author: Jones P. J.

text:
    In re Trusteeship of Couden.

      Trusts — Investment of funds — Provisions of will and Section 11314, General Code — Release of mortgage and private sale of mortgaged property — 'Acceptance of unsecured note for balance due — Purchase of stock in corporation — Trustee’s accounts may be opened up, when — Section 11033, General Code.

    1. Where a will itself directs a particular form of investment of trust funds, that form should be pursued, and the trustee is not limited to that prescribed by Section 11214, General Code, but it is desirable that such investments be made under the order of the probate court.
    2. A trustee does not act in good faith in accepting an unsecured note of one without means to pay said note, or interest thereon, for a balance due upon a prior note secured by mortgage on real estate, and in releasing said mortgage, or in selling such property valued at $6,000 to $10,000 at private sale for $3,100.
    3. The purchase of stock in a corporation, upon which dividends may possibly be paid, is contrary to Section 11214, General Code, which authorizes an executor to invest funds.
    4. The purchase of stock in a corporation, upon which dividends may possibly be paid, is not in compliance with the provisions of a will which provides that- the trust funds shall be put and forever kept at interest.
    5. Under the provisions of Section 11033, General Code, accounts of a trustee, previously filed, can be opened up so far as to correct any mistakes or errors, none of which had been previously subjected to any special hearing -or determination by the probate court.
    (Decided December 6, 1917.)
    Error: Court of Appeals for Warren county.

      Mr. L. K. Langdon, for Couden, trustee.

      Messrs. Eltzroth & Maple, for Salem township.
   Jones P. J.

These proceedings in error are brought to review the action in the court of common pleas in the matter of exceptions to the ac■count of Frank 'M. Couden, as trustee under the will of Isaac Jones, deceased, appealed into that ■ court from the probate court of Warren county.*

■Couden as trustee had from time to time filed accounts in the probate court, the last being his eighth account as such trustee. No exceptions were taken to any of the first seven accounts, and they were confirmed by the court as a matter of course.

Upon the filing of the eighth account exceptions were filed thereto on behalf of the trustees of Salem township, which township was the beneficiary under the second item of the will of Isaac Jones. These exceptions undertook to go back and except to the fourth, fifth, sixth and seventh accounts, respectively, as well as to the eighth account which was then before the court.

The exceptions are taken on the following grounds:

1. Because of the failure of the trustee to charge himself with sufficient interest in the fourth account.
2. That the investments' of funds set out in said -accounts are without authority of law and without the order of court and are contrary to the •provisions of the will.
3. That the investment of the funds in stock of The People’-s Electric Light Company, of Morrow, Ohio, is- fraudulent and unauthorized.

The will of Isaac Jones provided in the second item for a bequest of $7,000 to the township of Salem, Warren county, Ohio, “the same to be put and forever kept at interest, and interest thereon to be deposited with the treasurer of said township of Salem and be used” for the purposes of said township.

This will further nominated and appointed three individuals as executors' and trustees to carry into effect the provisions of said will, providing:

“It is my request that they and their successors in said office exercise their good judgment and sound discretion in making said loans, the same as if loaning for themselves.”

Section 11214, General Code, provides for the investment of funds in the hands of trustees “in certificates of the indebtedness of this state, of the United States, or in such other securities as the court having control of the administration of the trust approves.”

Where, as in this case, the will itself directs a particular form of investment, .that should be pursued, but' as a matter of safety and precaution in the management of the trust it is desirable that such investment be made under the order of the probate court.»

The record shows that so far as the Frank H. Kemper note, dated December 30, 1903, at six per cent, interest, is concerned, it was an improper and unauthorized investment 'by the trustee.

The fact appears that prior to the making of this note, a mortgage loan had been made by the trustee to Frank H. Kemper, secured by a mortgage, executed by himself and wife, upon property-in Avondale, Cincinnati, of a value of not less than $6,000 and estimated to be possibly worth $10,000; that when this mortgage note became due, although interest had been previously paid regularly thereon, without any foreclosure * proceedings the trustee permitted this mortgaged property to be sold at private sale, and acknowledged the receipt of some $3,100 in money for said mortgage and note and. of an unsecured note made by Frank FI. Kemper for $915. At that time Mr. Kemper had just passed through insolvency proceedings, under a voluntary assignment for the benefit of creditors, and was without means to pay the note, or interest upon same. It appears from the accounts that no interest has been since paid.

The trustee at that time caused the following cancellation to be endorsed upon the record of the $4,000 mortgage in the recorder’s office of Hamilton county, Ohio:

“Cincinnati, Dec. 50, 190J.
“The notes secured by the within mortgage/ are fully paid and satisfied and the recorder of Hamilton county is hereby authorized to cancel said mortgage of record.
“Frank M. Couden,
“Trustee of the Jones Fund.”

The trustee has failed to show that he acted in good faith in this matter, and for his own protection it was clearly necessary for him to have insisted upon an enforcement of the mortgage lien against that ^property, as Under the facts shown in the record it would undoubtedly have brought a larger sum, if not the entire amount of the loan with interest.

The exception to this investment was properly ¡sustained.

The other investment criticized in these exceptions 'is the purchase of fifty shares of stock of The People’s Electric Light Company at the par value of $100 per share, making $5,000.

This investment was not authorized by the probate court, and is contrary not only to the statute, Section 11214, General Code, but also to the provisions .of the will. The purchase of stock in a corporation, upon which dividends may possibly be paid, can not be considered as a compliance with the duty of loaning money out at interest. The accounts show that for some time four per cent, dividends were collected upon this stock, and then dividends ceased entirely.

So far as the investment in this stock is concerned, the exceptions were rightfully sustained, and the .trustee is undoubtedly liable for any loss that may occur on the sale of this stock, which sale should be had by the present trustee at the earliest suitable opportunity.

Inasmuch as dividends háve been paid upon .this ■stock at the rate of four per cent., and no taxes were required to be paid thereon, and no showing is made by the township trustees that a larger income would have been realized if the terms of the trust had been faithfully carried out and the money loaned as required by the will, we are not disposed to insist that any interest be allowed upon this pant of the fund during the time dividends Avere collected, but six per cent, interest should be calculated upon the $5,000 during that period of time ■succeeding the last payment of dividends on this stock up to the time of the filing of the account by the trustee.

We hold that under the provisions of Section 11033, 'General Code, the fourth, fifth, sixth and seventh accounts could be opened up so far as to correct any mistakes or errors, none of which had been previously subjected to any special hearing or determination by the court; and, of course, the exceptions appfy directly to the eighth account. Watts v. Watts, 38 Ohio St., 480, and Lambright, Admr., v. Lambright et al., 74 Ohio St., 198, at page 207.

The facts in this case are not like those in the case of Willis, Admr., v. Braucher, Gdn., 79 Ohio St., 290, where the executor and trustee were authorized to invest the proceeds of sale in such manner as they might think best, and it was shown that they had, upon careful investigation and expert advice, made investments in certain bank stock.

In this case a particular form of investment was pointed out by the will; or rather it was required that the money should be put and kept “at interest,” and, as above stated, the purchase of stock in a private corporation can not be deemed a compliance with such a provision, more especially so when it appears, as in this case, that the stock in which such investment was made had previously been the individual property of the trustee and was transferred either directly or indirectly from him as an individual to himself as trustee without approval of the court and without any report to the court disclosing such fact.

An entry may be made modifying the judgment below to the extent that both of the investments as reported by the eighth account must be disap•proved and disallowed. And interest ntust be charged as against the- Kemper note at six per cent, from its date, and as against The People’s Electric Light Company stock from the time of the last payment of dividend.

Judgment accordingly.

Gorman, J., concurs.

Hamilton, J., not participating.


source: Caselaw Access Project

author: Wilson, J.

license: Public Domain

text:
    The East End Loan Association Co. v. The Methodist Book Concern et al.

      Liens — Priority — Judgment creditor and mortgagee — Subsequent mortgage to liquidate prior-lien — Later mortgagee subrogated, when.

    The fact that a judgment, by relating back to the first day of the term during which it was rendered, antedates the execution of a mortgage, does not give the judgment creditor a prior lien, where the proceeds of the mortgage were, by agreement with mortgagor, used in liquidating previously existing liens, and the mortgagee thereby became subrogated to the rights of said former lienholders.
    (Decided June 24, 1918.)
    Error: Court of Appeals for Hamilton county.

      Mr. M. W. Cowway and Mr. David Davis, for plaintiff in error.

      Messrs. Wolf & Bailey, for Methodist Book Concern, defendant in error.
   Wilson, J.

This action was brought in the court,below by The Methodist Book Concern, a corporation, against Mary B. Corwin, The East End Loan Association Company et ah, to enforce the collection of a judgment, marshal liens and for the sale of real estate, the judgment having been recovered on January 11, 1917, and by force of istatute related back to the first day of the term of court, to-wit, January 2, 1917.

The defendant, The East End Loan Association •Company, filed a second amended answer and cross-petition therein, alleging that on January 9, 1917, it loaned to Mary B. Corwin the sum of $2,000 secured by a mortgage of that date on the property • described in plaintiff’s petition, and further alleging that said money was applied by it at the request and direction of Mary B. Corwin to the payment of .a $1,500 mortgage on the property held by The Southern Ohio Loan & Trust Company, dated February 7, 1913, and a $500 obligation of Mary B. Corwin to Edward B. Quinn, •secured by a conveyance by way of deed of the legal title to said property to said Quinn, dated August 26, 1916, with a lease back containing a privilege of purchase for the sum of $500; that said obligations were paid on said January 9, 1917, •and said property was then and there conveyed by said Quinn to said Mary B. Corwin, who thereupon executed the mortgage to said loan association company. Said company by reason of the fact's so alleged claimed a right to be subrogated to the rights of the lienholders so paid by it, and prayed that it might be so subrogated and declared to have the first and best lien on said property prior and superior to the lien asserted by the plaintiff.

To this answer and' cross-petition the -plaintiff demurred on the ground “that it does not state facts sufficient in law to entitle it to priority over plaintiff’s judgment lien.” The court below sustained the demurrer arid entered a judgment in favor of plaintiff, holding that it had a prior and superior lien to the mortgage of The East End Loan Association Company. To which the -said company excepted.

The question presented for the consideration of this court is as to whether or not the fact's alleged, if proven, would entitle the said defendant, The East End Loan Association Company, to be subrogated to the right's of the prior lienholders whose secured claims were so paid by the said company at the request and direction of the mortgagor.

'It will be observed that on January 2, 1917, when it is claimed the plaintiff’s lieri attached to the property, the two liens of The' Southern Ohio Loan '& Trust Corfipany and Edward B. Quinn, aggregating $2,000, were then subsisting liens on the property, so that if The East End Loan Association Company is subrogated to the rights of said two lienholders it will work no injustice to the rights of The Methodist Book Concern, as its security remains the same as when the lien attached and its position will in no way be changed for the worse on account thereof.

The right of subrogation is founded in equity, and will be invoked only when necessary to secure some equitable right and without which an injustice will be done.

In Straman, Admr., v. Rechtine et al., 58 Ohio St., 443, the court say:

“Where money is loaned under an agreement that it shall be used in the payment of a lien on real estate, and it is so used, and the agreement is that the one who so loans the money shall have a first mortgage lien on the same lands to secure his money and through some defect in the new mortgage or oversight as to other liens, the money can not be ,made on the last mortgage, the mortgagee has a right to be subrogated to the lien which was paid by the money so by him loaned, when it can be done without placing greater burdens upon the intervening lienholders than they would have borne if the old mortgage had not been released.”

To the same effect are the cases of Amick v. Woodworth et al., 58 Ohio St., 86, and Joyce v. Dauntz, 55 Ohio St., 538.

The court is of the opinion that the facts alleged in said answer and cross-petition, if proven, will entitle The East End Loan Association Company to be subrogated to the rights of the .lienholders so paid by it out of said $2,000, that the allegations contained in said answer and cross-petition are sufficient to state a cause of action for such relief, and that the court below erred in sustaining said demurrer.

“An answer which seeks affirmative relief must be treated as a cross-petition, and if the facts therein set forth entitle the defendant to any relief, the defense thus set up is good as against a general demurrer.” Cincinnati & Columbus Traction Co. v. Jewett Car Co., 11 C. C., N. S., 189.

This court has some doubt as to the right of the court below to entertain and pass upon said demurrer, by reason of the fact that it does not conform to the requirements of the code; however, it appears upon inspection of the record that the ¡court below, while sustaining -said demurrer and the defendant having declined to further plead, ■did proceed on final distribution, as though said ■demurrer had not been sustained, to determine the rights of said loan association company, although said company was not in court with any pleading, and ordered it to pay a portion of the costs, and further ordered .paid to it out of the proceeds of the sale the sum of $516.99, on account of its distributive 'share of said' proceeds. The court having found the lien of The Methodist Book Concern to 'be the first lien on the fund so realized, and entitled to be paid before the claim and lien of The East End Loan Association Company, ordered its claim paid in full out of the proceeds of ■said sale; to all of which said company excepted.

By reason of the erroneous action of the court below in sustaining said demurrer and in adjudging and decreeing that the lien of The Methodist Book Concern was 'prior and superior to the-lien of The East End Loan Association Company, and distributing the proceeds of the sale in the manner ■it did, prejudicial to the rights of The East End Loan Association Company, this court therefore orders that the judgment of the court below in sustaining said demurrer, and the finding, judgment and decree of the court in determining and marshaling the liens on said property and distributing the proceeds thereof, be reversed, and that this cause be remanded to the court below for further proceedings according- to law.

Judgment reversed, and cause remanded.

Jones, P. J., and Hamilton, J., concur.


author: Lieghley, J.

text:
    Farrell v. Brazee.

      'Court of appeals' — ■Jurisdiction in error — Order of common pleas court — Discharging attachment on appeal from justice’s court —Petition in error dismissed — In absence of bond — Failure of statutes to provide for bond.

    A motion to discharge an attachment in a justice court was overruled. An appeal from the overruling by the justice, of the motion to discharge the attachment, was taken by the defendant to the court of common pleas under Section 10260, General Code, where the attachment was discharged, from_ which order of the common pleas court error was prosecuted to the court of appeals. Held:

    1. That the order of the common pleas court in discharging the attachment was one affecting the substantial rights of a party and was a final order within the meaning of Section 6, Article IV of the Constitution as amended in 1912.
    2. That since the chapter relating to proceedings before a justice of the peace upon a review of the findings of the justice on error or appeal .is silent as to any bond when error is prosecuted • to the court of appeals, and no bond was given, the decision of the questions of error would benefit no one and the petition in error should be dismissed..
    3. Whether the sections of the civil code applicable to courts of common pleas may be invoked and the bond provided for in Section 1'1866, General Code, may be given in this kind of case, quere.

    (Decided June 11, 1917.)
    'Error: Court of Appeals for Cuyahoga county.

      Mr. John B. Kane, for plaintiff in error.

      Messrs. Stearns, Chamberlain & Roy on, for defendant in error.
   Lieghley, J.

Farrell brought suit in a justice court and procured an attachment of certain property of the defendant. A motion was made in the justice court to discharge the attachment, which ... motion was overruled. An .appeal from the overruling by the justice of the peace of the motion to discharge the attachment was taken by the defendant to the court of common pleas, under favor, of Section 10260, General Code, commonly known as the “three-day appeal.”The_- court of common pleas, on hearing, discharged the attachment, from which order of the common pleas court error is prosecuted to this court to reverse the same.

Several alleged errors are assigned for review, but we will confine our discussion and decision to but one, which involves the jurisdiction of this court to entertain this proceeding.

Previous to the amendment of the constitution in 1912 the circuit court -of Lucas county, in the -c-a-se of Nemit v. Vargo, 8 C. C., N. S., 97, held that the circuit court had jurisdiction to' review such an order.

The circuit court of Hamilton county, in the case of Lyon v. Phares, 9 C. C., N. S., 614, held the contrary.

Previous to the said amendment of the constitution the circuit court acquired its jurisdiction by statute. The justice code did not then nor does it now provide for such error' proceedings, nor for the giving of a bond to maintain matters in statu quo pending the error proceedings. Lucas county circuit held that it had jurisdiction, upon the theory that the provisions' of the civil code applicable to courts of common pleas were also applicable to this proceeding. In -view of the fact that the justice code contains no section making -the provisions of the civil code applicable -to -courts of common pleas a part of the justice code when error is prosecuted, and contains no reference to the civil code referred to, we do not understand upon what principle the same may be invoked for the purpose.

However, the constitutional amendment of 1912 conferred upon this court jurisdiction to review any final order, of the court of common pleas, and we hold that the order of the court of common pleas in this case discharging the attachment was one that affected the substantial rights of a party and was a final order. But 'the chapter relating to proceedings before a justice of the peace upon a review of the finding's of the justice on error or appeal is silent as to any bond when error is prosecuted to this court. And no bond being provided for, and none having been given, we are called upon to review many assignments of error, the decision of which will be beneficial to neither party and avail no one anything, as the attachment was discharged below and the property was released. The filing, of a petition in error' does not operate to suspend the judgment of the court of common pleas, nor is this action one included in the section providing for a supersedeas bond. Therefore we think the petition in error should be dismissed for the reasons stated.

Should we be mistaken in this position, and it be proper to invoke the sections of the civil code applicable to courts of common pleas, and the bond provided for in Section 11866, General Code, may be given in this kind of case, the petition in error should 'be dismissed for the reason that the plaintiff in error has not complied with that section and has failed to give a bond in this case, which is necessary to give us jurisdiction. Martin v. Gun nison, 14 O. C. D., 679, affirmed without opinion, 71 Ohio St., 480.

The petition in error is dismissed at the costs of plaintiff in error.

Petition in error dismissed..

■Grant and Carpenter, JJ., concur.


author: Jones, P. J.

text:
    The City of Hamilton v. Greevey et al.

      Municipal corporations — Referendum — Section 4227-2, General Code — Validity of petition — Date when signatures affixed and petition tiled — Resolution declaring necessity for street improvement— Veto by mayor and subsequent passage over veto.

    1. Section 4227-4, General Code, which requires the date of the signing of a referendum petition to be stated in the petition by the petitioner, does not require that such signature should be on any particular date, and such signatures are valid if made at any time after the original passage of a resolution declaring the necessity of a street improvement and before the filing of the petition.
    2. The provisions of Section 4227-2, General Code, fixing the time within which a referendum petition shall be filed with the city auditor, are complied with where such petition is filed with the auditor within thirty days from the original passage of the resolution by council and also within thirty days after the resolution has been passed by council over the mayor’s veto.
    (Decided November 3, 1917.)
    Appeal: Court of Appeals for Butler county.

      Mr. Harry J. Koehler, ■ Jr., city solicitor, for plaintiff.

      Messrs. Andrews & Andrezvs, for defendants.
   Jones, P. J.

This case comes into this court by appeal from the 'court of common pleas of Butler ■county.

Plaintiff seeks to secure an injunction against the holding of a referendum election on the question of the improvement of East Pligh street.

A resolution declaring the necessity of this improvement was passed by the council of the city of Hamilton March 7, 1917, and was filed with the mayor March 8, 1917. The mayor vetoed said resolution and returned it to council without his approval and with his objections March 14, 1917.

Thereafter, on April 4, 1917, council reconsidered said resolution, and upon said reconsideration approved it by 'a vote of two-thirds of all the members elected to council. After such passage the resolution was; again filed with the mayor on April 7, 1917.

On April 6, 1917, a referendum petition signed by the necessary number of electors, in due form, in accordance with the provisions of Section 4227-2, General 'Code, was filed with the city ■auditor, requiring and ordering that the resolution be submitted to the electors of such municipal ■corporation for their approval or rejection.

In objecting to this referendum election counsel for plaintiff, the city solicitor of Hamilton, relying upon the decision of this court in McFarlan v. City of Norwood et al., 26 C. C., N. S., 33, contends that there is no right of referendum upon the resolution declaring the necessity of the^ improvement of a street, but that the proper step to which referendum would apply would be the ordinance to proceed with such improvement.

The decision in McFarlan v. City of Norwood was with reference to the appropriation of land for the opening of a street,-and under the particular sections' of the code relating to such appropriation proceedings it was there held that taxpayers were entitled to a referendum upon the ordinance to appropriate. With that decision the court is still satisfied.

In the case of Ella Snyder v. The Village of Montgomery, decided by .this court June 18, 1917, occasion was afforded to examine the question of the right to a referendum election upon a resolution declaring it necessary to improve a street, and it was there held that in street improvement proceedings the proper step at which a referendum should be had is upon the passage of the resolution declaring it necessary to improve the Street.

It is not necessary to again review that question, and in this case it merely remains for the court to consider the other objections made to the petition and to the steps taken herein to secure such referendum.

It is objected that the referendum petitions were in some cases signed too early. .Each petitioner, in accordance .with the provisions of Section '4227-4, General Code, in signing the petition, gave the date of such signing. Many, of these dates were earlier than the day on which the resolution ■was passed by council over the mayor’s veto, and some even before the date of the mayor’s veto.

It is also objected that the petition was 'filed with the city auditor before the resolution, as finally passed by council after the veto of the mayor, was again filed’with the mayor.

'While Section 4227-4, General Code, requires the date of the signing of such petition to be stated in the petition by the petitioner, there is no requirement that said signature should be on any particular date, and no reason appears why it would not be a valid signature if made at any time after' the original passage of the resolution and before the filing- of the petition.

Section 4227-2, General Code, fixes the time within which the petition shall be filed with the city auditor “within thirty days after any ordinance, or other measure shall have been filed with the mayor, or passed by the council of a village.” The referendum petition was filed with the city auditor within thirty days from the original passage of the resolution 'by council, and also within thirty days after the resolution had been passed by council over the mayor’s veto; so that it was filed strictly within the provisions of this section. The fact that the resolution was again filed with the mayor, after it had been passed by the council subsequent to .the mayor’s veto, can have no effect in fixing the date of filing the referendum petition, for the reason that we are shown no provision of law which requires this second filing of the resolution with the mayor.

We therefore find that the referendum petition was duly filed in accordance with the law, and that the election should be accordingly held.

The petition of plaintiff will be dismissed at its (costs.

Petition dismissed.

Gorman and Hamilton, JJ., concur.


author: Gorman, J.

text:
    The Village of Wyoming v. The Citizens’ Trust & Guaranty Company of West Virginia.

      Municipal corporations — Depository of funds — Surety bonds — • Statutes a part thereof — Liability of surety — Insolvency and liquidation of depository — Deposits exceed amount of bond — Who to seeh increase of bottd,

    1. A bond securing deposits made by a city or village in a "designated depository is a statutory bond into which the provisions of the •statute relating thereto must be read, and the surety will be held to have contracted with reference to such statutory provisions.
    2. The responsibility for providing for an increase in the amount of the indemnity bond, where deposits are made by the municipality in excess of the 'sum named in the existing bond, is in the first instance upon the depository, and where such a situation arises the surety becomes liable for the full face of its bond, and not ninety per cent, thereof.
    3. The amount for which the surety is liable, up to the face of its bond, is the a'mount with interest shown to remain due the municipality after liquidation of the depository.
    (Decided November 5, 1917.)
    ■Error: Court of Appeals for Hamilton county.

      Mr. S. C. Roettinger and Mr. James E. Robinson, for plaintiff in error.

      Messrs. Pogue, Hoffheimer & Pogue, for defendant in error.
   Gorman, J.

This case is here on error to the judgment of the common pleas court, wherein the judgment was adverse to the plaintiff in error.

The case was submitted to this court upon an agreed statement of facts to take the place of a bill of exceptions.

From the agreed statement of fact's, omitting the immaterial parts, it appears that the village of Wyoming, a municipal corporation in Hamilton county, duly organized under the laws of Ohio, designated the Metropolitan Bank & Trust Company of Cincinnati as its depository, and that after competitive bidding it awarded to this bank the contract to receive on deposit in its bank moneys of the village, said bank being the highest and best bidder for said deposits.

A resolution providing for deposits in this bank was duly passed by the council of the village on or about June 1, 1909. The resolution provided that the treasurer of the village was 'authorized and instructed to deposit the funds of the village in said bank in the manner provided by law and in accordance with the terms of said bid.

Pursuant to the award the bank, as required by law, executed and delivered to the village of Wyoming its bond, with the defendant company as surety thereon. Said bond was renewed on the 5th day of July, 1910, for a period of one year, upon the same terms and conditions as the original bond; and again said bond was renewed on or about the 1st day of July, 1911, for a further term of one year and to continue in force until the close of the banking hours on July 6, 1912.

After the execution of the-bond the treasurer of the village in consideration thereof deposited the village funds 'in said bank, commencing on or about July 19, 1909, and from time to time made - ' deposits; and withdrawals were made from time to time to meet the payments ordered by the village council out of the funds.

The amount of this bond was $10,000; and the renewals were for the same amount in each of the - two succeeding years. On the 18th of September, after the second renewal of said bond, said bank closed its doors and went into the hands of a receiver under the direction of the state bank examiner of the state of Ohio, this being a state bank, and the payment to its depositors including the plaintiff in error was then and there suspended.

At the time of its suspension the plaintiff in error had on deposit as principal the sum of $18,879.11; and there was due on this principal by way of interest the sum of' $427.08; making, a total amount of principal and interest belonging to the plaintiff in error, in the bank, the sum of $19,306.19. The receiver of said bank from time to time paid dividends to the depositors including plaintiff in error and finally upon the winding up of the bank’s affairs there had been paid to the plaintiff in error on account of its claim, by the receiver, dividends aggregating $10,618.40, leaving unpaid on its claim a balance of $9,305.59, with interest.

After the receiver of the bank had paid all the 'dividends that could be paid out of the assets of the bank, the defendant in error, The Citizens’ Trust & Guaranty Company, paid to the village the sum of $4,756.50, claiming that this was the ■ ■entire amount which it should pay on its obligation under said bond. This money was paid by the defendant in error and received by the plaintiff in error without prejudice to the rights of plaintiff in error to assert this claim against defendant, in error for the full amount unpaid by the bank or its receiver; and without prejudice to the fights of the defendant in error to resist the 'claim of the village of Wyoming.

The condition of this bond is as follows:

“The condition of the above obligation is such, that whereas, under and by virtue of a certain proposal of the said The Metropolitan Bank & Trust Company, the said bank has been designated as a depository of the money belonging to the incorporated village of Wyoming, and in. consideration thereof, the said bank 'has agreed to pay to said incorporated village of Wyoming upon such deposits the rate of interest agreed upon.
“Now, therefore, if, during the period beginning on the date of this bond, the said The Metropolitan Bank & Trust Company shall receive, safely keep and pay over all moneys which may come under its custody under and by virtue of the laws of the state of Ohio relating to such depositories, and under and by virtue of the said bank’s contract with the said incorporated village of Wyoming, and shall properly account for and pay over, as required, the interest on such deposits at the rate agreed upon, and shall faithfully perform all the duties imposed by the laws of the state of Ohio upon it as a depository of the moneys of said incorporated village of Wyoming, then this obligation shall be null and void; otherwise to remain in full force and virtue.”

There are other provisions in the bond by way of provisos, which need not be quoted, as they do not in the opinion of the court affect the question involved in this’case.

The limit of the liability of the defendant in error was $10,000, and this it obligated itself to pay to the village of Wyoming provided The Metropolitan Bank & Trust Company defaulted in its payment of the village moneys. In other words, the defendant in error bound itself to the extent of $10,000 to indemnify and hold harmless the village of Wyoming from any loss which it might sustain by reason of having designated said bank as its depository. .

If the loss were less than $10,000, then the defendant in error did not obligate itself to pay more than the amount of the loss. If the loss exceeded $10,000, it was Obligated to pay only $10,000.

In the court of common pleas, upon the submission of this cause to the court without the intervention of the jury — a jury having been specially waived — a judgment was rendered ' in favor of the defendant, holding in substance that it had paid all that it was required to pay under bond, and in fact had paid in excess of the amount for which it was liable in the sum of $311.47, which sum was claimed' by defendant in the court below on its cross-petition upon which it sought to recover.

It is argued by defendant in.error that this being a statutory bond the provisions of the statutes relating to depositories must be impliedly read into the bond or contract — there being no other contract between the village and the Metropolitan Bank & Trust Company except the bond involved in this proceeding. We concur most heartily in the claim of counsel for defendant in error that the provisions of the statute relating to bonds required to be given by the depositories are impliedly read into the contract or bond.

At "the time of the last renewal- of said bond the legislature had made some amendment to the provisions relating- to the depositories of municipal corporations, found in 102 Ohio Laws, 122, being an amendment of Section 4-295, General Code.

In substance that section provides that “council may provide by ordinance for the deposit of all public moneys coming into the hands of the treasurer, -in such bank or banks, situated within the county, as offer, at -'competitive bidding, the highest rate of interest and give a good and sufficient bond issued by a surety company authorized to do business in the state, or furnish good and sufficient surety, or secure said moneys by a deposit of bonds or other interest-bearing obligations of the United States,” etc.

A description is given in the section of the kinds ■of securities that may be given to secure the deposit of funds. And the section further provides that “there shall not be deposited in any one bank an amount in excess of the paid in capital stock and surplus of such banks, and not in any event to exceed one million dollars.”

And it further provides that “whenever any o£ the funds of any of the political subdivisions of the state shall be deposited under any of the depositary laws of -the state, the .securities herein mentioned, in addition to such other securities as are prescribed by law, may be accepted to secure such deposits.”

The section further provides, “said security to be subject to the approval of the proper municipal officers, in a sum not less than ten per cent, in excess of the maximum amount at 'any time to be ¡deposited.”

'Now it is claimed by counsel for defendant in error that this language of the statute being impliedly read into the bond means that the village of Wyoming would not be permitted under the law to deposit in The Metropolitan Bank & Trust Company at any tíme more than $9,091, which would be in round numbers 90 per cent, of the face of this bond; and that if the village deposited more than 10 per cent, less than the ariiount of the bond, it, the village, did so at its own risk, or it was obliged to provide for an additional security or bond to be given.

'But this statute puts the duty upon the bank •which is designated as the. depository of the municipal corporation to give good and sufficient bond. It does not impose the duty upon the council of the municipality or upon the treasurer of the municipality to see that the bond is given. No doubt it would be the duty of the officers of the municipality to see that a 'sufficient bond was given in order to protect the village from any loss which might occur; but it does not lie in the mouth of the surety company to say that because the village 1 failed to secure additional sureties or an additional , bond, it, the surety company, is therefore not liable for more than 90 per cent, of the face of its bond. The surety contracted to be liable to the village to the extent of $10,000, and if the loss, of the village reached $10,000 it would be liable for the full amount of the bond:

In the case under consideration the loss of the village was less than $10,000. It suffered no loss except that which the bank failed to pay. The fact that it had on deposit more than nineteen thousand dollars when the bank closed its doors does not establish a loss of nineteen thousand dollars. After the bank had closed its doors the village received on its claim more than ten thousand dollars, paid ■to it by the receiver of the bank, and, manifestly, to the extent that it received payment on its deposit in this bank there was no loss. Its only loss was the amount which the bank failed to pay upon •the winding up of its affairs.

We do not think it necessary that any authorities be cited in order to establish this plain proposition. The plaintiff in error (plaintiff below) was entitled to recover from the defendant in error, upon the agreed statement of ’ facts, the amount which The Metropolitan Bank & Trust Company failed to pay on account of the sum of moneys on deposit in said bank. This amount, $9,305.59 with interest, less the amount voluntarily paid by defendant in error, $4,756.50, leaves a balance of $4,642.10 with 'interest, this being the total amount claimed by plaintiff in error in the action at law.

The court of common pleas having erred in rendering judgment in favor of the defendant, in the amount rendered, when it should ‘have rendered judgment for plaintiff in the sum of $4,642.10 with interest, and there being no question of fact involved in the case, but only a question of law, we hold that the judgment of the common pleas court [should be reversed and judgment entered in this [court in favor of the plaintiff in error for the amount of $4,642.10 with interest, as claimed in the petition.

Judgment accordingly.

Jones, P. J., and Hamilton, J., concur.


author: Richards, J.

text:
    Witker v. Ellison et al.

      Trusts — Personal liability of trustee — Goods ptirchased to continué foisiness.

    One who acts as trustee of a merchant tailor for the purpose of receiving daily the proceeds from the business transacted and paying the accounts arising, in order to provide for the continuance of the business, is personally liable for the purchase price of goods bought on his behalf and used in carrying on the business, in the absence of a stipulation relieving him from such liability.
    (Decided May 27, 1918.)
    Error : Court of Appeals for Lucas county.

      Messrs. Fell & Schaal and Mr. E. E. Davis, for plaintiff in error.

      Messrs. Hall, Flowers '& 'Cotter, for defendants in error.
   Richards, J.

Henry H. Ellison and others, partners, doing business as John B. Ellison & Sons, began an action in the court of common pleas, in which they filed a third amended petition against Ernest H. Witker, claiming judgment in the amount of $669.49. A demurrer to the third amended petition was overruled and an answer and reply filed. The trial resulted in a verdict and judgment in favor of the plaintiffs for the amount claimed.

The bill of exceptions shows that one August E. Ziegler had been engaged in business as a tailor in the city of Toledo and that in 1913 his business had become so unsuccessful that he applied to his relatives for assistance. The indebtedness which he was then carrying was about $2,000, and various relatives, including Witker, executed, notes for him to provide for the payment of his indebtedness. Thereafter the business was continued with the arrangement that Ernest H. Witker should act as trustee for Ziegler, and should receive the funds derived from the business and deposit the same in the 'bank in the name of Witker as trustee, and should pay claims from this fund. Ziegler continued the business for a considerable period of time after this arrangement was made, and accounts were opened, using the same books that Ziegler had theretofore used, but leaving a blank space after the time when Ziegler had constituted Witker trustee. The moneys were deposited in the bank, as provided, in the name of Witker, as trustee, and from this account various payments were made. Among other payments that were made was the indebtedness represented by the notes, amounting to some $2,000, which had theretofore been given for the prior indebtedness, upon which Witker was liable.

While the business was being so continued, and while Witker was acting as trustee for Ziegler, goods were purchased of John B. Ellison & Sons and charged to Witker as trustee, the various items amounting to $1,341.73. Upon this account Witker as trustee made two payments, one of $500 and one of $172.24, leaving the balance claimed in plaintiffs’ third amended petition.

Ultimately Ziegler was taken seriously ill and the business was closed - up by Witker, and the assets of Ziegler proved to be insufficient to pay the indebtedness of various creditors.

While several grounds of errors are assigned in ■this- case, on which it is claimed that the judgment in favor of Ellison & Sons should be reversed, the ■real and only question of law at issue is whether Witker is personally liable for the claim of Ellison & Sons. After a careful examination of the authorities we have no doubt of this liability. The general principle is laid down in 39 Cyc., 333, in the following language:

“Acting within the limits of his powers, a trustee may create contractual obligations enforceable against the trust estate, such as for goods, supplies, and services, where the trust contemplates the -carrying on of the settlor’s business by the trustee, .or where the trust is for the support and maintenance of the beneficiaries.. To render the estate liable, however, it must be shown that the trustee acted within the scope of his powers, and that the articles furnished were realty for the use and benefit of the trust estate; and the trustee may and should, in making- contracts, expressly stipulate that the trust estate, and not he, shall be liable thereon, for, in the absence ' of such an express agreement absolving him from liability, a contract ■made by him is binding on, and enforceable against, him alone.”

We suppose it to be well settled that the contracts of guardians, administrators and other trustees, though made in the execution of the trust, impose upon them a personal liability in the absence of a stipulation relieving them therefrom. It was manifestly contemplated by Ziegler and Witker that the business should • be continued, and that in the continuance of that business it would, of course, be necessary to buy additional goods. Ellison & Sons were justified in charging these goods to Witker, as trustee, and on the claim so made Witker would be personally liable.

In addition to the authority already cited we call attention to Truesdale v. Philadelphia Trust, Safe Deposit & Insurance Co., 63 Minn., 49; McGovern v. Bennett, 146 Mich., 558; Knipp v. Bagby, 126 Md., 461, and Taylor v. Davis’ Admx., 110 U. S., 330.

In view of these authorities we reach the conclusion that Witker became liable for the goods sold by Ellison & Sons.

Independent of the fact of the sale to Witker, as trustee, the record discloses that Witker, as trustee, used the funds in the bank in his name as trustee, derived from the sale of goods made subsequent to the time that he became trustee, in payment of the preexisting indebtedness evidenced- by promissory notes on which he was personally liable, and this fact is of vital importance in determining the liability of Witker.

The judgment of the court of common pleas will be affirmed.

Judgment affirmed.

Kinkade, J., concurs.

Chittenden, J., not participating. - -


author: Hamilton, J.

text:
    Powell, etc., v. Durr, Auditor, et al.

      Taxation — Revaluation of real estate• — ■Parrett-Whittemore law — Authority of county auditor — Injunction by landowner — Judgment as to unnamed plaintiffs.

    1. Under Sections 2 and 3 of the Parrett-Whittemore law (106 O. L., 246) the county auditor did not have the power to revalue real estate, but such revaluation could only be made through the assessors.
    2. Where a property owner, on his own behalf and “on behalf of numerous other landholders,” brings an action to enjoin the county treasurer from the collection of a tax, and such other landowners are not named nor their properties set forth with certainty,. the court can not enter a judgment in such action in favor of such other landholders.
    (Decided April 30, 1917.)
    Appeal : Court of Appeals for Hamilton county.

      Messrs. Powell &■ Smiley, for plaintiff.

      Mr. John V. Campbell, prosecuting attorney, and Mr. Smith Hickenlooper, Mr. Henry G. Hauck and Mr. Louis H. Capelle, assistant prosecuting, attorneys, for defendants.
   Hamilton, J.

The plaintiff brought this action on his own behalf, and “on behalf of numerous other landholders of the Village of Cheviot,” against the defendants, Peter W. Durr, auditor of Hamilton county, Ohio, and Charles Cooper, treasurer of Hamilton county, seeking to enjoin said treasurer from the collection of taxes in excess of taxes based on the assessment appearing upon the duplicate for the year 1915, except as to increase by reason of additions or construction of buildings, and to enjoin said treasurer from listing said property upon delinquent tax list, etc., and praying, further, for a mandatory injunction directing the said auditor to restore the tax duplicate of the •village .of Cheviot for the year 1916 with the assessed valuations of real property as shown by the last decennial appraisement.

The defendants filed a general demurrer to the petition, which was overruled, and judgment was rendered by the lower court in favor of plaintiff as prayed for. From this judgment defendants appeal to this court.

It appears that the auditor during the month of August, 1916, made an attempted revaluation of the real estate of said village of Cheviot, through his deputies, and greatly increased the valuation thereof. It is not claimed that the new valuation was made through any assessor or his assistant, but was done by. the auditor as his own act.

While the revaluation complained of was made under the Parrett-Whittemore law, which is admittedly unconstitutional, and there may be some question as to the validity of acts performed under that law, we do not find it necessary to pass upon this phase of the case since we are of the opinion that the Parrett'-Whi.ttemore law did not give the auditor the power exercised in making the revaluation complained of.

The defendant's claim this power was given the auditor by Sections 2 and 3 of the Parrett-Whittemore law, but that these sections must be read in connection with the whole taxing law to construe the meaning and power intended to be given.

It is not necessary to review the provisions of the statute, but is sufficient to say that if this power was given to the auditor there would be no reason for the taxing machinery, such as assessors, assistants, etc. The auditor could on his own motion take any particular piece of property in the county, without regard to uniformity, and arbitrarily place a value thereon. We are of the opinion that revaluation made under this law could only be made through the assessors as' provided, and that the auditor’s powers were only supervisory.

In the case of Zangerle, Auditor, v. Thompson, 95 Ohio St., 262, the supreme court laid particular stress upon the qualifications of the assessors, in the following language:

“Section 17 of the Parrett-Whittemore act (106 O. L., 250) provides that an assessor shall be a citizen possessing the qualifications of ■ an elector of such ward or district; and Section 18 of the same act provides that the assistant assessor shall possess all the qualifications of 'an elected assessor.
“These sections of the law are mandatory and specifically require that the assistant assessor shall be an elector of the ward or district 'selected for appraisal. In providing for this feature the general assembly may well have had in mind a policy of requiring a resident elector to be appointed to assess property within a specified district, since a resident would have a better knowledge of conditions and values of property than a nonresident; and, as showing the solicitude of the general assembly upon that subject, by Section 22 of the same act it provided that in case of a vacancy in the office of assessor such vacancy should be filled by the appointment of an elector of such ward or district.”

'This indicates that assessments could only be made by duly qualified assessors.

In view of the unconstitutionally of the Parrett-■Whittemore law there can be no remedy available to plaintiff in the form therein provided, and his only remedy is an appeal -to a court of equity. It therefore follows that the judgment of the court will be entered in favor of the plaintiff, John Powell.

While the plaintiff in his petition undertakes to ■bring this suit on his own behalf, and on behalf of numerous resident landowners of the village of Cheviot, the value of whose lands has been increased in a manner similar tb that of plaintiff, these property holders are not named nor are their properties set forth with sufficient certainty in the petition for the court to enter a judgment as to same, and in so far as the court below undertook to render such judgment it must be held ineffective. It may, however, be well said that the same holding would apply to other owners of real estate similarly situated and under like conditions as that of plaintiff, if properly brought before the court, and the county officials would be fully justified in treating all such property holders in like manner and in making remits in their favor without compelling them to resort to the courts in independent suits, thus making unnecessary costs against the county.

Judgment for plaintiff.

Jones, P. J., and Gorman, J., concur.


author: By the Court.

text:
    Klein et al., Exrs., v. The Employers' Liability Assurance Corporation.

      Indemnity insurance — Automobile accident — Liability of company limited, how — I-Jusband and wife recover damages — Amount insured may recover. ■

    Where a policy of insurance indemnified the assured against loss from liability imposed by law for damages on1 account of bodily injuries accidentally suffered by any person or persons by means of the maintenance or use of a certain automobile, and the company’s liability was limited to five thousand dollars for an accident resulting in such injuries to one person, the word “such” injuries refers only to bodily injuries, and the indemnity is limited in the case of injuries to one person to five thousand dollars, no matter how many may recover because of such injuries.
    (Decided February 4, 1918.)
    Error: Court of Appeals for Hamilton county.

      Messrs. Kramer & Bettman, for plaintiffs in error.

      Messrs. Worthington, Strong & Stettinius, for defendant in error.
   By the Court.

The policy upon which this action is based indemnifies plaintiffs “against loss' from the liability imposed by law upon the assured for damages on account of bodily injuries, including death resulting therefrom, accidentally suffered by any person or persons by means of the maintenance or use” of a certain automobile, within certain limits of time and place, subject to certain conditions among which is:

“Condition A: The Corporation's liability on account of an accident resulting in such injuries to ■one person, including death, is limited to Five .Thousand Dollars ($5,000.00), and subject to the same limit for each person, the Corporation’s total liability on account of any one accident resulting in injuries to more than one person, including death, is limited to Ten Thousand Dollars ($10,-000.00).”

By reason of bodily injuries to Jennie Goldstein damages have been recovered and paid to her and also to her husband, Daniel Goldstein. It is conceded by defendant that it is- bound to indemnify plaintiffs for both these recoveries subject to the limitation expressed in the policy. The only question to be determined is whether the limit of liability is five thousand or ten thousand dollars.

We hold that this limit is five thousand dollars.

This is clearly fixed by the first clause of Condition A: “The Corporation’s liability on account of an accident resulting in such injuries to one person, including death, is limited'to Five Thousand Dollars.” This clause by the use of the word “such” injuries refers only to bodily injuries, and limits the indemnity, no matter how many may recover because of such injury, since, as in this case, more than one person may claim and secure damages for bodily injuries to the one person.

The latter part of Condition A, which increases ■the limit where more than one person is injured as a result of any one accident, is distinctly stated to be “subject to the same limit for each person,” that is, to the five thousand dollar limit for .each person receiving bodily injuries.

'We are in accord with the opinion of Judge May in the trial court, as found in 19 N. P., N. S., 426.

Judgment affirmed.

Jones, P. J., and Hamilton, J., concur.

Gorman, J., not participating.


author: Houck, J.

text:
    The Pennsylvania Co. v. The Ireton Brothers Co.

      Weight of evidence — Review■ — •Verdict will not be set aside, when.

    Where the claim of plaintiff is reasonable under all the surrounding circumstances and the facts as developed by proper evidence, and the judgment below is responsive thereto, and the loss must fall upon one of the parties to the case, the finding of the jury under proper instructions from the trial judge will not be disturbed by a reviewing court.
    (Decided April 22, 1918.)
    Error: Court of Appeals for Van Wert .county.

      Messrs. Wheeler & Bentley and Mr. Clark Good, for plaintiff in error.

      Messrs. Dailey & Hoke and Mr. H. L. Conn, for defendant in error.
   Houck, J.

(of the Fifth Appellate District, sitting in place of Hughes, J.). The Pennsylvania Company operates, controls and manages a line of railroad running through the city of Van Wert, Ohio, from Chicago to Pittsburgh, with tracks, cars, locomotives and other appurtenances thereto belonging, and the defendant in error, The Ireton Brothers Company, owned a hay barn located on the north side of the right of way of the Pennsylvania tracks, and on the east side of Walnut street, in the 'city of Van Wert, and at about one o’clock P. M. of September 26, 1916, the said hay barn, together with the contents, burned. Shortly before the fire was discovered, an engine and several cars, owned and operated by plaintiff in error, passed along and upon its tracks and by said barn.

Just prior to the time that said engine and cars passed said hay barn the engine had been standing still for nearly an hour. Employes of the defendant in error had been unloading and storing hay in said barn during the forenoon, and had worked in and about the barn until about eleven or twelve o’clock noon that day'. When the fire was first discovered in the barn i't was at the top, in the southeast corner. Shortly before this, the locomotive in question passed said barn, and was puffing very loudly and throwing out a large amount of black smoke and red cinders. The defendant in error filed its action in the court of common pleas of Van Wert county, in which it asked for a judgment in the sum of $1,622.95, with interest from the 26th day of September, 1916. The issues in the case were raised by the allegations in the petition of plaintiff and the answer of the defendant, which was in substance a general denial. Said cause was tried to a jury, which resulted in favor of the plaintiff below in the sum of $1,396.68, and the trial court entered judgment on the verdict.

A reversal of the judgment is sought in this court for two reasons:

1. That there was no legal evidence offered in support of the verdict and judgment.
2. That the verdict of the jury was against the weight of the evidence.

As to the first claim of plaintiff in error, which in substance is that a demurrer to the evidence of plaintiff should have been sustained by the trial judge, we will say that we have read all of the evidence offered by the plaintiff and defendant, as embodied in the bill of exceptions, the same being necessary for the proper determination of the questions raised by counsel in the case.

'Had plaintiff below, at 'the time it rested its case, made by the evidence thus offered a prima facie case, or established such facts as would entitle it to prevail, if not rebutted or disputed? In order to do so, it must have sustained by proper proof each and all of the material allegations of its petition; and this can only be determined from the proven facts as contained in the testimony offered in its behalf as found in the bill of exceptions.

It is urged that from these facts it was a physical impossibility for the locomotive in question to have caused the fire. This is based upon the conceded facts in the 'case, as to the location of the barn from the railroad track; the place where the engine stood prior to the fire; the rapidity with which it traveled past the barn; and its location where it stopped and was standing at the time the barn was discovered to be on fire.

Legal evidence is not confined to mere oral testimony and statements made by witnesses, but-it includes every known means obtainable .to ascertain the truth about any disputed question of fact. All the circumstances and surroundings must be taken into consideration, and if when taken together they raise a mere suspicion as to the truthfulness of the claim made, the same is not sufficient. But in the case now before us, where the facts and all the surrounding circumstances seem to point to the reasonableness of the claim of plaintiff below, we hold the rule to be tihat as between parties situated as the ones in the present case are, where the loss must fall upon one or the other, it is just, legal , and'right that-the law shall cast it upon the one shown by the reasonable probability of the proof to have been the cause of the loss.

If this rule is sound, and we feel that it is, then applying it to the present case the judgment -below must stand, unless we further find from all of the evidence in the case that the verdict of the jury was against the weight of the evidence. The weighing of evidence is not a mere question of mathematics, nor is it to be determined by mere conjecture, but depends upon its effect in inducing the jury or court to reach a proper conclusion based wholly and entirely upon the adduced facts.

The question here for determination is as to whether or not the proof on the part of the plaintiff below is greater than that of the defendant, as -shown by all of the evidence in the case as contained in the bill of exceptions. If it is, then the judgment should be affirmed; otherwise reversed. No complaint is made by counsel as to the law of 'the case, as charged by the trial judge; yet we have read it' and find that it fully and completely covers every issue of fact and law in the case. If a reviewing -court was clothed with the same power as a jury in passing upon facts, and could see and hear the witnesses and observe their demeanor while upon the witness stand, instead of being compelled to rely upon typewritten testimony alone, it would be a great aid in determining the question as to whether-or not the evidence was properly weighed by the jury. The jury is not only the judge of the credibility of the witnesses, 'but of the weight of the evidence given by them, and a reviewing court is not authorized or justified in setting aside a verdict of a jury because it is claimed that it is against the weight of the evidence, unless after a careful examination of the whole record in the case it is clearly and fully satisfied that such verdict was manifestly against the weight of the evidence. The supreme c'ourt of our state has said, “Where there is no dispute or conflict in the testimony of different witnesses, but nevertheless the unconflicting testimony discloses a variety of circumstances from which different minds may reasonably arrive at different conclusions as to the ultimate fact shown by such evidence, then it is. the duty of the jury to determine such ultimate fact.” Hickman v. Ohio State Life Ins. Co., 92 Ohio St., 87, 95.

The ultimate fact as to whether or not the plaintiff in error was .the cause of the mischief complained of in the case at bar having been determined by the jury under proper evidence submitted to it, and under proper instructions as to the law by the trial judge, a reviewing court has no authority in law to disturb the verdict of the jury.

Counsel for plaintiff in error insist that the following rule of law be applied to this case:

“A scintilla of evidence is enough to send the case to the jury, but a preponderance of the evidence constitutes the degree' as to the weight .to which the party on whom the burden of proof rests must have in order to have sufficient evidence to sustain the verdict, and preponderance is the test measure of the weight of the evidence. If it does not preponderate in favor of the party the weight is not with him. If it is evenly balanced the weight is not with the party. If .the evidence does not preponderate in favor of the party sustaining the burden, then and only then may it be said that the verdict in his favor is not sustained by sufficient evidence.”

We heartily agree with learned counsel that this proposition of law is sound, and that it is clearly applicable to the issues raised by the pleadings and the proven facts in the case now before us under review, and that when §o applied it is decisive of same, 'and that by reason thereof but one conclusion can be reached, and that is that the judgment below is responsive to the facts and law, and .must be affirmed.

Judgment affirmed.

Kinder and Crow, JJ., concur.


text:
    Dillingham v. Dillingham et al.

      Husband and wife• — Injunction against squandering property — Section 12001, General Code — Appointment of receiver void, when — Married ivoman’s act of i88f, construed.

    Section 12001, General Code, providing for an injunction against a husband upon petition of his wife, restraining him from wasting or squandering or converting to his own use property held by her and him in his and her own right, has no application to women married since the passage of the married woman’s act of 1887. As to such" women said act is obsolete, and an order appointing a receiver to manage and control the separate property of a woman married since 1887 is without force or effect.
    (Decided December 3, 1917.)
    Error: Court of Appeals for Hamilton county.

      Messrs. Dickerson, Black & Dickerson and Mr. J. W. Peck, for plaintiff in error.

      Messrs. Lit'tleford, James, Ballard & Frost, for defendants in error.
   Gorman, J.

The defendant in error, Viola Dillingham, on April 25, 1917, commenced an action in the common pleas court of Hamilton- county against the plaintiff in error, Frank A. Dillingham, her husband, making The Market National Bank, Louis G. Pochat, The Security Savings Bank & Safe Deposit Company and Anna M. Maloney parties defendant.

Her action was brought under Section 12001, General Code, under favor of which section she alleges in her petition that she and Frank A. Dillingham were married on November 10, 1908; that she is entitled in her own right and is the owner of a part of and share in the business carried on in the name of Frank A. Dillingham in the city of Cincinnati, which business is that of the manufacture and sale of a proprietary' medicine called “Plant Juice” which is now and has 'been widely and extensively sold in drug ■stores throughout the entire United States'. She further ■ says that her husband, from habitual intemperance and profligate habits, is about to waste and squander the said property and business and the profits thereof, to a part of and a share in ■which she is entitled in her own right; and that he is proceeding to and is about to proceed to fraudulently convert the entire business and profits therefrom to his own use for the purpose of placing them beyond her reach and depriving her of their benefit. She further avers in her petition that the other defendants, The Market National Bank and others, have in their possession and under their control certain moneys and property belonging to said business, to a part of which she is entitled in her own right. She prays in her petition that a temporary restraining order issue restraining the defendant from disposing of or otherwise interfering with the said business, its moneys or credits, choses in action or property, and restraining the defendant from in any way transferring, delivering or turning over to any person whomsoever any money, property or security in their 'hands in the name of or being held for Frank A. Dillingham, or the Dillingham business, or the Plant Juice business. She further prays for a restraining order against the other defendants from permitting Dillingham or any other person from having access to any safe-deposit box in the name of Frank A. Dillingham or the Dillingham business or the Plant Juice business, until further order of court. And she prays for a further restraining order restraining Anna M. Maloney from permitting Frank A. Dillingham to in any wise interfere with or dispose of the said business or any of the property, moneys, credits and choses in action of the said business, and from paying over or delivering tq said Dillingham any moneys or the equivalent thereof arising from the proceeds or profits of the above-described business. And she further prays that upon a final hearing the temporary restraining order asked for may be made permanent. She further prays the court to appoint a receiver to manage and control the above-described business for' the benefit of herself, and prays the court to make such other order in the premises as it deems just and proper.

Upon the filing of this petition the court made an order dispensing with the giving of notice to the defendant, as required by the rules of court upon the application for' a restraining order, upon the grounds that the giving of the notice would defeat the purpose of the injunction. Defendant Dillingham was not in the jurisdiction of the court, and notice was published for him according to the law.

Upon the day of the filing of the petition a temporary restraining order was issued as prayed for in the petition, and the business carried on in the name of Frank A. Dillingham was thus prevented from being sold, disposed of or carried on.

Two days after the filing of the petition, without the presence of the defendant and without any service being made upon him, the court of common pleas appointed a receiver of the business described in the petition, and in the entry appointing the receiver it was recited that Messrs. W. W. Dickerson and Robert Black appeared in court as the attorneys of Frank A. Dillingham. The ■court fixed the amount of the receiver’s bon’d at $30,000 and ordered the .entire business and assets of Dillingham to be placed in the hands of the receiver and directed the receiver to carry on the business and employ the necessary help and purchase the necessary material therefor, and to do all things necessary to 'prosecute the business. Publication of constructive, notice for Dillingham was then made, as required by law.

Counsel for Dillingham filed a petition in error in the court of appeals, from the judgment appointing the receiver, said cause being numbered on the docket of this court N'o. 1101. Upon application for a stay' of execution in this court an order was made staying the appointment of the receiver upon the defendant Dillingham giving bond in the sum of $50,000, and further proceedings in the common pleas court were thereupon stayed.

Thereafter in the common pleas court a hearing was had at great length. A great mass of evidence was adduced before the court, and on the 31st day of July, 1917, the court reappointed Frank C. Zumstein receiver of all the business, property and assets of the Dillingham business, and of Frank A. Dillingham, and of the Plant Juice business. No other relief was asked in the petition except an injunction restraining the defendant Dillingham from disposing of the property and restraining the other defendants from permitting any of the property in their hands belonging to Dillingham to be taken and disposed of; and the further prayer for the receiver.

In' the first appointment by the court of common pleas the receiver was designated as a temporary receiver; the last appointment merely provides for the appointment of a receiver without any limitation as to the time of the receivership, and without any reservation for any further order of court. The predicate upon which the court based this order for the appointment of the receiver was that Dillingham, plaintiff’s husband, had been wasting and squandering and was about to waste and squander the assets and profits of the said business, one-half óf which belonged to the plaintiff, by reason of habitual intemperance and profligate habits, and was proceeding to and was about to proceed to fraudulently convert the half of the said business • and profits aforesaid, belonging to the plaintiff as aforesaid, to his own use, for the purpose of placing them beyond the reach of the plaintiff and depriving her of their benefit. And the court further found that all of the allegations of the plaintiff’s petition were true and that the plaintiff was entitled to the relief prayed for in her petition. The receiver was authorized and- directed to carry on the business, employ all the ■ necessary help, purchase all the necessary materials, and to do all things necessary to carry on and promote the business, and to take charge of all the property, and out of the profit's thereof to pay one-half to .the plaintiff Viola’ Dillingham. And all persons having any property or choses in action in their possession belonging to said Frank A. Dillingham or to the business were directed to turn over the same to the receiver. The order was quite a sweeping one, and dispossessed Dillingham entirely of any dominion or control over the property or business, and placed it in the hands of the receiver without limit as to time, and without limit as to authority to carry on the business.

Dillingham excepted to this order, and prosecutes error to this court in proceeding No. 1171 on the docket of this court.

We have, therefore, two error cases in this court growing out of the original litigation brought by the defendant in error.

It is unnecessary to state anything further with reference to the first case, No. 1101, inasmuch as the purpose of the proceeding was merely to stay the execution of the judgment entered in the common pleas court appointing a receiver. temporarily. That proceeding having been stayed, all the matters necessary to be considered in this error proceeding will be considered in the last proceeding brought herein, No. 1171.

It appears from the record in the case that previous to the bringing of this action in the common pleas court' for the appointment of a receiver and for an injunction to restrain Dillingham from disposing of the property, the defendant in error, •Viola Dillingham, brought an action in the common pleas court, in the division of the court of domestic relations, praying for alimony against the defendant, Frank A. Dillingham. This suit -was filed in the court of domestic relations September 16, 1916, more than seven months before the commencement of this action for the appointment of a receiver. In her petition in the common pleas court, division of domestic relations, plaintiff set out, inter alia, that the defendant had for many years been engaged in the manufacture in the city of Cincinnati of a proprietary medicine called “Plant Juice” which is widely and extensively advertised and sold in drug stores throughout the entire United States. She averred that defendant was possessed also of large quantities of valuable stocks and bonds, and also of a very large number of extremely valuable diamonds and other personal property. She also set out in this petition for alimony that defendant had been guilty of wrongdoing in many places throughout the United States, and that he bad been guilty of gross neglect of duty, and that he had remained away from the plaintiff for a long time and refused to communicate with her. She further alleged that' he had been guilty of habitual drunkenness for a number of years past. She averred that he had an interest in the business of the manufacture and sale pf said proprietary medicine known as “Plant Juice,” and that he was about to dispose of or encumber same so as to defeat her from obtaining alimony. She prayed for temporary alimony during the hearing of the cause, and for her expenses during the prosecution of this suit; and that upon a final hearing a reasonable alimony be allowed out' of the property of said Frank A. Dillingham. She further asked that an injunction issue restraining Dillingham from disposing of any property or of the business known as “Plant Juice.” ■ •

A temporary restraining order was issued by the judge of the court of domestic relations, without bond.

In no place in the petition of the plaintiff for alimony did she aver that she had any interest in the business known as “Plant Juice,” but though she does not state specifically that the business and property belonged to the husband Frank A. Dillingham, the averments of the petition would lead one to infer that she claimed he was the owner of this 'business, and that she had no interest therein except as the wife of Frank A. Dillingham.

The question to be determined in this case turns upon the construction and application of Section 12001, General Code, to the facts in this ease. That section reads as follows:

“A married woman may file a petition in the common pleas court, setting forth that from habitual intemperance, or other cause, her husband is about to waste and squander the property, legal or equitable, money, credits, or choses in action, to which she is entitled in her own right, ór a part thereof, or is proceeding, or about to proceed, ■fraudulently to convert them, or a part thereof, to his own' use, for the purpose of placing them beyond her reach, and depriving her of their benefit, whereupon the court may enjoin him from disposing of, or otherwise interfering with, such property, money, credits, or choses in action, appoint a receiver to manage and control them for the benefit of the wife, and also make such other order in the premises as it deems just and proper. On filing the petition, a provisional injunction also may be allowed as in other cases, with or without ■bond, at discretion. Such petition shall be filed in the county where the petitioner resides, and the husband made a party defendant, as in the case of a petition for a divorce.”

'It' is claimed by plaintiff in error that under this section the common pleas court has power and authority to appoint a receiver not only for the property owned by the wife in her own right, but also for the property of the husband if the same is in any way joined with that owned by the wife.

At the outset we may say that a careful consideration of the evidence in this case satisfies us that it is not sufficient to establish the ownership of Viola Dillingham to any of the property claimed by 'her in the petition filed in the court of common pleas. We think the evidence is insufficient to establish her ownership and title' to any of the prop-' erty. The business was established by Dillingham many years ago. She claims that in 1912, at Houston, Texas, her husband orally told her that he would give her a half interest in the'business. It is claimed that this statement of the husband was heard by a man by the name of Briscoe, who was acting in the capacity of a private secretary for Mrs. Dillingham., Briscoe on the witness stand testified that he heard this conversation; but the facts and circumstances of 'his employment and service with the Dillingh'ams would lead us to believe that he was not present at the time the wife says this conversation took place. Furthermore, it was shown on the trial of the case that Briscoe had been convicted twice, at least, in the courts; and upon being questioned as to his conviction he denied it. But the proof adduced by counsel for Dillingham established his conviction. Pending the hearing of the case after this proof was adduced Briscoe fled the state and has not since been heard from. More than a year after the time when the wife claims that Dillingham gave her a half interest in this property, she wrote him a letter while he was in San Francisco. This letter is dated March 17, 1913. ' In this letter, among pther -things, she says:

“This is another holiday, but holidays come and 'holidays go and I never know anything about, them. It is getting to be rather a treadmill sort of thing; not that I mind that in the least if I was getting anything out of k. I like to work and would not mind the daily grind, also evenings and Sundays too, if I had any sort' of share in it. Of course I do not know the workings of your brain but it seems to me the many protestations of jour ■love, etc., lack any convincing weight. I am giving every minute of my waking hours to the business; it seems only fair that I should share equally.”

The 'husband -denied that he ever had such conversation with her as that testified to by her, and the evidence disclosed that she never drew any money from the business except upon Dillingham’s order and Dillingham’s checks. She had nothing to do with establishing the business; none of her individual or private property or funds went into the business; and the conduct of Dillingham and the conduct of the business, the testimony of numerous witnesses, the letters that passed between the parties, and the conduct of Mrs. Dillingham herself, appear to us to conclusively rebut the claim that she was given an interest in this business.

But', assuming for the purposes of the case, that the facts in the case do establish that she was given an interest in this business, then we are to consider whether or not under Section 12001 the .court of common pleas was authorized and warranted in appointing a receiver for this entire business because the wife was an owner of one-half 'interest therein.

It will be interesting to trace the history of Section 12001, General Code. This section appears under the subdivision of Divorce and Alimony, Part Third, Title IV, Division VII, Chapter 3, of the General Code of Ohio, and it has been placed in this chapter and subdivision since the codification in 1880. It appears to 'have been considered by the codifier, and also by the legislature when it passed this enactment, as a proper proceeding under the chapter for divorce and alimony.

Under the Constitution of 1802 there was no provision made for divorce and alimony, and it was the practice during the early days of the legislature for that body to pass a special act providing for the divorce of married people. The supreme court in the case of Bingham v. Miller, 17 Ohio, 445, finally called a halt on this practice ■by holding that the granting of divorce by the legislature was a usurpation of judicial functions by that body.

On January 7, 1824 (22 O. L., 341), the general assembly passed an act concerning divorce and alimony and vested in the supreme court of the state that sole jurisdiction of granting divorces When any cause existed for a divorce as mentioned in that act. There was also provision made in' the act for the custody and maintenance of children and the allowance of alimony in a proper case. There was no provision for a suit for alimony independent of an, action for divorce.

On March 6, 1840 (38 O. L., 37), the legislature passed another act concerning divorce and alimony, and repealed the act of January 7, 1824. In this latter act of 1840 the supreme court was again given sole cognizance of granting divorces for the •causes enumerated in the act; but there was no provision made for alimony independent of the action for divorce and alimony. In other words, alimony could be granted in a divorce proceeding but not a separate proceeding.

On March 2, 1846 (44 O. L., 115), the legislature passed an act to amend the act concerning divorce and alimony passed March 6, 1840. This act was the original progenitor of Section 12001, General Code. It reads as follows:

“Be it enacted by the General Assémbly of the State of Ohio, that any married woman, by her next friend, may file her bill in chancery in the supreme court', or court of common pleas, setting forth that her husband, from habitual intemperance, or any other cause, is about to waste and squander the property to which he is entitled in her right [italics by court], or any part thereof, or is proceeding fraudulently to convert the same to his own use, for the purpose of placing it beyond her reach, and depriving her of the benefit thereof; and the court, upon the hearing of the case, may enjoin the husband from disposing of, or otherwise interfering with such property, and may'appoint a receiver, to manage and control the same, for the benefit of the wife; and may •also make such other order in the premises as they may deem just and proper.”

'Spme slight changes have béen made in the verbiage of this act in the codification of 1880, the most important change being that whereas in the original act the property mentioned is that “to which he is entitled in her right,” by the codification of 1880 that language is changed so as to read, “the property, legal or equitable, money, credits, or choses in action, to -which she is entitled in her own right.”

Manifestly the purpose of this act of 1846 was . to protect a married woman in the enjoyment of her own separate property. The rule of the common law at that time prevailed in Ohio that a woman upon her marriage lost her entire entity; her existence and her life were merged in that of her husband. He was everything; she was nothing. She lost 'her name; all of the personal prop- ■ erty which she had in her own right and her own name became his, except choses in action, and they became his whenever he saw fit to reduce them to his possession. She had no right to bring an action in her own name except as provided by statute. She could not enter into any contractual relations. She could not sell or dispose of her property without her husband’s consent and without him joining with her. Her personal earnings belonged to her husband and he could subject them to his possession.

But this had' been the state of the law from time immemorial. Not only did her person belong to her husband, but all her pronerty. She was as much a slave as though he had bought and paid for her and owned her absolutely, and all her belongings.

The legislature from time to time, during, these middle and dark ages of Ohio, was endeavoring to ameliorate to some degree the condition of the married woman; and it is evident that the purpose of. this legislation was to give her some benefit ■and enjoyment of her separate estate, the property that came to her either by inheritance or gift, or by her own earnings when she was a femme sole, and to prevent an intemperate and wasteful husband from dissipating her property and depriving her and her 'children óf the benefits thereof. She could not bring a suit in her own name at that time as the act plainly shows, but it would have to be brought by her next friend; and it had to be brought in chancery in the supreme court or the court of common pleas. No one will question the justice and equity of this humane provision of the legislature for the protection of the married woman. This act continued to be the law down to the present time with the exception that now she may bring an action in her own name and is not obliged to have to resort to her next friend.

In 1851, March 24 (49 O. L., 102),' jurisdiction was conferred upon the courts of common pleas of the state to grant alimony independent of divorce, for the several grounds set out in the act, and it is provided therein that the proceedings in an action for alimony shall be-conducted in all respects as in cases for divorce. This is the first time courts of common pleas were given jurisdiction to hear and determine actions for alimony independent of actions for divorce.

On March 11, 1853 (51 O. L., 377), the legislature passed an act concerning divorce and alimony, which act was to take the place of all the previous acts relating to divorce and alimony. In -this act, under Section 14, is set out the provision of the -act relating to a married . woman bringing an action for the appointment of a receiver .for her separate property. The language of Section' 14 is substantially the same as the language employed in the original act passed March 2, 1846, with this exception: it relates to property, moneys 'and credits to which she is entitled in her own right. The legislature having changed the phraseology from the language employed in the original act as being property to which he was entitled in her right, recognized evidently that it was her property to which she was entitled in her own right, and related to her separate property. This act repealed all previous acts touching divorce and alimony' and also the act providing for an- action for a receiver of the wife’s -separate property; but the new act embraces not only all the matters covered by the previous legislation on the subject, but additional legislation also.

This act was again amended April 15, 1857 (54 O. L., 131). Section 14 of the original act— now Section 12001, General Code — was not changed or amended by this act.

From 1857 to 1880 there was no change made in the divorce and alimony statutes.

In 1880 the codifying commission collected all these provisions relating to divorce and alimony under Part Third, Title I, Division 7, Chapter 6 of the Revised Statutes, Sections 5689 to 5706, inclusive. In this chapter -is found Section 5705, which was originally Section 14 of the act of March 11, 1853, and is Section 12001, General Code, as it now exists.

No change was made in this section from 1880 down to the present time, and the codifying commission of 1910, and the legislature which adopted and ratified the acts of the commission, left it substantially as it was then in force.

In 1880 when the codifying commission collected all the laws relating to divorce and alimony, it was necessary -to retain present Section 12001, General Code, because at that time a married woman could not sue or be sued in her own name; she could not hold her own property in her own name, although the legislature at that time had made quite an advance in emancipating woman from the enthrallment of her husband.

In 1887 an act was passed which practically emancipated a woman from the control of her husband. She has since that time a right to contract and be contracted with as though unmarried; she has a right to hold in her own name and for her own use all her separate earnings acquired by her, or by inheritance, or by gift, or in any other legal manner, <and is free from the rights of her husband and from his control and subjection as to all her property. She has a right to enter into business as though unmarried, and in any manner to enter into any obligation she may desire, as though she were a femme sole; she cannot by contract between herself and husband change the legal status of their married relations. See Sections 7995 to 8004, inclusive, General Code, Part Second, Title VI, Chapter 1, Domestic Relations. The only interest he has in her property during her life is a contingent right of dower in her real estate.

The state of the law at the present time, therefore, is that the separate property of a married woman 'is not in possession or under control of the husband unless she sees fit to give it to him.. We think the proper construction to place upon Section 12001, General Code, is that it-was for the protection of married women at a time when they had no right to hold their own separate property ■and no right to bring an action in their own names, or to make contracts in their own names; but since the passage of the Married Woman’s Act in 1887, there is no occasion for the use of Section 12001 except for the purpose of preserving such property of a married woman as came to her husband by marriage prior to the passage of the Married Woman’s Act of 1887. The codifying commission of 1880 and the commission of 1910 no doubt retained this section in the Revised Statutes and in the General Code because they realized that there was at those times, and there still may be, cases in which a woman was married prior to 1887 and brought to her husband personal property and choses in action which were her separate property and which by marriage passed to his dominion and his possession and control; and in order to protect her in the enjoyment of her rights in those properties this section is retained in the statute laws of the state.

It has no application, in our opinion, to the cases of dvomen who have married since the passage of the Married Woman’s Act of 1887, because since that time no condition can arise whereby an action could be brought in the court of common pleas under Section 12001, General Code, by a woman who ha's married since the passage of the act of 1887. So far as women who have been married since the passage of the Married Woman’s Act in 1887 are concerned, this section is obsolete and can have no application to them or their affairs. It would be unnecessary for such a woman to bring such action. In fact, she could not set out a state of facts which would confer upon the court jurisdiction to bring an action, because her property would not pass to her husband by her marriage, as it did before the passage of the Married Woman’s Act of 1887.

'In the case before the court, Mrs'. Dillingham claims that she has separate property in a one-half interest in this business, and that this was acquired ■in 1912. It was not acquired 'by her prior to 1887, and therefore there appears to be no reason for the application of the rules laid down in Section 12001, General Code. If she has an interest in this' property, she may bring an action against her husband to secure this interest without having a receiver appointed. If she were a partner she could come into court and ask for a dissolution of the partnership, a winding up of the business, and the appointment of a receiver to take charge of the business and sell it for the benefit of the partnership. The record does not disclose a state of facts which would- warrant the court in the application of Section 12001, General Code.

We hold that this section can apply only to cases of married women whose property passed into possession of their husbands prior to the passage of the Married Woman’s Act in 1887, and whose husbands took possession of their property by virtue of the rules of common law, before the wife was emancipated from the husband.

In any event, the court of common pleas was not warranted in appointing a receiver for Frank A. 'Dillingham’s property under Section 12001, General Code. There is no warrant or authority under this section for taking the husband’s property out of his hands and placing it in the hands of a receiver. The only warrant and authority under that 'section is for the appointment of a receiver for the wife’s property. Even if the court were authorized to appoint a receiver under Section 12001, it exceeded its authority in appointing a receiver for the entire property, the husband’s property as well as that claimed by the wife.

It appears from the record in this proceeding that -while this case -was pending in the court of common pleas, and before the-judge of the court of common pleas who heard the matter took up the consideration thereof, counsel for Dillingham, plaintiff in error, made application and motion to the court to send the cause to the judge presiding in the court of domestic relations, for the reason, -as he claimed, that there was at that time pending an action for alimony, and that all the relief prayed for in this case could be granted by the judge of the court of domestic relations, in the alimony case. It appears from the record that the judge refused ¡to -send the cause to the judge presiding in the Court of domestic relations; and it further appears from the record that the judge who presided in the court of domestic relations was of the opinion that he had no jurisdiction to hear and determine this action1.

The view we take of this matter is that the judge of the court of common pleas presiding in the court of domestic relations should have taken this- case and heard and determined it. This Section 12001, General Code, is a part of the chapter relating to divorce and alimony, and, in view of the fact that the judge of the court of common pleas who presides in the court of domestic relations has jurisdiction and special authority from the legislature to hear and determine all matters relating to divorce and alimony, this case should have been sent to that particular judge.

We think it was error on the part of the common pleas court judg.e who heard this case not to have sent the cause to the judge presiding in the court of domestic relations; but we are in- doubt as to whether or not such error was so prejudicial as to warrant a reversal of the judgment, if there ■were no other errors in the record.

For the reasons above stated, the judgment of the court of common pleas will be reversed.

Judgment reversed.

Jones, P. J., and Hamilton, J., concur.