal, an independent newspaper of general circulation in Summit county, and such publication conformed to the requirements of Section 5704, as above set forth. The fact that publication in the Summit County Democrat appeared in installments, conformed to the permission, so to do contained in Section 5704.

We find no irregularity as to said publication, except the omission from the first publication in the Akron Beacon Journal of the closing words of Section 5704, and that is held to be not fatal, in the light of the judgment of the court entered under Section 5718-lc.

As to the publication of the notice of hearing under Section 5718-lb, we are of the opinion that such publication complied with the express provisions of Section 5704.

As to the second question presented, Section 5762-1, General Code, reads as follows:

“In all cases wherein real property in this state is or has been sold under and by virtue of the provisions of Chapter 14 or 15 of this Title, no action shall be commenced, nor shall any defense be set up to question, the validity of the title of the purchasers at such sale for any irregularity, informality or omission in the proceedings relative to the foreclosure, forfeiture or sale, unless such action be commenced or defense set up within one year after the deed to such property is filed for record or one year after the effective date of this act, whichever is longer.”

In the instant case, the sale in question was made, and the deed for said property filed for record, more than one year prior to the institution of this action, and the omissions, irregularities and informalities which it is conceded were present in the proceedings herein, are such, in our opinion, as to fall squarely within the bar of this statute — more than one year having elapsed since the recording of plaintiff’s deed.

It is accordingly declared by this court that, under the facts here present, the Court of Common Pleas, by virtue of the provisions of Section 5718-lc, acquired jurisdiction to pass upon all steps taken in the proceedings to forfeit the land in question, and to determine the sufficiency and validity of all acts, proceedings, advertising and other steps relating thereto, and that the judgment entered by said court constituted a valid final judgment, subject only to the right of appeal as provided in Section 5718-lc.

It is further declared that Section 5762-1, under the facts here present, constitutes a bar, when properly interposed, to an attack upon a title acquired by a purchaser at a tax forfeiture sale.

A decree in accordance with this declaration may be prepared, with exceptions.

Decree accordingly.

Huhsicker and Doyle, JJ., concur.


author: Conn, J.

text:
    Lambright, Appellant, v. Heck et al., Appellees.
    (No. 744
    — Decided November 28, 1949.)

      Mr. Francis A. Marley, for appellant.

      Messrs. Guernsey <& Guernsey, for appellees.
   Conn, J.

This action was begun by plaintiff July 10, 1948, in the Court of Common Pleas against the defendants, Vaughn A. Heck and Jean A. Heck, husband and wife, on a promissory note in the principal sum of $1,000, dated July 10, 1947, due on or before one year after date without interest if paid when due.

Pursuant to the authority of the warrant of attorney incorporated in the note, an answer was filed waiving the issuance and service of process and confessing judgment in the amount of $1,060.83 and costs. On the same day, judgment was entered for that amount, execution was issued and levy made on a 1941 Buick sedanet automobile. On motion of defendants, the judgment was set aside and suspended, the execution issued thereon stayed, and defendants were given leave to answer forthwith.

Separate answers were filed by each defendant. The defendant Jean A. Heck alleged that at the time she signed the note she was a minor and that she disavowed the same, and for a second defense, averred that she signed the note by reason of false representation made by plaintiff that she was signing an option to purchase three lots. The answer of defendant Vaughn A. Heck contains four defenses — a general denial, want of consideration, failure of plaintiff to tender a deed for the lots described on the face of the note for the purchase of which the note was given, and that the defendant was induced to sign the note by false representation that he was signing an option to purchase such lots.

Separate replies were filed to the answers, denying the allegations therein. It was further averred that the note was signed as a part of the purchase of real estate under the provisions of the Servicemen’s Readjustment Act of 1944; that the note was given by defendants to plaintiff to cover the balance of the purchase price of four lots adjoining each other, one being improved with a dwelling, and the other three unimproved.

The issues raised on the pleadings embrace the right of defendant Jean A. Heck to avoid payment on the ground of infancy, the validity of the note sued on, and the necessity of plaintiff tendering a deed to defendants for the three lots as a condition precedent to the maintenance of his action on the note.

The issues were submitted to the court, jury trial being waived, and a finding and judgment were entered for defendants, from which plaintiff appeals on questions of law.

The errors assigned by plaintiff are substantially grounded on the adverse finding and judgment of the trial court on the above issues.

1. At the conclusion of plaintiff’s evidence, the court sustained the motion of defendant Jean A. Heck, dismissing the action as to her on the ground of her minority and her disavowal of obligation on the note.

It is undisputed that the defendants agreed to purchase the four lots and dwelling house, including some furniture and an automobile, at the total price of $6,000, on condition that a loan under the Servicemen’s Readjustment Act could be obtained; that no such loan could be obtained, except on the one lot on which was located the dwelling; that defendants obtained a loan of $4,950 and paid $50 cash, which plaintiff accepted for the dwelling house and lot, including the furniture and automobile. For the remainder of the agreed price of $1,000 for the unimproved lots, plaintiff accepted the $1,000 note of defendants sued on in this case.

Section 8023-1, General Code, provides:

“* * * Any person who is eligible for a loan under the Servicemen’s Readjustment Act of 1944 or any amendments thereto, whether or not said person or his or her spouse is a minor, is authorized and empowered, * * * to execute any and all contracts, notes, * * * under the Servicemen’s Readjustment Act of 1944 # # * J >

The loan having been made on the lot improved with the dwelling house, excluding the three unimproved lots which were not purchased with the proceeds of the loan, the statute would have no application in determining the validity of the note or the issue of Jean A. Heck’s liability thereon. The court did not err in dismissing this action as to the defendant Jean A. Heck.

2. The issue of the validity of the note is raised on the alleged false representation of plaintiff that defendants were signing an option to purchase the lots and that they signed the note without reading it or knowing its meaning or import.

The evidence shows that immediately following the final steps taken in the matter of the loan, the parties went to the office of an attorney known to all of them and that plaintiff told the attorney, in the presence of defendants, that they “wanted a note.” The note was prepared by the attorney now representing the defendants in this action, while the parties waited. After the note was prepared, the defendants then and there signed the note and it was delivered to plaintiff.

The record contains no credible evidence of any false representation on plaintiff’s part whereby the defendants were induced to sign the note. The claim of defendants is incredible that it was executed under the belief that it was an option. We conclude that this assignment of error should be sustained, as this defense is wholly without merit.

3. It is conceded that plaintiff did not tender to defendants a deed for the three lots as a condition precedent to the commencement and maintenance of this action. The promissory note sued on is an unconditional promise of the makers to pay a certain sum of money and is in the usual form of a negotiable instrument prescribed in the statute. (Section 8106, General Code.)

The notation on the face of the note that it was given in payment of the three lots is not incorporated in the body of the instrument as a condition or reservation and does not modify the note with respect to its character as an unconditional promise or as a negotiable instrument.

Section 8108, General Code, provides:

“An unqualified order or promise to pay is unconditional within the meaning of this chapter, though coupled with:
*****
2. A statement of the transaction which gives rise to the instrument.”

Mansfield Savings Bank v. Miller, 2 C. C., 96, 1 C. D., 381; Cincinnati Brush & Mop Mfg. Co. v. Weber, 35 Ohio App., 506, 172 N. E., 568.

The evidence clearly shows that the promissory note sued on was executed and delivered by defendants pursuant to an oral agreement between the parties for the sale and purchase of the three lots. There is no claim that plaintiff did not own the lots, that he was unable to convey them, or that, for any other reason, plaintiff would not or could not perform. The promise of the plaintiff to convey the lots to defendants is a sufficient consideration for the promissory note executed by defendants and on which plaintiff claims in this case. 29 Ohio Jurisprudence, 909, Section 121.

Furthermore, the note being a negotiable instrument, the law presumes it to have been issued for a valuable consideration. (Section 8129, General Code.) The defense of want of consideration is without support, either on the evidence or under the law.

Was plaintiff required to make a tender of the deed as a condition precedent to bringing his action? Plaintiff contends that tender of a deed is not a condition precedent in this case for the reason that defendants informed plaintiff that they would not or could not pay the note and that a tender under these circumstances would have been useless. It has often been said that the law does not require the doing of a vain thing. 39 Ohio Jurisprudence, 133, Section 2. George Wiedemann Brewing Co. v. Maxwell, 78 Ohio St., 54, 84 N. E., 595.

It is further urged by plaintiff that plaintiff’s agreement to convey the lots and the defendants’ agreement to pay the note were not dependent covenants. On the other hand, defendants contend that the note was in the nature of a land contract, as it was stated on the face of the note the purpose for which it was given. The case of Will-O-Way Development Co. v. Mills, 122 Ohio St., 242, 170 N. E., 439, is relied on. That was an action to recover the balance due on a land contract and it was held that as the purchase price was payable in instalments, the covenants were dependent and that the vendor could not recover a judgment for the balance due, which included the final instalment, in the absence of tender. In the instant case the covenants are not mutually dependent but clearly independent.

It is the opinion of this court that the unconditional promise to pay the principal of the note and the covenant to convey the lots were independent covenants, and for this further reason plaintiff may maintain his action on the note against the defendant Vaughn A. Heck without tender of a deed as a condition precedent.

The order vacating the judgment as to Jean A. Heck is affirmed, and the order as to Vanghn A. Heck suspending the judgment and staying execution is reversed. The judgment in favor of plaintiff and against Vaughn A. Heck and the execution and levy made pursuant thereto are restored and this cause is remanded to the Common Pleas Court for further proceedings.

Judgment reversed in part.

Carpenter and Fess, J J., concur.


author: Carpenter, J.

text:
    National-Ben Franklin Fire Ins. Co. et al., Appellees, v. Woolcott, Appellant.
    (No. 4372
    — Decided May 31, 1949.)

      Messrs. Foster, Foster é Foster and Mr. William A. Finn, for appellees.

      Mr. J. W. Starritt, for appellant.
   Carpenter, J.

This appeal on questions of law was taken from an order sustaining a demurrer to a cross-petition and a judgment dismissing it.

The action started as one for property damage allegedly caused by the negligence of the defendant in a collision of his automobile at- a highway intersection with that of the plaintiff, Ernest Warner, with whom plaintiff, National-Ben Franklin Insurance Company, had a subrogation contract. Their petition was filed September 17, 1947.

November 29, 1947, plaintiff, Ernest Warner, died and Clara V. Warner was appointed administratrix of his estate. December 18, 1947, as such administratrix, she filed a motion to be substituted for her decedent herein and for an order reviving the cause, and it was granted the same day. August 24, 1948, the insurance company and the administratrix filed an amended petition which was identical with the petition except as the administratrix took the place of the decedent.

September 9, 1948, defendant filed his answer to the petition and with it his cross-petition for damages for personal injuries to himself and property damage to his automobile, both allegedly caused by the negligence of decedent, Ernest Warner, in the intersection collision of their automobiles. A general demurrer to the cross-petition was filed by the administratrix, and was sustained and the cross-petition dismissed because it did not allege that defendant’s claim against the estate had been presented to the administratrix within four months of her appointment as required by Section 10509-112, General Code.

•If presentation of such claim was required, that it was done must be alleged in an action therefor, or the cross-petition was subject to demurrer. Beach, Recr., v. Mizner, Exr., 131 Ohio St., 481, 3 N. E. (2d), 417.

Was presentation necessary? Defendant answers “No,” and cites Goehring v. Dillard, 145 Ohio St., 41, 60 N. E. (2d), 704. In that case the defendant died after the action was commenced and it was revived in the name of the administrator, and the court said presentation of that claim was not necessary. That was quite different from this. There the action was commenced before defendant died. The administrator knew all about the plaintiff’s claim. Here, so far. as this record shows, no claim against the estate was mentioned until after the death of Ernest Warner.

When this cross-petition was filed it was strictly a claim against the estate and there existed every reason why it should have been presented to the administratrix for her allowance or rejection as provided by the statute, the purpose of which is to facilitate the prompt administration of estates.

In Benson, Admx., v. Rosine, 76 Ohio App., 439, 64 N. E. (2d), 845, this court had before it a similar situation, only there the cross-petition was filed within four months of the appointment, and it was urged that it was a presentation of the claim. The decision was that the filing of the cross-petition was not a compliance with the claim statute and that the cross-petition could not stand as such. Following that precedent, and for the reasons stated herein, the judgment dismissing this cross-petition will be affirmed.

Judgment affirmed.

Conn and Fess, JJ., concur.


author: Guernsey, P. J.

text:
    Prencsil, Appellant, v. Golaska et al., Appellees.
    (No. 21521
    — Decided December 5, 1949.)

      Mr. Lody Euml, for appellant.

      Messrs. Gull & Cull, for appellees.
   Guernsey, P. J.

This is an appeal on questions of law from a judgment of the Common Pleas Court of Cuyahoga County in an action wherein the appellant, James Prencsil, was plaintiff and the appellees, James Golaska, and others, were defendants.

The action is one instituted to recover a commission under a written contract entered into between Prencsil and Golaska, whereby Golaska employed Prencsil as a real estate broker for a stipulated commission to procure a purchaser for and sell certain real estate owned by Golaska, upon the terms set forth in the contract. The sale of the real estate was not effected and the claim for commission is based on the alleged refusal of Golaska to sell the real estate upon the terms prescribed in the contract to a purchaser procured by Prencsil.

On the trial in the Common Pleas Court, the court granted defendants’ motion to arrest the taking of testimony and to enter judgment in favor of the defendants, which was done. That is the judgment from which this appeal was taken.

In order that a real estate broker may recover a commission from his principal for the sale of real estate, where the sale is not consummated, it is necessary that the broker procure not only a purchaser able, ready and willing to complete the purchase, but also the execution by the proposed purchaser of an enforcible contract for the purchase of such realty; or that he bring the vendor and proposed purchaser together so that the vendor may procure such a contract. Patton v. Alessi, 42 Ohio App., 91, 180 N. E., 387; Hrovat v. Krall, 28 Ohio App., 46, 162 N. E., 437; Harris v. Manhattan Real Estate Co., 1 Ohio Law Abs., 616; Mattingly v. Pennie, Admr., 105 Cal., 514, 39 P., 200.

To be enforcible, such a contract is required by the statute of frauds to be in writing.

In the instant case, it conclusively appears that the plaintiff did not procure the execution of an enforcible contract on the part of the proposed purchaser, the agreement of the purchaser not being in writing; and the plaintiff did not bring the vendor and the proposed purchaser together so that the vendor might have procured such a contract. Consequently the plaintiff is not entitled to recover any commission under the contract entered into between him and the defendant Golaska.

The judgment of the Common Pleas Court is therefore affirmed.

Judgment affirmed.

Middleton and Doyle, JJ., concur.

Guernsey, P. J., and Middleton, J., of the Third Appellate District, and Doyle, J., of the Ninth Appellate District, sitting by designation in the Eighth Appellate District.


author: Fess, J.

text:
    Shunk, Appellant, v. Shunk Mfg. Co., Appellee.
    (No. 1467
    — Decided July 11, 1949.)

      Mr. Charles F. Schaber, for appellant.

      Messrs. McConnell, Blackmore, Gory & Burke, Mr. Baird Johnson and Mr. C. Victor Vollrath, for appellee.
   Fess, J.

This is an appeal on questions of law from a finding and judgment by the court, a jury having been waived, in favor of the defendant.

For many years plaintiff had been general manager of a partnership engaged in a manufacturing business in Bucyrus, Ohio. As of August 1, 1943, the partnership of which plaintiff was a member sold its business to another partnership consisting of new personnel (hereinafter referred to as the McGraw partnership). The sale included all the assets and goodwill of the partnership, including its name, Shunk Manufacturing Company, except the accounts receivable of the Shunk partnership. Separate and apart from the sale of the business, the plaintiff entered into an employment contract with the defendant, Shunk Manufacturing Company (the McGraw partnership). After reciting that the defendant had acquired the business, that plaintiff had managed the business for many years and was entirely familiar with it, and that the partners of defendant were not familiar with the business and not in position at once to undertake its management and desired to retain plaintiff a limited period to manage the business, the defendant agreed to employ plaintiff as general manager of the business from August 1, 1943, to July 31, 1945, for the sum of $50,000 payable in monthly installments. Plaintiff agreed to continue his managerial duties “as has been his custom during the past several years, and to use his best efforts in behalf of the company and its interest and welfare with the understanding that matters of special importanee are to be brought to the attention of the company for its consideration.”

The contract had a somewhat unusual provision that, in the event of the death or incapacity of the plaintiff, or if the company should discharge him without “good and just legal cause” then the company would, within 30 days from the happening of any of such events, pay to plaintiff or his estate the unpaid balance of the $50,000.

The contract was executed September 1, 1943, at which time plaintiff was 77 years of age. On September 2, 1943, an announcement was posted on the stationery of Shunk Manufacturing Company carrying the name of plaintiff as general manager and signed by one of the new partners to the effect that Arthur E. Socin had been appointed general superintendent with full authority and responsibility for the management of all shop operation and that Arno W. McGraw had been appointed treasurer and office manager with full responsibility of treasurer, accounting and office procedure. The announcement stated also that the entire shop personnel would receive all orders directly from Socin and the entire office personnel from Mc-Graw. Although McGraw. was a newcomer, Socin had been an employee of plaintiff for 20 years and shop superintendent for several years under the supervision of plaintiff. Plaintiff construed the announcement as depriving him of authority and responsibility over the shop and office.

As of March 31, 1944, McGraw and another partner sold their interests to new partners, but McGraw remained in the employ of the second partnership as treasurer and office manager. The articles of the Mc-Graw partnership provided that in the event of the sale of an interest to any person other than a partner, such sale would dissolve the partnership. Plaintiff had no notice or knowledge regarding the formation of the new partnership until at the trial.

From September, 1943, to April, 1944, plaintiff spent a limited number of hours at the plant, following the same schedule he had observed prior to the sale, but after April 1, 1944, he reported at the plant with less frequency and remained shorter periods of time. The record is silent as to what plaintiff did at the plant or what his activities were. Plaintiff says he had no authority to do anything and was ignored by the personnel. Up to April 1, 1944, McGraw was the only resident partner regularly in the plant and thereafter apparently no partner was actively engaged in the plant. For all the evidence discloses, the business merely ran itself without supervision except by McGraw and Socin. As to the period from September to December, 1944, the testimony was in conflict. McGraw testified he saw plaintiff in the plant only on payday at the end of each month. Plaintiff testified that he was at the plant at intermittent intervals but with less frequency than the year preceding. Plaintiff, however, was paid his compensation regularly up to December 31, 1944, and no complaint was ever made by the partners concerning plaintiff’s failure to report regularly for duty.

In the spring of 1944, a dispute arose between plaintiff and the defendant (McGraw partnership) over the old accounts receivable and the inventory, and in September 1944, The Jay Que Company brought an action against the defendant relating to this dispute. The Jay Que Company was a partnership organized October 13, 1943, by plaintiff and his former partners to handle the accounts receivable of the old Shunk partnership.

Under date of December 28, 1944, plaintiff received a letter from counsel, who had represented the MeGraw partnership at the time the contract was negotiated, referring to the contract and stating:

“The partners of Shunk Manufacturing Company are advised that you have devoted no time to the management of the business of the company for the past few months and you have not used your best efforts in behalf of the company and its interests and welfare. On the contrary, in their opinion, you have, in many respects, acted against the best interests of the company. Accordingly, they have directed me to notify you that for the reasons stated they do hereby terminate your employment as general manager of Shunk Manufacturing Company, effective at December 31, 1944.”

Plaintiff filed his petition herein against Shunk Manufacturing Company, a partnership, on February 19,1945. The petition does not designate the individual names of the partnership defendant but since it is brought on the theory of damages for breach of the employment contract it follows that the defendant herein is the McG-raw partnership. After reciting the terms of the contract, plaintiff alleges:

“Plaintiff continued in said employment until the 31 day of December, and was ready and willing to remain in the same for said term, but defendant on said day, without good and just legal cause, in violation of said contract, discharged plaintiff, and has thence hitherto refused to allow plaintiff to continue in said employment. To his damage $14,583.33, for which he asks judgment, with interest from February 1, 1945.”

The case was tried on December 10 and 11, 1945, before the court without a jury, and on May 4, 1946, the court found for the defendant, and thereafter denied plaintiff’s request for findings. (From the record it appears that a motion to quash service upon the defendant by serving same upon McGraw, upon the ground that McG-raw was not a partner, was overruled.)

Plaintiff thereafter filed notice of appeal accompanied by the usual transcript of docket and journal entries and bill of exceptions. In this first appeal, plaintiff noted 11 assignments of error, including the refusal of the request for findings. In the minutes entered on the trial docket as of January 21, 1947, it appears that the judgment was reversed and remanded to the Common Pleas Court for further proceedings because of the refusal of the request for findings, and that the other assignments of error were overruled, including those relating to the weight of the evidence. The journal entry as recorded in the transcript refers only to the failure to make findings, but the original journal entry, after reversing for such error, recites, “no other prejudicial error appearing in the record” the cause is remanded, etc.

In this appeal, appellant presents 14 assignments of error, including those assigned on the first appeal. With respect to those errors presented in the former appeal, appellee asserts that the former judgment of the Court of Appeals is binding upon a subsequent review in such court on every question determined by the former judgment, including the question that the finding was not against the weight of the evidence.

At the former hearing, the judgment was reversed because of the failure to make findings. The express statutory purpose of findings is “with a view of excepting to the court’s decisions on questions of law involved in the trial. ’ ’ The chief purpose is to require the court to state its conclusions of fact when it tries the case. This enables a party to determine whether such findings of fact warrant the legal conclusions reached by the court in rendering judgment. A further purpose is to avoid the necessity of an extended bill of exceptions on review. The important right of the litigant is to have a statement of facts, in a proper case, upon which the court’s judgment was based, whereas the statement of the court’s legal conclusion, aside from its judgment, is unimportant. Bauer v. Cleveland Ry. Co., 141 Ohio St., 197, 203, 47 N. E. (2d), 225. Where one of the errors relied upon in a review is that the judgment is against the weight of the evidence and the record contains all the evidence, the refusal to make findings is not prejudicial. Oxford Township v. Columbia, 38 Ohio St., 87, 94; Bauer v. Cleveland Ry. Co., supra; In re Guardianship of Zimmerman, 78 Ohio App., 297, 302, 70 N. E. (2d), 153.

At the former appeal, this court had a complete bill of exceptions and apparently reviewed the evidence, but nevertheless reversed the judgment for the failure to make findings. Possibly this was because on appeal to the Supreme Court it would reverse the judgment because that court could not determine that the appellant had not been prejudiced without weighing the evidence. Cleveland Produce Co. v. Dennert, 104 Ohio St., 149, 135 N. E., 531.

On this appeal, is this court bound by its former decision by different personnel? The fact that the personnel of another court is sitting on this appeal by designation has no significance. It is the same court.

The first assignment of error that claimed attention at the former appeal was the refusal of the trial court to ‘ ‘ state in writing the conclusions of fact found separately from the conclusions of law.” Section 11421-2, General Code. That assignment gave rise to two questions: (1) Was the plaintiff entitled to such statement?, and if so, (2) was he prejudiced by the refusal thereof?

This court answered both questions in the affirmative, and as no appeal was taken from that judgment and remand, that matter is now res judicata. As that conclusion was reached, there was no occasion to consider any other errors assigned. Since the purpose of findings is “with a view of excepting to the court’s decision upon questions of law,” until a party entitled to the findings has them, he cannot determine whether he wants to appeal, and if he does, what errors he may want to assert, and without it the reviewing court cannot consider his assigned errors. This court now has before it for review all the errors asserted in this appeal, without regard to what it may have said or done in the previous appeal. We, therefore, have reviewed the entire record and, after considering those errors assigned on the former appeal, find none of those relating to the trial below prejudicial except as hereinafter commented upon.

At the former hearing the court reversed the judgment because of the failure to make findings and remanded the cause for further proceedings, without specifying the point at which the cause should be resumed or that a new trial be had. Upon rehearing before the trial court, plaintiff requested leave to withdraw his reply and to file a motion directed to the amended answer, and also for a trial de novo, all of which were denied. Thereupon, pursuant to the mandate, the court filed conclusions of fact and conclusions of law, and the second judgment was entered thereon. Plaintiff contends that upon the reversal and remand he was entitled to a new trial. However, the only error upon which the reversal was based was the failure to make findings, which occurred after the parties had rested. Thereupon, upon remand, the case should proceed from the point where the error occurred and the action of the trial court in refusing leave to plead further and denying a new trial was proper. Commissioners of Montgomery County v. Carey, 1 Ohio St., 463. Certainly no prejudice resulted from such action, since the entire proceeding at the trial is before us for determination upon the record.

The serious problem presented on this appeal is the conclusion of law that plaintiff did not maintain the burden resting upon him to prove by a preponderance of the evidence that the defendant breached the contract. As hereinbefore shown, the terms of the contract were unusual. Were we permitted to speculate, we would infer that the contract was merely a device to pay plaintiff an additional $50,000 for his interest in the partnership sold. True, he was required to devote his best interests to the affairs of the company and perform in the same manner as he had been accustomed, but the time to be devoted and the manner of his performance were left to his own determination. In the event of incapacity or death, he or his estate was to be paid any balance due under the contract. He was likewise to be paid in event of his discharge without just legal cause. The day after the contract was signed, the company took from him his authority over shop, office and financial matters. The company employed a sales engineer working in the field who occupied plaintiff’s office on occasions when he was at the plant. Plaintiff was ignored by the new owners, all of whom were absentees except McG-raw, the resident partner and treasurer. The only incident that McGraw could relate when he consulted plaintiff was with regard to a patent on the D. K. spreader. At no time did the owners or their representatives at the plant make any complaint to plaintiff concerning his performance prior to the letter discharging him. If he was derelict in his duties, he would not be entitled to warning notice prior to discharge, but the above circumstances would tend to show that his failure to report regularly for duty was not regarded as a breach of the contract until some time in December 1944. MeGraw had reported the matter to the owners as early as April of that year.

The trial court found in part as follows:

“On or about March 31, 1944, certain original members of the preceding partnership withdrew from the original partnership and certain other individuals and a trust estate came into the original partnership. Plaintiff had no knowledge of such change in personnel and was not adversely affected by reason of such happening. Up to the time of the dismissal of plaintiff, plaintiff was paid the entire compensation owing to him under the terms of the contract, up to the date of dismissal. There is nothing in the record to indicate that plaintiff would not have been paid full compensation up to the time of the termination of the contract, if plaintiff had not violated the terms of the contract and failed to fulfill the duties imposed upon him by such terms.”

As partnerships rest upon the agreement of the parties, a dissolution occurs and a new partnership is formed whenever a partner retires or a new one is admitted. Snyder Mfg. Co. v. Snyder, 54 Ohio St., 86, 95, 43 N. E., 325, 31 L. R. A., 657. A retiring partner remains liable for all the existing debts of the firm, to the same extent as if he had not retired. Rawson v. Taylor, 30 Ohio St., 389, 27 Am. Rep., 464. Upon the dissolution of the partnership, plaintiff was entitled to actual notice thereof. After dissolution, in the language of Judge Story, “ ‘none of the partners can create any new contracts or obligations binding upon the partnership; none of them can buy or sell, or pledge goods on account thereof; none of them can endorse or transfer the partnership securities to third persons, or in any other way make their acts the acts of the partnership. In short, none of them can do any act, or make any disposition of the partnership property or funds, in any manner inconsistent with the primary duty, now incumbent on all of them, of ivinding up the whole concerns of the partner ship. ’ ” Palmer v. Dodge, 4 Ohio St., 21, 28, 62 Am. Dec., 271.

The voluntary dissolution of the defendant partnership terminated plaintiff’s employment without fault on his part. Redheffer v. Leathe, 15 Mo. App., 12; Brace v. Calder (1895), 2 L. R., Q. B., 253. Cf. Gaspar v. United Milk Producers of California, 62 Cal. App. (2d), 546, 144 P. (2d), 867; Matthews v. Minnesota Tribune Co., 215 Minn., 369, 10 N. W. (2d), 230.

As between the members, the new partnership could continue the business of Shunk Manufacturing Company, but as to strangers, the legal status of the Mc-Oraw partnership ceased to exist except for the purpose of winding up its affairs. Plaintiff’s employment contract could not be assigned to the new partnership without his consent, and the evidence does not indicate it was so assigned or that plaintiff ever agreed to work for the new partnership. Nor was plaintiff obligated to work for the defendant incident to the winding up of its affairs. Under such circumstances, the payment by the successor partnership of plaintiff’s salary from April 1 to December 31, 1944, did not create a novation or relieve the defendant of its obligation to plaintiff under its contract. Such payment, however, did amount to a reduction of plaintiff’s damage. The fact that the plaintiff was not harmed by the change of ownership of the business and might have continued to receive compensation had he reported regularly for duty is not material. To justify the discharge of an employee, it is sufficient for an employer to show that the employee was guilty of a default in duty such as unjustifiable absence, the natural tendency of which was to injure the business, and actual injury thereto need not be shown (Beckman, Jr., v. Garrett, 66 Ohio St., 136, 64 N. E., 62), but in the instant case the defendant employer had no going business. So it does not follow that plaintiff’s absence tended to injure defendant’s business.

Having made it impossible for the plaintiff to perform his contract with it for any of the time after it passed out of existence, the defendant cannot be heard to say that plaintiff did not perform his part of the contract for any of the employment period after defendant made performance by him impossible.

In the instant case, plaintiff seeks to recover damages for breach of the contract, not to recover compensation due under the contract. James v. Allen County, 44 Ohio St., 226, 6 N. E., 246, 58 Am. Rep., 821; Tiffin Glass Co. v. Stoehr, 54 Ohio St., 157, 163, 43 N. E., 279. Parenthetically it may be noted that the Stoehr case holds that a dissolved corporation remains liable to an employee for damages for breach of employment contract.

We have considered the absence of any evidence on mitigation of damages. In Allen, Heaton & McDonald, Inc., v. Castle Farm Amusement Co., 151 Ohio St., 522, 527, 86 N. E. (2d), 782, the Supreme Court said:

There are authorities holding that the burden of proving matters in mitigation or reduction of the amount of plaintiff’s damages rests upon a defendant. 1 Sedgwick on Damages (9 Ed.), 447, Section 227. However, such authorities should not be relied upon as imposing the burden on a defendant to prove one of the essential facts which must be established in order to determine what plaintiff’s damages are. There can be no mitigation or reduction of damages until damages are proved.”

In the instant case the employment contract provided that should the plaintiff be discharged “without good and just legal cause, then the company shall, within thirty days from the happening of any of said events, pay to the party of the second part, or to his estate,” etc. It therefore follows that, since plaintiff was discharged without good and just legal cause on March 31, 1944, as a matter of law the defendant became obligated to pay plaintiff within 30 days the unpaid balance due upon his contract, regardless of any questions of mitigation of damages. Plaintiff, however, seeks only recovery of the unpaid balance due as of J anuary 1, 1945.

The judgment below is, therefore, reversed, and final judgment is entered herein for plaintiff in the amount prayed for in his petition.

Judgment reversed.

Conn and Carpenter, JJ., concur.

Conn, Carpenter and Fess, JJ., of the Sixth Appellate District, sitting by designation in the Third Appellate District.