text:
    RELATION OF EMPLOYEE TO EMPLOYING CORPORATION IN WHICH HE HAS PURCHASED STOCK.
    Court of Appeals for Richland County.
    Joseph E. Smitt v. The Aultman & Taylor Company and The Aultman & Taylor Machinery Company.
    Decided, January Term, 1916.

      Equity — Fiduciary Relation "between Employee and Corporation — "Where Employee Pv/rchases Stoclc of the Corporation on Representation That it Can be Paid for Out of Dividends — Company Liable for Failure of Dividends, "When — "Word “Dividends” Can Not be Used Interchangeably with “Earnings” — Oral Evidence in Explanation of a "Written Contract.

    1. The rule which permits the giving of oral testimony in explanation of the circumstances surrounding the making of a written contract, does not authorize the varying of the plain terms of the written' contract by such oral testimony, unless it be shown that the contract was made through mistake, fraud, surprise or accident; and Where the plaintiff is not claiming fraud, sor asking that the contract be set aside, but rather that it be enforced in his favor, such oral testimony is inadmissible.
    2. Where one who has been in the employ of a corporation for many years and has come to have great confidence in the honesty and business ability of the officers having charge of its affairs, purchases stock from this corporation at the solicitation of these officers in a new corporation organized by these officers for the purpose of purchasing the property of the old corporation, and continuing its business under the control of the officers of the old corporation, and giving his note, secured by the stock thus purchased, to the old corporation in payment therefor in which it is recited that dividends declared by the company are to be applied to' its payment, a fiduciary relation exists, and if the confidence so reposed is abused the company would become liable therefor; but this principle does not require that the company shall be held liable for losses growing out of a change in business conditions, or from mistake in judgment on the part of those in control, unless it can be shown they intentionally abused the trust and 'confidence gd reposed in them.

      3. A court of equity is without power, in the absence of fraud or abuse of discretion, to require a board of directors to declare dividends, and it follows that no authority exists for declaring paid a note given by an employee for stock, which note was to have been satisfied by application of dividends on the stock but was not so paid because of failure to declare dividends.

      Brucker, Voegele & Henkel, for plaintiff in error.

      McBride & Wolfe, Harter & Harter and Pomerene, Ambler & Pomerene, contra.
   Pollock, J. (sitting in place of Shields, J.)

This case comes into .this court on appeal, and was submitted on the pleadings, the evidence and the argument of counsel.

The plaintiff seeks to have the defendant, the Aultman & Taylor Company, cancel and surrender a note given by him to it for $5,000, and a re-transfer of fifty shares of the capital stock of the Aultman & Taylor Machinery Company deposited as collateral security.

The pleadings are long, and I will not attempt to state, only in very general terms, the allegations made therein. Plaintiff says that the Aultman & Taylor Company was organized in 1867 for the purpose of manufacturing threshers and threshing engines; that it continued in business to 1891; that its business was very profitable; that in 1891 those holding the majority of stock in that company desired to quit the active business in which it was engaged, and that they organized the Aultman & Taylor Machinery Company, with a capital stock of $500,000, subscribing for and receiving all of the capital stock of that company; that the Aultman & Taylor Company sold to the Aultman & Taylor Machinery Company all of its property except its notes and accounts receivable; that plaintiff was an employee of the Aultman & Taylor Company at the time of the organization of the later company, and had been for many- years prior to that time, and that, by representations of the Aultman & Taylor Company, he was induced to purchase from that company fifty, shares of the capital stock.of the Aultman.& Taylor Machinery Company, giving in payment therefor .his note for $5,000 and depositing the stock as collateral security, with a condition in the note that he was to apply all dividends declared on this stock to the payment of his note.

He further alleges that the Aultman & Taylor Company has always owned a majority of the capital stock of the Aultman & Taylor Machinery Company, and that it has controlled the election of directors of that company and its management; that in fraud of plaintiff’s rights it has refused to permit dividends to be declared on the capital stock of the Aultman & Taylor Machinery Company, and in fraud of plaintiff’s rights it has engaged in other business not contemplated at the time plaintiff purchased his stock.

He further alleges that the earnings of the Aultman & Taylor Machinery Company have been very large, setting out the earnings as shown by the statement of that company each year, and alleging that the Ardtman & Taylor Company has prevented dividends to be declared by the Aultman & Taylor Machinery Company.

He prays that the Aultman & Taylor Machinery Company be compelled to declare dividends of all its earnings, as of the date when the same should have been declared, and that all the earnings of the company, or enough to pay the same, be applied upon the note of the plaintiff now held by the Aultman & Taylor Company, and that said note be canceled and held for naught, and that the Aultman & Taylor Company be compelled to immediately surrender to plaintiff the stock held by it as collateral, and for other and proper relief.

The two defendants filed separate answers which admit the organization of both companies, and many of the allegations of the petition, but deny all allegations* of fraud or fraudulent practice, and deny plaintiff’s right to have said note canceled and the stock surrendered; and the Aultman & Taylor Company, as a cross-petition, asks for a judgment on the note and an order to sell the stock held by defendant as collateral security. The plaintiff, in his brief, says that he is not insisting upon any relief or order directed against the Aultman & Taylor Machinery Company. .. v:

The note, which the plaintiff asks to be canceled and the stock deposited as collateral security therefor surrendered to him, reads as follows:

“Mansfield, Ohio, October 1st, 1891.
“No. $5,000.
“On or before October 1st, 1906, the undersigned promises to pay to the Aultman & Taylor Company or order five thousand ($5,000) dollars for value received, with interest at 6%, payable annually, and has deposited with the Aultman & Taylor Company as collateral security shares of stock in the Aultman &
Taylor Machinery Company of Mansfield, Ohio, with authority to sell the same at public or private sale, at its option, on the non-performance of this promise and without notice, applying the net proceeds to the payment of this note, including interest, and accounting to the undersigned for the surplus, if any. In case of deficiency the undersigned promises to pay to the Aultman & Taylor Company the amount thereof, forthwith after such sale, with legal interest. The Aultman & Taylor Company agrees not to sell the stock above described before October 1st, 1906, and the undersigned agrees to apply all dividends paid by the Aultman & Taylor Machinery Company to the payment of the principal and interest of this note as fast as such dividends are declared. The undersigned agrees that with such dividends (supplemented if necessary by cash payments) the principal of this note shall be paid off, beginning October 1, 1896, at the rate of not less than 10 per cent, each year.
“Joseph E. Smitt.”

The plaintiff in the trial of this case seems to abandon his right, as stated in the prayer of the petition, to have dividends declared by the Aultman & Taylor Machinery Company, as of the date that he claims the earnings were made and applied to this note, but claims, first, that the contract as intended by the parties was that all the earnings of the Aultman & Taylor Machinery Company were to be credited upon this note from time to time as they were made by the Aultman & Taylor Machinery Company, whether these earnings had been declared as dividends or not; and, further, that, as the Aultman & Taylor Machinery Company soon after its organization went into the manufacture of what is denominated “the large boiler business” and con-tinned for a number of years in this business, which they claim was not contemplated at the time of the giving of this note, or rather that the Aultman & Taylor Company had promised and agreed that the Aultman & Taylor Machinery Company would only engage in the business that had formerly been engaged in by the Aultman & Taylor Company, that the engaging in this boiler business was a constructive fraud on this plaintiff and, as there were large losses made, the Aultman & Taylor Company should be required to bear plaintiff’s proportion of that loss and that that proportion should be credited on the note for the reason that the Aultman & Taylor Company dictated the policy of the Aultman & Taylor Machinery Company by electing its directors.

On the trial of this ease the plaintiff introduced the testimony of himself, and, in order to substantiate these claims, he testified to conversations with M. D. Harter, who represented, in the sale of this stock to plaintiff, the Aultman & Taylor Company. This testimony was to the effect that during the conversation of plaintiff with Harter in regard to the subscription for this stock, plaintiff was assured by Harter that the Aultman & Taylor Machinery Company would not engage in any other business except that which had been conducted by the Aultman & Taylor Company, and also that the earnings of the Aultman & Taylor Machinery Company would be declared in dividends and applied on the plaintiff’s note, and that plaintiff would not be called upon to pay any of the principal and interest of this note. This testimony was objected to by the defendant and taken under objection.

The claim of the plaintiff is that this testimony is competent under the rule that written contracts may always be read in the light of surrounding circumstances. Masters v. Freeman et al, 17 Ohio St., 323. This is a rule of universal application in the construction of written contracts, but the rule that oral testimony is not admissible to contradict or vary the terms of a written instrument is equally as well supported. Thompson on Ohio Trial Evidence, Section 405. The sections following and the cases cited thereunder will illustrate the first rule as to when oral testimony can be given in explanation of the circumstances surrounding the making of a written contract. But this does not authorize the varying of the plain terms of a written contract by oral testimony. This author, of course, refers generally to actions at law, but we think there is no variance from the rule in actions in equity, except where the contract is induced to be made through mistake^ fraud, surprise or accident. Pomeroy’s Equity Jurisprudence, Section 858.

In the present case it is not claimed that there was any mistake or fraudulent representations made by the Aultman & Taylor Company to induce plaintiff to enter into this contract, but all the representations were made in good faith. And the plaintiff is now not asking that the contract be set aside, but he is asking that it be enforced in his favor. We do not see how, under these rules, any statements that were made by the representative of the Aultman & Taylor Company, at and before the making of the contract, which tend to vary its terms, can be proven by oral testimony. For this reason we think that the exceptions to all the oral testimony as to the statements made by Mr. Harter at and prior to the time of the making of the contract should be excluded.

The plaintiff further claims that, by reason of his being in the employment of the Aultman & Taylor Company for many years before the organization of the other company, and his confidence in the business ability and management of those having control of the Aultman & Taylor Company, and the success of that company, a fiduciary relation existed between himself and the Aultman & Taylor Company in entering into this contract for the purchase of the stock of the Aultman & Taylor Machinery Company.

A fiduciary relation exists between parties when one party is placed in charge of the person or property, or both, of another, through legal proceedings; and it may exist between parties in a contractual relation where one party, with the knowledge of the other, places confidence and trust in the honesty and judgment, or both, of the other, and this is known to the other party by reason of some former relationship or dealings that give the one the right to rely upon the other. This rule is very aptly stated in Pomeroy’s Equity Jurisprudence, Section 956:

“Wherever two persons stand in such relation that, while it continues, confidence is necessarily reposed by one, and the influence which naturally grows out of that confidence is possessed by the other, and this confidence is abused, or the influence is exerted to obtain an advantage at the expense of the confiding party, the person so availing himself of his position will not be permitted to retain the advantage, although the transaction could not have been impeached if no such confidential relation had existed.”

And the Supreme Court of this state has announced this principle, as follows:

‘‘1. The principle that a party is responsible for false representations of material facts, applies to all those cases where influence is acquired and abused, or confidence is reposed and betrayed.” Smith v. Patterson, 33 Ohio State, 70.

We think that this relation did exist, under the principles just referred to, between the plaintiff in this case and the Aultman & Taylor Company in the entering into this contract for the purchase of the stock, and also in the carrying out of the contract for the payment of the note given for the purchase money. Mr. Smitt relied upon the good faith and the business judgment of those in charge of the Aultman & Taylor Company in the management of the Aultman & Taylor Machinery Company in order to pay his obligation to the first company, and if this confidence was abused or intentionally taken advantage of, the company would be liable to the plaintiff in some way therefor. But the rule does not require that the Aultman & Taylor Company should be held responsible, either in equity or in law, for mistakes in the management of the Aultman & Taylor Machinery Company by which loss was incurred, unless they intentionally abused this trust and confidence.

The testimony shows that shortly after the organization of the Aultman & Taylor Machinery Company, the board of directors of that company went into what is denominated in the trial of this case “the construction of large boilers.” While this business at first seems to have been profitable, yet from that on it is admitted that the business was not profitable and was finally disposed of at a loss. It is admitted that this business was not contemplated at the organization of the Aultman & Taylor Machinery Company, but it was within the provisions of the charter of that company.

Now, the plaintiff insists that the Aultman & Taylor Company should be required to credit on his note his proportionate amount of that loss, for the reason that it held a controlling amount of the stock and that it cast its vote at the election of directors of the Aultman & Taylor Machinery Company for the directors that were elected, and that they were under the control and management of this company.

There is no testimony tending to show that the Aultman & Taylor Company, either in the respect complained of or in any other respect, acted in bad faith in the management of the Aultman & Taylor Machinery Company. There is no complaint that the board of directors elected were not competent and honest, and there is no testimony tending to show that those in charge of the Aultman & Taylor Company or the directors of the Aultman & Taylor Machinery Company, when the latter company engaged in the boiler business, had any other motive than that of the best interests of that company. They believed that the business in which they then embarked would prove profitable and advantageous to their company, and this belief was acquiesced in by the Aultman & Taylor Company, and there is no evidence tending to show but what both exercised their best •judgment in this matter, and they are not chargeable with any loss that afterwards occurred.

The plaintiff trusted to their judgment and skill, and he received what he trusted in, and the Aultman & Taylor Company are not responsible for any loss that occurred by reason of this misjudgment, if it was such, but the loss is perhaps better attributed to a change of business conditions.

It is further urged that the true intent and meaning of the note or contract signed by the plaintiff, providing for the applying of dividends declared on the stock of the Anltman & Taylor Machinery Company to the payment of the note, was that whenever any earnings were made by the Aultman & Taylor Machinery Company the proportionate part should be applied to the discharge of this obligation, regardless of the fact that no dividends were declared, and if the amount had been applied each year, as the company’s statements show the earnings were made, it would have paid the note prior to this, and for that reason the defendant should be required to surrender it.

It is urged that this construction was placed upon this contract or note by the Aultman & Taylor Company at its meeting in January of 1898. At that meeting there was a resolution passed by the Aultman & Taylor stockholders reciting that the earnings of the Aultman & Taylor Machinery Company had not come up to the hope and expectation of the Aultman & Taylor Company, and this company made the offer then to plaintiff, and others, who held stock under similar contracts to surrender their stock to this company and they would surrender the note and cancel the contract. It is claimed that by reason of the Aultman & Taylor Company in this resolution using the word “earnings,” that this contract or note should be construed to mean “earnings” in place of “dividends.”

Dividends are declared by a corporation from its earnings. When the earnings did not reach the hope and expectation of the Aultman & Taylor Company, no dividends could be declared thereon. The company, in making its offer to cancel the contract between the plaintiff and it, used the word “earnings,” but this resolution in no way tended to place a different construction upon this contract or note than is gathered from its plain reading.

The contract entered into between the plaintiff and the Aultman & Taylor Company, in regard to how this note should be paid, is too plain to apply all dividends paid by the Aultman & Taylor Machinery Company to the payment of principal and interest of this note as fast as such dividends are declared. This is the plain provision of this contract, and equity does not permit courts to make other or change plain provisions of a contract.

Our attention has been called to the maxim: “Equity considers that done which ought to be done.”

If payment of this note had actually been received by the Aultman & Taylor Company, equity would apply that maxim and cancel the note without inquiring whether it was received through dividends or other provisions of this note or not.

But there is another maxim of equal importance, that, “He who seeks equity must do equity.”

“The meaning is, that whatever be the nature of the controversy between two definite parties, and whatever be the nature of the remedy demanded, the court will not confer its equitable relief upon the party seeking its interposition and aid, unless he has acknowledged and conceded, or will admit and provide for, all the equitable rights, claims, and demands justly belonging to the adversary party, and growing out of or necessarily involved in the subject-matter of the controversy.” Pemeroy’s Equity Jurisprudence, Section 385.

The plaintiff can not demand the surrender of this note in equity from the Aultman & Taylor Company, until he has paid the consideration as provided by that note, or in some other manner which is its equivalent. There is no claim that the note has been paid, or anything paid thereon except the dividends of eight and six per cent., made in the first years of the Aultman & Taylor Machinery Company’s existence. "While the earnings of this company are very large at the present time, yet from the testimony as to their manner of doing business it would be disastrous to the credit of the Aultman & Taylor Machinery Company to require it to declare a dividend from its earnings at the present time.

There can be no question about the rule that a court of equity has no right to require the directors of a corporation to declare dividends in the absence of fraud or abuse of discretion upon the part of the board of directors. Cook on Stock and Stockholders, Section 545. In fact, the plaintiff does not claim the right to require the Aultman & Taylor Machinery Company to declare a dividend at this time. In the absence of that right we feel that the court of equity has no power to declare the note canceled and the surrender of the collateral security.

The Aultman & Taylor Company are asking for an order directing the sale of plaintiff’s stock held as collateral security. The conditions under which this stock was deposited have been broken, and the defendant company has a right to have such an order.

As the Aultman & Taylor Company, in its brief, authorizes the court to mould its judgment in such a way that no judgment for a personal liability in its favor against the plaintiff may be had, the judgment may be that the defendant, the Aultman & Taylor Company, may have a finding against the plaintiff for the amount due upon its note, and an order of sale of the stock deposited as collateral security, but no personal judgment against the plaintiff for the remainder, if any, unpaid of the amount of the note after the application of the selling price of the stock.

The costs made in the court of common pleas will be adjudged against the defendant, the Aultman & Taylor Company. Those made in this court will be adjudged against the plaintiff. Exceptions noted for plaintiff. If plaintiff files a motion for a new trial, it is overruled, and exceptions noted.

Houck, J., and Spence, J. (sitting in place of Powell, J.), concur.


source: Caselaw Access Project

author: Sayre, J.

license: Public Domain

text:
    AS TO THE LOCATION OF GATES AT A GRADE CROSSING.
    Court of Appeals for Ross County.
    The Chillicothe Electric Railroad, Light & Power Company v. Norfolk & Western Railway Company et al.
    Decided, February 29, 1916.

      Grade Crossings — Location of Safety Gates — Presumption that When Gates Save Been Placed it Has Been Done in Accordance With the Order of the Public Utilities Commission.

    1. By the provisions of Section 588, the Public Utilities Commission has authority to order the erection of a gate where the tracks of a railroad cross a public street at grade,, but such gate can only be lawfully ordered erected at such crossing.
    2. Such commission, being an administratrive body, is presumed to know whether its order has been obeyed, and in the absence of a suit by it tó enforce such order the courts will presume that in the opinion of the commission its order has been obeyed.
    3. When the commission has ordered a gate placed at such crossing, and it has taken no steps under the provisions of Section 614-67 (Section 70) to enforce such order, the courts will conclude that in the opinion of the commission the gate has been located at the crossing and that such location of the gate is the order of the commission, and hence the provisions of Section 549 (Section 38), 103 O. L., 816, divest the court of common pleas and the court of appeals of jurisdiction to restrain the erection of such gate at such location on the ground that the gate was not located at the crossing.

      L. B. Yaple and John P. Phillips, for plaintiff.

      Henry Bannon and Lyle S. Evans, contra.
   Sayre, J.

The plaintiff brought suit in the court of common pleas, seeking an injunction to restrain the defendants from erecting a gate on East Main street in the city of Chillicothe, Ohio, at the intersection of such street and the track of the defendant, Norfolk & Western Railway Company. The railway company was undertaking to carry out an order made by the .public utilities commission of Ohio, directing it to erect a gate at such crossing.

Main street in Chillieothe runs east and west. The railroad tracks crossing such street are so located that if each end of the gate was placed the same distance from the rail farthest west and parallel to it, the gate would extend in a northwesterly and southeasterly direction. The railway company, for supposed convenience and safety to teams and automobiles using Main street, located the end of the gate on the north side of the street about seven feet west of the west rail and the south end about seventy feet west of such rail so that the gate would stand on a north and south line or at right angles to the sides of Main street.

The plaintiff operates a street railroad in Chillieothe and its east-bound cars on Main street are brought to a stop very near the railroad tracks, but do not cross the same. The railroad station used jointly by the Baltimore & Ohio Southwestern and Norfolk & Western companies is southeast of the place where the tracks cross Main street, and if the gate in question was located parallel with the west rail of the tracks, as above described, the ears of the plaintiff can approach so near the railroad tracks that passengers alighting at the station can see such cars; but if the gate was placed at right angles to the sides of Mlain street, as above described, the ears must stop farther west and can not be seen by passengers when alighting at the station; and it is claimed by the plaintiff that because passengers can not see its cars at that time they take other means of conveyance into the city of Chillieothe and thus the plaintiff loses a large amount of traffic.

The plaintiff brought this action for an injunction on the ground that the order of the public utilities commission was not being obeyed, in that the gate was not being erected at the crossing. The order of the commission directs that the gate be placed at the crossing. The defendants claim that the gate was being erected at the crossing. Defendants claim they were obeying the order of the commission. Plaintiff claims they were disobeying it.

Section 614-67 (Section 70) provides that:

“Whenever the commission shall be of the opinion that any public utility or railroad has failed, omitted or neglected to obey any order made with respect thereto, or is about to fail or neglect so to do, or is permitting anything, or about to permit anything contrary to, or in violation of law, or an order of the commission, duly authorized under the provisions of this act, the Attorney-General, upon the request of the commission, shall commence and prosecute such action, actions, or proceedings in mandamus or by injunction in the name of the state, as may be directed by the commission, against such public utility or railroad, alleging the violation complained of and praying for proper relief, and in such case the court may make such order as may be proper in the premises.”

By the provisions of this section the commission has á complete remedy to enforce its orders, and we conclude that this is the exclusive remedy for enforcing the orders of the commission. No other person or persons can maintain a suit to enforce such order on the theory that an order of the commission has not been obeyed.

The commission being an administrative body, it is its business to know whether its order has been obeyed, and so long as the commission takes no steps to enforce its order' the courts must conclude that in the opinion of the commission its order is being or has been obeyed.

Section 549 (Section 38), 103 O. L., 816, provides:

“No court other than the Supreme Court shall have power to review, suspend or delay any order made by the commission or enjoin, restrain or interfere with the commission or any member thereof in the performance of official duties.” # * *

Plaintiff’s contention is that it is not, by this suit, seeking to delay any order made by the commission or to enjoin, restrain or interfere with the commission in its official duties, but rather that it is aiding the commission in the performance of its duties by seeking to enjoin the disobedience of the order of the commission because it claims the defendants are not erecting the gate at the crossing where the commission ordered the gate to be erected.

But it is clear that if the gate is located where the commission intends it shall be located then such location is the order of the commission.

The court will presume under all circumstances, except in case the commission brings an action to enforce its order, that in the opinion of the commission the order is being obeyed and that where an order issued by, the commission is being executed that such execution is in accordance with the order and direction of the commission.

The court, therefore, concludes that the location of the gate at right angles to the sides of Main street, as above described, is in accordance with the order of the commission and that such location is its order.

It is clear then, if we are free from error in the conclusion reached, that neither the court of common pleas nor the court of appeals has any power to entertain the present suit, and that each is wholly without jurisdiction in the premises.

The petition will therefore be dismissed.

Walters, J., and Merriman, J., concur.


author: By the Court.

text:
    VALIDITY OF LONGVIEW HOSPITAL BOND ISSUE.
    Court of Appeals for Hamilton County.
    State of Ohio, on the Relation of John V. Campbell, Prosecuting Attorney, v. Fred E. Wesselmann et al.

    Decided, April 3, 1916.

      County Bonds — Validity of Issue of — For Enlargement of an Insane Asylum Where Issue Has Been Authorized by the Electorate — ■ How Proceeds May be Expended.

    Injunction does not lie against an issue of bonds, put forth by county commissioners for improvements in an insane asylum owned by the county, where the issue has been approved by the people and the proceeds are disbursed in accordance with the statutory provisions.

      Campbell, Hickenlooper, Hauck & Capelle, for plaintiffs in error.

      Herman P. Goebel, contra.

       Affirming, State, ex rel Campbell, v. Wesselmann et al, 18 N.P.(N.S.), 564.

   By the Court.

The commissioners of Hamilton county have the authority to provide for the issue of bonds for the construction, enlargement and repair of buildings for Longview Hospital under Section 2434, General Code, after first submitting the question of such issue to the voters of the county and receiving their approval in compliance with Section 5638, et seq., General Code.

The proceedings for the issue of bonds in the sum of $300,000 for such purpose, which are attacked in this action, are regular and valid, and fully comply with all the requirements of the law.

So much of the proceeds of these bonds as are issued for the purpose of constructing new buildings can only be disbursed and expended by a building commission to be constituted and controlled under the provisions of Sections 2333 to 2342 inclusive, General Code; and the amount used for the repair of existing buildings must be disbursed and expended by the board of directors of Longview Hospital.

The judgment of the court of common pleas is affirmed.


author: Chittenden, J.

text:
    TENANT HOLDING OVER BECOMES LIABLE FOR. YEAR’S RENT.
    Court of Appeals for Hamilton County.
    Martin J. Rickard v. James W. Utter.
    Decided, February 14, 1916.

      Landlord and Tenant — Latter Holds Over on Promise of Repairs, and Becomes Liadle for Tear’s Rental — Retention of Key dy Landlord. Not an Acceptance of Surrender, When,

    1. Where a tenant by the year holds over, and thereafter there are negotiations regarding a new lease but none is executed, the negotiations regarding the new lease in no way operate to relieve the tenant from the obligation for another year’s rental which he assumed by holding over.
    2. Failure on the part of a landlord- to make promised repairs does not release the tenant from the obligations of his lease, but his remedy is by way of an action for damages for failure to carry out the agreement to make repairs.
    3. Retention by the landlord of the key to the premises sent to him through the mail does not constitute an acceptance of the surrender of the lease.

      A. B. Hoffman and Powell <& Smiley, for plaintiff in error.

      Hunt, Bennett & Utter, contra.
   Chittenden, J.

This action was begun in the Municipal Court of Cincinnati- by James W. Utter to recover from tbe defendant, Martin J. Pickard, an amount claimed to be due upon a lease of real estate. Tbe facts are substantially as follows:

On February 9, 1910, tbe plaintiff and tbe defendant entered into a written lease for a residence belonging to the plaintiff, for one year from February 15, 1910, with the privilege of renewal for one year. Tbe defendant agreed to pay therefor tbe sum of $50 per month, payable each month, beginning March 15, 1910. At tbe -expiration of tbe first year tbe defendant exercised bis option of renewal and remained another year. Without any further agreement, he continued in the occupancy of the property for the third year, and, without any further arrangement being made, he entered upon the fourth year. Some time in March, 1913, probably about the 9th of the month, pursuant to an invitation from the defendant, the plaintiff went to the leased premises and there discussed with the defendant certain repairs that were desired, and agreed that such repairs would be made. At the same time there was a discussion concerning the executing of a new lease, and the defendant testifies that he agreed to execute a new written lease for one year from April 1, 1913, upon condition that the repairs that had been agreed upon should be made within a reasonable time. The evidence is not in conflict, on any material matter, as what was stated on this occasion, the plaintiff, however, claiming that while he agreed to make the repairs desired, the making of such repairs was not a condition to the executing of the new lease. At any rate, the plaintiff very shortly thereafter had a lease prepared in duplicate, for one year from April 1, 1913, and signed the same and sent them to the defendant. The defendant says that when he examined the lease he discovered that there was no condition in-it relating to the repairs that had been agreed to be made, and thereupon he retained possession of the lease until he found that the repairs were not being made within a reasonable time, when he returned the lease to the palintiff; and, on April 30, 1913, wrote to the plaintiff, saying that he had purchased a house and that he would vacate the premises to the plaintiff by the middle of the next month. He in fact did vacate the premises before the middle of May, and, on the fourteenth day of May, sent to the plaintiff a check for the rent due on the fifteenth day of May, and also enclosed with the check a key to the premises.

The plaintiff testifies that he acknowledged receipt of the check and advised the defendant that he would hold him for the remainder of the year, that is, until the 15th day of February, 1914. The defendant denies receiving any such letter. The plaintiff testifies that he did then take possession of the house, and made necessary repairs and used every reasonable means to obtain a tenant, but that he was unable to do so prior to February 15, 1914. It is the rent, at the agreed rental, from May 15, 1913, to February 15, 1914, that the plaintiff seeks to recover.

It should be added that at the conference between the plaintiff and the defendant on March 9, 1913, it was understood that Mrs. Utter should call upon Mrs. Rickard soon and determine just what repairs were required by Mrs. Rickard. Mrs. Rickard does not testify, but Mrs. Utter testifies that she did call upon the wife of the defendant and went over the matter of repairs, and that Mrs. Rickard stated that because of their having a small baby in thé house, she did not want the repairs undertaken until the first of May. We think this statement of facts is sufficiently full to show the questions involved.

The ease was tried to- a jury in the municipal court, and upon motion made by the plaintiff at the close of all the evidence, court directed a verdict in favor of the plaintiff for the amount claimed by him. Upon proceedings in error in the common pleas court the judgment entered on such verdict was affirmed.

This court is of opinion that the judgment is right, and that the facts would not justify any other conclusion, and that, upon the ground that substantial justice has been accomplished, the judgment should be affirmed.

A majority of the court are of the opinion that the judgment should be affirmed upon the additional ground that there is no evidence on behalf of the defendant tending to establish a legal defense to the claim of the plaintiff.

The law as to the effect of holding over under the terms of a written lease is so well settled in this state that the authorities need not be reviewed or even cited. We find that when the defendant held over after February 15, 1913, he became bound for another year in accordance with the terms of the original written lease. Thereafter a new lease for a different term was proposed and in fact agreed upon, but it was never consummated by the proper execution of the new lease by both parties, or by any change of possession that could be referable to that lease. In fact, the defendant does not assert that he is bound by the terms of the new lease. We are unable to see that the negotiations with reference to the new lease is any way operated to excuse him from the obligation that he was under for the year beginning February 15,1913.

The evidence sufficiently explains the reason why the repairs were not made before May 1,' and before that date arrived the defendant had written the letter in which he stated that he was about to vacate the premises. Even if the repeairs .were not-made before May 1, as the defendant seems to claim they should have been, the failure to make the repairs would not operate to release the defendant from the obligations of his lease. He might have some remedy by way of an action for damages or otherwise for the failure to carry out the agreement to make repairs, but certainly such failure would not violate the terms of a lease that was in effect before the agreement to repair was made.

It is claimed -that there was an acceptance of the surrender of the lease by retaining the bey that was sent to the plaintiff through the mail. We can not accept this claim. One can not escape the obligations of a lease merely by sending a key to the lessor through the mail, or leaving it under the door; nor is the lessor bound, under such circumstances, to return the key, which would, no doubt, be returned to him again. Parties, are not obliged to pass keys, or other emblems of title or possession, back and forth in order to assert their legal rights to leased premises.

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

Richards, J., and Kinkade, J., concur.


text:
    AFFILIATION OF PUBLIC SCHOOL TEACHERS WITH A LABOR UNION.
    Court of Appeals for Cuyahoga County.
    J. M. H. Frederick v. John G. Owens.
    Decided, June, 1915.

      Schools — Appointment of Teachers in the Public Schools — Will Not be Interfered with by the Courts, When — Teachers Without Vested Rights After the Period of their Employment Has Ended — Are Not Disqualified by Affiliation with a Labor Union — Affidavit Charging a Judge with Bias and Prejudice — Disqualifies Him from Sitting in the Case — Contempt Proceedings Before One so Disqualified are Without Validity — Section 1687.
    1. The management of the public schools of a city is vested in the superintendent and board of education, and their decision as to the policy to be pursued in the employment of teachers will not be interfered with by the courts in the absence of a showing of fraud or abuse of discretion.
    2. In the appointment of teachers the superintendent and board of education are authorized to employ whomsovere they will from among those having the necessary certificates and giving preference to teachers whose terms are expiring. Such freedom of contract is guaranteed by the Constitution, and where the board adopts a resolution providing, among other things, that no applicant for position of teacher in the public schools will be given appointment who is affiliated with a labor organization, the discretion so exercised is within the authority vested in the board.
    3. An order of court attempting to control the discretion of the superintendent and board of education in the appointment of teachers, and enjoining them from refusing to appoint applicants for the position of teacher because such applicant is affiliated with a labor organization, or intends to become affiliated with such organization, or has participated, or intends to participate, in forming a union of the teachers of the schools, is beyond the power of the court and is a nullity, and the court is without power to punish a violation of such order in a proceeding for contempt.

      4. The judgment and finding of the trial court in this case, that the superintendent of schools had violated the order of injunction, is not supported by the evidence and is contrary to law.
    5. An affidavit charging the existence of bias and prejudice, definite and positive in its statements and filed in due time, disqualifies the trial judge under Section 1687, General Code, as amended, 103 O. L., 417. The evidence of bias and prejudice on the part of the trial judge is so clearly manifest by the record and opinion in this case that this court would set aside the judgment and finding on this ground alone if none other existed.
    6. The fact that a judgment involving the liberty of an. individual is void will, when shown, constitute a good defense in his behalf, even though the judgment be one which can not be reversed by proceedings in error, and it is immaterial whether the judgment be vend for want of jurisdiction to hear the case or because of want of power to enter the judgment.
    7. Teachers have no vested rights in positions held by them in the public schools, and their rights terminate at the end of the period for which they were employed.

      John N. Stoclcwell, City Solicitor, and D. C. Westenhaver, for plaintiff in error.

      John A. Cline and J. E. Mathews, contra.
    Kinkade, J.
    On error to common pleas court.
   A few years ago some of the teachers in the public schools of Cleveland formed an organization known as the Grade Teachers’ Club. The club was formed to promote the interests of the members as teachers, and for the betterment of the system of teaching in general. One of the main purposes of the club was to secure higher wages for the teachers, another was to correct certain methods pertaining to the school system that were claimed to be erroneous and unnecessarily burdensome to both pupils and teachers. The club selected for its members the usual officers and committees, including an executive committee and a press committee, the plan being to direct the attention of the public to the claims of the teachers.

For the purposes of this opinion, we need refer only to the two objects of the club mentioned, and chiefly to the matter of increase of salaries for.the teachers.

After the club had given the question of salary consideration and attention for a few years, without securing satisfactory results, the club considered the question of affiliating with the Federation of Labor of Cleveland, and through that body with the American Federation of Labor, to the end that the club might thereby bring to its assistance the influence of these powerful union labor organizations and, with the power of tbe elub thus supplemented, thereby be able to secure from the board of education higher salaries for the teachers.

This plan of affiliating with union labor, for the purpose mentioned, was discussed in the club and in various committee meetings. Distinguished leaders of union labor were invited to and did address the club, advising the carrying forward of the plan proposed. Full and free discussion was engaged in by members of the club, many favoring and others opposing the plan. Full publicity was given in newspapers of all that was taking place. By a very large majority of the members, the club voted to approve the plan.

The board of education thereupon determined that the plan adopted by the club, as stated, would, if carried out, be detrimental, instead of beneficial, to the schools of Cleveland, and pursuant to this decision the board passed a resolution disapproving of the action of the club and calling upon all teachers who were members of the club, who desired to remain as teachers in the schools, to abandon the plan. The board decided, and so resolved, that participation by teachers in the plan of affiliating with union labor, as stated, at any time while teachers, would be treated as equivalent to a resignation by the teachers; that all future contracts or appointments to teach should contain a stipulation to this effect, and that no teacher should be appointed or reappointed who did not freely first assent to these requirements of the board.

The superintendent of schools, J. Mí. H. Frederick, was directed by the board of education to notify all teachers of this decision of the board and to act in accordance with the resolution in making appointments or reappointments of teachers. The teachers were so notified by the superintendent. All these facts were fully discussed in the teachers’ club and in the newspapers of the city. At this stage of events John Q-. Owens, a tax-payer of the city of Cleveland, filed a petition in the court of common pleas, setting forth the foregoing facts and averring, among other things, that said resolution adopted by the board of education was null and void and an abuse of discretion on the part of the members of the board, and that the carrying out of tbe resolution would accomplish a great wrong against the teachers, pupils, tax-payers and citizens of Cleveland in general, by needlessly throwing out of employment a large number of experienced and competent teachers whose places could not be filled by others equally competent, all of which, Owens averred, would result in throwing the whole school system into a confused and chaotic condition and incur' an unwarranted increase in the expenditure of public money made necessary to meet these unusual conditions, all to the great and irreparable damage of Owens and the other tax-payers of Cleveland, for which no remedy at law existed. An injunction was prayed for against the board of education and the superintendent of schools to prevent the carrying into effect of the resolution.

The board of education and the superintendent filed an answer to the petition, admitting the passage of the resolution and denying that the enforcement of the resolution would in any wise produce the results set forth in the petition. The answer denied that the board was abusing its discretion or was in any wise acting in an unlawful manner.

The common pleas Judge, Honorable W. B. Neff, who had heard the application for an injunction shortly prior to the close of the school year of 1914, found, on June 22, 1914, that the allegations of the petition were true; that the resolution adopted by the board of education was null and void; and, so finding granted the prayer of the petition and issued an injunetion in these words:

“The board of education of the city school district of the city of Cleveland, and J. M. H. Frederick, are perpetually enjoined from enforcing said resolution and carrying the same into effect; that said defendants are enjoined from refusing to appoint, reappoint or confirm any applicant for a position of teacher in the schools of said school district, because such person is affiliated with any labor organization, or intends to become affiliated with any labor organization, or because any such applicant has participated in or intends to participate in any effort to form a union of the teachers of the schools of the said district.”

The board of education thereupon gave notice of an intention to appeal the case to the court of appeals and attempted to per-feet the appeal. The omission to file an appeal bond resulted in the appeal being dismissed by the court of appeals, and this action by the court of appeals was affirmed by 'the Supreme Court.

Thereafter, six, and only six, out of the several hundred teachers, members of the Grade Teachers’ Club, a very large majority of whom had, as stated, been active in urging affiliation by the club with union labor organization, failed of reappointment as teachers for the next ensuing year.

The superintendent or liis assistants interviewed these six teachers, respectively, prior to the final closing and making public of the full list of teachers for the coming year.

The evidence found in the record discloses some conflict between these teachers and the superintendent and his assistants as to what was said by each at these interviews. Following the interviews, these teachers, assuming, as they did, that the door had been closed against them, gave interviews to a newspaper in which the conduct of the superintendent and his assistants, as well as the school-teaching system in general, under their management was freely discussed and sharply criticised.

The superintendent claims that prior to the time these teachers gave these interviews to the newspapers, he had not finally determined against their reappointment. The superintendent and his assistants claim these six teachers were told at these interviews that they were out of harmony with their superiors in the management of the schools, and that unless their attitude in this respect was altered, they would not be reappointed.

These six teachers at the same time wrote six letters, one each, all substantially alike in terms, to the superintendent, promising harmonious co-operation with their superiors if reappointed for the coming year. It is admitted by one of the counsel for Owens, that these six letters were prepared under his instruction and were all sent at one time and in one package from his office to the office of the superintendent of schools, Mr. Frederick. It was stated by the counsel under whose direction these letters were written and sent that they were so prepared and sent to test the good faith of the claim on the part of the superintendent that he was insisting only upon harmonious co-operation by teachers with their superiors.

These six teachers were claiming and giving it out to the public through the newspapers that they had been, or were about to be, denied reappointment on the ground that they had been active in urging affiliation of the members of the teachers’ club with union labor organizations as stated.

The claim of the superintendent was and is that these six duplicate letters, coming in one package from the attorney representing the teachers, were no evidence of good faith and a harmonious spirit on the part of the teachers, but were a mere subterfuge put forward to secure reappointments.

When it became definitely and finally known that these six teachers had failed of reappointment, Owens, who secured the injunction, filed in court on September 9, 1914, a charge against superintendent Frederick, alleging the following:

“That the defendent, J. M. H. Frederick, is guilty of disobedience of, and resistance to, a lawful- order, judgment and command of this court, to-wit, the judgment rendered by this court in this cause on the 22d day of June, 1914. Said disobedience of and resistance to said judgment consists in this, to-wit: that on or about the 21st day of June, 1914, * * *' said defendant, J. M. IT. Frederick, * * * did refuse to appoint, reappoint or confirm the following persons, who, at that time and prior thereto, were and have been applicants for the position of teacher in schools of said school district, to-wit: (naming said six teachers); that each of said teachers had served creditably in the schools of said school district for long periods of time, varying from ten to twenty-five years, and had been commended for their fidelity and competency not only by the incumbents of the superintendent’s office preceding the defendant Frederick, but by said defendant Frederick himself; that no reason exists or has been assigned for the dismissal and non-appointment of said teachers, and this plaintiff avers that the sole and only reason actuating the said defendant Frederick in refusing to reappoint said teachers is that said applicants are affiliated with a labor organization known as the Grade Teachers’ Association, or intended to -become affiliated or to continue their affiliations with said organization, and to become affiliated with the Cleveland Federation of Labor, a labor organization, and because they, and each of them, in varying degrees have participated in efforts to form and maintain a union of the teachers of the schools of said school districts.”

Thereupon, on September 9, 1914, Judge W. B. Neff made the following order:

“It is therefore ordered that said defendant, J. M. H. Frederick, appear in this court on the 14th day of September, 1914, in Court Room No. 10 thereof, at the hour of 10 o’clock a. m., to answer said charge, and show cause, if any he has, why he should not be punished as for contempt because of said violation of said decree. ’ ’

The foregoing citation was duly served on Mr. Frederick, with copies of the charge, on September 10, 1914.

On the same day, September 10, 1914, Mr. Frederick duly filed in the office of the clerk of the court of common pleas an affidavit alleging that Judge Neff was biased and prejudiced against him, and thereby was disqualified to sit in the hearing of the charge of contempt.

The question of the existence of the alleged bias and prejudice on the part of Judge Neff was later passed on by Chief Justice Nichols of the Supreme Court, who found that no bias or prejudice sufficient to disqualify existed.

Without entering his appearance, motions to quash the citation and to dismiss the defendant, based on several grounds, including want of jurisdiction to hear the original action and want of power to make the original order claimed to have been violated, wrere duly made by Frederick and were overruled with exceptions saved.

When counsel for Frederick were directed by Judge Neff to proceed with the trial before him, on September 30, 1914, and before the commencement of the trial, the city solicitor, Mr. J. N. Stockwell, one of the counsel for the defendant, Frederick, made the following statement to Judge Neff:

“Before we proceed to the hearing in this case, I would like to say a word with reference to the situation here. This case has been a source of embarrassment to a good many of us, and perhaps to the court, certainly to me, and I feel that what I have to say is said under that embarrassment. The court well knows wdiat the procedure was when the motion to cite Mr. Frederick for contempt was made; Mr. Frederick filing an affidavit of bias and prejudice. That motion was heard by Chief Justice Nichols, and in the course of that proceeding certain testimony was introduced which was passed on by the court, and this court, then, after Judge Nichols had said that he would dismiss it because no evidence had been introduced of bias and prejudice, unless Your Honor felt that he ought to remand it; and Your Honor then, after consultation, said that you felt no bias and prejudice in the case. In behalf of Mr. Frederick, who is here, and is here under circumstances which may deprive him of his property and liberty, I feel it my duty to Mr. Frederick, and my duty as an officer of this court, to Your Honor, to say what I have to say, and that is that Mr. Frederick now feels here in this court that he will not be able to secure a fair trial under all the circumstances. Of course this is a criminal proceeding, a quasi-criminal proceeding, and a proceeding in which Mr. Frederick may, through Your Honor’s action, be deprived of his liberty. It seems to me that it is due to Mr. Frederick, and to the interests of justice generally, that if a man is cited here, with the penalties which may attach to any conduct which has been his, that every possible opportunity ought to be given to Mr. Frederick to see that he has a fair trial, not only to see that he has a fair trial, but to satisfy him that he is to have a fair trial. That is his feeling. We, therefore, suggest that under all these circumstances Your Honor ought not to hear this motion, and I therefore make application, as an officer of this court, to send it to some other judge. I feel that if I were sitting on the bench, and a person to be tried by me as court and jury, to pass upon the law and the facts, that if such a feeling existed on the part of the defendant, counsel should call that fact to my attention. With that in mind, and with the statement that this is his feeling here, we ask Your Honor to send this case back to the assignment room, because this is a citation for contempt of the order of court, not a citation for contempt of this particular branch of the court — that Mr. Frederick may have an opportunity to be tried by a branch of this court where he feels that he will have every possible opportunity. He does not now feel that, before this branch of the court. It is a reasonable request. He has said certain things in the presence of this court. He feels that there is a bias and prejudice; and with that in mind, I make this application. I know of no case in the whole history of the court, at least in the relations which I have had with this court, where the suggestion has been made, if the litigant does not feel that he wants to try that case before that particular judge to whose room it happens to be sent — I know of no ease where even a suggestion of this kind has not prevailed. With that in mind, we make this application. ’ ’

The court forthwith overruled the application so made by-Mr. Stoekwell.

Thereupon the defendant, Frederick, filed his answer, denying all the allegations charging him with having violated the order of injunction, and averring that at all times since the issuing of that order he had acted in full compliance therewith in every respect, and had at no time taken any step towards carrying into effect the resolution of the board of education, and that a.t no time had he any intention to in any way violate the order of the court. Thereupon the trial before Judge Neff upon the charge of contempt proceeded. Many witnesses were examined on both sides. The following journal entry, made on October 30, 1914, shows the decision of the court, to-wit:

“Now comes the defendant, and the complainants, and this cause comes on to-be heard on the evidence touching the defendant’s alleged disobedience of the order of the court made heretofore herein; and upon due consideration the court finds that said defendant is guilty as charged, and is thereby guilty of contempt. It is therefore adjudged that said defendant pay a fine of $500, and costs of this proceeding, and execution is awarded therefor; and it is further ordered that said defendant be committed to the jail of this county for a period of ten days. To which judgment the said defendant excepts. The motion for a new trial of this ease is overruled, to which ruling the defendant excepts.”

The record contains-over thirteen hundred typewritten pages of the oral testimony taken, and in addition thereto a very large number of exhibits. This is a proceeding in error to reverse the judgment of the court of common pleas, and final judgment by this court, discharging the defendant, is asked here.'

Many errors are assigned by counsel for Frederick, which they insist necessitate not only a reversal of this judgment of conviction and sentence, but also final judgment in his favor here. We think it unnecessary to state all the alleged grounds of error with the detail in which they are presented by counsel. The principal grounds, summarized, are-

That the trial judge, Honorable W. B. Neff, was wholly disqualified, by -reason of bias and prejudice, to hear the case; that the court had no jurisdiction to hear the original case in which the order of injunction was granted; that the plaintiff in that action, Owens, the tax-payer, had no right to commence or maintain the action; even conceding the right of Owens, the taxpayer, to thus bring this subject-matter to the attention of the court and the power of the court to consider his petition thus presented, nevertheless the court was wholly without power to issue the order of injunction that it did issue, and that for this reason alone, as well as on other grounds, the order was a mere nullity, and, being so, could not form a sufficient basis to sustain a charge of contempt arising by reason of an alleged violation of such void order; that incompetent evidence, prejudicial to the accused, was admitted over objection and exception; and that the judgment of conviction and sentence is contrary to law and is not sustained by sufficient evidence.

The defendant in error, Owens, claims that the question of jurisdiction and the question of Owens’ capacity to bring and maintain the action were necessarily involved in and were passed upon in the original action, and that the judgment of the trial court entered therein can not now be attacked collaterally in this contempt proceeding.

In view of the conclusion we have reached upon the other grounds of error assigned, we deem it unnecessary to spend any time discussing this question of jurisdiction and capacity to sue. We go directly to the controlling legal question in this case, to-wit: Had the court the power to make the order that it did make? Manifestly, if the court was without power to make the order, then the order was utterly void, and, being void it affords no ground upon which to base a prosecution for contempt arising by reason of an alleged violation of the order. In any ease involving the liberty of an individual, the fact that the judgment, by virtue of which he is denied his liberty, is void will, when shown, constitute a good defense in his behalf, even though the judgment be one which can not be reversed by proceedings in error. It is quite immaterial whether the judgment be void for want of jurisdiction to hear the case, or because of want of power to enter the judgment. The fact that it is void, for any reason, and not merely voidable, is sufficient.

In the case of Siebold, Ex parte, 100 U. S. (25 L. Ed., 717), this language appears in the opinion of Mr. Justice Bradley on pages 376 and 377:

“The validity of the judgment is assailed on the ground that the acts of Congress under which the indictments were found are unconstitutional. If this position is well taken, it affects the foundation of the whole proceedings. An unconstitutional law is void, and is as no law. An offense created by it is no crime. A conviction under it is not merely erroneous, but is illegal and void, and can not be a legal cause of imprisonment. It is true, if no writ of error lies, the judgment may be final, in the sense that there may be no means of reversing it; but personal liberty is of so great moment in the eye- of the law that the judgment of an inferior court affecting it is not deemed so conclusive but that, as we have seen, the question of the court’s authority to try and imprison the party may be reviewed on habeas corpus by a superior court or judge having authority to award the writ. We are satisfied that the present is one of the eases in which this court is authorized to take such jurisdiction. We think so because, if the laws are unconstitutional and void, the circuit court acquired no jurisdiction of the causes. Its authority to indict and try the petitioners arose solely-upon these laws.”

Many other decisions of the Supreme Court of the United States sustain the same proposition.

By the law of Ohio it was the duty of Frederick, the superintendent of schools, to appoint the teachers subject to approval by the board of education. The lav/ prescribes the qualifications of teachers and provides that teachers already in the schools shall be given preference in the matter of appointment as against persons who have not been appointed to teach. Aside from these conditions ipiposed, the statute makes no attempt to control or regulate the discretion of the superintendent and of the board of education in the selection of teachers the whole subject being committed to their sound discretion.

We have nothing to do in this case with the question of the dismissal of teachers during the term of their employment, as none were dismissed. Neither the superintendent nor any of his assistants nor any of the teachers have any vested right in the position that they hold. The right to longer occupy these positions terminates at the end of the period for which the appointment has been made, and.thereafter the right to continue therein depends upon the judgment of the superintendent and the board in so far as assistants and teachers are concerned, and of the board alone in so far as the superintendent is concerned. It was necessary that this power of selection, appointment and reappointment, should be vested somewhere, and the Legislature saw fit to vest it in the superintendent and in the board of education. The statutes will be searched in vain to find any provision to the effect that the superintendent and the board may only make selections and appointments when they are able to give reasons therefor that are satisfactory to the courts; and the record in this case will be searched in vain for evidence tending to show that any teacher has been appointed who was not qualified to fill the position to which she was appointed. It might well be contended that the superintendent and the board of education were abusing the discretion reposed in them by the Legislature in the selection of teachers if it were shown to be true that they had intentionally and wilfully selected incompetent teachers when competent teachers were available. No such question is presented here. The question here is, there being no showing that any teacher appointed is incompetent to perform the duties of the position, can the superintendent and the board of education be held to have abused their discretion in making selections, because they selected the ones they did instead of others who might have been chosen 1 It being true that neither the superintendent nor the board is required by law to state the reasons to any one for the selections made, can the court enumerate certain reasons as insufficient and then command the superintendent and the board of education not to omit to appoint for those stated reasons, and then punish them for contempt if they do so ?

The Supreme Court of the United States, in the case of Coppage v. Kansas, 236 U. S., 1, announced again, on January 25, 1915, the doctrine that any law which abridges the freedom of contract is in violation of the Constitution of the United States. Since that decision, the Supreme Court of Ohio, in the case of Jackson v. Berger, 92 O. S., —, decided May 4, 1915,' has held that Section 12943, General Code, which reads—

“Whoever being a member of a firm, or agent, officer or employee, of a company, corporation or person, prevents employees from forming, joining or belonging to a lawful labor organization or coerces or attempts to coerce employees by discharging or threatening to discharge them from their employ, or the employ of a firm, company or corporation, because of their con-' nection with such labor organization, shall be fined not more' than one hundred dollars, or imprisoned not more than six-months, or both,”

—is unconstitutional and void. In the case mentioned, decided by the Supreme Court of the United States, that. court was considering the validity of a Kansas statute substantially the. same as the section of the General Code above quoted. A large number of decisions were reviewed by the United States Supreme Court in the- case cited, and the law pertaining to legislation of this character is there very-clearly and definitely, stated, and, as I have said, that decision has been followed by the Supreme Court of Ohio in the case mentioned.

We heartily concur in these decisions, and we will not attempt any restatement here of the principles so clearly and comprehensively announced by the Supreme Court of the United States and followed by our own Supreme Court. These two decisions-state the law as applied to the rights of an employer to, be precisely the same as it has long been understood to be with respect to employees, that is to say, that neither may compel the other to continue the relation of employer and employee beyond the term of service agreed upon, nor can either compel the other to enter into any new contract for service except by mutual consent of the parties. The law thus stated as applicable to -individuals, partnerships, corporations and other associations of individuals handling their own money, should surely apply wdth equal force to public officials who are not spending their- own money, but who are trustees of a public fund raised by -taxation, and whose duty it is to make these expenditures according to their best judgment for the common benefit of all. Individuals may be very liberal, if they so elect, with their owm money. Public servants may not have the funds in hand with which to do as they would like in the matter of increasing the salaries .of persons employed by them. They act, as is well known, under many limitations, 'including often an insufficient tax -levy.

It is difficult to conceive of anything that would be more certainly productive in practical application than the proposition that the courts may state to public officers the various grounds upon which they shall not determine against appointing an applicant for a position under the control of such officers. This doctrine extended to its logical result necessarily tabes from the public officer very much of the authority given him by law to make the selection in question, and to that extent, and without the slightest warrant of law, passes this power over to the courts. We are very clearly of the opinion that nothing exists in the statutes giving the courts any such power. We think it would be quite as justifiable for the courts to undertake to regulate all political appointments in the state by prescribing that different political affiliations should not furnish sufficient ground for denying appointments, and then proceed to punish the public officer who violated the order by denying appointment on political grounds.

The members of the board of education are elected by the people. If the people make mistakes in their selection of men to fill these important positions, the ballot box, and not the courts, is the place to correct these errors.

We hold that the trial judge in this case was wholly without power to issue the order of injunction which he did issue against the board of education and the superintendent. Having reached this conclusion, it follows of necessity that the judgment must not only be reversed, but final judgment entered here discharging the defendant, and we might stop here in our consideration of this case. However, certain other matters of importance have been argued by counsel, and we will consider some of them.

We have examined, with great care, the evidence submitted in this case. It would serve no useful purpose to attempt a discussion, in detail, of the thirteen pages of testimony and the very large number of exhibits, nor would it be practicable within the reasonable limits of an opinion. Therefore, I will state only the conclusions that we have reached with respect to the evidence. It is this: That the evidence falls very far short of being .sufficient to justify the judgment of conviction and sentence in this case. We hold the judgment is contrary to law and contrary to the evidence.

I now go to a question presented in this ease that is by no means free from doubt so far as the provisions of the statutes are concerned, and concerning which counsel for plaintiff in error remarked, in presenting it, that they were not very particular which way it was decided, but only that it be decided, to the end that they might not be met with the claim in the.Supreme Court that it had not been presented to this court and consequently could not be reviewed there. I refer to the question of claimed bias and prejudice on the part of the trial judge. The affidavit of the defendant, Frederick, charging the existence of bias and prejudice, was filed in due time and was definite and positive in its statements. This affidavit was called to the attention of the Chief Justice of the Supreme Court, who heard the evidence presented by the affidavit and reached a conclusion adverse to Ml'. Frederick, and consequently ihe trial proceeded before Judge Neff. A majority of this court are of the opinion that the filing of this affidavit disqualified the trial judge, under 1687, General Code, as amended 103 O. L., 417, notwithstanding the other provisions in the code with respect to the Chief Justice of the Supreme Court hearing and deciding the question of the existence of prejudice when charged against a judge of the court of appeals. One member of this court is of opinion that the provisions of Section 1687, General Code, amended as stated, only apply when there is in fact an interest, bias or prejudice, and that the section requires' a hearing before the Chief Justice of the Supreme Court to determine the fact, in accord with the provisions of Article IV, Section 3 of the Constitution.

It will be noted that Section 1527, General Code, found in the same amendatory act, 103 O. L., 413, makes provision, with respect to the disposition of similar affidavits filed against judges of the court of appeals, markedly different from the provisions of Section 1687, General Code.

It has long been the contention of a very large majority of the practicing lawyers in the state that when an affidavit is filed charging the trial judge with bias and prejudice, that affidavit thus filed should operate to disqualify that judge. We think a great majority of the practicing lawyers have felt the embarrassment and the impracticability of trying to prove that bias and prejudice exist in the mind of a trial judge. The conviction in the mind of the lawyer or the litigant that it does so exist arises out of a multitude oí minute circumstances .not easy to bring to .the' attention of any tribunal trying the question. It is very easy to prove, relationship or interest, or to disprove these charges is averred in an affidavit. Not so with the question of bias and prejudice. This court would have preferred that this question might first have been settled by the Supreme Court, and we appreciate keenly the delicacy of any decision upon it by this' court .in this action. However, we are- asked to rule upon the question, and we think we should rule upon it, and, pending further light from the Supreme Court directly on the subject, we hold that, under Section 1687, on the filing of this affidavit the trial judge was without power to hear the case. We have not before us the evidence that was submitted to the Chief - Justice on this question, and the Chief Justice did not then have for consideration the evidence in the contempt case or the-opinion of the trial judge finding the defendant guilty and imposing sentence'. After a thorough review of this case we are firmly of the opinion that if the Chief Justice had been able to look into the mind of the trial judge and see there what is disclosed to us by the evidence in this case and the opinion of Judge Neff, the Chief Justice would very promptly have rendered a decision the very opposite of what he did render on the question of the existence of bias and prejudice. We heartily commend to the Chief Justice,- if this case shall reach the Supreme Court, an examination of the evidence and the opinion of the trial judge, on this question of prejudice, and in this connection we call special attention to the statement of the city solicitor, Mr. Stockwell, made to Judge Neff at the commencement of the trial. . Every member of this court served for a number of years on the court of common pleas. None of us recall any case in which a trial judge insisted upon- hearing a case under circumstances like these attending the trial of this case. It is self-evident, and not contended by counsel to the contrary, that there were many other common pleas judges in the city of Cleveland any one of whom would have been entirely satisfactory to .both parties. The defendant was not asking that the case should be heard by some particular judge;.he only asked that he be not judged by that particular judge. It is almost as important, and particularly so in a case where individual liberty is involved, that a litigant shall believe that he will have a fair trial, as it is that he have a fair trial. It is neither becoming nor in furtherance of the ends of justice that a trial judge insist that he and nobody else shall try a given case, notwithstanding the fact that many other equally competent judges are available and notwithstanding the fact that he is thoroughly convinced, as he must have been in this ease, that both the defendant and his counsel honestly believed the trial judge to be biased and prejudiced. It is not uncommon for reviewing courts to reverse judgments, even in civil actions, on account of the misconduct of juries. It is somewhat rare to find the claim honestly made by reputable counsel that a judgment should be reversed on account of the intentional misconduct of a court.

We are unanimously of the opinion that the evidence of an existing bias and prejudice against the defendant, Frederick,' upon the part of the trial judge in this case, is so manifest from the evidence and the opinion that the judgment ought to be set aside, as contrary to law, on that ground alone, if no other existed.

The freedom of contract guaranteed by the Constitution to all men, and the free exercise of the discretion reposed in the board of education and the superintendent of the public schools, by the statutes of Ohio, are not to be abridged or destroyed by a judicial injunction.

We have not here for consideration and determination the question of Avhether it was wise or unwise for the teacher’s club of Cleveland to affiliate with union labor organizations, and we have no opinion to express upon that' subject. That they had a perfect right to affiliate with these organizations and the organizations with them, if they saw fit, everybody must concede. That right is guaranteed to both by the Constitution. Neither are we concerned with the question whether the resolution passed by the board of education was wise or unwise, and we have no opinion to express concerning that. If the board honestly believed that the contemplated affiliation would for any reason be detrimental to the schools, it had a legal right to discourage the completing óf this affiliation by the teachers. The resolution of the board coerced nobody, not even the board of education itself. It could have been rescinded at any time by the board when it saw fit to do so.

Whether the best and most modern methods of teaching are employed in the schools of Cleveland; whether, as claimed by some teachers, the schools are over-supervised by too many assistant superintendents and special teachers; whether the superintendent is a suitable man for the position which he holds; whether the grade teachers are in fact underpaid, as they claim, for the work they perform, and whether the board of education could pay higher salaries to teachers out of the funds at their disposal for this purpose, are all important questions for the consideration of the board of education of Cleveland, but they are not questions to be decided by this court, and we express no opinion upon any of these matters.

The question as to whether a refusal alone to appoint an applicant to a position, or the discharge alone of one in a position, could never be held to be coercion and therefore unlawful, where the term of service was at will or had' terminated by lapse of time, was directly decided in the case of State v. Bateman (10 Dec., 68; 7 N. P., 487) in a very able opinion rendered by Judge Isaac P. Pugsley, then sitting as a common pleas judge of Lucas county. Able counsel appeared in that case on both side, and after the fullest investigation of authorities, Judge Pugsley wrote an opinión in the case so thoroughly satisfactory to counsel that the case was prosecuted no further. It was there decided that the exercise of a legal right, to-wit, the right to terminate an employment when the employment was at will, or at the close of the term of employment when a fixed term was agreed upon, would not support the claim that the exercise of this legal right amounted to an unlawful coercion of the employee whose term of service was thus- terminated. The Supreme Court of the United States in the case mentioned cite this decision of Judge Pugsley with approval.

For the reasons stated, the judgment of the court of common pleas will be reversed, and final judgment will be entered here discharging the defendant, Frederick.

Richards and Chittenden, JJ., concur.