text:
    AUDITOR’S CERTIFICATE NECESSARY TO VALIDATE CONTRACT FOR A PUBLIC BUILDINC.
    Court of Appeals for Licking County.
    Knowlton & Breinig v. The Board of Education of The Village of Johnstown.

    Decided, 1920.

      Clerk’s Certificate When Bonds are LaiofuTly Authorised — Sections 5660 and 5661 Construed — Restrictive Statutes to he Strictly Construed.

    1. Under the provisions of Section 5660 of the General Code, when money for a public building is to be derived from the sale of lawfully authorized bonds, a contract for such improvement, or any part thereof, is void unless the auditor or clerk of the board first certifies that the money required for the payment of such obligation or appropriation is in the treasury to the credit of the fund from which it is to be drawn.
    2. Where there is only one bond issue authorized, but several separate contracts are entered into with separate contractors, the auditor or clerk must file, a separate certificate for each of such contracts.
    3. The restrictive statutes of the state are enacted for the general good, and for the protection not only of the contractor but also of the tax-payer, and their provisions will be strictly adhered to, and it devolves upon those who deal with public officials to see for themselves that the statutes have been complied with.

      Jones & Jones, for plaintiff in error.

      Chas. L. Flory, Pros. Atty., for defendant in error.

       Motion for an order directing the Court of Appeals to certify its record in this case overruled by the -Supreme Court, June 17, 1920.

   Patterson, J.

Heard on error.

Tlte parties in tbis ease stand in the same order in which they stood in the case below. The plaintiff in its petition alleges that it is a partnership.doing business in the state of Ohio,- that the defendant in the year 1913, by resolution duly passed, declared it necessary to construct an addition to its then existing school building in the village of Johnstown, and to provide a new heating and ventilating system for its then existing building as well as for the new addition; that notice was given for four consecutive weeks in a newspaper of general circulation in said school district. That plaintiff thereupon submitted to defendant its proposal to furnish the material and to perform the labor necessary to make such improvements, except the heating and ventilating system; that on the 11th day of July, 1913, plaintiff’s proposal was submitted to said board and was declared to be the lowest and best bid for furnishing material and labor for the said work, and was accepted by the defendant, and notice of such acceptance immediately served by defendant upon plaintiff who accepted service of said notice and thereupon proceeded to enter upon the work of making said improvements covered by its said proposal. That it entered into a bond in the sum of $8,000 conditioned according to law which was approved by the defendant. That the defendant prepared, and presented to plaintiff, a written memorandum which plaintiff signed, providing for the construction of said addition to said school building according to plans and specifications.

Plaintiff says that it has completed that part of the improvement covered by its proposal according to the terms thereof, and according to the plans and specifications, and that the architect has approved such work, or improvement, as constructed by plaintiff, and on the 22nd day of April, 1914, so notified defendant and issued a final estimate to defendant to pay plaintiff the balance due it for making its part of said improvement; that the cost of said improvement was the sum of $11,549, under the terms of the contract, and that extras in the sum of $20.20 were furnished by plaintiff, which defendant agreed to pay, making the total amount due plaintiff from defendant the sum of $11,-569.20; that plaintiff has received from the defendant, as part pay for the said improvement, the sum of $9,479.70, and that there is still due and owing the plaintiff from the defendant a balance of $2,089.50 with interest from January 15, 1914, for which sum the plaintiff asks judgment.

A demurrer was filed to this petition which was sustained by the court below. An amendment to the petition was filed, by leave of court, amending plaintiff’s petition by inserting between lines 11 and 12 on page three of said petition the following :

“Plaintiff further says that at the time said board of education accepted plaintiff’s bid on July 11th, 1913, and at the time plaintiff and defendant signed said written memorandum said defendant had sold for $16,267.20 the lawfully authorized bonds of said village school district of the par value of $16,000. Said bonds were sold for the purpose of erecting an addition to the then existing public school building of said village, and to place in said school building, when so enlarged, a heating and ventilating system and to repair the then existing school building and the school grounds. Plaintiff further says that at said last named times, said bonds were in process of delivery; and that there was then an unappropriated balance of said siim of $16,-267.20 sufficient to pay plaintiff the amount due it under its said contract with defendants.”

A general demurrer was filed to the amended petition which was sustained by the court, and the plaintiff not desiring to plead further final judgment was rendered against the plaintiff and in favor of the defendant, and to reverse this judgment a petition in error is filed in this court.

The question presented for determination is, Whether it is necessary under the circumstances of this case that the clerk of the defendant board of education should certify that the money required for the payment of the defendant’s obligation, under this contract with plaintiff, was in the treasury and unappropriated for any other purpose, in order that the contract might be valid and that plaintiff could collect the contract price ?

The statutes relating to public contracts must be strictly adhered to and strictly construed, and it is now well settled that there can be no recovery upon a quantum meniit, and that to state a good cause of action against this school board it is necessary that the petition should declare upon a contract, agreement, obligation or appropriation made and entered into according to the statutes.

In support of this we would call attention to the case of Wellston v. Morgan, 65 O. S., at page 228:

“There has been no common law implied municipal liability-in this state since the passage of the act of April 8, 1876, amending Section 97 of the Municipal Code, 73 O. L., 125, and carried into the Revised Statutes as Section 1693, because that section conflicts with the common law as to such liability, and whenever a statute is in conflict with a rule of the common law, or of equity, the statute must prevail.
Before the passage of that act, there were holdings by this court which seemed to recognize implied municipal liability, notably Cincinnati v. Cameron, 33 Ohio St., 336, and since that time there have been some expressions in opinions which seemed to recognize the same implied liability, but in none of those later eases were the provisions of the statute invoked by counsel, or considered by the court; and in the late cases of McCloud v. Columbus, 54 Ohio St., 439; City of Lancaster v. Miller, 58 Ohio St., 558; Buchanan Bridge Co. v. Campbell, 60 Ohio St., 406, and Comstock v. Nelsonville, 61 Ohio St., 288, full force has been given to the restrictive statutes of the state, and implied liability denied, and the doctrine established that public officers can incur obligations against those for whom they act, only in pursuance of the provisions of the statutes, and that they can not deal upon the quantum meruit, or reasonable value plan. With these holdings we are content.
A strict adherence to the provisions of the restrictive statutes of the state will be for the general good; and it devolves upon those who deal with public officers, to see for themselves that the statutes have been complied with.
There being no implied municipal liability in cases ex contractu, under our restrictive statutes, it follows that to state a good cause of action against a municipality in such cases, the petition must declare upon a contract, agreement, obligation, or appropriation made and entered into according to statute. A petition on an account merely or quantum meruit, in such cases, is not sufficient.”

The question presented in this case involves the construction of Sections 5660 and 5661, General Code, which are as follows:

“Sec. 5660. The commissioners of a county, the trustees of a township and the board of education of a school district, shall not enter into any contract, agreement or obligation involving the expenditure of money, or pass any resolution or order for the appropriation or expenditure of money, unless the auditor or clerk thereof, respectively first certifies that the money required for the payment of such obligation or appropriation is in the treasury to the credit of the fund from which it is to be drawn, or has been levied and placed on the duplicate, and in the process of collection and not appropriated for any other purpose; money to be derived from, lawfully authorized bonds sold and in the process of delivery shall, for the purpose of this section, be deemed in the treasury and in the appropriate fund. Such certificate shall be filed and forthwith recorded, and the sums so certified shall not thereafter be considered unappropriated until the county, township or board of education is fully discharged from the contract, agreement or obligation, or as long as the order or resolution is in force.”
“Sec. 5661. All contracts, agreements or obligations, and orders or resolutions entered into or passed contrary to the provisions of the next preceding section, shall be void, but such section shall not apply to the contracts authorized to be made by other provisions of law for the employment of teachers, offiversT and other school employees of boards of education.”

The words in italics in Section 5660 will not be found in the section prior to its last amendment March 29, 1910 (101 O. L., 37). Similar provisions of the General Code relating to municipalities will be found in Sections 3806 to 3810, inclusive. Sections 3806, 3807, 3808 and 3809 were originally in one section and were Section 45 of the Municipal Code found in 86 O. L., 37, and this section was carried into Bates’ revision of the Revised Statutes as Section 1536-205. Section 3806 is substantially the same as Section 5660 omitting the words in italics. Section 3807 is substantially the same as 5661; Section 3809, as amended, 103 O. L., 526, provides for certain exceptions to the limitations of 3806; Section 3810 reads as follows:

“Money to 'be derived from lawfully authorized bonds or notes sold and in process of delivery, shall for the purpose of the certificate that money for the specific purpose is in the treasury, be deemed in the treasury and in the appropriate fund. ’ ’

Section 3810 was first enacted March 21, 1904, 97 O. L., 44, and was then designated as Sections 45a and was carried into Bates’ revision of the Revised Statutes as Section 1536-205a.

It will be observed that about the only difference in the statutes relative'to the certificate and relative to the sale of bonds is that these provisions are all embodied in Section 5660 in relation to the boards and officers therein mentioned, while as regards municipalities the provisions are in two Sections 3806 and 3810.

It is contended on the part of the plaintiff in error that inasmuch as the defendant in error sold bonds for the contemplated improvement the certificate of the clerk was not necessary.

This certificate has a two-fold purpose not only to protect the contractor by indicating the amount of money which has been appropriated for the fulfillment of his contract, and of 'which he is bound to take notice, but for the larger purpose of protecting the general public and taxpayers from extravagent and unwarranted expenditures of money for which no provision has been made by sale of bonds, taxation or otherwise.

In Carthage v. Diekmeier, 79 O. S., at page 341 the court say:

“Whatever may be the correct view as to the meaning of this statute where a single contract is let, it seems to be a reasonable construction that there be a definite sum certified for each contract where there are several of the same species entered into at the same time to be paid from a theretofore gross fund. It would seem conducive, if not necessary to the safety of each contractor, that a definite sum be certified, because it is on the performance of that act by the village clerk that money to discharge the obligation is set apart and appropriated, and which “shall not thereafter be considered unappropriated,” etc. The two branches of the section must be construed together and when so construed, the entire section given its proper operation. Governed by this rule, we can not say that the original certificate in question was drawn in compliance with said statute, and while in case of a single contract in contemplation, to be satisfied from a single fund, such a certificate might be sufficient (but we do not so decide), it is quite clear to us that when the statute is to be applied to the subject matter where several different streets are to be improved for which purpose separate contracts are let on different separate bids, the certificate should contain a specified sum set apart for each of such contracts. Such must have been the construction entertained in the Linden avenue contract, or rather the resolution authorizing the contract, for the jury found (No. 8) that when the resolution had been read, the solicitor made the objection that the certificate of the clerk contained no specified amount for the improvement of Linden avenue, whereupon the engineer gave the clerk the amount to be inserted for that avenue, and it was" placed on the face of the certificate in figures, and after that the resolution was adopted. These acts of the engineer and clerk can not be safely discarded by the contractor, for in doing so, he must rely on a document which was not drawn in compliance with law, and his whole claim would be illegal and void. Under the facts of this ease as to the nature and number of contracts awarded at the same time, the original certificate did not conform to the statute, and the contractor would be without remedy. But with the figures added to the face of the instrument $2,030 was the sum certified and to that extent the village set apart from the gross fund the amount to cover the Linden avenue improvement. We are told this amount has been paid before suit was brought, and the suit is to recover $2,260 in excess of that amount. ’ ’

And again at page 345 the court say:

“Moreover, it was not within the power of the council or the village engineer to increase the liability of the corporation beyond the amount for which the certificate had been filed, and thereby nullify Section 2702. That would be striking down rather than obeying the statute. No mere final estimate of the engineer, no matter if it is correct in its terms, can increase the corporate liability, neither did the acceptance of the work by the public authorities accomplish that result. If the contractor found he was deceived by the estimate as to quantities and work, and that the improvement could not, be made on such terms, he should have acted promptly and had legal and proper action taken to relieve the dilemma rather than proceed blindly or willingly, expecting that the law and action of council would be relaxed so he could get full compensation by putting another and unexpected burden upon the taxpayers.
“No longer can it be said that the contractor need not look to the legal phases of his negotiations with a municipal corporation. He must be active in protecting himself. This doctrine was announced in McCloud & Geigle v. City of Columbus, 54 Ohio St., 439; and. clearly stated in Lancaster v. Miller, 58 Ohio St., 558. It is there held, not only that the terms of a statute regulating the execution of a contract whereby public money will 'be expended, must be followed, but where the statutory requirements have been omitted, the corporation will not by the acts of its officers be estopped to set up sueb omissions as a defense to an action brought against it on such contract. The strictness of the rule is justified in the opinion of the court on page 575. Among other things, it is there said: ‘Contracts made in violation of these statutes should be held to impose no corporate liability. Persons who deal with municipal bodies for their own profit should be required at their peril to take notice of limitations upon the powers of those bodies which these statutes impose.”

In the above case it will be observed that contracts were let for an amount largely in excess of the proceeds of the bonds; that there was one bond issue and a number of separate contracts let for the contemplated improvements.

In the case at bar there was one bond issue and the plaintiff bid only for a part of this work. True its bid is within the bond limit, but the record does not disclose whether all of the bids were within the bond limit or not, nor does it disclose what the estimate or what the contract was for the heating and ventilating of this building. And where there is a single bond issue and different contracts are let for different parts of the improvement we hold that it is a condition precedent and the duty of the clerk to file and record his certificate covering each of these separate contracts and the contractors are bound to take notice at their peril that a sufficient amount of money is in the treasury, and duly certified, to provide sufficient funds for the payment of the money due them.

Our attention has been called to the case of Akron v. Dobson, 81 O. S., 66, and the third syllabus of that ease is as follows:

“Section 1536-205, Revised Statutes, providing that no contract, agreement or other obligation involving the expenditure of money shall be entered into, nor shall any ordinance, resolution or other order for the expenditure of money, be passed by the council or by any board or officer of the municipal corporation, unless the auditor of the corporation shall first certify to council that the money required for the contract, agreement or other obligation, or to pay the appropriation or expenditure, is in the treasury, to the credit of the fund from which it is to be drawn and not appropriated for any other purpose, does not apply to an ordinance appropriating the money obtained by council, from a sale of bonds made by it, to the purpose for which the bonds were sold.”

Our attention has also been called to Emmert v. Elyria, 74 O. S., 185, and the second syllabus in that case is as follows:

“Sections 45 and 45a of the municipal code (1536-205 and 1536-205a, Revised Statutes, Bates 5th Ed.), providing in substance that no contract invplving the expenditures of money shall be entered into unless the auditor of the corporation shall first certify to council that the money required for the contract is in the treasury to the credit of the fund from which it is to be drawn and not appropriated for any other purpose and that a contract entered into contrary to such provision shall be void and that the money to be derived from lawfully authorized bonds or notes sold and in process of delivery shall be deemed in the treasury and in the appropriate fund, do not apply to contracts for street improvements, when bonds have been authorized by the municipality to be issued to pay the entire estimated cost and expense of the improvement.”

It is somewhat difficult to harmonize or distinguish the three cases cited above.'

In Akron v. Dotson, at page 77, the court say:

“It is also contended that the contract is void because the auditor did not certify to the council that the money required for the contract was in the city treasury as prescribed by Section 1536-205, Revised Statutes. The supplemental petition avers that the auditor did not so certify. This is denied by the answer in the circuit court, and that court does not make any finding upon that issue.”

So that in this case the question does not seem to have been decided by the circuit court. The petition averring that the auditor did so certify, which averment was denied in the answer and the circuit court making no finding upon this issue.

Emmert v. Elyria was an injunction suit seeking to enjoin the city of Elyria from paying the balance due on a paving contract. The certificate of the auditor of the city that the money necessary for said improvement was in the treasury to the credit of the proper fund and unappropriated for any other purpose' was filed with the clerk of the council, and also in the office of the board of public service of said city on the same day and immediately before said contract was let. At page 194 the court say:

“But, 'because a municipality is not legally liable to pay for a public improvement, it does not follow tbat it is not under a moral obligation to do so or that a court because it will not enforce payment will enjoin it. The contract for paving this street is not ultra vires. If invalid it is merely so because the contract was made before the bonds to provide the money to pay for it were sold. Now that the work has been done in accordance with the contract and the bonds have been sold and the money to pay for it is in the treasury, it is right that it-should be paid for and a court of equity ought not, unless its failure to do so would defeat the purpose of the law, prevent the municipality from doing what equity and fair dealing would exact from an individual.”

And the third finding by the circuit court on page 189 is as follows:

“At the time said certificate was filed there was no cash in the proper fund and unappropriated in said treasury for said improvement, but bonds of said city wherewith to provide such cash, had 'been duly authorized. Said bonds had not been sold nor were there any notes of said city then sold and in process of delivery, and said facts were all well known to all the defendants ; who, however, in good faith,' and pursuant to the advice of the solicitor of said city, proceeded with said improvement, believing that their proceedings were lawful.”

So that the real question in this ease seems to have been not that a certificate was not filed, 'but that the contract was invalid because the contract was let before the bonds were sold for the improvement.

In Carthage v. Diekmeier a certificate and an amended certificate were duly filed and the contract then executed and that the amended certificate is a limitation on the amount to be paid on the contract for the street, beyond which the corporation is not liable to the contractor; that in Emmert v. Elyria a certificate was filed but was filed before the bonds for the improvement were sold. So that in both of the above cases certificates were filed and recorded, and in the case of Akron v. Dobson there was an allegation that the certificate was filed, which was denied by the answer and no finding was made by the court upon the issue thus joined.

In the ease at bar it is shown by the pleadings and conceded in the argument that no certificate whatever was filed, or recorded or attempted to be filed or recorded, the contractor relying solely upon the fact that bonds of the school district had 'been sold and were in the process of delivery in the sum of $16,-267.20 a sum sufficient to pay plaintiff its contract. The pleadings show that there was one bond issue for the entire contemplated enlargement and improvement of the school house, but that the plaintiff did not enter into a contract for all of the contemplated improvements. The contract for the heating and ventilating was a separate and distinct contract and the record does not disclose the .amount of this contract or whether there were any further contracts to be entered into in order to complete the improvements.

This decision may seem somewhat harsh and technical, but courts do not make the laws. Their duty is to interpret them as they find them; and it is important that public officers as well as contractors should be familiar with their powers and duties and rights and liabilities under the section herein construed.

The amendment to Section 5660 as found in 101 O. L., 37 wás certainly made for some purpose and in construing this purpose we hold that 'the intention of this amendment was to require the clerk, or other proper officer, to make a certificate that the money was in the treasury when bonds were sold and in the process of delivery — the money not being actually but constructively in the treasury; that the object of this amendment, as claimed by the plaintiff in error, was not to dispense entirely with a certificate by such officer when bonds were sold, keeping in mind the fact that the object of the entire section is for the protection of the contractor and the general public. Entertaining these views the judgment of the court of common pleas in sustaining the demurrer to the petition and the amendment to the petition and in rendering final judgment will be affirmed.

Judgment affirmed.

Houck, P. J., and Shields, J., concur.


source: Caselaw Access Project

author: Dunlap, P. J.

license: Public Domain

text:
    VACATION OF A DEFAULT JUDGMENT NOT A FINAL ORDER.
    Court of Appeals for Cuyahoga County.
    Higinbotham v. Atwater.
    Decided, October 24, 1919.

      Final Order — Granting of Motion to Set Aside a Default Judgment — Not a Basis for Prosecution of Error.

    The granting by the trial court of a motion to vacate a default judgment at .the same term in which the judgment is rendered, when the motion is filed within three days after the rendition of the judgment, is not a final order from which a proceeding in error may be prosecuted.

      Stearns, Chamberlain & Royon, for plaintiff in error.

      Lamb, Vaughan & Lamb, for defendant in error.
   Dunlap, P. J.

Heard on error.

Plaintiff in error, who was plaintiff in the municipal court, secured a default judgment in an action brought upon a prom.issory note. This judgment was obtained in the January term; to be exact, it was obtained on February 3, 1919, a day of said term. On the next day, being also a day in said term, the defendant filed a motion to vacate the judgment, and an affidavit in support thereof; and upon February 15th, being also a day in said term, the court granted the motion and set aside the judgment.

To this action of the court the plaintiff excepted and filed his petition in error in this court to reverse the ruling of the municipal court vacating the judgment, and to be restored to all things he had lost by reason of said ruling, which, of course, means the restoration of the judgment so vacated. In support of his contention we are cited to Sec. 11637, G. C., which provides that “a judgment shall not be vacated on motion or petition until it is adjudged that there is a valid defense to the action in which, the judgment was rendered,” and as construing this section favorably to his contention we are cited to a decision of the court of appeals of Hamilton county in the case of Cincinnati Archiable, 21 C. C. (N. S.), 582 (4 Ohio App., 218), the first paragraph of the syllabus of which is as follows:

“A trial judge is without discretion, in the'face of a rule of court and the provision of See. 11637, to set aside a default judgment, even during the term at which it was rendered, without first requiring the defendant to show a valid defense and forthwith set it up before an order is made setting the judgment aside. ’ ’

In the case at bar the affidavit offers an excuse for failure to file an answer (or statement of defense, as it is styled in that court), but does not show the existence of any actual defense, and certainly there' was no adjudication of the existence of a valid defense, and it must be conceded that if the ease just cited is to be distinguished at all, it must be only in fact that in it an interval of eleven days elapsed between the rendition of the decree and the filing of the motion to vacate, while in the case at bar the motion was filed on the day following the rendition of the judgment. If it were not for this distinction, the ease just cited would be a precedent for granting the relief prayed for here, and, if good law, would be decisive, although we have generally adhered to the opinion that during the term at which a judgment was rendered the court rendering the same had full control over its docket and could set aside, change or vacate its judgments and orders in the exercise of a sound legal discretion. Our own adherence to this doctrine is shown by the opinion in Washburn, J., in the cases of Kornick v. Hahn, Admx., 30 O. C. A., 591, and Wybel v. Sheaffer, post,-, and would appear to be further justified by a consideration of the cases of Huntington & McIntyre v. Finch & Co., 3 Ohio St., 445; Knox County Bank v. Doty, 9 Ohio St., 505; Niles v. Parks, 49 Ohio St., 370; Van Camp v. McCulley, Tr., 89 Ohio St., 1, 8; Seelbach v. Craft, 21 C. C. (N. S.), 158; Huber Mfg. Co. v. Sweeny, 57 Ohio St., 169, and Mercer Co. (Comrs.) v. Deitsch, 94 Ohio St., 1.

The foregoing citations will, we think, be sufficient for the purposes of this opinion, although many others could doubtless be discovered.

It is not to be denied that the provisions of Sec. 11637, G. C., give some justification for the opinion of the Hamilton county court of appeals in Cincinnati v. Archiable, supra, which opinion is completely destructive of this very prevalent belief in ihe inherent power of courts over their judgments and orders during the term. It is not essential, however, for the purposes of this opinion, to enter into a discussion of such inherent right, however desirable it might be to have the matter again freshly settled. It is sufficient to say that the question presented by 1 his petition in error seems to have very recently come to the attention of our Supreme Court as evidenced by the per curiam opinion in the case of Continental Trust & Savings Bank Co. v. Home Fuel & Supply Co., 99 Ohio St., 453, which states:

“The motion to vacate the judgment rendered in the common pleas on a cognovit note upon warrant of attorney and without summons or notice was filed the day following the rendition of the judgment and during the same term. The lower courts, therefore, were right in considering it as a motion for a new trial, filed within the time prescribed by law. The action of the trial court sustaining such motion does not constitute a final order from which a proceeding in error may be prosecuted. ’ ’

It would appear to us, then, that the motion in the case at bar must also be regarded as a motion for a new trial, which is “filed within the time prescribed by law,” and that the action of the trial court in sustaining the motion was not a final order from which a proceeding in error can be prosecuted.

This conclusion, of course, disposes of the case, and requires us to dismiss the petition in error. .

Our entry will be “petition in error dismissed.”

Washburn and Vickery, JJ., concur.


author: •Shohl, P. J.

text:
    MEASURE OF DAMAGES FOR INJURY TO A BUSINESS AUTUMOBILE.
    Court of Appeals for Hamilton County.
    Mayer v. Cohn.
    Decided November 3, 1919.

      Damages — Injury of Chattel hy Tort of Another — Entitles Owner to Compensation for Loss of Use.

    The proper measure for damages against one who wrongfully injures the automobile of another, which is used for business purposes, includes compensation for the loss of use during the time necessarily expended in making the repairs.

      Robertson, Buchwalter & Oppenheimer, for plaintiff in error.

      Robert P. Goldman and Murray Seasongood, for defendant in error.
   •Shohl, P. J.

Pleard on error.

Plaintiff in error, Jesse C. Mayer, brought suit against the defendant in error, Arthur Cohn, in the municipal court of Cincinnati for damages caused in a collision between the automobiles of the parties. The defendant in error, who was the defendant in the original action, filed a cross-petition for the damages caused to his automobile, alleging the cost of his repairs to be $6.98, and also claiming damages for the loss of the use of his machine for the time expended in making the repairs. The jury returned a verdict in favor of the defendant and against the plaintiff in the sum of $81.98, and judgment was entered thereon. This was affirmed by the court of common pleas, and it is now sought to reverse both judgments.

The principal error complained of is that the court permitted the defendant to recover damages for the loss of the use of the automobile. The automobile in question was a touring car, used by the defendant in his business to call on the trade. He did not hire another machine for the three days that it was in the repair shop. The weight of authority and the better reasons support the rule allowing compensation for the loss of use during the time necessarily expended in making repairs.

The primary end to be attained in the awarding of damages for torts is to put the injured person in as good a position as he would have been if the tort-feasor had not injured him. If one is wrongfully deprived of the use of a chattel through the tort of another, the proper measure of damages includes compensation for the loss of use proximately caused by the tort. There is no good reason why the injured party should be required to hire another chattel in order to establish the value of the use. If that use is valuable it can be shown by evidence, like any other question of fact. The statement of the rule in Sedgwick on Damages (8 Ed.), Sec. 435, which was approved by the court in the case of Pittsburgh, C. C. & St. L. Ry. v. Kelly (12 C. C., 341; 5 Circ. Dec., 662), affirmed 53 Ohio St., 667, is:

“Where the plaintiffs property was injured, he may recover the expense of restoration of the property to health or soundness, compensation for the loss of use of it during the period of disability, and the amount of the .difference, if any, between its value before the injury, and after the cure or repair.”

See also Loud & Sons Lumber Co. v. Peter (20 C. C., 73; 11 Circ. Dec., 155) ; and Cook v. Pockard Motor Car Co., 88 Conn., 590, and note to same, L. R. A., 1915C, page 319.

The trial court did not err and the judgment will be affirmed.

Hamilton and Cushing, JJ., concur.


author: Shohl, P. J.

text:
    DEFENSES OF A CORPORATION AGAINST AN UNCANCELED OUTSTANDING STOCK CERTIFICATE.
    Court of Appeals for Hamilton County.
    John N. Russell, Administrator of the Estate of J. N. Russell, vs The Fourth National Bank.

    Decided, March 15, 1920.

      Corporations — Transfer of Stock without Surrender of Old Certificate —Action to Compel Issue of New Certificate to Administrator of • Original Holder — Application of Statute of Limitations — As to Claim for Back Dividends and as to Compelling Issue -of New Certificate — Nature of an Appeal under the Ohio Law — Findings of Fact in Error Proceeding not Authorized — Meaning of the Phrase “Law of the Case" — Laches.
    1. Under the system of appeals in Ohio, the case is not presented on the record as made up in the court below but there is a new trial on new evidence and pleadings which may be different.
    2. The reviewing court is without authority in error cases to make findings of fact on issues as to which there is conflicting evidence or on uqestions as to which different inferences may he drawn from facts proved.
    3. The phrase “law of the case,” as applied to the effect of previous orders on the latter action of the court in the same case, merely expresses the practice of courts generally to refuse to reopen what has (been decided. The court has power to redetermine what has been adjudged on a previous appeal or writ of error. But unless ■the former decision is very clearly erroneous, it will be adhered to.
    4. The plaintiff administrator brought an action to require the defendant bank to transfer to him certain stock and for an accounting • as to unpaid dividends thereon. The action was based on an unpancelled stock certificate found among the papers of the intestate. The certificate .was issued in 1865. Dividends were paid thereon for two years, and were then discontinued, although other stockholders continued to receive dividends during the entire intervening period. The bank claimed that the stock was transferred to another in 1867, but through some oversight the certificate held by the intestate was not cancelled. With reference to the defense of the statute of limitations—

      Held: (a) As to the claim for an accounting for dividends the six years statute applies, (b) But in the absence of a preponderance of evidence that the intestate knew of the transfer of his stock to another, the statute of limitations does not terminate his ownership of the stock.
    5. The entire failure of the intestate, a man of business experience, a resident of the same city in which the bank was located, and in straightened circumstances during the later years of his life, to take any action regarding his failure to receive dividends, although it was common knowledge that other stockholders were receiving them regularly, renders it inequitable that a suit should be main tained by his administrator, long after all the parties having knowledge of the facts are dead and the records have been lost or destroyed; and the claim fer equitable relief is, therefore, held to bo barred by laches.

      Tuttle & Boss, for plaintiff.

      William Worthington and Charles B. Wilby, for defendant.

      Certified .by this court to the Supreme. Court on the ground of conflict with a former judgment of this court when differently constituted.

   Shohl, P. J.

This case has been before this court on two previous occasions. See 23 C. C. (N. S.), 1, and 26 C. C. (N. S.), 529. See also 15 N. P. (N. S.), 184 and 18 N. P. (N. S.), 585.

The plaintiff, John N. Russell, administrator of the estate of J. N. Russell, deceased, brought an action in the Superior Court of Cincinnati against The Fourth National Bank for equitable relief. The elder Russell in 1865 became the owner of thirty-shares of the capital stock of the defendant bank. Dividends were paid to him semi-annually in May and November during that year and the year following, and never afterwards. From that time until the summer of 1889 he resided with his family in Linwood, Hamilton County, Ohio. He then moved to Portland, Oregon, and lived there until his death, June 8th, 1895. As he left no apparent estate, there was no administration. During the summer of 1911, his son, the administrator herein, in looking over some old papers, discovered a certificate for thirty shares of the stock of The Fourth National Bank, It had never been cancelled. Later, after his appointment as administrator by the Probate Court of Multnonah County, Oregon, he made demand on the bank for a new certificate and for an accounting for the dividends on the stock since 1866. The bank refused to recognize any ownership of the stock in the decedent or his administrator and this action was accordingly brought in December, 1912.

The stock book of the bank containing transactions prior to 1872 has been lost since 1906, when the bank moved to a new location, but the defendant offered in evidence the stock ledger for the years 1865-1867, the dividend receipt boob, and now offer in evidence a certified copy of the report filed with the Comptroller of the Currency of the United States, in accordance with Section 5210 of the Revised Statutes of the United States. The stock ledger is offered for the purpose of showing that Russell disposed of his shares to W. F. Colburn, January 9th, 1867. The dividend receipt book was offered for the purpose of showing that Colburn received the dividends on this stock after that date.

During the period in which Russell resided at Linwood, the evidence shows that he was in reduced circumstances, and he remained poor up to the time of his death.

The judgment in favor of the defendant at the first trial was based upon the finding of the court that the plaintiff is not the owner of the shares of stock represented by the certificate in his possession. This judgment was reversed by the Court of Appeals, which rendered an opinion, holding that the court erred in admitting the stock ledger in evidence. The court, however, said at the conclusion of its opinion:

‘ ‘ In regard to the other defenses alleged in the answer — those of laches and the barring of the action by limitation or lapse of time — we desire to say no more than that none of them seems to us to be of merit to control the conclusions otherwise reached here, and they are denied.”

A new trial was ordered. At the second trial on additional evidence as to the entries, the stock ledger was admitted in evidence and judgment was again rendered in favor of the bank. ■ To this, error was prosecuted to this court and the case was again reversed. The court in the entry of judgment purported to make certain findings of fact in favor of the administrator. The case was remanded “for such further proceedings in accordance with the above findings as is authorized by law.” Application was made to the Supreme Court to direct the Court of Appeals to certify its record and the application was refused.

Pursuant to the mandate of the Court of Appeals, the case was then heard for the third time in the Superior Court, where the defendant made certain admissions as to the market value of the stock and the dividends that had been declared and paid since 1867. The defendant offered proof of its case on the merits but the court rejected it and rendered a decree “that the plaintiff recover from the defendant the sum of twenty-three thousand, six hundred and nineteen and 38-100 ($23,619.38) dollars” with interest and costs. The defendant then filed an appeal from this decree, and this case is now heard in this court on appeal, as distinguished from error, for the first time.

The plaintiff here offered in evidence proof of the value of the stock and dividends, and rested, maintaining that the law of the ease had been established and nothing more remained to be done but to supply what was missing from the facts already conclusively determined in this court. Later the court permitted the case to be reopened and evidence on all the foregoing was offered.

We must determine the effect of the findings contained in the former judgment entry in the error proceedings in this court* But first let us ascertain the nature of an appeal under the Ohio constitution. Appellate jurisdiction in chancery cases is granted by Section 6, Article TV of the amended constitution, and this jurisdiction cannot 'be enlarged or diminished by statute. Cincinnati Polyclinic v. Balch, 92 O. S., 415; Wagner v. Armstrong, 93 O. S., 433.

There is no doubt but that the case at bar is a chancery case. An appeal under the Ohio law differs radically from the system of appeals in chancery in England, where the case is presented on the record of the trial below. By the Act of February 16, 1810, 1 Chase, 705, 712, it was provided (Section 44):

‘ ‘ That when any cause is removed by appeal into the supreme court, the appeal shall be tried on the pleadings made up in the court of common pleas, unless on good cause shown, and on payment of costs, the said court should permit either or both parties to alter their pleadings, in which ease such court shall lay the parties under such equitable rules and restrictions as they may conceive necessary, to prevent delay.”

This Section continued in force through the various revisions until the constitution of 1852 was adopted, and it was then continued with the changes made necessary by the substitution of the district courts for the supreme court sitting in the circuit. See 2 Swan and Critchfield, 1161, 1169. "When the Code of Practice of 1878 was passed the provision was re-enacted, 75 O. L. 648, Section 65:

“The district court shall have jurisdiction of certain eases, as hereinafter mentioned, by appeal, and the trial therein shall be conducted in the same manner as in the court of common pleas, and upon the same pleadings, unless amendments are permitted or ordered by the court.”

That act has been carried forward into the Revised Statutes, Section 5225, and into the General Code, Section 12223, as amended 103 Ohio Laws, 429.

Unlike the English system of appeals, an appeal in Ohio is a new trial on pleadings which may be different, if the court so permits, and upon new evidence. This has been the Ohio practice throughout all of its legal history. See Grant v. Ludlow, 8 O. S. 1, 30, and Mason v. Alexander, 44 O. S., 318, 327. When the phrase “appellate jurisdiction” in the trial of chancery cases was adopted in the constitution of 1912, there was thereby adopted a phrase already construed, which is taken with its established construction.

The defendant, therefore, is entitled to a trial on the pleadings. What then, is the effect of the so called findings in the judgment. entered by this court in the- error proceedings the second time that the cose was before it for review ? The authorities already referred to establish that the powers of the Court of Appeals are derived solely from the constitutional provision. The court is authorized in error cases to review, affirm, modify or reverse judgments of the lower courts. There is no authority cited which establishes the power to make findings in an error case as to disputed questions of facts or'questions from which different inferences of fact may be drawn from the matters proved. The authoritative decisions are that the court must order a new trial on such disputed questions of fact. Hickman v. Insurance Co., 92 O. S., 87; Minnear v. Holloway, 56 O. S., 148; Gay, Exrx v. Davey, 47 O. S., 396; Miller v. Sillivan, 26 O. S., 639; Emery’s Sons v. Irving Nat’l Bank, 25 O. S., 360; Stivers v. Borden, 20 O. S., 232.

We are of opinion, therefore, that the court was without authority to make the findings contained in the judgment of reversal hereinbefore rendered. The right of this court to reconsider and review its own decision in this case is challenged by the plaintiff, and the so called doctrine of “the law of the ease” has been urged. It is stated that a prior decision is conclusive upon a subsequent appeal of a case in the same court even if it is erroneous, and that propositions of law once decided by an appellate court are not open for reconsideration in that court upon a subsequent appeal. This subject is treated by note in 1 A. L. R. 1267. The court is of opinion that the better rule is that laid down by the Supreme Court of the United States in Messenger v. Anderson, 225 U. S. 436, wherein the court say:

“In the absence of statute the phrase, law of the case, as applied to the effect of previous order on the later action of the court rendering them in the same case, merely expresses the practice of courts generally to refuse to reopen what has been decided, not a limit to their power. King v. West Virginia, 216 U. S. 92, 100; Remington v. Central Pacific R. R. Co., 198 U. S. 95, 99, 100; Great Western Telegraph Co. v. Burnham, 162 U. S. 339, 343.”

It is not conducive to the orderly administration of justie.e that questions of law once decided should be reopened upon a reconsideration of the case in the same court, and regardless of the fact that the. personnel of the court may have changed, the former decision will be adhered to, unless it is very clearly erroneous, as stated in Platt v. Pennsylvania Co., 47 O. S., 366, 379. The reviewing court, however', has the power to redetermine matters adjudged on a previous appeal or writ of error, and may reopen what has been decided.

We are impelled to the conclusion that the making of the findings in question was improper and not within the jurisdiction of the court. Though a court may possess jurisdiction of a causo, of the subject matter, and of the parties it is still limited in its modes of procedure, and in the extent and character of its judgments, and if it renders a judgment which is not within the powers granted to it by the law of its organization, the judgment is void. See Standard Oil Co. v. Missouri, 224 U. S. 270, 281, 282, Works on Courts, 2nd Ed. See. 8; Windsor v. McVeigh, 93 U. S. 274, 282, 15 R. C. L. 853, 854. The order to the Superior Court for ‘ ‘ such further proceedings in accordance with the above findings as is authorized by law”, could mean no more than a simple reversal with instructions to grant a new trial according to law. Hovey v. Elliott, 145 N. Y. 126, affirmed, 147 U. S., 409.

In view of our determination that this court has the right to re-examine and reconsider questions already determined herein, we have taken up those matters that have already been discussed in the opinions of this court with great care.

This court has twice held that the ledger offered for the purpose of shewing the transfer to Colburn was inadmissible. We are of opinion that this ruling is not so clearly erroneous that it should not be followed at this hearing.

The defendant has set up the defense of the statute of limitations. We will consider its effect separately as to dividends and as to the stock itself. When a corporation properly declares a dividend, it becomes an ordinary debt due stockholders by the company. 2 Machen on Corporations, Section 1357; 2 Cook on Corporations, 7th Ed. Section 542. It is ordinarily stated that such dividend becomes payable on demand, and until demand and refusal, the dividend is not due the stockholder. In Larwill v. Burke, 19 O. C. C., 513, 526, it was held on this principle that until the demand was made, the statute of limitations did not begin to run. .

In the case at bar, however, there was a dividend declared, but not to Bussell on his stock as he was not a stockholder of record. This fact is shown even without the books of the corporation by the statement which is filed with the Comptroller of the Currency. Indeed the admissibility of this evidence is not a vital question in view of the statement made in open court by counsel for plaintiff that the bank did not treat Bussell as a stockholder after 1867. In their brief counsel state “and it is not disputed by the plaintiff that ever since 1867 the Bank has considered Bussell not the owner of the stock.” And again: “There is no question in anyone’s mind that the bank did not consider Bussell the owner of the stock.” That Bussell was not treated as a stockholder is the foundation of plaintiff’s claim for an accounting. If the plaintiff was entitled to dividends, the corporation violated his rights when the dividend was declared by failing to declare a dividend in his favor. A declaration of dividends to stockholders of record does not create the right to bring' an action in assumpsit, except by those who are such stockholders. After the declaration of dividends in 1867 and thereafter, there was no money standing to. the credit of J. N. Bussell and payable on demand. If there was a wrong done to him, it was done each time a distribution of dividends was made without allotting any to him. He had a right of action at that time, and, except as to such dividends arising within six years of the bringing of the action, the statute of limitations is applicable.

In the case of Stearns v. Hibben Dry Goods Co., 11 C. C. (N. S.), 553, the court held that the statute of limitations barred a right of action by a stockholder six years after a dividend was distributed, though he had failed to make demand at that time. His failure to do so did not suspend the operation of the statute of limitations. The decision was affirmed by the Supreme Court in 84 O. S., 470. And see Clark and Marshall on Corporations, Section 527; Re Severn & Wye Ry., L. R. 1 Ch. Div., 559.

As to dividends more than six years prior to the bringing of this suit the plaintiff is barred by the statute of limitations.

Let us now take up the defense of limitations upon plaintiff’s right to the stock as distinguished from the dividends. The relation of a stockholder to his corporation sounds in contract, and his right is in the nature of a chose in action. 1 Morawetz on Corporations, 2nd Ed., Sections 43-45, Section 225; 1 Machen on Corporations, Section 832; Hawley v. Malden, 232 U. S. 1, 12; The Colonial Bank v. Whinney, L. R., 11, App. Cas., 426, 440, 447, 448.

His contractual right cannot be rescinded without his consent, either express or implied, hence the mere execution of a transfer of his stock on the books, unknown to him, would merely destroy the evidence of the relation, but would not divest him of his rights. It does not constitute a conversion of his stock. 1 Morawetz on Corporations, 2nd Ed., 208; 1 Machen on Corporations, Section 854; Western Union Tel. Co. v. Davenport, 97 U. S., 369; Pratt v. Taunton Copper Mfg. Co., 123 Mass., 110. See Note 45 L. R. A. N. S., 1076.

However, when a corporation wrongfully transfers the stock, and the owner knows of its actions, it amounts to a repudiation of the obligation which the corporation owes to him. An express repudiation of such an obligation gives rise to a right of action immediately and starts the running of the statute of limitations against an obligee under no disability to whom such a repudiation is brought home. This is the inferential holding of Cleveland & Mahoning R. R. Co. v. Robbins, 35 O. S., 483, 502, where the owner of shares did not know of the transfer. While such knowledge need not be proved by direct testimony but may be shown by the circumstances, we are of opinion in view of all the evidence that actual knowledge on the part of Russell has not been established. While from the facts shown, there are some inferences rending to show that Russell did in fact know of the transfer of his stock, we find no preponderance of evidence to that effect. As to the stock itself, as distinguished from the dividends, the defense based on the statute of limitations must fail.

We shall now consider the question of laches. The court is of opinion that under the unexplained facts shown at the hearing here, the plaintiff is barred by laches and is not entitled to equitable relief against the defendant. During the twenty-eight years from 1867 to 1895, the plaintiff’s intestate, though in want, made no effort to assert any rights against the bank. For the first twenty-two years of this period, he lived in Cincinnati. A further period of sixteen years elapsed after his death in 1895 before suit was brought. Laches is such neglect or omission to assert a right as, taken in conjunction with lapse of time and other circumstances, causes prejudice to the adverse party and therefore operates as a bar in a court of equity. Kemper, Admrs. v. Bldg. Association, 11 C. C. (N. S.), 372. It is founded upon the evanescent character of all testimony and the consequent difficulty of making a defense to any claim after the lapse of a number of years. See Douglas v. Corry, 46 O. S., 349; Harris v. Wallace Co., 84 O. S., 104, 108.

During the period which elapsed all those who were officers of the bank at the time the transfer of the stock was made have died. Russell’s delay until his own death deprives the bank of such evidence as he might have been required to give. Important books and records have been lost. These circumstances render peculiarly applicable the doctrine of laches. See Hanner v. Moulton, 138 U. S., 486, 495. In Hammond v. Hopkins, 143 U. S., 224, 250, the court says:

“No rule of law is better settled than that a court of equity will not aid a party whose application is destitute of conscience, good faith and reasonable diligence, but will discourage stale demands, for the peace of society, by refusing to interfere where there have been gross laches in prosecuting rights, or where long acquiescence in the assertion of adverse rights has occurred. The rule is peculiarly applicable w'here the difficulty of doing entire justice arises through the death of the principal participants in the transactions complained of, or of the witness or witnesses, or by reason of the original transactions having become so obscured by time as to render the ascertainment of the exact facts impossible. Each case must necessarily be governed by its own circumstances, since, though the lapse of a few years may be sufficient to defeat the action in one ease, a longer period may be held requisite in another, dependent upon the situation of the parties, the extent of this knowledge or means of information, great changes in values, the want of probable grounds for the imputation of intentional fraud, the destruction of specific testimony, the absence of any reasonable impediment or hindrance to the assertion of the alleged rights, and the like Marsh v. Whitmore, 21 Wall. 178; Landsdale v. Smith, 106 U. S. 391; Norris v. Haggin, 136 U. S. 556; Hanner v. Moulton, 138 U. S. 486.”

Plaintiff urges that the intestate is not shown to have had knowledge of his rights, and, therefore, is not chargeable with neglect in failing to prosecute them. In the case of Foster v. Mansfield Coldtwater, etc. R. R. Co., 146 U. S. 88, 99, the court says:

“The defence of want of knowledge on the part of one charged with laches is one easily made, easy to prove by his own oath, and hard to disprove; and hence the tendency of courts in recent years has been to hold the plaintiff to a rigid compliance with the law which demands, not only that he should have been ignorant of the fraud, but that he should have used reasonable diligence to have informed himself of all the facts. Especially is this the case where the party complaining is a resident of the neighborhood in which the fraud is alleged to have taken place.”

See also Weininger v. Success Mining Co., 227 Fed., 548, 557, 558; Naylor vs. Foreman Blades Lumber Co., 230 Fed. 658, 673.

There is no doubt that the elder Russell once knew that he was the owner of Fourth National Bank stock. He was a business man of experience. He resided in the neighborhood. The bank was obviously an active, going concern. He received substantial semi-annual dividends at regular intervals for two years, and then ceased to get them. The law at that time required the publication four times a year in a newspaper where the bank was established, of a report showing in detail the assets and liabilities of the company. (13 Stat. 109, 110). He must have known that the Bank held stockholders’ meetings in January, as required by statute, and by atending them he could have been informed as to its condition and why he got no further dividends.

We have considered the question of Russell’s actual knowledge of the facts, and it is referred to in dealing with the question of the statute of limitations.

For the purpose of the defense of laches, it is enough to say that unless he used reasonable diligence to have himself informed of the facts, mere ignorance will not excuse him. And a, fortiori must this be true where his silence and failure to assert his rights continue for forty-five years until those persons who would naturally be able to explain and defend the conduct of the bank have passed away and after the records have been lost. Under ordinary circumstances a suit in equity will not be stayed for laches before and will be stayed after the time fixed by the analogous statute of limitation at law. When a suit is brought after such statutory time has elapsed, the burden is on the plaintiff to show that it would be inequitable to apply the doctrine of laches in this case. Kelley v. Boettcher, 85 Fed., 55; Davey v. Dodge, 213 Fed., 722, 727. Neither the pleadings nor the proofs show facts which justify so great a delay. See Pomeroy’s Eq. Jurisprudence, 4th Ed. page 3445 note; Shaw vs. Goebel Brewing Co., 202 Fed. 408, and note to same 45 L. R. A. n.s. 1090. The plaintiff’s claim for equitable relief is barred by laches.

A decree may be drawn in accordance with the foregoing.

Hamilton J. and Cushing J., concur.


author: Allread, J.

text:
    FORFEITURE CLAUSES MUST BE STRICTLY CONSTRUED.
    Court of Appeals of Cuyahoga County.
    Dietrich v. Ezra Smith Co.

    Decided, March 9, 1920.

      Lease — Forfeiture Clause not Favored in Law — Will Not he Declared if Main Use of Premises Conforms to the Covenant.

    1. Forfeitures are not favored either in equity or at law. Conditions of forfeiture in a lease will therefore, be strictly construed.

      2. Where a lease provides that the lessee shall use the premises only for certain purposes and for a forfeiture in case of violation of the covenants, the forfeiture will not be extended to a case where the main use of the premises conforms to the covenant in the lease and a portion of the premises are used as living quarters by the lessee, such being acquiesced in by the lessor’s agents prior to and at the time the lease was executed.

      Joseph G. Bloch, for plaintiff in error.

      Squire, Sanders & Dempsey, for defendant in error.

      Motion to require the court of appeals to certify its record in this case. overruled by the Supreme Court, 'June. 17, 1920.

   Allread, J.

Heard on error.

This is a proceeding to review a judgment of the municipal court in an action of forcible entry and detention.

The action in the municipal court was by the landlord against the tenant upon condition broken.

The defendant below sought reformation of the written lease upon the ground of mistake. Reformation was refused and an instructed verdict in favor of plaintiff below was returned.

We may assume that the reformation was properly refused, and consider the case upon the action at law.

It appears that Dietrich, the plaintiff in error, went into possession about March, 1918, under a verbal contract for a written lease. He remained in possession under the verbal agreement until March 12, 1919, when a written lease was executed Eor a term of three years.

The material provisions of the lease are as follows:

* * * being a storeroom, together with basement underneath located at No. 8017 Euclid Avenue. The premises are leased to the lessee upon condition and with the understanding that he will use the same only as a store for the sale of electrical goods and appliances and such other articles of merchandise as are usually kept in such stores. * * * If any default be made in any of the conditions, covenants or agreements herein contained, or there be any refusal or neglect to perform the same on the part of the said lessee * * * then and thenceforth it shall be lawful for said lessor or for the lessor’s representatives to avoid this lease and re-enter upon said premises without any formal notice.”

It appears that the premises leased consist of a business room with a frame partition near the middle and another partition in the rear part. The rear apartments were equipped with a hot water tank, toilet, and a sink. The undisputed testimony-shows that the rear rooms had been used by previous tenants as living quarters, and that Dietrich from the time he took possession under the verbal lease used the 'same as living quarters. Bach, the agent of the plaintiff below, assured Dietrich that he might so use the same, and Heins, succeeding agent, had full knowledge of Dietrich’s occupancy for living purposes.

The front room was occupied continuously by Dietrich as a store for the sale of electrical goods in accordance with the terms of-the lease.

The forfeiture is based upon the occupancy of the rear part for living purposes.

It is well settled that forfeiture both in equity and at law are not favored. No better statement of this principle can be found than that by Judge Spear in Webster v. Dwelling House Ins. Co., 53 Ohio St., 558:

“Relief against forfeitures is matter of equitable cognizance, but rules applicable to the subject are resorted to in courts of law, and there seems no good reason why the principles which govern courts of equity should not be available in a suit at law where the facts make such cognizance necessary to the ends of justice.
“A primal rule is that forfeitures are not favored either in equity or at law; indeed, it is declared as a universal rule that courts of equity will not lend their aid to enforce a forfeiture. Following as a corollary from this, provisions for forfeitures are to receive, when the intent is doubtful, a strict construction against those for whose benefit they are introduced.”

See also Toledo v. Rys. & Light Co., 2 C. C. (N. S.), 97, and Eichenlaub v. Neil, 6 Circ. Dec., 567; 10 C. C., 427.

The term “use” employed in the covenant in the lease ought not to be enforced in a technical or restricted sense, but may be reasonably enlarged to prevent a forfeiture. It is reasonable to hold that the word “use” include an incidental use.

The word “only” does not necessarily restrict or limit the meaning of the word “use.” It applies whenever the use enlarged by ineluding reasonable incidental uses is transcended and other independent and distinct uses are resorted to. Many businesses devote a part of their space to incidental work. Rest rooms and welfare departments for customers and employees are regarded as incidental, and such incidental uses would certainly not work a forfeiture of a lease unless it should be expressly and clearly so denominated in the lease.

It is a matter of common knowledge that small shopkeepers sometimes choose to live in connection with the business. This enables them to devote longer hours and give closer attention to business. It also gives them the benefit of the assistance of members of the family in cases of emergency.

The rear rooms involved in this lease were in a crude sense adapted to use as living quarters.

Dietrich testifies that it was agreed at the time of the oral lease that the rear rooms were to be so used, and that he did so use them during the term of said verbal lease, and was so using them at the time the written lease was executed. And he also testifies that he so notified Fisher & Allen, who acted for the owner when the leases were made. This testimony is undisputed. No objections were made to such use until November, 1919, about eight months after the execution of the lease. The evidence is sufficient to prove that both Dietrich and the company regarded the use of the rear rooms for living purposes as consistent with the lease. It is clear that Dietrich so understood it, and the agents of the owner, according to the undisputed evidence, must have known that Dietrich so understood it.

We quote from Porter, J., in Hoffman & Place v. Aetna Fire Ins. Co., 32 N. Y., 405, 413, quoted with approval by Judge Spear in the Webster case, supra:

“It is a rule of law, as well as of ethics, that when the language of a promisor may be understood in more senses than one, it is to be interpreted in the sense in which he had reason to suppose it was understood by the promisee. * # *
“It is also familiar rule of law, that if it be left in doubt, in view of the general tenor of the instrument and the relations of the contracting parties, whether governing words were used in an enlarged or a restricted sense, other things being equal, that construction should be adopted which is most beneficial to the promisee.”

The undisputed evidence in this case justifies us in the conclusion that it would be no injustice to the owner to construe this covenant as the parties evidently intended, and that it would be harsh and oppressive, to enforce a forfeiture against the tenant under the circumstances.

It is argued that an estoppel should not be applied against an enforcement of a continuing forfeiture by the failure of the party benefited to object in the initial stages.

We rely upon a liberal construction of the word “use” rather than estoppel, but if estoppel is to be employed we think the principle urged by counsel does not apply.

The estoppel in the present case sinks deeper. It is embedded in the consideration of the lease. It is presumed to have formed an inducement for the lease, and is represented in the rental agreed upon. The agents of the owner having recognized the incidental use at the time of the execution of the lease we think it would be inequitable and unjust now to restrict the use or enforce the forfeiture complained of.

It would, therefore, follow from the undisputed evidence that the court erred in instructing a verdict in favor of the plaintiff below.

The judgment will, therefore, be reversed and final judgment allowed in favor of the plaintiff in error.

Ferneding and Kunkle, JJ., concur.


author: Kunkle, J.

text:
    COMPETENCY OF EVIDENCE RELATING TO DEATH BY BEING STRUCK BY AN AUTOMOBILE.
    Court of Appeals for Franklin County.
    Ernest Prince v. State of Ohio.

    Decided, November 6, 1919.

      Automobile Fatally Injures Boy Riding Bicycle — Evidence as to Speed —Violation of Speed Stattite Proximate Cause of the Injury — Contributory Negligence of Decedent not a Defense.

    1 Evidence tending to prove that the accused was driving his automobile at a high rate of speed a short distance from the scene of the accident is competent.
    2. Where it is established by the evidence that the accused operated his automobile in violation of the statute as charged and that such illegal act was the proximate cause of the injury and death of decedent — the fact that the decedent was guilty of negligence contributing to his death would not constitute a defense.

      C. M. Addison and E. J. Schanfarber, for plaintiff in error.

      Hugo N. Schlesinger, Prosecuting- Attorney, B. J. O’Donnell and G. Baffin, Assistant Prosecuting- Attorneys for Franklin county, for defendant in error.

      Motion to require the Court of Appeals to certify its record in this case overruled by the Supreme Court, March 16, 1920.

   Kunkle, J.

Heard on error.

Plaintiff in error was indicted, tried and convicted of tbe crime of manslaughter. A motion for a new trial was overruled. Error is therefore prosecuted to this court.

Various errors are assigned in the petition in error and are urged by counsel for plaintiff in error in the brief which has been filed and also in the oral argument of counsel..

In brief the evidence shows that on July 3rd, 1918, at about eight-thirty o’clock a m., the plaintiff was driving a Ford automobile and collided with one Ora J. Boyer, a boy of about twelve years of age who was riding upon a bicycle on Livingston Avenue in the city of Columbus. As a result of such collision Ora J. Boyer received injuries which caused his death within about one-half hour after the accident.

The State of Ohio relies upon the following sections of the Code for conviction of the plaintiff in error, namely:

Section 12603:

“Whoever operates a motor vehicle or motorcycle on the public roads or highways at a speed greater than is reasonable or proper, having regard for width, traffic, use and the general and usual rules of such road or highway, or so as to endanger the property, life or limb of any person, shall be fined not more than twenty-five dollars, and for a second offense shall be fined not less than twenty-five dollars nor more than fifty dollars. ’ ’

Section 12604:

“Whoever operates a motorcycle or motor vehicle at a greater speed than eight miles an hour in the business and closely built-up portions of a municipality, or more than fifteen miles an hour in other portions thereof or more than twenty miles an hour outside of a municipality, shall be fined not more than twenty-five dollars, and, for a second offense shall be fined not less than twenty-five dollars nor more than fifty dollars.”

During the progress of the trial there was no testimony introduced which tended to show that the accident occurred in the business and closely built-up portions of the city of Columbus and the trial court instructed the jury that the provisions of the above quoted section to the effect that the speed of the automobile should be limited to eight miles per hour in such sections of the city did not apply and that the limit as to the speed, fixed by the statute, insofar as this case is concerned, was fifteen miles per hour.

Counsel for plaintiff in error claim the court erred in the admission of evidence tending to show the rate of speed at which the automobile was traveling a short distance before reaching the scene of the accident.

There was evidence tending to show certain marks upon the street which marks were claimed to have been made by the skidding- of the automobile just prior to the collision.

Considering- all the evidence upon this subject we think the trial court did not err in admitting the same. This is true especially in view of the instructions given by the trial court in the general charge.

Counsel for plaintiff in error also claim the court erred in its general charge to the jury and also in its refusal to give certain special-instructions in advance of the argument.

This is an important question and we have given the same careful consideration.

The portions of the charge especially complained of are as follows:

“If the death of the boy was due solely to his own acts, the defendant would not be guilty even though you might conclude that the defendant was at the time violating the statute. But the defendant will not be excused because the boy might have been at the time of the collision guilty of negligence which contributed to his own injury and death, if you also find that the defendant, was at the time violating the statute, and that the defendant’s unlawful act in violating the statute also contributed to causing the collision and death of the deceased. That is if the jury should find that the boy by his own conduct endangered his own safety and contributed to his own injury and death, still if you find that at the time of the collision which resulted in the death of the deceased, the defendant was in the commission of an unlawful act, to-wit the violation of the statute, and that this violation of the statute on his part contributed to the injury and death of the deceased, then you shorrld find that the defendant is guilty although you may find that the defendant’s unlawful act was not the sole cause of the death of the deceased.”

Counsel for plaintiff in error cite the following from Section 902 of Berry on Automobiles, namely -.

“To warrant a conviction of manslaughter, on account of the killing of a human being by the negligent operation of an automobile the conduct of the accused must have been the proximate cause of death. .While the contributory negligence of the deceased is no defense, still the conduct of the deceased must be considered in determining- the proximate, or actual cause of the death.”

It is claimed by counsel for plaintiff in error that the court should have gone further in its general charge and instructed the jury that they might consider the alleged contributory negligence of the decedent for the purpose of determining whether the plaintiff in error was operating his automobile at the time in question at an unreasonable sp.eed under all the circumstances then existing.

We concede that this question is not entirely free from doubt but are of the opinion that the above quotation from Berry on Automobiles states the law correctly.

We think the charge of the trial court on the subject of proximate and contributing- causes was correct insofar as it went.

As stated by the trial court the contributory negligence of the decedent is not a defense unless it is the sole proximate cause of the accident.

It will also be noted that the trial court before argument of counsel to the jury, at the request of plaintiff in error, charged the jury upon the subject of proximate cause as follows:

“And it is not sufficient that the evidence of such acts may have 'been proven to you by some evidence or by the preponderance of the evidence, but you must be convinced beyond a reasonable doubt that at the time the injury occurred the defendant was driving the machine at the speed or in the manner hereinbefore stated to you, and that such driving was the approximate cause of the death of Ora Boyer. ’ ’

We think the trial court might properly have added an instruction to the effect that the acts of the decendent just prior to the collision might be considered upon the question as to whether under all the circumstances the speed of the automobile was unreasonable but in order to make the failure to give such charge prejudicial error we think it was incumbent upon plaintiff in error to have presented to the court a proper charge upon that subject. 67 O. S., 53; 5 C. C. Reports, N. S., 437.

The testimony offered by the state tends to prove that- the plaintiff approached the scene of the collision at a rate of speed of from thirty to forty miles per hotír and that marks were found on the street at a point near the place of the accident which indicated the skidding of the automobile due to a sudden application of the brakes.

These marks were discovered at a distance of 96% feet from the point where the automobile struck the curb and. was stopped.

It is true the testimony as to the speed of the automobile was denied by plaintiff in error but we think the jury might well have accepted the evidence of the state as to the fact that plaintiff in error was driving the automobile in question at an unlawful rate of speed at the time of and just prior to the collision.

"We are also of the opinion that the jury was justified under the evidence in finding that the unlawful rate of speed immediately before the collision was a proximate and contributing cause of the collision.

In the case of State v. Schaeffer, 96 O. S., 216, the first portion of the seventh paragraph of the syllabus is as follows;

“The unlawful act relied upon as the predicate for manslaughter must be the proximate cause of death. If death resulted from any other cause, or there be a reasonable doubt as to the unlawful act being the proximate cause of death, the jury should acquit.”

In the decision in the above ease Judge Wanamaker on page 242 discusses the question of proximate cause and also what will constitute prejudicial error in cases of this nature.

In the oas.e' at bar there is no dispute but that the automobile killed Ora J. Boyer. We can not escape the conclusion that the jury was justified under the evidence in finding that the unlawful rate of speed at which this automobile evidently was being driven was the proximate cause of this boy’s death.

It is also claimed by counsel for' plaintiff in error that counsel for defendant in error were guilty of such misconduct in their argument to the jury as would justify this court in granting a new trial. Our Supreme Court in the case of Dock v. Trapnell, 88 O. S., page 516, has stated the rule which governs reviewing courts upon the question of misconduct of counsel. The court say:

“Remarks of this kind are wholly improper in the trial of the ease and it is the duty of the trial court to see that they are hot made, or at least not persisted in, but something must be left to the discretion of a trial court, otherwise we would never reach an end to litigation, and a reviewing court ought not to reverse unless it clearly appears that such misconduct was of such character and so persistent as to prevent a fair trial of the cause,” etc.

W.é have carefully examined the record as to this ground of error and applying the above rule to the record in this case find nothing in the record which would warrant this court in disturbing the verdict upon the ground of misconduct of counsel for defendant in error.

We have considered all the grounds of error suggested by counsel for plaintiff in error in oral argument and in their brief but finding no error in the record which we consider prejudicial to plaintiff in error the judgment of the lower court will be affirmed. If desired a stay of execution for thirty days will be allowed to enable plaintiff in error to prosecute the case in Supreme Court.

Allread and Ferneding, JJ., concur.


author: Chittenden, J.

text:
    LIABILITY FOR INJURY TO PROPERTY IN THE HANDS OF A BAILEE.
    Court o£ Appeals for Huron County.
    Gfell v. The Jefferson Hardware Co.
    Decided October 17, 1917.

      Negligence — Injury to an Automobile in the Hands of a Bailee — Contributory Negligence of the Bailee Not a Bar to Recovery by the Bailor.

    The owner of property in the hands of a bailee may recover from a third person damages caused to such property by the negligence of the third person, even though the bailee be guilty of contributory negligence in the handling of the property, and even if the bailee, in an action brought by him, might be met by the defense of contributory negligence.

      Young & Young, for plaintiff in error.

      Wickham, & Martin, for defendant in error.
   Chittenden, J.

Heard on error.

This action was brought by the plaintiff, George Gfell, to recover a judgment for damages sustained by reason of injuries to an automobile belonging to him, resulting from a collision with a delivery wagon owned by the defendant. The trial resulted in a verdict in favor of the defendant. Judgment being entered thereon, a motion for new trial having been overruled, error is prosecuted in this court.

The error relied upon for reversal is in the charge of the court to the jury.

At the time of the collision the automobile was being driven by one Frank J. Herman, and was proceeding in a southerly direction on Benedict avenue in the city of Norwalk. Near the Children’s Home the automobile overtook the delivery wagon, drawn by one horse, and driven by one James A. Vradenburg, an employee of the defendant. Both vehicles were traveling in the same direction. The driver of the automobile undertook to pass the delivery wagon on the right hand side thereof. At about this time the driver of the delivery wagon turned to the right for the purpose of entering the drive to the Children’s Home, where delivery of material was to be made, and thereupon the driver of the automobile applied the brakes hard causing the automobile to skid. The damage arose, as claimed by the plaintiff, by reason of the automobile being struck on one side by the delivery wagon and by being forced into the curbing and a telegraph or telephone pole at the side of the street.

The evidence is in conflict as to the exact position of the delivery wagon just prior to the collision. Plaintiff claims that the delivery wagon was upon the left-hand side of the street contrary to the provisions of the state law and the city ordinance. The defendant claims that the delivery wagon was not on the left-hand side of the road, but that it had turned over to about the middle of the road for the purpose of enabling the driver to turn into the driveway of the Children’s Home. Defendant claims that there was plenty of room for the automobile to pass on the left-hand side of the delivery wagon, as required by the state law and the city ordinance, and that the driver of plaintiff’s machine was negligent in attempting to pass on the right-hand side.

Before argument counsel for plaintiff requested the court, in several written instructions, all framed to present the same question, to charge the jury that no question of contributory negligence was involved in the case. These propositions were based upon the theory that the evidence did not show that Herman, who was driving the automobile, was an agent or servant of the plaintiff, and that it did show, that the driver was in possession of the automobile as a gratuitous bailee. These instructions were all refused by 'the -trial court, who, in the general charge, instructed the jury, in substance, that they were to determine from all the evidence whether or not the relation of agent or servant existed between the plaintiff and Herman and that if they found that such relation existed and that Herman was guilty of negligence directly contributing to the injury to the automobile the plaintiff could not recover.

An examination of the record discloses no evidence from which the jury would be justified in finding the relation of principal 'and agent or master and servant between the plaintiff and Herman. The only evidence upon the subject shows that the relation of bailor and bailee existed, and that Herman was in possession of the automobile as a gratutious bailee. We find' that the great weight of authority is to the effect that when such relation exists the bailor may recover of a third person for damages caused to the property of the bailor in the hands of the bailee, if caused by the negligence of a third person, even though the bailee be guilty of contributory negligence in the

¡handling of the property, and even if the bailee, in an action for damages brought by him, might be met by the defense of contributory negligence. We will not undertake to cite the numerous cases in which the subject has been discussed, but call attention to the decisions in the two eases, Spelman v. Delano, 177 Mo. App., 28, 163 S. W. Rep., 300, and Loomis v. Norman Printers’ Supply Co., 81 Conn., 343, 71 Atl. Rep., 358.

In the course of the opinion in the case first above cited is found the following quotation from Van Zile on Bailments, Section 130:

“The bailee does not stand in the place of the bailor; he does not represent him in such a relation as would render the bailor liable for his negligent acts, or for the negligent acts of his servants or agents; and so, while in an action brought by the bailee against third parties for the injuries to the property, the third party may defend in the action upon the ground of contributory negligence upon the part of the bailee, his servants or agents, in an action by the bailor, who is the owner of the property, against a third party for injury to the bailment, the negligence of the bailee, or his servants or agents, would be no defense and would not prevent a recovery for the reason that such negligence is not imputable to the bailor. ’ ’

The doctrine of imputed negligence does not prevail in Ohio. (Davis v. Guarnieri, 45 Ohio St., 470, and Norwood v. Hauk, 19 C. C. 656; 10 C. D., 826.) This court has repeatedly followed the doctrine as announced in the two cases just cited.

It follows from what has been said that the instructions requested by the plaintiff to be given before argument, in so far as they sought to exclude the question of contributory negligence, should have been given, and their refusal constituted prejudicial error. It is entirely settled by the decisions of the Supreme Court and this court that it is error to -charge upon the subject of contributory negligence in a' case in which that issue is not properly presented by the pleadings or the evidence.

In view of the fact that the judgment must be reversed and the cause remanded, we think it proper to express our views as to the effect of the ordinance introduced in evidence. -Section 218 of the general ordinances of the city of Norwalk provides that “every vehicle shall keep on the right side of the street, except when necessary to turn to the left in crossing or in overtaking another vehicle.” It is an elementary proposition that ordinances of this character must be reasonable in order to be valid. It is quite evident that the regulation is a proper one and tends to facilitate traffic upon the streets and the safe use thereof. In order to be valid, however, it must be so construed as to permit the reasonable use of the street in gaining access to and egress from property abutting thereon. The court charged the jury, in substance, that if the driver of the delivery wagon turned to the left only so far as was reasonably necessary in order to make the turn to gain access to the grounds of the Children’s Home, which abutted on the west side of the street, he was not guilty of negligence per se in so doing by reason of the fact alone that in making the turn he went to the left of the center line of the street. We think that this instruction is correct. It is manifest that a reasonable interpretation of this ordinance includes not only the right to turn across the street at street intersections, but also to turn into alleys and private driveways.

We do not find from the evidence in this case that the doctrine of joint enterprise is applicable.

For the reasons above stated, the judgment of the common pleas court will be reversed and the cause remanded for new trial.

Kinkade and Richards, JJ., concur.

       Motion to require the Court of Appeals to certify the record in this .case overruled by the Supreme Court, February o, 1918.