text:
    Eysenbach, Appellant, v. Reilly et al., Appellees.
    (No. 162
    Decided March 15, 1951.)

      Mr. Robert Tait, for appellant.

      Mr. George M. Monahan and Mr. Roy E. Layton, for appellees.
   Guernsey, J.

This is an appeal upon questions of law from a judgment of the Common Pleas Court of Auglaize County, Ohio, in an action, wherein the appellant, Bose Eysenbach, was plaintiff, and the appellees, LeBoy P. Beilly and Jane W. Beilly and the Home Savings & Loan Association, were defendants.

It is submitted to this court upon the pleadings and original papers and a transcript of the journal entry of judgment in the Common Pleas Court.

The petition of the plaintiff, omitting caption, signature and oath thereto, is in the words and figures following, to wit:

“Plaintiff Bose Eysenbach is the residuary devisee and legatee of Aldula Sharp late of the- village of Cridersville, county of Auglaize and state of Ohio by virtue of a certain last will and testament of Aldula Sharp admitted to probate in the Probate Court of Auglaize County, Ohio, on July 27, 1949 as case number 18862 of such court which last will and testament may be found in Journal 65, page 402 of the records of such court.

“Plaintiff for her cause of action says that on or about the 31st day of May 1949 Aldula Sharp, a single person executed and delivered to the defendants, Le-Roy P. Reilly and Jane W. Reilly, husband and wife, a warranty deed to the following described real estate situated in the village of Cridersville, county of Auglaize and state of Ohio, to wit:

“ ‘Being inlot number eight (8) in Ezra DeLong’s west addition to said village of Cridersville, Ohio.’

“Said deed was presented for record to the recorder of Auglaize county, Ohio on June 1, 1949 at 3:45 p. m. and was recorded on June 2, 1949 in deed volume 146, page 147 as instrument number 61328 of the records of the recorder of Auglaize county, Ohio.

“Plaintiff says that on the 31st day of May, 1949 and for sometime prior thereto, Aldula Sharp was suffering from the advanced stages of cancer and was weakened by disease and suffering; that she was on such date by reason of said physical weakness incapable of knowing and comprehending the consequences and nature of the transaction hereinafter set forth.

“That on or about the 1st day of May, 1949 the defendants LeRoy P. Reilly and Jane W. Reilly moved in with and into the home of Aldula Sharp and agreed to care for said Aldula Sharp and support her in return for the said Aldula Sharp permitting them to occupy and live in such property free from the payment of any rent; that on or about the 31st day of May 1949, the defendants, well knowing the physical weakness of said Aldula Sharp and her inability to appreciate the consequences of the transaction, abused their relationship and wrongfully and fraudulently influenced her so as to exert such a force as to control the free act of her will; induced unnatural and unwarranted resentment toward members of her family and procured from Aldula Sharp the aforementioned deed; causing and inducing said Aldula Sharp to execute and deliver said deed to them for the real estate hereinbefore described, reserving therein to said Aldula Sharp an- estate for her life time with a further agreement on the part of the defendants that they would look after and take care of said Aldula Sharp for the rest of her life and would pay her funeral expenses.

“Plaintiff further says that at the time said deed was given the said Aldula Sharp was seventy-five (74) years of age and the defendants well knew that she was suffering from the advanced stages of cancer and was not expected to live much longer; that any value of any services the defendants LeRoy P. Reilly and Jane W. Reilly gave or could have given was far less than the value of the premises conveyed to them. Plaintiff further says that these acts and conduct, of said defendants were not in good faith and the consideration for said deed was grossly inadequate.

“Plaintiff further says that the provisions of the will of Aldula Sharp hereinbefore set forth have been administered and the distribution under the will has been made and that all expenses of administration have been paid or secured to be paid; that under the provisions of said will this plaintiff as residuary legatee is entitled to receive such real estate herein described in the event this petition is granted and the transaction between the decedent and LeRoy P. Reilly and Jane W. Reilly set aside and held for naught.

“Plaintiff further says that on or about the 30th day of November 1949 the defendants, LeRoy P. Reilly and Jane W. Reilly executed and delivered to the defendant, Home Savings & Loan Association of Wapakoneta, Ohio, their mortgage deed conveying said property to secure a loan of two thousand dollars ($2,000) which mortgage is recorded in volume 130 at page 515 of the mortgage records of Auglaize county, Ohio.

“Wherefore plaintiff prays that the deed from Aldula Sharp to LeRoy P. Reilly and Jane W. Reilly dated the 31st day of May 1949 be cancelled and held for naught and that the title to said property be quieted and freed from any right, interest, estate or claim of the defendants and that the defendants, LeRoy P. Reilly and Jane W. Reilly be required to account for the value of the use and occupancy of said property; that the mortgage to the defendant, Home Savings & Loan Association of Wapakoneta, Ohio, be set aside and held for naught and that the Home Savings & Loan Association of Wapakoneta, Ohio, be required to set up any interest that they might have in the premises and for all other and further relief to which the plaintiff may be entitled either in law or in equity. ’ ’

To this petition, the defendants LeRoy P. Reilly and Jane W. Reilly filed a motion to dismiss for the stated reason that plaintiff is a stranger to the agreement between- the above mentioned defendants, and there is no privity between them; that plaintiff did not except to the inventory in the estate of Rose Eysenbaeh, deceased, or to the assessment of inheritance tax therein, or to the final account therein, and is estopped from instituting a collateral action.

The defendant Home Savings & Loan Association also filed two motions to dismiss the petition, the first for the stated reason that the court lacked jurisdiction of the action, and the second for the stated reason that all matters pertaining to the last will and testament of Aldula Sharp, deceased, under which plaintiff claims the right to bring her suit, are pending in the Probate Court of Auglaize County, Ohio, which court has sole jurisdiction of all questions pertaining to legatees or devisees under said last will and testament, as well as jurisdiction to hear a suit to set aside a deed to real estate which formerly belonged to said decedent, and determine then, if need be, the rights of any legatees or devisees under said will.

The defendants Reilly also filed a motion to strike certain words and phrases from the plaintiff’s petition.

The defendant Home Savings & Loan Association also filed motion to strike certain words and phrases from plaintiff’s petition.

The above mentioned motions were submitted to and heard together by the Common Pleas Court, no evidence being offered or introduced by any of the parties.

Upon such hearing the court rendered the following judgment upon its journal, which judgment, omitting caption and signature of the court, and the signed approvals of counsel, is in the words and figures following, to wit:

“This day this matter came on to be heard on the motion of the defendants, LeRoy P. Reilly and Jane W. Reilly, for an order dismissing the petition of the plaintiff; on the motion of the defendants, LeRoy P. Reilly and Jane W. Reilly, to strike certain portions of her petition and to set forth what acts these defendants did to unduly influence Aldula Sharp and abuse their relationships; on the motion of the defendant, the Home Savings & Loan Association, to dismiss the petition for the reason that plaintiff is a stranger to the suit, is not a proper party plaintiff, is not duly interested in the real estate described in the petition, is not a relative or heir at law or next of kin of Aldula Sharp, deceased, and is not a devisee of Aldula Sharp, deceased; on the motion of the defendant, the Home Savings & Loan Association, to dismiss the action for lack of jurisdiction; on the motion of the defendant, the Home Savings & Loan Association, to strike certain portions of the plaintiff’s petition. The court upon consideration of said motions finds that said motions are well taken and should be sustained. The court further finds that the allegations of the petition tending to prove fraud are not applicable so long- as there are no allegations in plaintiff’s petition that the estate of Aldula Sharp is insolvent, and that the transfer herein was made to defraud creditors.

“The court, therefore, orders, adjudges and decrees that the' motions heretofore filed herein by the defendants, LeRoy P. Reilly and Jane W. Reilly and the Home Savings & Loan Association of Wapakoneta, Ohio, are hereby sustained and the plaintiff is given twenty (20) days in which to amend her petition.

“Plaintiff not desiring to amend her petition, the court orders, adjudges and decrees that said petition be dismissed and judgment rendered for the defendants against the plaintiff for costs. Exceptions saved to plaintiff.”

This is the judgment from which this appeal is taken.

The plaintiff assigns error in a number of particulars which are all to the effect that the judgment in every respect is contrary to law.

In its judgment sustaining each of said motions and dismissing the petition, the court was apparently laboring under the impression that the right to bring and maintain an action to set aside a deed executed by a testator upon the ground that it was procured through the exercise of undue influence vested in the executor of her estate.

This impression was incorrect.

In the case of Czako v. Orban, 133 Ohio St., 248, 13 N. E. (2d), 121, an action involving the setting aside of a deed for real estate executed by an intestate, it is held in the syllabus that “the right to cancel a deed obtained from a grantor by mistake, fraud, duress, or undue influence descends to his heirs if it existed unimpaired at the time of his death. ’ ’

While we have found no Ohio cases involving the right to maintain an action to set aside a deed executed by a testator, upon the grounds mentioned, we find the general rule, based upon the decisions of courts of last resort of other jurisdictions, which we approve as the correct rule applicable to the instant case, in conformity with the rule above mentioned in the Czako case, and further prescribing that the right to maintain such an action vests in the devisees and not in the executor or administrator of a person who died testate.

This general rule, as stated in 12 Corpus Juris Secundum, 1029, 1030, Cancellation of Instruments, Section 53, is as follows:

“After the death of a person who was a party to a conveyance and who had a cause of action for its cancellation, the proper parties plaintiff are his heirs, or if a will disposing of the land in question has been duly admitted to probate, his devisees and not his executor or administrator.”

Assuming, as we must assume, from the allegations of the petition in the instant case that the defendants Reilly procured the deed of the real estate in question through the exercise of undue influence over the testator, the testator, from the time she executed said deed until her death, had a cause of action for its cancellation which, by virtue of the provisions of her last will and testament making plaintiff her residuary devisee, vested in the plaintiff.

The right of plaintiff to have said conveyance set aside and her title to the real estate therein described quieted, is subject, of course, to the right of the executor to subject the real estate to the payment of any legacies or debts of the testator and the costs and expenses of the administration of testator’s estate, to the extent that funds of the estate are not available for the payment of the same.

As the plaintiff, as the residuary devisee of testator’s estate, had the legal right to bring and maintain her action to set aside said deed, she was not a stranger to the action but the real party in interest, and, as such right was wholly apart from and independent of the administration of said estate, nothing she did or failed to do in connection with such administration proceedings estopped her from bringing and maintaining her action, and the Common Pleas Court, being a court of general jurisdiction, had the power to hear and determine said cause. 6 Ohio Jurisprudence, 585, Cancellation of Instruments, Section 47.

The motions of the defendants to strike certain words and phrases from the petition are predicated upon the stated reason that certain allegations of the petition with reference to plaintiff being the residuary devisee of the real estate in question are improper for the reason that the testator did not own the real estate in question at the time of her decease or at any time since she made the will.

We have already determined that the plaintiff had the legal right to bring and maintain this action in her capacity as residuary devisee and that said right was dependent upon a cause of action for the setting aside of said deed, existing in the testator at the time of her death, and not upon testator having title to the real estate at the time of the execution of her last will and testament or at her death.

The motions of defendants are further directed to that part of the prayer of the petition asking that “the title to said property be quieted, ’ ’ for the above stated reason, and for the further reason that the action is not one primarily to quiet title but one to set aside a deed.

As we have already determined, the first stated reason would not warrant the striking of said phrase from the prayer of the petition nor would the second stated reason warrant such action, as the relief asked by way of quieting title is incidental to the relief asked by way of setting aside the deed.

The motion of the Home Savings & Loan Association to strike is further directed to the phrase in the prayer of the petition, “that the mortgage of the defendant, the Home Savings & Loan Association, be set aside and held for naught,” for the stated reason that there are no facts or allegations set out in the petition warranting the cancellation of said mortgage.

It is true that there are no allegations in the petition, which, if proved, would warrant a court to decree cancellation of the mortgage in question, but this does not authorize or require the striking of said phrase from the prayer of the petition, it being immaterial as to what relief is asked in the prayer, as it is presumed that a court will grant only such relief as is warranted by the pleaded and proven facts. This motion is, therefore, not well taken.

For the reasons mentioned, the judgment of the Common Pleas Court sustaining the motions to dismiss said petition, and dismissing the same, and sustaining said motions to strike is erroneous in that it is contrary'to law.

For this reason the judgment is reversed and the cause remanded to the Common Pleas Court with instructions to overrule all said motions, and for further proceedings according to law.

Judgment reversed.

Middleton, P. J., and Jackson, J., concur.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Cronin, Jr., et al., Appellees, v. Greenwald et al., Appellants.
    (No. 7517
    Decided January 14, 1952.)

      Messrs. Barbour, Kimpel & Allen, for appellees.

      Messrs. Weiland, Solinger S D’Angelo, for appellants.
   Per Curiam.

This is an appeal from a judgment for the plaintiffs by the Common Pleas Court in an action for breach of a written contract. The action was tried to the court without a jury upon an agreed statement of facts referred to in the judgment entry and filed by leave with the papers in the case. Attached to the agreed statement are an agreement and supplemental agreement, but, as the supplemental agreement has no relation to the provisions of the primary agreement pertinent to this controversy, no further reference to the supplemental agreement will be necessary.

The plaintiffs and others owned all the issued and outstanding capital stock of a corporation organized under the laws of Kentucky, known as the Pilgrim Distributing Corporation. The plaintiffs and the holders of the residue of the stock entered into a written agreement to sell the entire issue to the defendants for $32.50 per share, subject to certain conditions and recitals requiring the sellers to do certain things to enable the defendants to enjoy the benefit of their purchase. One of those provisions related to an asset of donbtfnl value growing out of the claims and counterclaims of Pilgrim Distributing Corporation and Galsworthy, Inc., against one another. It is that part of the written agreement that the plaintiffs assert imposed an obligation upon the defendants, which the defendants failed to perform to plaintiffs’ damage.

The claims of Pilgrim Distributing Corporation and Galsworthy, Inc., were the subject matter of litigation pending in Hamilton county, Ohio, and reference to this fact was made in several places in the agreement. The event showed that the claim was of no value, and this litigation relates only to the attorneys ’ fees that were incurred in the prosecution of the litigation.

The first mention of the Galsworthy, Inc., item in the contract is found in a paragraph relating to Charles J. Cronin, Jr. It recites: “As a further consideration for the purchase of said shares of stock, Charles J. Cronin, Jr., — hereby agrees with parties of the second part to place in escrow such amount in cash or at his option to furnish a bond — to protect and indemnify said Pilgrim Distributing Corporation against such sum or sums of money, if any — . Also for the purpose of protecting and indemnifying said Pilgrim Distributing Corporation for his proportionate share — of such sum or sums of money, if any, as it may have to pay by reason of claims or counterclaims by Galsworthy, Inc., —; attorneys’ fees in connection with the Galsworthy, Inc., litigation in the event there is no recovery from Galsworthy, Inc.”

In order to construe their language into a promise by the defendants to reimburse the plaintiffs, it would be necessary to effect a complete transposition. By the plain language, the obligation is imposed on the plaintiff Cronin, Jr., to indemnify and reimburse Pilgrim Distributing Corporation, and as the defendants were to become the owners of all its capital stock, they were the sole beneficiaries of the provision.

The next mention of the Galsworthy, Inc., item is found in a similar agreement to establish an escrow fund made by an associate of the plaintiffs as to the shares of stock owned by him. The language of the Cronin agreement — “Attorneys’ fees in connection with the Galsworthy, Inc., litigation in the event there is no recovery from Galsworthy, Inc.,” — is repeated in haee verba. This reference only emphasizes that Pilgrim Distributing Corporation was to be saved harmless against any claim for attorneys’ fees in the event there was no recovery from Galsworthy, Inc.

The next and last mention of the Galsworthy, Inc., item is contained in a recital that in fixing the selling price of the stock at $32.50 per share, the claim of $12,000 against Galsworthy, Inc., plus an estimated fee of $3,000, had been deducted. This was followed by a statement that as a further consideration for the sale at that figure, the defendants agreed “that Pilgrim Distributing Corporation will pay such actual court costs and expenses, exclusive of attorneys’ fees as may arise in connection with said litigation. ’ ’ This was followed by a provision that in the event there was a recovery against Galsworthy, Inc., the plaintiffs and their associates should get the benefit of the net recovery, calculated by deducting actual costs, expenses and attorneys’ fees in connection with the litigation.

Inasmuch as there was no recovery from Galsworthy, Inc., it would seem that as the event upon-which the provision last mentioned was to become operative had not transpired, the contract would stand as though it had never been in the contract, unless it can be said to shed some light on the meaning of the other provisions of the contract. And used for this purpose, it seems to us that it only emphasizes their meaning, that in order to get $32.50 per share the plaintiffs and their associates agreed that the attorneys’ fees in the Galsworthy, Inc., litigation were to be paid by them under the escrow agreement or in the event of a recovery in that litigation out of the proceeds of the recovery. At no point is there any agreement to pay by the defendants.

In fact, that last provision ends with the statement: “In the event there is no recovery from Galsworthy, Inc., parties of the first part agree to pay all attorneys’ fees in connection with said litigation as above provided. ’ ’

Counsel for defendants contend that the agreement recites that $3,000 was withheld to pay these attorneys’ fees. We do not so construe the language used. It is true the contract recites that in determining the selling price of $32.50 per share, the Galsworthy, Inc., item plus attorneys’ fees was deducted, but that is quite different from saying that amount was withheld to pay attorneys’ fees. If such had been the intent there would have been no occasion for the rather careful provisions to indemnify the defendants against these attorneys’ fees in the event there was no recovery. Having been fully indemnified by the deduction, any further indemnity would have been superfluous.

We are aware that under certain circumstances, a promise will be implied from the terms of a written contract, but certainly no such implication can arise to nullify express terms of the writing.

In 12 American Jurisprudence, at 767 et seq., Section 239, it is said:

“No terms or conditions can be implied which are inconsistent with the expressed'provisions. Express stipulations cannot, in general, be set aside or varied by implied promises. In other words, a promise is not implied where there is an express written contract, unless the express contract has been rescinded or abandoned. It is only where the express contract is silent that the implied contract can arise. It is said that where the meaning of a contract is plain, another meaning cannot be added by implication or intendment. The object of the interpretation of a contract is to ascertain the intention of the parties which must be determined from the language used in the instrument, and not from any surmises that the parties intended certain conditions which they failed to express. The absence of a provision from a contract is evidence of an intention to exclude it rather than of an intention to include it.”

See, also, 9 Ohio Jurisprudence, 399, Section 174.

For these reasons, the judgment is reversed and final judgment is rendered by this court in favor of the defendants-appellants.

Judgment reversed.

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


author: Matthews, J.

text:
    Bufler, Appellant, v. Pate et al., Appellees.

      (No. 995
    Decided May 28, 1952.)

      Mr. Frank F. Wessel, for appellant.

      Mr. John D. Andreivs, for appellees Antonio Pate and Innocenca Pate.
   Matthews, J.

This appeal presents the question of whether a note and second mortgage, given to secure it, for the deficiency due a mortgagee upon refinancing through Home Owners’ Loan Corporation is enforceable when they are executed as a part of the same transaction with full knowledge of the agent of Home Owners’ Loan Corporation, charged with the duty of closing the transaction.

This action is for a personal judgment upon the note and a foreclosure of the mortgage. The defendants Antonio Pate and Innocenca Pate were alleged to have executed the note and mortgage. In their answer they denied having executed those instruments, but that defense has been abandoned leaving only the contention that their enforcement would be against the public policy underlying the enactment of Home Owners’ Loan Act, Title 12, Section 1461 et seq., U. S. Code.

While Home Owners ’ Loan Corporation is a defendant and has filed an answer, the only relief prayed for by it is that its lien be declared a first lien and protected as such. Its answer contains the formal printed denial of the allegations of the petition for lack of knowledge. There never was any denial that Home Owners’ Loan Corporation’s mortgage is a first lien to secure the balance due it.

So the controversy is between the plaintiff-mortgagee and the defendants Antonio Pate and Innocenca Pate, the mortgagors, upon the note and mortgage which they admit they executed to evidence and secure the payment of a debt which they admit they owed, and which they admit are enforceable against them unless the obligation is against public policy and unenforceable for that reason.

The trial court found that the note and mortgage were against public policy and void, and entered judgment for the defendant mortgagors. The appeal is from that judgment.

Antonio Pate and Innocenca Pate owned a lot in the city of Hamilton, Ohio, upon which the plaintiff built a house for them; They financed the construction by borrowing from a building association, to which a first mortgage was given, and a second mortgage was given to the plaintiff for the balance of $700. This was in 1928. By 1934, the mortgagors were in default in making payments upon the mortgages and delinquent in payment of taxes. This caused them to seek help from Home Owners’ Loan Corporation. Home Owners’ Loan Corporation appraised the property at $5,500. It loaned the mortgagors $4,400, which was the maximum amount permitted. The amount of this loan was used to pay the first mortgage of $3,761.22 in full, the taxes amounting to $435.37, and the balance of $158.50 on the plaintiff’s second mortgage, upon which $862 was due at that time.

There is no dispute that Home Owners’ Loan Corporation was represented in all phases of this transaction by Frank Wessel, one of its attorneys. He testified that when he discovered that the available funds were insufficient to pay the second mortgage in full, he sent for the plaintiff and arranged with him to take the available balance of $158.50 to apply on the interest on the second mortgage, remit the balance of the interest and take a mortgage for $700, secondary to the Home Owners’ Loan Corporation’s mortgage. This plan was carried out. Wessel prepared the mortgages and had the parties execute them. Judging by the dates, Home Owners’ Loan Corporation’s mortgage was executed on May 15, 1934, and the second mortgage, to plaintiff, was executed on May 18, 1934, but the evidence is that the agreements as to the two mortgages were contemporaneous. Wessel’s only employment was by Home Owners’ Loan Corporation.

At the time this loan was made, the plaintiff signed a “Consent” in which he consented “If said refunding can be consummated, to accept in full settlement of the claim * * * the sum of $158.50 * * * and thereupon to release all the claim of the undersigned against said property.” He also signed an itemized statement showing the principal and the accumulated interest, totaling $862, and reciting that he consented to a reduction of $703.50.

An examination of the second mortgage, which is the subject of this foreclosure action, discloses that it is dated May 18, 1934, and contains a provision binding the mortgagee “not to foreclose this mortgage for a period of three years from date. ’ ’

The only evidence on the subject of Wessel’s authority and the rules promulgated by Home Owners ’ Loan Corporation and in force at that time is found in his testimony. He testified that he and various other representatives of Home Owners’ Loan Corporation at and prior to that time met in the office of the state attorney for Home Owners’ Loan Corporation, that the regulations applicable to making loans were discussed, that they were never given written instructions, and that the only regulation relating to second mortgages at that time was the provision that it could not be foreclosed for three years. He testified also that the regulations limited the Home Owners’ Loan Corporation’s loan to not more than 80 per cent of the appraised value of the property.

We are favored with the opinion of the trial court in which reference is made to a regulation of Home Owners’ Loan Corporation in force at the time, permitting second mortgages when the first and second mortgages combined would not exceed 90 per cent of the appraised value of the property and would not work an undue hardship upon the borrower. We fail to find any evidence of this rule in the record. However, there is no question that these combined loans did not exceed 90 per cent of the appraised value.

We also learn from the trial court’s opinion that his judgment for defendants was not based on any finding of fraud, secrecy, duress or collusion on the part of the plaintiff. His judgment was based on his finding that full disclosure had not been made, and that finding was based on his conclusion that as a matter of law, notice to Wessel, the representative of Home Owners ’ Loan Corporation, was not notice to his principal, notwithstanding that such notice was acquired while he was engaged in the performance of the duties he was employed to discharge. The court laid stress on the fact that Wessel prepared the note and second mortgage, but there is no evidence of a dual employment. He prepared them, it seems, in the belief that his duty to Home Owners’ Loan Corporation included the doing of all things necessary to the completion of the transaction, including negotiating with the holder of the second mortgage to get his consent to release it and take a new second mortgage for a part of the original debt.

Both parties cite Home Owners’ Loan Corporation v. Baker, 73 Ohio App., 195, 55 N. E. (2d), 426, and Dayton Mortgage & Investment Co. v. Theis, 62 Ohio App., 169, 23 N. E. (2d), 511. In the last cited case the court found that there was no evidence that any representative of Home Owners’ Loan Corporation knew of the collateral agreement between the borrower and the second mortgagee, and for that reason held the second mortgage to be void. In the first cited case the validity of the second mortgage was sustained because the court found that Home Owners’ Loan Corporation had notice. Neither involved the question of whether notice to the attorney employed by Home Owners’ Loan Corporation to examine the title and attend to all the details of closing the transaction constituted notice to Home Owners’ Loan Corporation. Indeed, in the Baker case the court expressly disclaimed any intention of deciding that point.

The trial court relied on Markowitz v. Berg, 125 N. J. Eq., 56, 4 A. (2d), 410, for his conclusion that notice or knowledge of the “fee” attorney of Home Owners’ Loan Corporation was not notice to or knowledge of Ms principal. The court in that case predicated its conclusion on the evidence showing the nature and extent of the attorney’s authority. The conclusion was that it showed that the attorney was a special agent and, therefore, had no implied authority. There is no such evidence in this case. On the contrary, the evidence in the case at bar shows the attorney taking full charge of the transaction and making the agreement to give the plaintiff a second mortgage at the very time and as a part of the transaction whereby Home Owners’ Loan Corporation took its mortgage.

Furthermore, in Markowitz v. Berg, supra, on a prior date, the attorney for plaintiff had written to the “fee” attorney, agreeing, not only to accept $200 in full settlement of the judgment, which was the lien in question, but expressly agreeing that he would not proceed on the judgment against the judgment debtor. This letter had been forwarded to Home Owners’ Loan Corporation, and it was not until the time of the closing that the plaintiff insisted upon a second mortgage. The defendant at first refused, and yielded only when convinced that the loan would not be granted otherwise. No such situation is shown by this record. This record shows voluntary action, with full knowledge by all the participants.

Now what is the touchstone by which to determine the validity of a second mortgage taken at the time of a refinancing with "Home Owners’ Loan Corporation? We are of the opinion that the cases furnish the answer with reasonable clarity. That answer is that a second lien taken upon a refinancing with Home Owners’ Loan Corporation is not ipso facto unlawful and void, and its validity is to be determined by the application of time-honored principles of fair dealing.

The facts of Lavery v. Rizza, 126 Conn., 132, 9 A. (2d), 819, are identical with those in the case at bar. There, as here, the three participants in the transaction were the mortgagor, the title-search attorney for Home Owners’ Loan Corporation, and the holder of the second mortgage. There, as here, the second mortgagee signed a consent similar to that signed by the plaintiff in this action. There, as here, the title-search attorney, prepared both mortgages, and both mortgages were executed on the same day. The court sustained the validity of the second mortgage. At page 137, the court said:

“In the case before us both the HOLC mortgage and the Mannino mortgage were prepared in the office of the company which, as regards the former, was acting for the HOLC, and the entire transaction was completed on the same day. While the finding is not explicit as to the authority of the Kelsey Company, as the agent of the HOLC, the evidence brought before us by the defendants in the effort to correct this part of the finding is that the Kelsey Company made the arrangements and closed the deal. The knowledge it had of the mortgage to Mannino must have come to it in the very course of the performance of its agency for the HOLC in securing the mortgage it took. Under such circumstances that knowledge is to be imputed to the HOLC.”

And, at page 136, ibid, the court cited Dayton Mortgage & Investment Co. v. Theis, supra, and, after quoting with approval from the opinion, summarized the conclusion as follows:

“In that case it was held that where full disclosures are made and in the absence of fraud, secrecy, duress or collusion, the home owner may contract with the original lien holder to take care of the difference between the amount due and the face of the HOLC bonds, provided the total does not exceed the HOLC appraisal. If the representatives of the HOLC know that it is proposed to give a second mortgage and with that knowledge are willing to accept the first mortgage, we see no reason why the second mortgage should be invalid as against public policy.”

In the opinion in McVicar v. Peters, 12 Wash. (2d), 92, 120 P. (2d), 485, the court reached the same conclusion, and, at page 96, said:

“These cases, together with cases therein cited, and many others which could be cited, show that the broad contention that a second mortgage, taken in connection with an HOLC refinancing, is ipso facto void as against public policy, is wholly untenable. If there can be said to be a general rule to that effect — which we doubt — it is manifestly subject to exceptions.”

And, upon the subject of notice, at page 100, ibid, the court said:

“The question is not what authority did the HOLC representative have to perform a certain act for his principal but — Is the knowledge which a local representative of the HOLC acquires in maldng an HOLC loan imputable to his principal? That question is, we think, satisfactorily answered in one of the quotations made from Lavery v. Rizza early in this opinion. A negative answer would, obviously, be absurd. This great corporation carries on business in every state of the Union and with literally millions of people. The head office at Washington could not possibly have actual knowledge of the details of all these transactions, or of everything that its representatives learn in dealing with its customers. If the knowledge of the representatives of the corporation, acquired while making loans in its behalf, be not imputable to the corporation, how could anyone safely transact business with the corporation at a local office?”

See, also, Williston Savings & Loan Association v. Kellar, 74 N. D., 338, 22 N. W. (2d), 30.

For these reasons, the judgment is reversed and the cause remanded with instructions to enter judgment for the plaintiff.

Judgment reversed.

Hildebrant, P. J., and Matthews, J., concur in the syllabus, opinion and judgment.


text:
    Archer et al., Appellants, v. Huntington National Bank, Appellee.
    (No. 4711
    Decided March 7, 1952.)

      Mr. John J. Chester and Mr. Robert P. Duncan, for appellants.

      Messrs. Wright, Rarlor, Purpus, Morris & Arnold, for appellee.
   Per Curiam.

This is an appeal on questions of law from a judgment of the Common Pleas Court of Franklin County sustaining a general demurrer to plaintiff's ’ petition and dismissing the action, the plaintiffs having elected not to plead further.

In plaintiffs’ petition it is alleged that on February 16, 1937, the plaintiffs employed the defendant bank as agent to sell certain securities owned by the plaintiffs and apply the proceeds toward the liquidation of a loan of the plaintiffs. The defendant oroceeded to sell the securities and between February 20, 1937, .and March 12, 1937, sold all of them except a block of 1,200 shares of stock of the Buckeye Steel Castings Company. Plaintiffs allege that defendant neglected to sell or attempt to sell the 1,200 shares of stock which it could and should have sold on March 4, 1937, and that defendant sold the stock on November 6, 1950, on a low market. Plaintiffs allege that had the bank sold the stock on March 4, 1937, the plaintiffs would have realized $22,138.55 over and above the amount necessary to pay off said loan with interest in full. Plaintiffs allege further “that by the negligence of defendant in not selling or making any attempt to sell said twelve hundred (1,200) shares of stock of the Buckeye Steel Castings Company on March 4, 1937, when defendant could and should have sold same, they have been damaged in the amount of $22,138.55, for which sum with interest from March 4, 1937, plaintiffs ask judgment against the defendant.”

To this petition defendant filed a general demurrer which was sustained on the ground that the right of action accrued on March 4, 1937, and that since more than four years had elapsed before the institution of the action, the action was barred by the statute of limitations applicable to tort actions. Section 11224, General Code.

The action sounds in tort. A canse of action in favor of a principal against an agent based on the negligent act of the agent accrues and the statute of limitation begins to run when the alleged negligent act is committed. The fiduciary relation existing between the parties does not operate to toll the statute of limitations, even though the extent of the damages could not then be determined. In the case at bar, the cause of action accrued March 4, 1937, and was barred by the four-year statute of limitation applicable to tort actions. Section 11224, General Code. This ruling is supported by the case of Minster Loan & Savings Co. v. Laufersweiler, 67 Ohio App., 375, 36 N. E. (2d), 895 (motion to certify overruled January 15, 1941), which was an action by the corporation against the former officers and directors to recover damages for alleged ultra vires and negligent acts. The court held that the action accrued when the negligent acts were committed and this date being more than four years prior to the bringing of the action, the action was barred. The court held this to be the rule, even though the damages may not be discovered until later or the actual injury is subsequent, and could not immediately operate. In support of this rule, the court cited 1 American Jurisprudence, 451, 452, Section 60; Kerns v. Schoonmaker, 4 Ohio, 331, 22 Am. Dec., 757; and Williams v. Pomeroy Coal Co., 37 Ohio St., 583.

Plaintiffs claim they could not determine their damage until the stock was actually sold, and, therefore, the cause of action did not accrue until the stock was sold. This contention is answered by the words used by the Supreme Court of the United States in Wilcox v. Exrs. of Plummer, 29 U. S. (4 Peters), 172, 7 L. Ed., 821, cited by the court in Kerns v. Schoonmaker, wherein the Supreme Court said:

“When the attorney was chargeable with negligence, his contract was violated, and the action might have been sustained immediately. Perhaps in that event, no more than nominal damages may be proved, and no more recovered; but, on the other hand, it is perfectly clear, that the proof of actual damage may extend to facts that occur and grow out of the injury, even up to the day of the verdict. If so, it is clear the damage is not the cause of action. ”

The plaintiffs rely on the case of State, ex rel. Lien, Supt. of Banks, v. House, 144 Ohio St., 238, 58 N. E. (2d), 675, which is distinguishable on the facts from the instant case and is not controlling. In the Rouse ease the court held that under an express trust, the cause of action against the trustee accrued when the trust was terminated. In our opinion this principle of law has no application here.

As we find no error in the record prejudicial to the rights of the plaintiffs, the judgment is affirmed.

Judgment affirmed.

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


author: Skeel, P. J.

text:
    The State, ex rel. Weber et al., Appellants, v. Vajner, Bldg. Commr., Appellee.
    (No. 22358
    Decided March 3, 1952.)

      Mr. Lody Huml and Mr. R. D. Metsner, for appellants.

      Messrs. Green, Latische & Wilmot, for appellee.
   Skeel, P. J.

This appeal comes to this court on questions of law from a judgment for the defendant entered by the Common Pleas Court of Cuyahoga County. The action is one in mandamus seeking to direct the defendant (building commissioner of Orange village) to issue a building permit for the construction of a single dwelling house on a lot owned by the plaintiffs on Walnut Hills road in said village.

The plaintiffs purchased the lot November 3, 1945. It fronts on Walnut Hills road (extended). Walnut Hills road runs south from Kinsman road in said village and for about 2,200 feet is a duly dedicated and accepted public highway. The Walnut Hills Homesteads Inc. (the allotor) extended Walnut Hills road further south to Harvard road. Such extension was graded and surfaced but was not dedicated and accepted as a public street by Orange village.

The plaintiffs, on July 5, 1949, presented plans and specifications and made application for a building permit to build a single residence on the aforesaid lot, a permit being refused for the reason that the lot upon which the building was to be built did not front on a dedicated public street in the village.

When the plaintiffs purchased the lot it was not so restricted by the zoning ordinance of the village, but on April 22, 1947, the village amended its zoning ordinance to provide that in all class U-l districts covering single residential property, every dwelling erected in the village shall have a frontage on a public highway or upon a public street which has been duly dedicated and accepted for public use.

The record discloses that on March 18,1947, Charles Miles, who was then the owner of a lot fronting on Walnut Hills road extension, applied for a permit to construct a single family residence thereon, and on April 22, 1947, the date the zoning ordinance was amended as herein set forth, the building commissioner issued a permit for the construction of such building on condition that the applicant sign a statement to the effect that the village is not obliged to furnish village services until such time as that portion of Walnut Hills road extension has been dedicated and accepted by the village. Whereupon, the house was constructed in accordance with such permit.

In the summer of 1946, Ruth Fieldhouse, who was the owner of a lot fronting on Walnut Hills road extension, made application for a permit to commence work preparatory to constructing a single family dwelling house, and on August 13, 1947, an application was made to permit construction of such single family dwelling, which application was refused by the building commissioner of the village. Thereafter, upon an action being filed and tried in Common Pleas Court of Cuyahoga County, the court ordered the issuance of such permit, and the permit was issued May 18, 1949, in accordance with the judgment. The single family dwelling house has since been constructed on said lot.

It is the claim of the plaintiffs that the amended zoning ordinance is invalid and void for the reason that it has no substantial relation to the public health, safety, morals or general welfare of the people of the village, and is, in fact, discriminatory and destructive of plaintiffs’ property rights, and that the plaintiffs’ rights were prejudiced by the judgment of the Common Pleas Court sustaining the validity of such zoning ordinance and refusing the plaintiffs the right to a building permit.

The only question presented by this appeal, therefore, is whether the amended zoning ordinance prohibiting the building of residences on lots which do not front on a dedicated street is a proper exercise of the police power.

It is for the village council and not the courts to determine the legislative policy of the village, and unless it is made clearly to appear that the ordinance in question violates the constitutional rights of the plaintiff it must be sustained. 8 Ohio Jurisprudence, 274, Constitutional Law, Section 169.

The village of Orange is located in the outlying, sparsely settled, and, in part, rural portion of the county, in which some part of the land is still devoted to farming. While this fact should not, and does not limit the right of the village to impose reasonable restraints upon the use of property in its development for residence and business purposes by a comprehensive zoning ordinance, yet the exercise of the police power must in general be kept within the needs of the people under the existing conditions. It is the contention of the village that in protecting the health and safety of its citizens, properly constructed highways which will provide ready access to all inhabitants are necessary, and that the requirements of dedication give the village control of the necessary improvements that must be installed before a street will be accepted by the village and, as such, used in the development of residential areas. Just what the minimum requirements are to be, or whether Walnut Hills road (extended) meets the standards, is not disclosed by the evidence. Upon this subject the record is completely silent.. We are unable to say, therefore, whether the village requirements are reasonable or prohibitive.

It is further suggested that the restriction prohibiting the building of a residence on undedicated streets will prevent the subdivision of vacant land for allotment purposes without the installation of improvements meeting the minimum requirements of the village. If this be so, the pressure is being applied in the wrong place. We are in full accord with the economic advantages to be found in planned urban developments, but the place to begin such a program is with those engaged in creating new allotments. Under the ordinance here being considered, lot purchasers, and not the real estate promoters, are being penalized for what is held by the ordinance to be improper developments. If this be the sole justification for the ordinance it must be held unconstitutional as unreasonable and confiscatory.

The validity of the ordinance here being considered must be judged with regard to its relationship to the protection of the health, safety, morals and welfare of the citizens of the village of Orange. The record fails to show a single municipal service which the village is prepared to extend to its citizens, including the plaintiffs, that would in any way be affected by a failure to dedicate for public use the street upon which plaintiff’s property fronts. If the condition of the highway upon which a residence is situated should limit or prevent the village from rendering an otherwise available municipal service, such limitation or denial of service should be the concern of the householder and not the village.

The evidence does not disclose a single fact or circumstance that in the slightest degree would justify preventing the plaintiffs from making reasonable use of their land. In fact the provisions of the ordinance are such that the plaintiffs will be unable to make any use of this property until the street is dedicated, a requirement which they are helpless to accomplish.

In 7 McQuillan on Municipal Corporations (3 Ed.), 490, Section 24.505, the author says:

“Prohibition of buildings as distinguished from their regulation cannot be ordained by the state or a municipal corporation unless the prohibited building is per se dangerous to public health and safety. * * *”

In the case of Pforzheimer v. Seidman, 99 N. Y. Supp. (2d), 87, the Board of Appeals of the incorporated village of Woodburgh, Nassau county, New York, had denied the petitioner the right to build an apartment house on property owned by the appellant, for two reasons, first, because (as was required by the zoning ordinance) a sewer connection could not be made to a street sewer, and, second, because a part of the plot of ground to be used extended 25 feet into zone “B” which was restricted to use for residence purposes. The zoning ordinance provided in part:

“Section 16. No apartment house shall be constructed

( ( # # *

“(c) Unless the sewage from such apartment house shall be conveyed to and a connection made with a street sewer or a combined street stormwater drain and sewer.”

There was no street sewer of any kind in the street. The court held that where a zoning ordinance prohibited construction of an apartment house unless sewage connection could be had, it arbitrarily deprived the property owner in apartment house zones from lawful use of his land, since there was no street sewer in the area and, therefore, such ordinance was illegal, unreasonable and unconstitutional.

This judgment was reversed by the appellate division (278 App. Div., 780, 103 N. Y. Supp. [2d], 886). It is to be noted, however, that the reversal in no way disturbed the principle of law on which the trial court founded its decision. The appellate division held that the proof before the board did not establish “that the use of the premises for one of the uses permitted in the D district would not yield a reasonable return * * V’ In other words, the reversal was on the facts, not because of the rule of law applied by the trial judge.

In 37 American Jurisprudence, 908, Section 280, footnote 1, the author says:

“If any doubt exists as to the extent of a power attempted to be exercised by a municipality out of the usual range, or which may affect the common-law right of a citizen, it is to be resolved against the municipality. ’ ’

We must conclude that the zoning ordinance of the village of Orange which prohibits the plaintiffs from making use of their property when the proposed use in no way affects the public health, safety, morals or welfare of the citizens of the village, is unconstitutional and void.

The judgment of the Common Pleas Court is, therefore, reversed and the cause is remanded with instructions to enter judgment directing the building commissioner of the village of Orange to issue a building permit as requested by the plaintiffs’ application.

Judgment reversed.

Hurd and Thompson, JJ., concur.


author: Guernsey, J.

text:
    Garrison, d. b. a. Liberty Mills Sale & Daily Hog Market, Appellee, v. Place, Admr., Appellant.

      (No. 1482
    Decided February 7, 1952.)

      Messrs. Kaylor & Kaylor and Mr. Charles P. Schaber, for appellee.

      Messrs. Baker, Hostetler & Patterson, for appellant.
   Guernsey, J.

This is an appeal on questions of law. The action is one brought in the Common Pleas Court of Crawford County by Dwane Garrison, doing business under the style and firm name of Liberty Mills Sale & Daily Hog Market, North Manchester, Indiana, as plaintiff, against The Farmers and Citizens Bank & Savings Company, Bucyrus, Ohio, a banking corporation, J. E. Faulkner, Bucyrus, Ohio, and H. E. Sherk, Bucyrus, Ohio, and H. E. Sherk, order buyer of livestock, a partnership, as defendants. Subsequent to the commencement of the action J. E. Faulkner died, and H. F. Place who had been appointed as administrator with the will annexed of his estate was duly substituted in the place of said Faulkner as a party defendant to said action.

In his third amended petition the plaintiff, among other things, alleged that the said Sherk and Faulkner had, during the times mentioned in the petition, been engaged as partners under the name of H. E. Sherk in the purchase and sale of livestock and that there was due and payable to the plaintiff from H. F. Place, administrator with the will annexed of the estate of J. E. Faulkner, deceased, for livestock sold and delivered to the said H. E. Sherk and J. E. Faulkner, doing business under the name of H. E. Sherk, the sum of $38,-191.87 with interest thereon from January 28, 1947. The cause was Submitted to the jury on the third amended petition of the plaintiff and the answer of J. F. Place, as such administrator, the other defendants, including the said H. E. Sherk, who had been adjudicated a bankrupt, having been theretofore dismissed as parties to said cause.

On the trial of said cause the jury returned a verdict in favor of the plaintiff and against the said administrator in the sum of $47,739.84. Motion for new trial having been overruled, judgment was duly entered upon the verdict. It is from this judgment that this appeal is taken by the said administrator.

The defendant-administrator assigns error in a number of particulars, but in the view we take of this case a consideration of his first assignment of error that “the trial court erred in overruling defendant’s motions for a directed verdict” will be dispositive of the entire case so that such assignment will be the only one considered.

In considering this assignment we have carefully checked the bill of exceptions and have found that during all the times complained of in the amended petition herein there existed a written agreement between Sherk and Faulkner, under the terms of which the said Faulkner loaned to the said Sherk from time to time various sums of money for the purpose of enabling the said Sherk to carry on the business of buying and selling livestock; that under the terms of said agreement certain fixed charges were made for the use of funds so loaned by the said Faulkner to said Sherk for the purpose aforesaid; that said agreement constituted the relationship between the parties thereto as one of creditor and debtor and was so drawn as to exclude any relationship as partners or joint adventurers ; that the said Faulkner, as shown by documentary evidence in the cause, kept a complete and accurate record of all transactions had between him and Sherk pursuant to said agreement; and said record shows conclusively that the only relationship between Faulkner and Sherk with reference to the livestock business conducted by Sherk was that of debtor and creditor. The bill of exceptions further discloses that the plaintiff was not a witness at the trial of said action, and that there is no evidence tending to prove that the plaintiff had any notice or knowledge prior to the times he made the sales of livestock, which are the subject matter of this action, of the existence of Faulkner or of any relationship between Faulkner and Sherk, or of any statements or declarations made by said Faulkner concerning his relationship to the livestock business conducted by Sherk, which precludes the plaintiff from claiming any partnership between the said Faulkner and Sherk by way of estoppel.

The evidence relied upon by plaintiff as tending to prove a relationship other than creditor and debtor between the said Faulkner and the said Sherk is substantially as follows:

a. Testimony of various witnesses to the general effect that Faulkner was active in promoting the livestock business of Sherk.

b. Testimony of Sherk that during the years of 1946 and 1947 he and Faulkner divided (split) the “profits” made on hogs, that Faulkner received on the division of such “profits” “$400 to $500 a week,” and that when the profits were divided with Faulkner they included the profits that were made upon invoices that Faulkner gave Sherk a check for.

c. Testimony of Sherk to the effect that ‘1 about two months after the 19th day of April, 1946,” Faulkner complained to him that “he was not making enough divvy on the transactions for the amount of money involved” and that “he was entitled to it and” they “should split half of what” they “were making.” That Sherk said to Faulkner: “Do you want half of what we make and be partners; is that the way you want it?” and Faulkner said “That’s the way it should be” and that from that time on “That’s the way we [Sherk and Faulkner] tried to carry it on.”

d. The testimony of one Connor and one Kirchner to the effect that Faulkner had stated to Connor and Kirchner that he and Sherk were partners in the business.

The question to be determined is whether the above mentioned evidence is sufficient to warrant the submission to the jury of an issue as to whether Sherk and Faulkner were partners or joint adventurers in said livestock business. We will consider such items of testimony in the order above set forth.

Participation in the profits of a business, though strong evidence of a partnership, is not necessarily the decisive factor. The persons making the profits must take them as principals in a joint business in which each has an express or implied authority to bind the other. Joint adventures are governed by the same rules. With this in mind we shall consider such items of testimony in the order above set forth.

a. The evidence in the case shows conclusively that Faulkner was realizing considerable sums of money upon his loans to Sherk. pursuant to the terms of his written agreement with Sherk and that Faulkner’s efforts to promote said livestock business are attributable to his interest in maintaining or increasing his income from loans made to Sherk, and the evidence of such promotion does not in any way tend to prove that he was a partner or joint adventurer in said business.

b. In his testimony upon his examination before the referee in bankruptcy, Sherk testified positively that Faulkner was not a partner in and had no interest in the livestock business conducted by Sherk. In this cause he was questioned about such former testimony and, when asked, did not deny that he had so testified. It was the function of the jury to determine which part of Sherk’s testimony was credible; and if there was evidence in the case tending to prove that Sherk and Faulkner were principals in the business and each had express or implied authority to bind the other, this evidence would require the submission to the jury of the question as to whether they shared in the profits of the business.

c. There is no evidence in the record other than the statement made by Sherk, mentioned in this item, tending to prove that Sherk and Faulkner after the date referred to in this item carried on the business as partners or divided the profits. This being the case, Sherk’s statement, “That’s the way we tried to carry it on, ’ ’ is too indefinite and uncertain as to have any probative value.

d. The statements made by Faulkner to Connor and Kirchner that he and Sherk were “partners” in the business is a mere conclusion of law not warranted by any evidence in the case and did not tend to prove either a division of profits or mutual agency.

In all cases except partnership by estoppel, proof of the essential elements of partnership is necessary for the submission of the issue of the existence of a partnership to the jury. The same rule applies to proof of a joint adventure. While, as above stated, item b of the evidence above referred to was sufficient if there was evidence in the case tending to prove mutual agency to warrant the submission of the question of division of profits in the hog business to the jury, we find on careful examination of the bill of exceptions no evidence warranting the submission to the jury of the question as to whether Faulkner and Sherk were principals in a joint business in which each had an express or implied authority to bind the other, but on the other hand find the following testimony of Sherk showing that neither had such authority:

“570. Do you recall being asked these questions and giving these answers which I am about to read to you, as a part of your deposition in the Kirchner case that I referred to a moment ago. Mr. Sherk [Pages 360 and 361 of the transcript] : ‘He’ refers to Mr. Faulkner.

“ ‘Q. He could not go out and buy any stock and charge it to you? A. No.

“ ‘Q. And you could not buy any stock and charge it to him? A. No.

“ ‘Q. On these stock barn deals, they contacted him? A. Yes.

“ ‘Q. He had no general authority to bind you for anything he did? A. No.

“ ‘Q. And you had no authority to bind him? A. I don’t believe so.

“ ‘ Q. Y ou know the fact to be that you did not have, is that right? A. Yes.

“ ‘ Q. And you never had any intention to go out and bind him for anything? A. No.

“ ‘Q. And he had no intention, so far as you know, to go out and bind you, did he? A. No, sir.

“ ‘Q. And you never did? A. No.’

“Q. Do you reoall giving that testimony as I have read it? A. No; I don’t recall it. I guess I must have.

“571. You would not say you had not so testified back in September of 1948? A. No, sir.”

As there was no evidence tending to prove that Sherk and Faulkner were principals in a joint business in which each had an express or implied authority to bind the other, there was no proof of one of the essential elements of partnership or of joint adventure and the court erred in overruling defendant’s motions for a directed verdict. For this error the judgment will be reversed and this court, rendering the judgment the trial court should have rendered, will render final judgment in favor of defendant-administrator and against plaintiff, at costs of plaintiff and plaintiff will be adjudged to pay the costs of this appeal.

Judgment reversed.

Middleton, P. J., and Jackson, J., concur.


author: Fess, J.

text:
    The State, ex rel. Meng, Appellee, v. Todaro, Appellant.
    (No. 263
    Decided January 28, 1952.)

      Mr. Myron A. Bosentreter, prosecuting attorney, and Mr. Thomas Murray, for appellee.

      Messrs. True <& Meyer, for appellant.
   Fess, J.

Defendant was convicted of the offense of contributing to the delinquency of a minor child and was sentenced to pay a fine- of $300 and committed to the Toledo workhouse for a period of six months. Defendant has filed herein notice of appeal as of right, under Section 13459-4, General Code, and, in compliance with Section 1639-51, General Code, has filed herein a motion for leave to appeal.

Section 13459-4, General Code, provides that an appeal from a judgment or final order of a court inferior to the Court of Appeals, unless otherwise provided, may be filed as a matter of right within thirty days after sentence and judgment.

Section 1639-51, General Code, provides that from prosecutions of adults under Chapter 8, Juvenile Court (Section 1639-1 et seq., General Code), an appeal on a question of law may be taken to the Court of Appeals of the county under laws governing appeals in other criminal cases to such Court of Appeals. The section then goes on to recite that “an appeal shall not be taken to the Court of Appeals except upon good cause shown, upon motion and notice to the prosecuting attorney, as in civil cases, or unless such motion is allowed by such court. ’ ’

As we construe the section, good cause is shown for the granting of leave to appeal upon a satisfactory showing to the court that a substantial question relating to the trial and conviction of the defendant is raised incident to the appeal. The following questions are presented upon the appeal:

1. The affidavit upon which the defendant was tried does not charge an offense against the laws of Ohio.

2. The proof failed to show that any offense was committed in Ottawa county.

3. The verdict is against the weight of the evidence.

Under the circumstances, the application for leave to appeal does not appear to be frivolous or a sham and we find good cause shown, and the application is allowed.- Bill of exceptions, assignments of error and brief of appellant having been filed, the appellee is granted leave to file a reply brief on or before February 4,1952.

Motion sustained.

Conn and Savord, JJ., concur.


author: Conn, J.

text:
    In the Matter of the Appeal in Joint County Ditch, Known as Packer Creek, Petitioned for by Schulte et al.

      (No. 262
    Decided May 26, 1952.)

      Mr. E. Donald DeMuth, for appellee petitioners.

      Mr. Myron Rosentreter, prosecuting attorney, for appellee county commissioners.

      Mr. A. W. Bachman, Mr. Wm. L. Moon, Mr. Oliver True, Mr. Morton Neipp, Mr. Donald Wargowshy and Miss Luella Ze-hner, for appellants.
   Conn, J.

On April 29, 1944, a petition, with bond pursuant to Section 6444, General Code, was filed with the auditor of Ottawa county by Fred Schulte and others, addressed to the county commissioners of Ottawa, Wood and Sandusky counties, for ‘ ‘ reconstruction by deepening and widening where necessary of Packer creek and its extension into Wood county known as Two-Root creek.” It was averred that “the construction of the improvement is necessary and will be conducive to the public welfare.” The petition set forth the “course and termini” of the proposed improvement as commencing in Wood county and running in a northeasterly direction through Ottawa county “to its outlet in Toussaint river, or to a sufficient outlet, being in all a distance of approximately 18 miles.” The names and addresses of several property owners residing in Sandusky county were designated in the petition as interested in the improvement.

The nature of the work petitioned for included the deepening and widening of Packer creek where necessary, and also “the enlargement of any bridges which are not of sufficient size.”

Section 6537, General Code, provides:

“* * * the joint board of county commissioners may do and perform all the things that the commissioners may do in a single county improvement, and shall be governed by and be subject to all the provisions of the chapter [G. C. Sections 6442 to 6508] relating to single county ditches in so far as applicable.”

The auditor of the county in which the petition is filed shall act as clerk of the joint board (Section 6538, General Code) and if the joint board of county commissioners finds for the improvement, the board may designate the engineer of any one of the interested counties to prepare the survey, reports and schedules, but the engineers in each interested county shall assist in making the reports and schedules (Section 6541, General Code).

Notice of the filing of such petition was duly given to the commissioners of the three counties by the auditor of Ottawa county, as provided for in Section 6539, General Code, fixing the time and place of the joint meeting of the county commissioners of the three counties. Thereafter the commissioners held such joint meeting as required by Section 6447, General Code, fixed a time for view and the first hearing on the petition, and also designated E. A. Guth, auditor of Ottawa county, to act as clerk of the board. Thereupon, the auditor of Ottawa county gave due notice of the proceedings to the owners of the land affected, as listed in the petition, describing the route, time fixed for view by the joint board of commissioners, and the time and place of first hearing.

Subsequently, on June 2, 1944, an application for extension of the improvement, with list of owners affected, was filed with the joint board of commissioners pursuant to Section 6449, General Code. This extension, as applied for, added several miles upstream and extended the total length of the improvement to about 25 miles.

Later a petition was filed to amend the engineers’ report so as to include removal of the buttresses in the New York Central bridge at Genoa, but this petition was dismissed by the board and later was withdrawn. Stella Tabbert and also Charles and Mary Nehls asked that the report be amended to include removal of the dam in Crane creek at Luckey, Ohio. It does not appear that said requested amendment was directly acted upon by the board.

Pursuant to the previous action of the joint board and notice given to the owners of land affected by its improvement, a meeting was held on June 14, 1944, at which time the board heard the evidence for and against the proposed improvement and extension, and by resolution duly adopted pursuant to Section 6452, General Code, found that the improvement and extension as petitioned for was necessary, that it will be conducive to the public welfare, and that the costs will be less than the benefits. The board granted the prayer of the petition.

The board also fonnd that the route and termini of the proposed improvement and extension “are the best and are hereby adopted,” and also directed the engineers of Wood and Ottawa counties to make the survey of this improvement and the engineer of Ottawa county to prepare the plans, specifications and estimates, with suitable maps and profiles, set construction stakes, and perform “such other duties as required by law” under authority of Section 6541, General Code.

It was further ordered that the engineer file with the auditor of Ottawa county “all of said maps, profiles, schedules and reports prepared by the engineers on September 1, 1944, at 10 o’clock a. m.”

On applications made from time to time by the engineer of Ottawa county, the board granted extensions to complete and file the survey, reports and schedules.

The board, on February 3, 1950, by resolution duly adopted, reaffirmed its earlier finding, made June 14, 1944, and also approved the report made by the engineers of Wood, Sandusky and Ottawa counties. This report was filed with the auditor of Ottawa county March 15, 1950, pursuant to the action taken by the board on February 3,1950. On the day the report was filed, the board fixed April 14, 1950, as the date for the final hearing on the engineers’ reports, including construction specifications, schedules, estimated assessments and claims for damages.

As provided for in Section 6456, General Code, notice of the schedules of estimated assessments were given by mail to each of the several owners whose names were on the engineers’ schedule and also the date of hearing by the board. The total estimated cost of the improvement, including interest on bonds, amounted to $120,500, not including claims for damages.

Numerous protests on acreage and assessment and also claims for damages were filed. Hearings before the board were adjourned from time to time. Certain minor adjustments were made by the board on protest as to acreage and estimated assessments.

Pursuant to the provisions of Sections 6459 to 6463, both inclusive, General Code, the board held its final hearing on May 17, 1950. Claims for damages had been filed by numerous property owners, aggregating $118,000. These claims were severally considered by the board and each and all disallowed. The board approved the schedule of assessments to be paid by each of the three counties and certain political subdivisions, determined the time to be given the owners in which to pay the assessments, fixed the time for letting the contracts, and directed that notice be given of the time when and place where bids would be received for the construction of such improvement.

Section 6463, General Code, makes provision for appeal as follows:

“Any owner opposed to the granting of the petition, or any owner opposed to further proceedings in the improvement; and any owner who claims that the assessment levied against him or it is excessive, or is not in proportion to benefits, may appeal from any order made pursuant to this section, as provided in this chapter [G. C. Sections 6442 to 6508].”

Separate appeals to the Common Pleas Courts (Sections 6467 and 6468, General Code) were duly perfected by a number of owners, as hereinafter indicated.

Section 6467, General Code, outlines the several grounds on which an appeal may be taken, as follows:

i i # # #

“(1) Is the improvement necessary?

“(2) Will the improvement be conducive to the public welfare ?

“(3) Is the cost of the improvement greater than the benefits conferred?

“ (4) Is the route, termini, or the mode of construction the best to accomplish the purpose of the improvement?

“(5) Are thé assessments levied according to benefits?

“(6) Is the award for compensation or damages just?

‘ ‘ Such appeal may be taken from any order affecting any part of the improvement, as well as from any order affecting the entire improvement.”

Appeals were taken to the Common Pleas Court from the final order of the board by several owners, to wit:

1. The New York Central Railroad Company appealed on all grounds enumerated in the statute and also from the disallowance of its claims for damages.

2. Stella Tabbert appealed on all statutory grounds and also on disallowance of claim for damages, failure of the engineers in their report to comply with Section 6454, General Code, in failing to note what culverts and bridges must be raised or channel enlargement made, and failure of the board to consider obstructions in Crane creek and Schneider ditch and removal of same.

3. Charles Goodman appealed from the order of the board dismissing his application to amend the engineers’ report to provide for the removal of buttress supporting walls of the New York Central Railroad bridge across Packer creek. As stated above, this appeal was withdrawn.

4. Separate appeals were duly filed by William’ Dreier, Donald and Frances Leggett, Fred Lickert, Frame Whipple, Robert Millinger, Carl Emmerick and Wilson Apling, on the grounds enumerated in the statute and the disallowance of their respective claims for damages.

5. C. H. Nehle and Mary Nehle appealed on the statutory grounds and on disallowance of damage claims presented.

6. Otto Steindem appealed on all statutory grounds, and also on disallowance of claims for land taken and damages, changing the natural course of said creek, and failure of the board to consider removal of obstructions in Crane creek and Schneider ditch, and 'also the removal of same.

The issues in the Common Pleas Court are raised upon the original papers and statements of the appellants (without pleadings), the same being deemed denied. Section 6471, General Code; 14 Ohio Jurisprudence, 966, Section 195.

The procedure is outlined in Section 6472, General Code. This section provides that the Common Pleas Court, sitting as a court of equity, shall hear all matters appealed de novo and that the “appeal shall bring into the Court of Common Pleas all the owners of land who in any way may be interested in or affected by the matter appealed * * * save and except an appeal from an order allowing or refusing to allow compensation or damages.”

The statute places the burden of proof on “the owner having the affirmative of the proposition. ’ ’ Section 6472, General Code.

Pursuant to Section 6543, General Code, claims for compensation shall be had the same as in single county ditch cases. It is provided further in this section that the auditor of the county in which the petition is filed shall transmit to the clerk of the Common Pleas Court in which the land is situated the original papers relating thereto, together with a certified transcript of the findings on the improvement and on the claims, which shall be docketed by the clerk. The following section (Section 6544, General Code) provides that “appeals on claims for compensation or damages shall be tried by jury as provided in chapter one of this title.” 14 Ohio Jurisprudence, 949, Section 176.

Section 6544, General Code, provides also that “Save and except appeals on claims for comensation or damages, all appeals to the Court of Common Pleas shall be heard by one judge of the Court of Common Pleas from each of the counties interested, sitting en banc * * * 5?

The court, composed of common pleas judges of Wood, Sandusky and Ottawa counties, sitting en banc, as a court of equity, heard the several appeals ele novo and found in favor of the improvement on each and all the statutory grounds specified in Section 6467, General Code, as above stated, excepting the sixth.

The court approved the plans, specifications, profiles and maps originally reported by the engineers of the three counties for the cleaning of the ditch, but determined that the cost of changing such improvement in accordance with the supplemental plan prepared by the engineers for the raising of the Carroll-Benton bridge and the construction of dikes between said bridge and Rainbow bridge would be greater than the benefits derived.

It was ordered that the cause be continued for hearing on claims for damages and that the journal entry be certified by the clerk of courts to the auditor of Ottawa county.

Notices of appeal on questions of law to this court were duly filed by the New York Central Railroad Company, Otto Steindem, Stella Tabbert and jointly by Donald Leggett and 23 other owners of land located at or near the lower terminus of the improvement.

The principal assignments of error are that the board employed Russell Harvey as engineer without a prior written request pursuant to Section 2411, General Code; that the existence of the several requirements enumerated in the statute were not established by sufficient evidence; and that there was a taking of private property for public use in violation of the Constitutions of Ohio and the United States.

Taking up the assignments of error in the order above stated, we first consider the contention made by certain appellants that the employment of Harvey as engineer to make the report, assessment and schedules, and his preparation of same, was without authority of law, and “that no proper report, schedule or complete plans” were ever before the board or the Common Pleas Court.

It does not appear in the record that a written request to employ Harvey was made by the engineer of Ottawa county to the board or that the board had employed him, as is provided in Section 2411, General Code.

As- heretofore pointed out, the board designated the engineers of Wood and Ottawa counties to make the survey for this improvement, the course of Packer creek being wholly within Wood and Ottawa counties. The board also designated the engineer of Ottawa county to file and make the report, suitable maps showing location of land to be assessed, profiles, and to “perform such other duties as required by law.” (Section 6541, General Code.)

The engineers of both Wood and Ottawa counties testified that the survey, plans and specifications for the improvement were made under their direction or supervision and the record also shows that the report of the engineer of Ottawa county filed with the board had been approved and signed by the engineer of each of the three counties.

The record also shows that Harvey was employed by the county engineer of Ottawa county; that his qualifications were practically conceded; that the survey of the land affected was made by the engineer of Ottawa county or under his supervision; and that the schedule of assessments was prepared under his supervision pursuant to an adopted plan for same.

On this showing, it is our opinion that Harvey was at least a cle facto employee of the board, as engineer, and that, as the report shows, the services he performed were rendered under the supervision and with the approval of the engineers of the three counties.

In the event claims for compensation or damages in substantial amounts were subsequently sustained, a reassessment would be required in order to apportion these additional costs. Vol. 1, Opinions of Attorney General (1933), 289, No. 205; Gilmore v. Board of County Commrs. of Hocking County, 17 Ohio App., 177.

It is our conclusion that the engineers’ report on this improvement and the detailed services rendered should not be invalidated on the basis of technical considerations, as urged by certain appellants, and that this assignment of error should not be sustained.

It is also contended by appellants that the court erred in finding that the improvement is necessary and is conducive to public welfare; that the cost of same is less than the benefits; and that the assessments levied are according to benefits. It is claimed by certain appellants that the judgment of the court results in taking private property for public use in violation of the Constitutions of Ohio and the United States.

The record discloses that the claims for compensation and damages are substantial. In fact, the aggregate of the claims is almost equal to the cost of the improvement. When the improvement is not one of general interest and of “sufficient importance to the public” to be paid out of the county treasury, the entire cost and expense should be assessed against the lands benefited. Board of County Commrs. of Portage County v. Gates, 83 Ohio St., 19, 93 N. E. 255; Vol. 1, Opinions of Attorney General (1938), 744, No. 2242.

Under the provisions of Section 6459, General Code, the board may order the amount of compensation for land taken, and also the amount of damages, paid out of the county ditch fund of the county in which the land is located and may order the amount so advanced subsequently restored to the ditch fund by apportioning. and assessing the amount so advanced to the benefited land owners. Section 6459, General Code, also provides that the amount so payable shall be paid before any work on the proposed improvement is done. 14 Ohio Jurisprudence, 935, Section 156. See, also, ibid., 950, Section 177.

However, in the instant case, the board denied all claims for compensation and damages and at the same time found in favor of the improvement. The trial court made a like finding on a hearing de novo and entered judgment accordingly. In that court the petitioners had the burden of establishing by a preponderance of the evidence each and all the statutory requirements, excepting compensation for property taken and damages sustained by the owners.

The drainage code is lacking in clarity with respect to certain phases of the proceedings by the commissioners as well as upon appeal to the Common Pleas Court. Construction or interpretation of the several sections is therefore required incident to the determination of this appeal.

It is a rule of statutory construction that all statutes which expressly refer to each other or by implication relate to each other or refer to the same subject matter should be construed as being in pari materia. 37 Ohio Jurisprudence, 599, Section 332.

Upon an appeal by a person affected by the improvement, raising the questions enumerated in Section 6467, General Code, a trial de novo' as in a court of equity is had upon all matters appealed excepting upon the questions of compensation and damages. Upon the first five items referred to in the section, the burden is upon the petitioners. Section 6472, General Code, expressly provides that “the burden of proof shall be on the owner having the affirmative of the proposition, who shall have the opening and closing.”

As already pointed out, Section 6543, General Code, provides that when an appeal is taken, claims for compensation or damages, with original papers relating thereto, shall be transmitted to the clerk of the Court of Common Pleas of the county in which the land is situated and by that official placed on the docket, and that the claimants be accorded a trial by jury for the determination thereof. In adjudging the amount of compensation or damages in such case, the Common Pleas Court exercises a semblance of original rather than appellate jurisdiction. 14 Ohio Jurisprudence, 948, Section 172. Pursuant to Section 6475, General Code, when there is more than one appellant with separate claims, the court in its discretion may submit all' claims to the same jury. 14 Ohio Jurisprudence, 949, Section 176.

Construing the several pertinent sections of the drainage code in logical relationship, it is concluded that upon an appeal to the Common Pleas Court as provided in Section 6467, General Code, that court is not capable of or in position to determine whether the cost of the improvement is greater or less than the benefits conferred until such time as the amounts of compensation and damages are finally determined. Although in a preliminary way the court could possibly determine that the improvement is necessary, that it is conducive to the public welfare, and that the route, termini or mode of construction is the best to accomplish the purpose, a final determination of the- appeal on trial de novo can not possibly be had until after the determination of the amount of compensation and damages.

It is therefore concluded that on the appeal to the Common Pleas Court, that court should first adjudge any claims for compensation and damages which have been docketed prior to final approval of the project. In the instant case, the three-judge court should not have made a final determination of the necessity, etc., until after the final determination by the Common Pleas Court of Ottawa county of all appeals on compensation and damages.

This not having been done, and the several appellants having been prejudiced thereby, it is our opinion that the judgment of the trial court should be reversed and this cause remanded thereto for a new trial.

In view of the reversal of this case and its remand for a new trial, it appears to be pertinent to comment on the contention made by appellants that the dams placed in Crane creek and Schneider ditch obstruct the natural flow of water in those areas and cause a diversion of same into Packer creek. There is credible evidence that the quantity of water diverted is substantial, that this diverted water increases the flow in Packer creek, and that this increased flow sustains a direct and proximate relation to material fact issues before the board and on appeal in the Common Pleas Court.

It is contended further and the evidence tends to show that the increased flow in Packer creek augments the amount of overflow water along the lower terminus of the stream, as the proposed improvement does not include a plan for increasing the capacity of the outlet of Packer creek.

Section 6443, General Code, appears to confer jurisdiction generally on county commissioners to remove obstructions from county ditches. See, also, Opinions of Attorney General (1941), 470, No. 3896. It may be noted further that Section 6462, General Code, contains an express provision authorizing the board in determining “whether * * * the improvement should be granted” to consider among other things “the sufficiency or insufficiency of the outlet.” Love v. Simon, 11 C. C. (N. S.), 359, 20 C. D., 639, affirmed 82 Ohio St., 400, 92 N. E., 1119; Wood County Commrs. v. Shinnew, 10 C. C. (N. S.), 554, 20 C. D., 158, affirmed 80 Ohio St., 712, 89 N. E., 1124.

It is apparent that if more water is precipitated into this creek in times of flood, such additional volume of water bears directly on the adequacy of the outlet and also on the capacity of the Carroll-Benton bridge, and the fact issue that this bridge became an obstruction to the flow of water at such times. Closely related is the further issue that dikes are necessary between that bridge and Rainbow bridge to prevent overflow on the lands along the lower terminus of this stream.

If it were established that the construction of these dams was duly authorized and that they substantially increased the normal flow of water, resulting directly in flooding lands from time to time along the lower terminus of Packer creek, such result would be taking property of the owners of such lands for public use for which such owners may claim compensation under the Constitution.

It is the general rule that neither the trial court nor this court may substitute its judgment for that of the board. Furthermore, on appeal, the petitioners have the burden of proof to establish the affirmative of all issues in relation to the finding in favor of the improvement. Unless such finding or judgment is manifestly against the weight of the evidence, an affirmance must follow. On the record before us, however, there is no evidence in relation to the circumstances surrounding the construction of these dams or by what authority they were constructed and no showing why they should not or could not be removed so as to relieve Packer creek of all water which would otherwise naturally drain into Crane creek and Schneider ditch and be carried by these streams directly into the lake.

Upon the admission of the engineers’ report the petitioners made a prima facie case. The record discloses that the prima facie case was overcome by direct evidence offered by the appellants as to the removal of the dams and with respect to the lower terminus. Aside from whether Harvey was properly employed, he was qualified to testify concerning the feasibility and other features of the project which he surveyed, prepared and proposed. The evidence relating to the effect of the improvement upon the lower owners was apparently disregarded.

Upon a retrial of the issues, the pertinent provisions of the drainage code can be given application and the right of the owners of lands affected be adjudicated accordingly. Since the three-judge court did not have jurisdiction of the appeals on compensation and damages, such appeals in, this court are dismissed. Presumably, such appeals are pending in the Common Pleas Court for determination. Upon the other appeals, the judgment of the Common Pleas Court is reversed, and the cause is remanded for a new trial.

Judgment accordingly.

Fess and Savord, JJ., concur.