author: Guernsey, J.

text:
    Waltenberger, Admr., Appellant, v. Pearson et al., Appellees.
    (No. 901
    Decided June 24, 1946.)

      Mr. R. Lyle Shank, Mr. Willis K. Batchelet and Messrs. Lippincott S Lippincott, for appellant.

      Mr. T. B. Ramillón, for appellees.
   Guernsey, J.

This is an appeal on questions of law from a judgment of the Court ofx Common Pleas of Allen' county, in an action wherein the appellant, Julius R. Waltenberger as administrator of the estate of Edna G. Thomas,, deceased, was plaintiff, and the appellees, Elsie Pearson, Katherine S. Pearson, Charles E. Pearson and The South Side Building & Loan Association of Lima, Ohio, were defendants.

The action is one in replevin to recover the possession of certain personal property loca'ted in a lockbox at the office of the defendant The South Side Building & Loan Association,' which the plaintiff alleged was wrongfully detained by the defendants. As the personal property was not taken, the action, under the provisions of Section 12070, General Code, proceeded as one for damages only.

The personal property sought to be replevined consisted of the following classes of property-:

First. United States savings bonds registered in the names of “Edna G. Thomas or Kathryn E. Lehman,” “Edna Thomas or Donald Gene Mack,” “Edna G.' Thomas or Mary K. Bennett,” “Edna G. Thomas or Judith K. Bennett,” “Edna G. Thomas or Sandra Lynn Bennett,” “Mrs. Edna G. Thomas or Mrs. Elsie M. Pearson,” “Mrs. Edna G. Thomas or Chas. E. Pearson,” “Edna G. Thomas or Robert Harry Pear* son,” “Mrs. Edná G. Thomas or Margaret Ann Pearson,” “Mrs. Edna G. Thomas or Richard S. Stager,” “Edna G. Thomas or Miss Betty Lou Lewis,” “Mrs. Edna G. Thomas or Nellie A. Mack,” and “Mrs. Edna G. Thomas or Mrs. Gladys A. Lewis.”

Second. United States savings bonds registered in the names of “Edna G. Thomas and Janice Carol Mack,” “Edna G. Thomas and Robert F. Mack” and “Edna G. Thomas and Dorothy Louise Stager.”

Third. A passbook issued by The South Side Building & Loan Association in the names of “Mrs. Edna G. Thomas or Charles E. Pearson,” showing a balance of $298.98, on deposit as of July 1, 1943.

Fourth. Cash consisting of bills 'and silver, in the total amount of $4866.36.

Certain other personal property 'located in such bdx was, in the petition, alleged to be unlawfully detained by the defendants. However, in their answers, the defendants disclaimed any interest in this property, so that such property was not a subject of consideration in the judgment rendered in this action.

At the close 6f the evidence introduced by the plaintiff, the court, on motion of the defendants, directed a verdict in favor of the defendants and against the plaintiff, and judgment was thereafter duly entered in favor of the defendants and against the plaintiff, and that is the judgment from which this appeal is taken.

As shown by the bill of exceptions, the evidence introduced by the plaintiff was as follows:

The lockbox in question was rented by the defendant Charles E. Pearson on July 17, 1939, and at the time he rented it, as a part of the contract of rental, he authorized the decedent Edna Thomas to have access to the box at any time, the same as he would have in person. At a later date he extended such authorization so that he, Edna Thomas and Elsie Pearson, his wife, were authorized to have access to the box at any time.

Jesse Thomas, husband of Edna Thomas, conducted a restaurant business in Angola, Indiana, and Edna Thomas worked in the restaurant and handled all the monies derived from the operation thereof.

Edna Thomas, without the knowledge of her husband, Jesse Thomas, took the money derived from the operation of the restaurant and purchased and paid for the United States savings bonds, hereinbefore referred to, and, with a portion of snch funds, maintained the savings account in The South Side Building & Loan Association,, hereinbefore referred to. She also, with a portion of such funds, made deposits in The City Loan Company of Lima, Ohio, from time to time, the certificates for which were made payable to her or Charles E. Pearson. These deposits were continued and renewed from time to time for several years until, on June 30,1941, the deposits were represented by two certificates made payable as aforesaid, one. for $3129.22 and the other*for $624.90. The deposit represented by the first certificate was withdrawn on September 13, 1941, and the deposit represented by the second certificate was withdrawn on September 20, 1941, the' total withdrawal of both certificates amounting to $3754.12.

In a letter under date of July 12,1943, addressed by Charles Pearson to Jesse Thomas, Mr. Pearson stated:

“I received a letter from Elsie, saying you checked over the things in my safety deposit box. Most of the stuff in the box was Edna’s. I’ll tell you what she wanted done with the part I know of. Once when she was in Lima she said she wanted me to give the bonds to whose ever name was on it with hers and the cash belong to me if any thing happened to her. I asked her what about you, she said you had the real estate and a few other things and she thought you had enough to live on. About Kathryn’s house and Harry’s note she never told me, what she wanted done with it. The money in the bank book in her’s and my name was mine. The money in her’s and Mom’s name belongs to Mom. Edna had money in the city loan in her name and mine for a while but she told me to draw it-out and put it in' my box. ’ ’

In another letter to Jesse Thomas, under date of August 2, 1943, Mr. Pearson stated:

“1 received your letter this noon that you wrote July 30 asking me about my safety deposit box contents. I have already told Elsie to give you Harry’s note and what papers I have on Kathryn’s house. I’m sure if you go and ask her for them, she will give them to you. About the bonds. Mr. Hamilton says, if Edna told me that I was to give them to whose ever name was on with her’s that I was custodian of them and was responsible for them till the persons got them and about the cash in the box. Edna had it in the city loan for a while in her name and mine. Later she told me to draw it out and put it in my box. She also told me, if any thing ever happened to her, I was to have the money. * * * As about the other money I can’t say much, but I know it was to be Mom’s. I have heard Edna say to Mom that if she needed any money to go to the bank and get it.”

There is no evidence showing the * source of the balance of the cash in the safety deposit box, and there is no evidence, other than the evidence as to the manner in which such bonds were registered, showing any agreement or arrangement between Edna Thomas and the other persons in whose names the bonds were registered as to the bonds or the proceeds thereof.

There is no evidence showing any contract with The City Loan Company or with The South Side Building & Loan Association with reference to such deposits made therein, other than that the accounts were in the names mentioned in the certificates of The City Loan Company and the passbook of The South Side Building & Loan Association.

Plaintiff makes the following assignments of error:

1. Overruling the demurrer filed by the plaintiff to the several answers on file, and overruling the renewal of the demurrer at the beginning of the trial.

2. Allowing the motion of the defendants for a directed verdict at the end of the evidence offered by the plaintiff.

3. Directing the jury to return a verdict of “no , cause of action.”

4. Overruling the motion for a new trial.

5. Other errors apparent in the record.

Before considering these assignments of error it will be advisable to discuss the purpose and nature of this action.

The principal purpose of a writ of replevin is to enforce the claim of an owner of property for its delivery to him by one who wrongfully detains it. The primary object is to determine the right of possession. What is an action in ‘ ‘ detinue ’ ’ at common law is now, by the General Code, designated as an action in replevin.

The action , for damages, where the property has not been taken, has been regarded as one in the nature of an action of trover.

The general rule is well settled that replevin can be maintained only for specific property capable of identification and delivery and will not lie for an undivided-interest in personal property. 35 Ohio Jurisprudence, 437, Section 17.

Assignment of error No. 1 will be first considered, and assignments 2 and 3 will be considered together as they involve the same subject matter. The other assignments will then be considered.

1. Plaintiff filéd demurrers to the answers of Charles E. Pearson and Elsie Pearson. The demurrer to the answer of Charles E. Pearson was directed to the defense pleaded in his answer, that all the United States savings bonds in question were registered in the names of, and payable to, Edna G. Thomas or another person as co-owners,' and that under the regulations of the United States Treasury Department, relating to bonds of this character,, the survivor of such co-owners is the sole and absolute owner of the bonds- and payment will be made only to such survivor. The demurrer to the answer of Elsie Pearson was directed to the defense pleaded in her answer to the same effect except that such defense was limited to the bonds registered in the names of “Edna Thomas or Elsie Pearson.”

An inspection of such regulations discloses the following provision applicable to the bonds in question :

“Sec. 315.45. Payment or reissue. — A savings bond registered in the names of two persons as co-owners in the form, for example, ‘John A. Jones or Mrs. Mary C. Jones’, will be paid or reissued as follows; * * #

“(c) Payment or reissue after the death of one co-owner. — If either co-owner dies without the bond having been-presented and surrendered for payment or authorized reissue, the surviving co-owner will be recognized as the sole and absolute owner of the bond and payment or reissue, as though the bond were registered in his name alone, will be.made only to such survivor. ’ ’

“Sec. 315.13. Judicial proceedings (judgment creditors, trustees in bankruptcy, receivers of insolvents’ estates and conflicting claimants). — A claim against an own'er or co-owner of a savings bond and conflicting claims as to ownership of or interest.in such bond as between co-owners or the registered owner -and a designated beneficiary, will be recognized when established by valid judicial proceedings and payment or reissue will be made, upon presentation and surrender of the bond, except as follows:

“(1) No such proceedings will be recognized if they would give effect to an attempted voluntary transfer inter vivos of the bond or would defeat or impair the rights of survivorship conferred by these regulations upon a surviving co-owner or beneficiary. ’ ’

“Sec. 315.4. Authorized forms of registration, series E, and general provisions relating to their use.

“(a) Forms of registration. — Bonds of series E may be registered only in the names of individuals (natural persons), whether'adults or minors, in their own right in one of the following forms:

“(1) One person: In the name of one person, for example: ‘John A. Jones.’

“(2) Two persons — Co-ownership form: In the names of two (but not more than two) persons in the alternative as co-owners, for example: ‘John A. Jones or Mrs. Ella S. Jones.’

“No other form of registration establishing co-ownership is authorized. ’ ’

These provisions, with the force and effect of law, . constitute a part of the contracts by which the bonds are sold by the government and determine not only the person to whom the bonds are to be paid but also determine the property rights, as between themselves, of the parties in whose names as co-owners the bonds are registered. Consequently where, as in the instant case, bonds are registered in the manner pleaded in such defenses, they become the absolute property of the survivor of the co-owners after the death of one of the co-owners, and the executor or administrator of such deceased co-owner has no right, title or interest in them or right to the possession thereof.

The court, therefore, did not err in overruling such demurrers, or the renewals thereof, and this assignment of error is without merit.

2 and 3. These assignments involve the question whether there was any evidence tending to prove that the plaintiff, as against the defendants, was entitled to the possession of any of the personal property in controversy.

Under assignment No. 1, we have held that the plaintiff neither owned nor is entitled to the possession of snch of the United States savings bonds as were registered in the names of plaintiff’s decedent or another as co-owners.

The next question to be determined is whether the plaintiff was the owner and entitled to the possession of the other United States bonds in controversy, which we have hereinbefore designated as class No. 2.

It will be noted, from the above-quoted regulations, that bonds of series E may be registered in the names of two persons in the alternative as co-owners and' no other form of registration establishing co-ownership is authorized, so it would appear that there is considerable doubt as to whether any of the bonds in controversy were registered in the names of Edna G. Thomas and another, coming within the class designated as class No. 2, of the personal property sought to be replevined. But assuming, as we must assume from the evidence, that certain of the bonds were so registered, such bonds, in the absence of regulations to the contrary, and no regulations to the contrary have been brought to the attention of the court, would be jointly owned by the. persons in whose names they are registered. In the absence of evidence to the contrary, and ■ there is no evidence to the contrary, such bonds would be presumed to be owned in equal shares by the persons in whose names they are registered. Upon the death of one of the registrants, his share in the bonds would descend to his heirs, subject to administration as a part of his estate, and the surviving registrant would retain his half interest.

In such situation, the administrator of the estate of the deceased registrant would not have the right to possession of the bonds to' the exclusion of the surviving registrant, and, there being no. such right to possession, an action in replevin by such administrator to recover the possession of such bonds could not be maintained.

In the absence of further evidence on the subject, other than above outlined, we do not decide or attempt to decide the respective interests the respective parti.es may have in the bonds or the proceeds thereof, but simply decide that upon- the evidence adduced the plaintiff is not entitled to the possession of, such bonds as against the defendants.

The next matter to be considered is whether, on the evidence adduced, the plaintiff is entitled' to the possession of the passbook of the savings and loan association, which we have designated as class 3 of the property in controversy.

The only evidence before us reflecting on this question is the evidence that the deposit account represented by the passbook stands in the names of “Mrs. Edna Gr. Thomas or Charles E. Pearson.”

It is the judgment of the writer of this opinion that the ’ evidence mentioned shows the account to be a joint account, as there are no words purporting to create a right of survivorship in the account. Joint tenancies with right of survivorship are not recognized by the courts of Ohio unless such right of survivorship is prescribed by the 'instrument creating such joint tenancy.

The account does not constitute a joint and survivorship account, within the meaning of Section 9648, General Code, relating to deposits of that character in building and loan associations, as the evidence fails to show a joint order of the parties to the account to the building and loan association that such deposits or any part thereof were to be payable to the .order of any one or more of such joint depositors and to continue to be so payable notwithstanding the death or incapacity of one or more of the persons making them.

It has been held that the adjudication of lunacy and the appointment of a guardian of one of the parties to a joint and survivorship account terminates the agreement, and, as each had a complete interest in the entire account, equity requires, in the absence of extraordinary circumstances, an equal division of the account between the parties involved, as of the time the guardian was appointed. Abrams, Gdn., v. Nickel, 50 Ohio App., 500, 198 N. E., 887, motion to certify overruled May 29, 1935.

By the same reasoning, it would appear that, where a deposit account in a building and loan association is payable to either one of two persons, with no right-of survivorship in either specified, such account terminates on the death of one of the parties and equity requires, in the absence of extraordinary circumstances, which did not exist in the instant case, an equal division of the account between the administrator of the deceased party, and the surviving party, as of the time of the death of the deceased party.

However, in the instant case, it is unnecessary to determine, and we do not determine, whether the deposit account was a joint account or a joint and survivorship account. In the first event the administrator of the estate of Edna G. Thomas would be entitled to half of the account and Charles E. Pearson, the other party to the account, the other half. In the second event, Charles E. Pearson as survivor would be entitled to the whole of the account. In neither event would the administrator of the estate of Edná G. Thomas be entitled to the possession thereof to the exclusion of Charles E. Pearson, and consequently could not maintain an action to replevin the passbook representing the account. •

We are not deciding or attempting to decide the respective interests of the parties in the account, but simply hold that upon the evidence adduced the plaintiff is not entitled to the possession thereof as against the defendants.

The next matter to be considered is the question of the right to possession of the cash in the safety deposit box.

As hereinbefore noted, the evidence discloses that $3754.12 of the cash amounting to $4866.36 in the safety deposit box was derived by Charles E. Pearson from withdrawals made by him on certificates of .deposit issued by The City Loan Company, payable to Edna G. Thomas or Charles E. Pearson, and there is no evidence as to the derivation of the balance of such monies.

In order for the plaintiff to recover such monies" in replevin, or damages in lieu thereof, it was incumbent upon him to prove his right to the immediate possession of such monies. Plaintiff’s right to possession in the instant case depended upon his ownership of such monies in his capacity as administrator of the estate of Edna Gf. Thomas, deceased.

As to the money in the safety deposit box in excess of the proceeds of the certificates of deposit, the plaintiff failed to show that his decedent had any right, title or interest therein. We will, therefore, confine our further consideration of'the question o’f the right of possession of the cash in the safety deposit box, to the proceeds of the certificates of deposit above mentioned.

Under the terms of these certificates, and in the absence of any further agreement between himself and Edna G. Thomas concerning the subject matter, Charles E. Pearson would have had the legal right to withdraw the funds on deposit and to hold the same as his own property upon making such withdrawal. However, the evidence shows a further agreement between Charles E. Pearson and Edna G. Thomas with reference to the subject matter.

The letters of Charles E. Pearson to Jesse Thomas, surviving spouse of Edna G. Thomas, above mentioned, show that Pearson, at the direction of Edna G. Thomas, withdrew the deposits from The' City Loan Company and put the proceeds in the safety deposit box rented by him, and that such funds were put and kept in the box upon the understanding that “if anything ever happened to her” (Edna G. Thomas), that is, if she died, “the cash belonged to me” (Charles E. Pearson). “I [Charles E. Pearson] was to have the money.”

The evidence further shows that while the box was rented by Charles E. Pearson, Edna G. Thomas, under the terms of the rental contract, had the right of access to it the same as Charles E. Pearson would have in person.

The fact that it was the understanding and agreement of the parties that the funds were to belong to Pearson upon and in the event of the death of Edna G. Thomas excludes any hypothesis that the funds belonged.to Pearson during the lifetime of Edna G. Thomas, and this fact, plus the fact that Edna G. Thomas had the right of access to the safety deposit box during her lifetime, excludes any hypothesis that •she had' parted with dominion over such funds and that the transaction constituted the delivery of a gift by Edna G. Thomas in her lifetime to Charles E. Pearson to take effect on her death.

Consequently the transaction, as shown by the evidence adduced on the subject, amounted to an attempted testamentary disposition of the funds, which could be made only by will, and was therefore ineffective to pass title to Charles E. Pearson upon the death of Edna G. Thomas.

The plaintiff, therefore, through the evidence adduced by him, made a prima facie case showing that he was entitled to the possession of such funds or for damages in lieu thereof. So far as such funds are concerned, the court erred in directing a verdict. in favor of the defendant Charles E. Pearson and against the plaintiff, which error requires a reversal of the judgment.

For the reasons .mentioned, assignments 2 and 3 are without merit except in the respect hereinbefore mentioned.

4. The subject matter of assignments 2 and 3 above mentioned constitutes two of the grounds on which the plaintiff based his motion for a new trial, and as they have been fully considered under such assignments we will not discuss them further.

The only other ground for the motion for new trial is that the court erred in the rejection of testimony offered. by the plaintiff. This error is not specified or argued in plaintiff’s brief, so the same will not be considered by the court.

5. The plaintiff, in his brief, neither specifies nor argues any errors other than those above mentioned, so this assignment will not be considered.

As we find error in the particulars hereinbefore set forth, the judgment of the Common Pleas Court is reversed at costs of defendant Charles E. Pearson, and the cause is remanded for a new trial and further proceedings according to law, in accordance with this opinion.

Judgment reversed.

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


source: Caselaw Access Project

author: Matthews, P. J. Ross, J.,

license: Public Domain

text:
    The State, ex rel. Indian Hill Acres, Inc., v. Kellogg, City Mgr., et al.
    (No. 6795
    Decided May 5, 1947.)

      Messrs. Taft, Stettinius & Hollister and Mr. John H. More, for relator.

      Mr. John D. Ellis, city solicitor, and Mr. Ed F. Alexander, for respondents.'
   Matthews, P. J.

This is an action instituted in this court, seeking a writ of mandamus directing the city manager and the superintendent of the waterworks department of the city of Cincinnati to permit relator to connect its water-main extensions to the water mains in Miami road, a public street, to permit consumers of .water to be served by such water-main extensions and connections and to accept the application of the relator to make such connections and permit the same to be made.

Stated tersely, the relator asks that the respondents, as the officials of the city of Cincinnati, charged with the duty, be required to supply the relator with water from the municipal waterworks, upon compliance by relator with the required conditions.

An alternative writ was issued and the cause now comes before this court on the relator’s prayer for a mandatory writ in conformity to the alternative writ.

There is substantial agreement on the facts.

The city of Cincinnati during all the time material here owned and operated a municipal waterworks with a capacity in excess of the normal requirements of the municipality and its residents. Although there is apprehension that at no distant time the capacity of the waterworks may be taxed to supply the increased needs of the municipality, it is clear that at the present time there is a surplus of water and that this surplus is being disposed of to consumers outside the munici pality.

Acting under the authority conferred by Section 6602-17, General Code, the county commissioners of Hamilton county, in 1925, established in Sewer District No. 1 a waterworks system to supply water to the public. They caused to be constructed in Miami road (then a highway in unincorporated territory in Hamilton county, but now in the incorporated village of Indian Hill) a 16-inch water main, as well as other mains, and, as authorized by law, levied an assessment of $2.13 per front foot plus $25 per acre to pay the cost.

The relator’s land consists of 43 lots of an area of more than one acre each, no part of which is contiguous to the city of Cincinnati. These lots formed a part of a tract of 213 acres acquired by the relator and its predecessor in title, all located in Sewer District No. 1. This land was acquired between 1929 and 1936 for the purpose of dividing it into residential lots of not less than one acre each, and this has - been done, at least in part. The part that has not been subdivided abuts on Miami road, where the 16-inch water main was installed.

The relator and its predecessor in title have paid in the form of assessments the- sum of $16,892.59 as their share of the cost of installing this water distribution system in Sewer District No. 1.

In 1935, while this land was still in unincorporated territory, the relator’s predecessor in title, as required by law, filed with the city planning commission of Cincinnati a preliminary plan for the subdivision of such land, which plan was tentatively approved, and, in 1942, after the land was incorporated as a part of the village of Indian Hill, the plan was filed with that village and tentatively approved on January 28, 1946.

The investment, including the original cost, plus the cost of constructing roads, streets, sewers, etc., totals somewhere between a quarter and a half million dollars. A very substantial portion of this cost was incurred in constructing water-main extensions under the supervision of and in accordance with the plans of the waterworks department of the city of Cincinnati, with the purpose of securing the supply of water through the water main previously constructed in Miami road.

In 1925, when the county commissioners, acting-under authority of Section 6602-1, General Code, created Sewer District No. 1 and laid out the water-distribution system therein, as heretofore set forth, they entered into a contract with the city of Cincinnati to provide the water for this district and eight others. On October 10, 1930, a new contract was substituted. This contract was to expire on May 29, 1946, and provided that the city of Cincinnati would furnish water from its surplus at one and one-half times the price charged by it to its residents and would collect the charges directly from the users in Sewer District No. 1.

After May 29, 1946, the city of Cincinnati continued and still continues to furnish water to residents in Sewer District No. 1, to whom it was supplying water on that date.

In making this contract with the county commissioners to supply water for the distribution system in Sewer District No. 1, the city of Cincinnati acted under the general authority conferred by Section 6 of Article XVIII of the Constitution of Ohio, which authorizes municipalities owning and operating waterworks systems to sell to others outside the municipal limits any surplus not exceeding 50 per cent of the total furnished' within the municipality. By Section 6602-17, General Code, municipalities are specifically authorized to sell their surplus water to water-supply systems established by counties.

In August 1946, the relator applied to the waterworks department for leave to attach or have attached the water-main extensions which it had constructed in Miami road, so that the relator’s property would be served with water on the same terms as it was served to all others in such district. When this application was placed before the council of the city of Cincinnati in the form of a proposed ordinance authorizing the connection, the council refused to adopt it. In November 1946, the relator made written demand upon the respondents for this' service, which was refused on January 18, 1947, on the ground that, as the relator refused to comply with Ordinance 164-1946, -they were not authorized to comply with the request. By section '1 of that ordinance, the city manager was authorized to continue for a period of five years from May 29, 1946, in accordance with the terms of existing contracts, except as modified by such ordinance, to supply water from such surplus as it might have to areas outside .the city of Cincinnati at the rate of 15 cents per 100 cubic feet; with the proviso, however,, that no water should be furnished through any extension of existing mains outside the city. There was imposed a furthér limitation that whenever an owner of land outside the city, which land was so located that it should become a part of the city, made a binding commitment on behalf of himself and subsequent owners to sign any petition or other document necessary to procure annexation of the land, and to do all things necessary or proper to bring about the annexation of the land, then the city manager should report such facts and his recommendations to council for its consideration as to whether water should be furnished to such owner. This ordinance expressly reserved the right of council to furnish water outside the city limits without such commitment, where a denial would cause gre.at hardship or serious economic social disadvantage to the community.

Since May 29, 1946, council has adopted 46 ordinances authorizing the city manager to supply water, through water-main extensions to be constructed, to owners outside the city who had committed themselves to co-operate in proceedings to annex their lands to the city as required by Ordinance 164-1946. In one instance the city manager was authorized to sell water to an owner outside the city on the ground that a denial would result in great hardship and serious economic and social disadvantage to the community. None of these instances, however, was in Sewer District No. 1, The relator refused to commit itself to co-operate in annexation proceedings. It is assured that relator would have been furnished water had it so committed itself.

As the others in Sewer District No. 1 are being furnished water without being required to commit themselves to co-operate in annexation proceedings, we pass by, without deciding, the interesting question as to the validity of a contract purporting to commit a citizen to co-operate in the desire of municipal officials to enlarge the municipal territory and authority. ,Valid or not, the relator’s refusal to sign a commitment was the only reason assigned for the respondents ’ refusal to furnish water.

As we view this case, it does not involve the general question of the right of any owner of land outside Cincinnati to have water supplied to him by Cincinnati or the right of any owner of land in Hamilton county outside of Sewer District No. 1. The question,' as we see it, is the limited one of the right of an owner of land in Sewer District No. 1 to have water furnished to his property upon the same terms and conditions as it is being furnished to the other owners of land in that district. Whether, in some other relation, the reason assigned for the refusal would be valid per se is of no consequence.

That an effective sewage-disposal and water-distribution system relates to the public health and, therefore, is a proper object of government, no one disputes at this late day. Although the limits of the pólice or sovereign power are often disputed, the fact that it includes every exertion that has any reasonable tendency to prevent disease and promote health is never the subject of argument. The power to enact all laws having any relation to those subjects is a part of the power expressly reserved to the state by the Tenth Amendment to the Constitution of the United States. However, this power must be exercised subject to the limitations upon state power imposed by other provisions of the United States Constitution, among which are the provisions of the fourteenth Amendment, that no state shall deprive any person of life, liberty or property without due process of law nor' deny to any person within its jurisdiction the equal protection of the law. The sovereign people of the state have recognized these limitations upon their, power by expressly imposing by Sections 2 and 19 of Article I of the Ohio Constitution these same limitations upon the agencies of government instituted by them.

So the city of Cincinnati, by . virtue of the power delegated to municipalities in the Ohio Constitution to exercise all local police power (Section 3 of Article XVIII) not in conflict with general laws and to own and operate a waterworks system (Section 4 of Article XVIII), was and is fully authorized to make distribution of the water and own and operate the facilities necessary or convenient to accomplish that purpose, limited, however, g-eographically by the municipal boundaries and constitutionally by the provisions that forbid the power to be so exercised as to deny to any person due process of law or the equal protection of. the law. There must be no discrimination. This does not prevent the classification of users of water within the city and regulation of use and rates according to classes, but the classification must be based on actual and substantial distinctions and all within the same class must be served without discrimination. Those similarly situated must be similarly treated.

"When the city of Cincinnati, engages in the supplying of water to the residents within its border, it is performing a governmental function. We are not concerned here with the distinction between governmental capacity and proprietary capacity for the purpose of fixing tort liability. Regardless of that distinction, the city is exercising the sovereign power of the state when it is engaged in such enterprise and it must do so without discrimination. The city is not authorized to enter into the private business of supplying water. No such power has been conferred upon it. However, if, in the exercise of the governmental function of supplying water to' its residents, a surplus is found to exist, the city becomes the owner of that surplus, and, as it is not used or useful for any governmental purpose within the municipality, it may be disposed of as any other property of which the city- may become the owner and for which it has no public use. It is an exercise of governmental power to dispose of such property, but upon the sale of such property, the governmental function ceases. On this subject, it is said,-in 37 American Jurisprudence, 748, Section 132:

‘ ‘ * * * where, as a necessary result of carrying on a legitimate public enterprise in a reasonably prudent manner, a surplus of the material used or distributed is acquired, or a by-product created, a municipal corporation may lawfully engage in the business of disposing of such surplus or by-product for profit, without special legislative authority.”

Speaking- of the status of surplus property (water power and electric energy) acquired in the exercise of the power of government, Chief Justice Hughes, in Ashwander v. Tennessee Valley Authority, 297 U. S., 288, 333, 80 L. Ed., 688, 56 S. Ct., 466, said:

“That the water power and the electric energy-generated at the dam are susceptible of disposition "as property belonging to the United States is well established. In the case of Green Bay Canal Co. v. Patten Paper Co., supra [172 U. S., 58, 43 L. Ed., 364, 19 S. Ct., 97], the question was ‘whether the water power, incidentally -created by the erection and maintenance of the dam and canal for the ^purpose of navigation in Fox river’ was ‘subject to control and appropriation by the United States, owning and operating those public works, or by the state of Wisconsin, within whose limits Fox river lies.’ Id., pp. 68, 69 * * * it was decided # # that it was ‘equally plain that the mode and extent of the use and enjoyment of such property by the canal company’ fell within the sole control of the United States.”

On the subject of sale of property once devoted to. a public purpose, but no longer used or useful for such purpose, it is said, in 3 McQuillin Municipal Corporations (Rev. 2 Ed.), 1028, Section 1243:

“Property devoted to a public use cannot be sold- or leased without special statutory authority, although property which has ceased to be used or is not .used by the public may be sold or leased as the public welfare may require.' * * * Municipal corporations hold all property in which the public is intérested, such as streets, alleys, public squares, commons, parks and wharves, in trust- for the use of the public, and on principle, such trust property can no more be disposed of by the municipality than can any other trust property held by an individual.”

Both by constitutional provision and by statute, the state of Ohio has recognized that surplus water beyond the municipal needs might result from the operation of a water-works system, and has provided that such surplus can be sold, but such authority to sell did not transmute the local municipal 'sovereign into a roving sovereign going beyond the city limits into the domain of other rulers. Such sovereign shed the regal panoply when it stepped beyond the municipal boundaries. Notwithstanding the power to sell the surplus, water, the city could not supplant the governmental power of the political subdivision into which the water might be taken. If the city entered the territory of other political subdivisions in order to sell its surplus, it did so as an owner of property for which it had no public use, seeking a purchaser or purchasers in a locality over which it had no governmental power.

Likewise in matters of county-wide concern, policy-making power has been delegated to the commissioners, and specifically has this power been confided to such board in the matter of establishing sewer districts and water-distribution systems and providing by contract or otherwise for a supply of water. Although the power to divide the county into districts is conferred, this power must not be exercised arbitrarily. The district bounds must be drawn with some reasonable relation to topography and habitation, so as to include to a practical degree all those similarly situated. When the district is established, all those residing within its bounds must be served without any discrimination.

Although the county commissioners are given the power to contract with a municipality for water and the municipality is authorized to sell water from its surplus, it is the county commissioners that exercise the sovereign power of the state in determining whether there shall be established and operated a sewer-disposal and water-distribution system within the unincorporated portion of the county and it is to the county commissioners that has been delegated the auxiliary power of taxation, assessment and eminent domain to effectuate the policy determined by them. When the city of Cincinnati entered the unincorporated portion of the county, it did so in its own right only as a vendor of surplus water. Whatever it has rightfully done in distributing water to the residents of the district has been as an agent of the county commissioners. It was and is without power to establish a county sewer district or to determine how such district shall be operated. That power rests in the county commissioners and discrimination is prevented by constitutional provisions. The commissioners themselves must not discriminate, and what they cannot do themselves, they cannot authorize any other person or corporation to do.

• We believe the principles 'announced in the case of Western Reserve Steel Co. v. Village of Cuyahoga Heights, 118 Ohio St., 544, 161 N. E., 920, are controlling here.

The facts in that case were:

The village of Cuyahoga Heights secured the water for its water-distribution system from the city of Cleveland under a contract containing a provision that if a user of water failed to pay the city of Cleveland for the water, the city of Cleveland had the right to turn off the water. If after such shutting off, the consumer failed to pay, then the village of Cuyahoga Heights would pay the city of Cleveland for the water, in which event the city of Cleveland would not turn the water on again for the delinquent consumer, or for anyone holding title through such consumer, unless the village of Cuyahoga Heights consented. A consumer defaulted, was adjudged- a bankrupt and the premises to which the water had been supplied were sold to Western Reserve Steel Company. The water bill not having been paid, the village of Cuyahoga Heights refused to consent to the turning on of the water connecting with the premises. Neither by contract nor by ordinance was the unpaid water bill made a lien on the premises where the water had been consumed. The suit was brought to require the turning on of the water. 7

The court held, as stated in the syllabus:

“1. It is the duty of a municipality which undertakes to supply water' to its public, to do so without discrimination. The duty arises out of such undertaking, regardless of the mode adopted to accomplish such purpose. The municipality cannot absolve'itself of such duty by a contract to which the person sought to be discriminated against and to whom it owes the duty is not a party. * * *

“3. When a municipality contracts to supply water to the public of another municipality, it dedicates itself in that respect to the service of the public of such other municipality; and while it may limit, by contract, the scope and extent of its duty to the municipality as such, it cannot, while enjoying the privileges and immunities of a public utility, by such contract absolve itself from the duties toward such public that are cast upon it by law by reason of such dedication. ’ ’

And at pages 549 and 550, the court said:

“With reference to the two municipalities themselves, the city of Cleveland and the village*of Cuyahoga Heights, the contention of the defendants in error is probably tenable. It is probably true that neither could enforce performance by the other- without performance - or tender of performance to the other, for, in respect to supplying water to each other and each other’s public, they owed no duty except such as they might impose upon themselves by contract. But when a municipality, under the authority conferred upon it by the Constitution, engages in the operation of a public utility, it enters that field burdened with the same duties and subject to the same restrictions, in respect to, the public of the territory served, as would apply to and govern a private corporation similarly engaged; and especially where it engages in such enterprise extra territorium is its relationship to the public shorn of sovereign prerogative. ’ ’ •

It is true that a factual distinction exists between the Western Reserve Steel Company case and the instant one, in .that that case involved a contract between two municipalities. However, we do not perceive where a municipal corporation owes any greater duty to serve its residents with water without discrimination than do county commissioners in serving the residents of a sewer district established by .the commissioners for the sole purpose of furnishing such service. It is also true that the contract involved in the steel company case was for an unexpired term, whereas, in the instant case, the original contract between the city of Cincinnati and the county commissioners was for a term of twenty years, which had elapsed. However, Cincinnati continued to supply water to consumers within Sewer District No. 1 through the water-distribution system established by the county commissioners in the exercise of their governmental powers. Cincinnati could do this only by the consent of the county commissioners; in other words, it was done as a result of a contract, tacit or express, between the two political agencies. Whether the contract was for a definite term or only at will is entirely unimportant. The important and controlling element is that the county commissioners through the the city of Cincinnati are furnishing a public service and under constitutional provisions are not permitted to discriminate among those similarly situated.

For these reasons, a peremptory writ of mandamus will be issued in conformity to the alternative writ heretofore issued.

Writ allowed.

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

Ross, J.,

concurring in the syllabus and judgment. I concur in the conclusion of my associate, Judge Matthews.

It is stated in the second paragraph of the syllabus in the case of City of Barberton v. Miksch, 128 Ohio St., 169, 190 N. E., 387:

“In the construction and maintenance of a system for supplying water to its inhabitants, a municipality acts in a proprietary capacity.” See, also, City of Salem v. Harding, 121 Ohio St., 412, 417, 169 N. E., 457.

I consider certain statements made' in the opinion of my associate to be in conflict with those authorities.

In Cleveland Ry. Co. v. Village of North Olmsted, 130 Ohio St., 144, 148, 198 N. E., 41, 101 A. L. R., 426, where the Barberton case is cited with approval, it is stated:

“This court held, in the first paragraph of the syllabus in State, ex rel. White, v. City of Cleveland, 125 Ohio St., 230, 181 N. E., 24, 86 A. L. R., 1172:

“ ‘A municipality, in so far as it acts in a proprietary capacity, possesses the same rights anql powers and is subject to the same restrictions and regulations as other like proprietors.’ ”

In Western Reserve Steel Co. v. Village of Cuya hoga Heights, 118 Ohio St., 544, 552, 161 N. E., 920, it is stated:

“At the same time, because of its having entered the field of public utilities, there devolved upon the city of Cleveland certain duties toward the public of the territory it had undertaken to serve that were cast upon it, not by the contract, but because of the contract, among which was the duty to serve the utility to the public of the designated territory without discrimination, from the performance of which duty it could not absolve itself except by contract with the person to whom it owed the duty.”

Many authorities are cited in support of that statement. The principle is incorporated in the syllabus quoted in the opinion of my associate.

The city of Cincinnati having seen fit in its proprietary capacity to assume to furnish water to some residents in Sewer District No. 1, Hamilton county, is subject to the same restrictions against discrimination as would apply to*any public utility assuming a similar service.

Under such circumstances, therefore, those residents of Sewer District No. 1, who are refused a service granted to other residents, may have the benefit of a writ of mandamus, through which such discrimination may be eliminated.


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    Milbourn, Appellee, v. Aska, Appellant.

      (No. 906
    Decided July 13, 1946.)

      Messrs. Cable & Cable, for appellee.

      Messrs. Meredith é Meredith, for appellant.
   Guernsey, J.

This is an .appeal on questions of law and fact from a judgment of the Court of Common Pleas of Allen county in a case wherein Charles M. Milbourn, the appellee herein, was plaintiff and J. C. Aska, the appellant, was a defendant, as was also one Marjorie Price who did not appeal. The case was tried de novo in this court.

The action was brought by plaintiff, as lessee under a written lease entered into between him and Aska as lessor, to enjoin Aska from terminating the lease and taking possession of the premises.

The material facts as disclosed by the evidence are as follows:

During the month of November and the early part of December 1944, plaintiff alid Aska were engaged in negotiations with reference to the leasing from the defendant of certain premises situated in the city of Lima, Ohio, which premises are a part of Lima House Hotel property.

During the month of November 1944, an instrument in writing was prepared setting forth the terms of the lease. That instrument purports to be dated the 23rd day of November 1944. It was typewritten but a minor change was made in writing on December 26, 1944. The minds 'of the parties had not fully met until that time as to the subject matter of the lease and the instrument was not fully completed, executed or delivered until December 26,1944.

The instrument .of lease, among other things, provides :

‘ ‘ This lease shall begin on the first day of December, 1944, and end on the 31st day of December, 1951, and this lease is subject to au original lease for • said premises held by J. C. Aska, the lessor herein, from Etta Goldsmith and Sallip Nirdlinger, surviving trustees of the estate of Joseph Goldsmith, deceased. * * *

‘ ‘ The lessee herein covenants and agrees that he will pay to the lessor for said premises the sum of fifteen dollars ($15) in advance; * * *

“The lessee further agrees that he will at all times keep said premises in a clean and orderly manner.and will permit no refuse or paper to accumulate in said premises; * * *

“It is agreed between the parties hereto that”if any of the obligations, to be performed on the part of the lessee, including the payment of rent, shall remain unperformed by said lessee for a-period of fifteen (15) days, then and without demand made therefor the lessor may terminate this lease and it shall thereupon become null and void; ***.”"_'

On December 27, 1944, the plaintiff gave his check for the sum of $15 to Aska in. payment of the first month’s rent of the leased premises. Thereafter, the' plaintiff delivered to Aska, plaintiff’s checks, each for the sum of $15 and dated,, respectively, January 18, 1945, February 18,1945, March 15,1945, April 15, 1945, May 15, 1945, June 15, 1945, July 16, 1945, August 15, 1945, September 15, .1945, and October 15, 1945, in payment of rent for the premises. Each of the checks was delivered by plaintiff to Aska from two to four weeks after their respective dates. At one time Aska notified plaintiff that he had not made a rental payment at the time provided in the lease, but did not call on the plaintiff for compliance with the terms of the /lease or notify him that in the. event of his failure to comply Aska would terminate the lease in accordance with its terms.

On November 19, 1945, plaintiff tendered Aska a check for $15, bearing date November 15, 1945, in payment of rent, which Aska refused to accept. He informed plaintiff that he was taking advantage of his rights, under the contract of lease, to declare the lease void. Aska, in his conversation with plaintiff and by letter of November 16, 1945, to plaintiff, predicated such forfeiture solely on plaintiff being in default in payment of rent and thereby limited his right to declare a forfeiture to such contention. It is, therefore, unnecessary to determine whether plaintiff was otherwise in default.

A number of months prior to .this, Aska, without notifying the plaintiff and without the .plaintiff’s consent, stored on the premises leased by plaintiff a large restaurant counter and kept.it there for a period of not less than three months. The reasonable value of such storage was $5 per month, making the total value of such storage $15.

Aska, after declaring the forfeiture, attempted to take possession of the premises and exclude the plaintiff therefrom. Plaintiff- then instituted this action.

The time of commencement of the term (of a lease) depends primarily upon the terms of the lease; secondarily upon the circumstances surrounding the transaction. Accordingly the lease may as to its commencement operate prospectively or retrospectively from the execution of the lease according to the intention of the parties and the language' employed by them. See Noyes v. Longhead, 9 Wash., 325, 37 P, 452; Spring v. Lorimer, 25 Pa. Sup., 340.

The terms of the written lease executed by the parties are clear and unambiguous as to the time of its commencement as of the first day of December 1944 and the time of commencement operated retrospectively to that date notwithstanding the lease was not executed until December 26, 1944. Consequently plaintiff, under the terms of the lease, was obligated to pay rent for the leased premises, from the first day of December 1944.

The plaintiff was, therefore, in default in the payment of rent, as prescribed by the contract of lease, for more than 15 days each month until he became entitled to the credit of $15 on the rental by reason of the storage of the counter. When that credit became due to plaintiff, the future'rental payments made by plaintiff were made within 15 days from the time such rent became due under the terms of the lease, so that at the time plaintiff tendered to Aska, on November 19, 1945, the rental payment evidenced by plaintiff’s check of November 15, 1945, the plaintiff was not in default in the payment of rent for the' period of 15 days, which default was prescribed as a condition precedent to the right of Aska to terminate the lease.

Although Aska, under the lease, had the option, upon the failure of plaintiff to pay the rent within 15 days after the same became due, to terminate the lease, such option could be exercised only at a time plaintiff was in default for such period, and, as Aska did not attempt to terminate the lease until the time plaintiff was not in default, Asia’s action in so doing was not authorized by the lease and had no legal effect. Accordingly, the lease remains in full force and effect notwithstanding Aska’s attempt to terminate the same.

Furthermore, even if plaintiff had not been entitled to such credit on the rent and had been in default for more than 15 days in the payment of rent at the time Aska attempted to terminate the lease, Aska would have had no right to terminate the lease, because of his course of dealing in accepting overdue rent.

“When a landlord, by a course of dealing in accepting overdue rent, has put a tenant off his guard, a forfeiture of the lease for a delayed payment of rent cannot be enforced, unless notice has been given to the tenant calling on him for a compliance with the strict terms of the lease; and equity will relieve from such a forfeiture.” Annotation, 16 A. L. R., 443, citing Merrill v. Trimmer, 2 Pa. Co. Ct., 49. See, also, Thropp v. Field, 26 N. J. Eq., 82.

It is, therefore, ordered, adjudged and decreed that, upon plaintiff paying to Aska or to the clerk of courts subject to the order of Aska the balance of the rent due under the terms of the written lease above referred to, after allowing credit to himself on such rent the sum of $15 for the storage, an order of injunction issue herein as prayed for in plaintiff’s petition, at costs of Aska. In computing the balance due on the rent, the plaintiff shall use December 1, 1944, as the commencement date of the term of the lease. Upon payment of such balance, as hereinbefore prescribed, and entry of judgment herein prescribed, the cause shall be remanded to the Court of Common Pleas for execution.

Decree accordingly.

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


text:
    Rutledge et al., Appellees, v. Hoffman, Admr., Appellant.
    (No. 926
    Decided July 24, 1947.)

      Messrs. Williams, Fitton é Pierce, for appellees.

      Messrs. Conclo & Walsh and Messrs. Andrews & Weiss, for appellant.
   Matthews, P. J.

This is an appeal on questions of law from a'judgment in favor of plaintiffs for breach of contract.

The plaintiffs alleged that the defendant’s decedent, on November 1, 1911, orally promised to pay the snm of $4,000 do the plaintiffs’ decedent, who was her' sister, in consideration of her agreement not to institute an action to contest the will of Mary Barbara Hoffman, their mother, and not to make any effort to vacate or set aside a deed, conveying a certain farm from their mother to the defendant’s decedent. The plaintiffs alleged that certain partial payments had been made commencing in 1930 and ending on October 6,1939. The judgment appealed from is for the unpaid balance with interest at 5 per cent per annum.

The defendant denied the making of the promise, and in addition alleged the bar of the statute of limitations. By objection to testimony, the defense of the statute of frauds was interposed.

Only one' witness (Robert Matson) testified to the making of the promise. He was a nephew of the decedents, and because of the pendency of an action by the administrator of his mother’s estate on a similar promise alleged to have been made to his mother it could be, and is, argued that he is an interested witness. However, the trial judge, sitting without a jury, has placed 'his stamp of approval upon his credibility, and there was no countervailing testimony offered. There was corroborating testimony.

But it is said that the testimony fails to show the terms of a contract and, perhaps, fails to show the animus contrahendi. We think both clearly appear. We observe here that seldom, if ever, does the evidence in proof of an oral contract present its terms in the exact words of offer and acceptance found in formal written contracts. And no such precision is required. It is sufficient if the intent is disclosed by word, deed, act, or even silence. Circumstantial evidence' is as available "to prove a contract as it is to prove a crime. In 12 American Jurisprudence, 518 et seq., this fundamental rule is stated:

“In the absence of a statute requiring a contract to be evidenced in a certain way, it is ordinarily unnecessary to reduce the agreement to formal language, either written or oral. The expression of assent necessary to form a contract may be by word, act, or conduct which evinces the intention of the parties to contract. Assent may be manifested by letters, telegrams, or telephonic conversation. Assent is sometimes indicated by silence or inaction. Even though the promise of one of the parties to a bilateral contract is not stated expressly therein, such promise is sometimes implied from the nature or terms of the contract. Frequently, it happens that contracts on their face and by their express terms appear to be obligatory on one party only; but in such cases, if- it is manifest that it was the intention of the parties, and the consideration upon which one party assumed an express obligation, that there should be a corresponding and correlative obligation on the other party, such corresponding and correlative obligation will be implied.”

The evidence discloses that shortly after the death of the husband of Mary Barbara Hoffman in 1889, she executed the will and at the same time certain deeds conveying different parcels of real estate to different ones of her children, including the plaintiffs’ and defendant’s decedents. However, these deeds were left with the scrivener and never .delivered or recorded' during the lifetime of Mary Barbara Hoffman, and the fact of the existence of the will and deeds was not disclosed until after her death in 1911, when the deeds were recorded and the will probated. It. was then that the dispute arose which was settled by the contract which is the basis of this action.

Robert Matson testified that in 1911 he was 24 years old, unmarried, and living at his mother’s home, that after the death of his grandmother, Mary Barbara Hoffman, he took his mother (Mary B. Matson) and his aunt, Mary Rutledge, to the home of his aunts Annie and Louisa Hoffman, and that he was present during a conversation among them on that and several other occasions. Among,other things, he said:

£<Q. Can you remember the substance of what was said by the people attending that meeting? A. They weren’t satisfied the way the will was.

££Q. Did they say they weren’t satisfied? A. My mother and Aunt Mary.

££Q. Did they say that? A. Yes.

££Q. And they expressed dissatisfaction? A. Sure.

“Court: Why don’t you say your mother said she wasn’t satisfied? A. That is what she said.

££Q. Whát did Mary Rutledge say about the will, of your grandmother and deeds your grandmother made? A. They weren’t satisfied and Uncle George Hoffman wasn’t satisfied.

“A. George Hoffman said that and Uncle George talked to Aunt Louise and Aunt Annie and they said he was up in the air and wasn’t satisfied.

££Q. After your mother and Mary Rutledge expressed dissatisfaction with the will and deeds, what did your Aunt Anna say? A. She said she wouldn’t want to upset the will, she promised the two girls '$4,000 a piece — that is my mother and Aunt Mary Rutledge.

£ £ A. The conversation was all three of them weren’t satisfied.

■“A. They .kept talking on there, they said George wanted $9,500 and mother and Aunt Mary — they promised them $4,000.

££Q. You aren’t to say that — what did they say? What did Anna and Lonisa say concerning the $4,-. 000.00, if anything?. A. They talked matters over, they knew they weren’t satisfied.

“Q. What else did they say? A. They come to agreement, they talked it over and come to agreement. They , had more than one meeting, they had several meetings.

“Q. You stated your mother and Mary Eutledge expressed at this meeting dissatisfaction at the way in which the will disposed of the estate and the deeds and I think you stated also Anna Hoffman said in that meeting George Hoffman was also dissatisfied? A. That is right.

“Q. What else did Anna and Louisa Hoffman say in that connection at that time — you are not expected to say the exact words — you are expected to remember to testify if you can the substance of what was said? A. They had several meetings and» talked this matter over and the only thing I can say—

“Q. What did they say at this one meeting? A. They said about dividing the place so they can divide in a way they wouldn’t go to court with it.

“Q. How did they propose to do that — what did they say? A. They would go ahead — you want me to bring that out — and give George Hoffman $9,500 and Mother and Aunt Mary $4,000 a piece.”

We think it is clear from this testimony that Mary Eutledge, Mary B. Matson and George Hoffman, all children of Mary Barbara Hoffman, were dissatisfied with the disposition of her estate, as made by the yvill which had just recently been probated and the deeds which had been recorded, of the existence of which they had not known until after the death of Mary Barbara Hoffman. They sought an interview with their sisters, Annie and Louisa Hoffman, whom they thought were unduly favored by the disposition. As a result of that and succeeding interviews, Annie and Louisa Hoffman agreed to pay George Hoffman $9,500 and $4,000 each to Mary Rutledge and Mary B. Matson, and they, George Hoffman, Mary Rutledge and Mary B. Matson, agreed they “wouldn’t go to court with it,” which, of course, meant and means that they would leave Annie Hoffman and Louisa Hoffman undisturbed in the possession and ownership of the property conveyed to them by the will and deed of Mary Barbara Hoffman.

That testimony was corroborated by testimony of witnesses as to the payments made on account of the obligation during the years and by conversations between the parties and statements made by Annie and Louisa Hoffman to others. If the testimony is believed — and the trial judge did believe it — the promise of 1911 and its obligation remained fresh in the minds of the parties during all the intervening years. There is further corroboration in the receipt given by George Hoffman upon the payment of $9,500 to him find receipt given by Mary Rutledge upon payment of $1,500 to her, and by notations upon tax receipts showing payment of Mary Rutledge’s taxes by Annie and Louisa Hoffman.

The contract thereby created was one of mutual promises, a bilateral contract. The promise of Annie and Louisa Hoffman required them to perform the affirmative act of paying money, whereas, the promise of George Hoffman, Mary Rutledge and Mary B. Matson was negative in its nature.- They agreed to do nothing to disturb the situation created by the probate of the will and the recording of the deeds. They have performed their promise. They filed no action to contest the will or to set aside the deeds. On the other hand, Annie and Louisa Hoffman did not fully perform their promise.

But it is said that the testimony tends more to show a promise based on love and affection without any intention to enter into a binding contract. That does not seem to be a normal construction, and the trial judge did not so construe it.

' It is true that the disputed will and deeds had been in existence for more than 20 years when their validity was questioned, but those questioning their validity had just learned of their. existence by the probate of the will and the recording of the deeds. There is a suggested strangeness in the secrecy surrounding the existence of the deeds and will, but the record is devoid of any evidence indicating the basis upon which it was intended to contest their validity. .On the other hand, the record carries no suggestion of fraud or lack of good faith in the assertion of George Hoffman, Mary Rutledge and Mary B. Matson, or any one of them, that the validity of-the will and deeds could be successfully contested by them. It is not essential to the validity of a promise made to settle a disputed claim that it be made to appear that the claim is valid and incontestable. It is sufficient if it is asserted in good faith, and, of course, good faith will be presumed in the absence of countervailing circumstances. In 17 ■ Ohio Jurisprudence, 112, it is said: ‘ ‘ The presumption of law is, until rebutted, that one acts honestly. ’ ’

In Blount v. Wheeler, 199 Mass., 330, 85 N. E., 477, the court held, as stated in the first paragraph of the headnotes as reported in 17 L. R. A. (N. S.), 1036, that:

“The promise by one who in good faith intends to contest a will for a cause which does not appear to him to be vexatious or frivolous, not to do so, is a sufficient consideration for a promise to let him share in the estate, without- the necessity of showing that the promisor had reasonable cause to believe that he had a fair chance of succeeding in the contest.”

See, also, annotation to case of Matter of Cook, 244 N. Y., 63, 154 N. E., 823, as reported in 55 A. L. R., 806, at page 815 et seq.; also, 41 Ohio Jurisprudence, 448.

So we are of the opinion that there is abundant evidence to sustain the conclusion of the trial court that there was a promise by Annie Hoffman to pay $4,000, and that that promise was supported by a valuable consideration substantially as alleged in the amended petition.

The defendant asserts that as the promise was oral and no note or memorandum signed by Annie Hoffman was produced, recovery is prevented by the statute of frauds. It is claimed a recovery violates the provisions of Section 8621, General Code, in two' respects —first, it permits a recovery upon an oral contract for the transfer of -an interest in real estate, and second, upon a contract not to be performed within one year from the making thereof.

In our view, the statute has no application. If it applied originally to the promise of Mary Rutledge, it could have no application, after she had fully performed, to the promise of Annie Hoffman to pay money. On this subject, it is said in Restatement of Law of Contracts, Section 219:

“If all promises in a contract which are within the Statute are fully performed the performance has the same legal operation as if the Statute'had been satisfied.”

And, also, in Section 221, it is stated:

“Where a contract consists of one or more promises unenforceable because of the Statute, and one or more promises which are not within it, the latter are unenforceable so long as the former remain unperformed or unenforceable but no longer * * *.”

The defense of the statute of limitations was also interposed, but there was proof of part payment, which tolled the running of the statute and prevented the bar of lapse of time.

Although not specifically assigned as error, it is claimed that the court erred in sustaining an objection to a question on cross-examination of one of plaintiffs’ attorneys as to whether he did not have a “contingent fee contract in this case.” This witness was one of the counsel of record and was participating in the trial. It had already been developed on cross-examination that he had been attorney for many -members of the Hoffman family, including Annie and Louisa Hoffman and their estates before the controversy arose among them, but had disassociated himself before the institution of this action. He had testified to various conversations that had taken place between • Annie and Louisa Hoffman, and others, in which they recognized the existence of the obligation. His testimony was, therefore, corroborative of that of the witness who had testified to the making of the contract. There was a similar admission testified to by another witness.

We assume that the terms of the employment of the witness was a proper field of cross-examination, but in this case it had already been made clear that he was employed and interested in the success of the plaintiffs. In weighing his testimony the court could properly take that into consideration. If that would not detract from its weight, it does not seem to us that the fact that his fee was to be contingent would destroy his credibility. There was no countervailing evidence. We are especially of this opinion, in view of the fact that this was not a trial td a jury, but to .the court, of which the attorney was an officer.

In 3 American Jurisprudence, 536, it is said:

“Matters relating to the impeachment of a witness are also discretionary and hence not reviewable in the absence of an abuse of such discretion.”

In 2 Ohio Jurisprudence, 717, it is said:

“The extent to which cross-examination may be carried and the limitations which may be imposed thereon, also rest largely in the sound discretion of the trial court; Accordingly the question to be determined upon review of its action in this respect is merely whether such discretion has been abused to the substantial prejudice of the reviewing party.” '

We hold that it' does not appear that the refusal of the court to allow the witness to answer the question operated to the prejudice of the defendant, and it is, therefore, no ground for the reversal of this judgment.

We find no prejudicial error in the record and the judgment is, therefore, affirmed.

Judgment affirmed.

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

Ross, J.,

dissenting. I dissent from the majority opinion, for the reason that the factual conclusions stated therein are not supported by the record. In the amended petition it is stated that the decedent of defendant (Anna Eliza Hoffman) agreed "to pay the decedent of plaintiff Mary Rutledge, $4,000, “in consideration of the promise and agreement by said Mary Rutledge, deceased, who was the sister of Anna Eliza Hoffman, deceased, not to institute any action to contest the will of Mary Barbara Hoffman, the mother of said Anna Eliza Hoffman and said Mary Rutledge, and not to make any effort to vacate or set aside a deed from said Mary Barbara Hoffman to said Anna Eliza-Hoffman conveying to her the farm in Fairfield township, Butler county, Ohio, of which Anna Eliza Hoffman died seized. By the terms of said agreement, any and all deferred payments of said amount of $4,000 were to bear interest at the rate of five per cent per annum. ’ ’ It is' alleged further that plaintiffs ’ decedent fully performed her promise, that certain payments were made by defendant’s decedent, and that a balance remains due for which judgment is prayed.

Now this constitutes the allegation of a specific, definite contract, embodying certain terms and legal obligations. In the majority opinion is set out or noted the evidence which it is asserted substantiates this contract. .

It is doubtful whether such evidence even sustains a justifiable conclusion that any contract was entered into by the parties, certainly, it is only by recourse to speculation and conjecture that the terms of the contract found to exist can be identified and the legal obligations alleged shown to exist.

The majority opinion states- that the record contains circumstantial evidence sustaining such result.

In L. S. & M. S. Ry. Co. v. Andrews, Admr., 58 Ohio St., 426, 51 N. E., 26, it is stated in the syllabus:

“In the absence of direct evidence in its support, an allegation that one sustained injuries by reason of the negligence of the defendant is not sustained by proof of circumstances from which the fact that his injuries were so sustained is' not a more natural inference than any other.”

What are the circumstances proved?

(1) The plaintiffs’ decedent was not satisfied with the disposition of her mother’s estate, as disclosed by the will and deeds of her mother.

(2) A number of family conferences were held.

(3) Court action was discussed.

(4) Some agreement between the heirs of the deceased mother was reached.

(5) No action to contest the will or set aside the deeds was ever filed.

(6) The defendant’s decedent from time to time paid certain obligations of plaintiffs’’ decedent.

(7) Some 32 years elapsed from the time the “contract” is alleged to have been made' until suit was filed thereon.

(8) No specific demand was ever made by plaintiffs’ decedent upon defendant’s decedent in which a legal obligation was asserted as the basis for a request for money.

If there is to be recovery in this case, it must be because a legal obligation was assumed by defendant’s decedent, which has not been performed.

It is apparent from the meager evidence in the record that the only justifiable inference is that .the defendant’s decedent did consider herself under an obligation to pay something to plaintiffs’ decedent, but it is just as fair and reasonable an inference from such evidence that such obligation was merely a moral obligation to equalize the distribution of the mother’s estate as it is that such obligation constituted a legal basis for this action.

Speculation and conjecture can never reach the status of circumstantial evidence, nor can difficulty in securing pi’oof take the place of-proof.

While the statute' of frauds may not have a controlling influence upon the issues here presented, certainly, the lapse of time, the absence of any writing, the indefinite character of the evidence presented, the family. relationship of the parties, all should cause a court to scan with close scrutiny the evidence advanced as supporting the contention that the specific contract alleged in the petition has been proved. __ '

My conclusion is that as a matter of law, there was no substantial evidence offered at the trial justifying the conclusion that either the decedent of plaintiffs or defendant ever assumed any legal obligation to do or refrain fr'om doing any specific thing, and that judgment should be here rendered for the defendant.


author: Hornbeck, J.

text:
    Swisher, Appellant, v. Miami Motors et al., Appellees.
    (No. 1917
    Decided April 15, 1947.)

      Messrs. Oldham ds Oldham and Mr. Carl W. Norman, for appellant.

      Messrs. Shaman, Winer ds Shulman, for. appellees.
   Hornbeck, J.

This appeal on questions of law is from a judgment of the Common Pleas Court affirming-a judgment of the Municipal Court of Dayton, dismissing plaintiff’s petition against both defendants, upon their motion, at the conclusion of plaintiff’s evidence, on trial had to the judge in the absence of a jury.

The action was for breach of warranty given by ■defendant Miami Motors, to the plaintiff when he purchased from it a 1938 Packard, 4-door sedan. The selling price was $887, which, with tax and title cost, •totaled $917.41, upon which plaintiff made a down payment of $500 and executed his note and mortgage for the balance, which note was transferred to the defendant, First Discount Corporation, for value before due. Plaintiff prayed for judgment against Miami Motors in the sum of $541 and against the First Discount Corporation in .the sum of $80, representative of two monthly payments on the balance due on the note. Cancellation of the note and mortgage is prayed.

At the outset it should be observed that inasmuch as the case was disposed of in the trial court on a motion for judgment at the end of plaintiff’s evidence, all the testimony in his behalf must be given the' most favorable interpretation. So doing, if he made a prima facie case the trial judge should not have dismissed his action.

Manifestly the judgment is correct so far as it relates to the cause of action against the First Discount Corporation.

The trial judge, upon entering judgment for the defendants, made, upon request of plaintiff, separate findings of fact and conclusions of law. Upon the facts specifically determined the court held, as a matter of law, that, inasmuch as the defendant dealer “made all necessary repairs on said car within said warranty period and all other repairs as requested by plaintiff within the terms of the warranty, etc., he had observed all obligation enjoined upon him by the terms of the warranty.” The court found further that “this express warranty was limited to a period of thirty days; the evidence shows, by the plaintiff’s own testimony, that there was never any offer made to return the car during the thirty-day warranty period;” that three days after the warranty period expired the defendant dealer made repairs on the car at thd request of the plaintiff; and that the car was not returned until January 26th “about thirty days after the warranty period expired, when the car was left on the defendant’s lot without any previous announcement or request made for satisfaction.” The court concluded that the defendant dealer complied with all terms of its warranty as a matter of law and that, the plaintiff failed to establish a case under his statement of qlaim.

Six errors are assigned which may be encompassed under two headings: First, that the conclusions of law upon the findings of fact are not correct; and secondly, that the judgment is against the law and the manifest weight of the evidence.

Although, as we view it, a construction of the language of the warranty is not determinative of this appeal, it is necessary that we consider this question as against the possibility that we be in error upon the one ground upon which we base our decision.

Factually, it appears upon the plaintiff’s own testimony and his supporting evidence that he had trouble with the operation of the Packard car from the date of its delivery and almost continuously during all the time he had it in his possession; that for about 28 of the 30 days succeeding the date of purchase the car would not operate satisfactorily because it would not start and would frequently, stall when plaintiff would be required to stop it at a traffic light. It also developed knocks in the motor. The dealer was considerate and made efforts to correct the mechanical defects, but without success. It also directed the plaintiff, to take the automobile to the Packard Company in Dayton and to have that company repair it. However, for ten days the car stood where it was placed by the plaintiff when he took it to that company and no effort was made to attend to the car, although the company promised to repair it during the ten-day period. On one occasion, probably the last time the car was taken to the dealer, plaintiff expressed his satisfaction with its operation, which observance he admitted, but stated that the good condition remained only for about one day. Finally, more than 30 days after the date of purchase, early in January .1946, plaintiff took the car to an automobile mechanic of 25 years experience, who reported that certain functional parts of the car were not in such condition as to operate and properly run the car mechanically; that one of the bearings was galled to the crank shaft; that the connecting rod and one main bearing were' not good; and that the drive shaft was rotted. This mechanic advised against any attempt to repair the automobile which, he said, would cost from $150 to $175. He also ventured the opinion that the condition of the car, as he found it, was of long-standing and had been brought about by usage prior to the time the plaintiff acquired it.

Upon learning of the condition of the car as reported by the mechanic, the plaintiff returned it to the dealer on the 26th of January 1946, placing it upon the dealer’s lot and leaving it without any notice to the dealer of the purpose for which it was left:

We first consider several questions arising upon the obligation of the dealer under the warranty which was given to the plaintiff at the time he purchased the car. The warranty is a part of the Maximum Price Regulation 540, a part of Section 7 of the Regulation being (c) thereof, as follows:

“Used car described below, including any equipment named in Appendix D of Maximum Price Regulation 540, is hereby warranted to be in good operating condition, and to remain in such condition under normal use and service for a period of 30 days after delivery, or 1,000 miles, whichever may first occur.

“We, the undersigned, agree, if said car is delivered during the above period to our place of business, to make with reasonable promptness any repairs or replacements which may be necessary to its good operating condition in accordance, with normal use and service, at a cost to the purchaser named below of not more than 50% of the normal charge for such repairs or replacements. Our normal charge is not in excess of OPA ceilings.”

Good operating .condition is defined in (b) of the same section of the regulation,

“A used car is in good operating condition when its functional parts, and those of its non-functional parts which are customarily attached to a car, are in a condition that will permit the used car to be driven safely and efficiently. Functional parts include but are not limited to: the chassis, motor, clutch, transmission, drive shaft, differential, steering mechanism, front axle, rear axle, brakes, battery and lighting system.”

Upon the testimony of plaintiff’s mechanic, in connection with the difficulty that plaintiff incurred in the use of the car, his evidence required the determination that the automobile which he purchased was not, upon the date thereof, or within 30 days thereafter, in good operating condition and that the defects were in a functional part of the automobile. Likewise, it must be concluded that the plaintiff did not know of the functional defects at any time during the 30 days subsequent to ifs purchase. Whether, upon learning of the defects in the automobile, he returned it within a reasonable time thereafter should not, as a matter of law, have been resolved against the plaintiff at the conclusion of his testimony. 46 American Jurisprudence, 893.

What is the meaning of the dealer’s warranty? The sale here was not “as is,” which would not have enjoined upon the dealer any obligation to make any effort to put the car in running condition at its own expense. Manifestly, when it sold the car upon a warranty it assumed obligations in addition to and beyond that of an “as is” sale. Under the OPA regulations the dealer was entitled to sell the car at a higher price when accompanied with the warranty than in an “as is” sale. The first paragraph of the warranty is definite and unequivocal to the effect that the car is. “warranted to be in good operating condition and to remain in such condition under normal use and service for a period of 30 days after .delivery, or 1,000 miles, whichever may first occur.” Unless this is modified by some subsequent portion of the warranty, there is no doubt as to its meaning. The second paragraph of the warranty provides that:

“We * * * agree, if said car is delivered during-the above period to our place of business, to make with reasonable promptness any repairs or replacements which may be necessary to its good operating condition in accordance with normal use and service, at a cost to the purchaser named below of not more than 50% of the normal charge for such repairs or replacements.”

Manifestly, the second paragraph , should not be construed to change the obligation of the first paragraph unless the language is such as to require it. If the only obligation of the dealer upon the warranty is to make repairs during 30 days after its delivery at a cost of 50% of normal charge, the purchaser may be obligated, immediately and during the 30-day period, to incur heavy expenses, in addition to the purchase price, to put the car in such condition as is contemplated in the first paragraph. Such construction might add to the first cost of the car many hundreds of dollars. This certainly is not within the spirit of the regulation and, in our judgment, is not required by the letter thereof. The first paragraph enjoins upon the dealer the obligation to turn over to the purchaser a car in good operating condition at the date of the purchase and to insure that it will remain in such condition during the succeeding 30 days, or until it is driven 1,000 miles, whichever may first occur. The second paragraph refers only to such necessary minor repairs or replacements as are required to keep it in the good operating condition warranted.

Our construction is in accord with the interpretation of the district enforcement attorneys for the OPA, as appears in their opinion set out in letters supplementing plaintiff’s brief. A holding somewhat analogous is also found in the case of Duffy v. Howell (Appellate Department, Superior Court, Los Angeles County, California, No. Civ. A. 6120, Trial Court No. 726,271), 73 Cal. App. (2d), 990, 166 P. (2d), 411. A case more directly in point is that of Martelli v. Roth (Municipal Court, Los Angeles, California), found in Pike and Fischer OPA Desk Book, Vol. 3, p. 2230. It calls attention to the principle recognized in Ohio that in construing a statute the interpretation placed upon it by an administrative body charged with its interpretation carries some weight. State, ex rel. Brower, v. Graves, 89 Ohio St., 24, 104 N. E., 999; State, ex rel. Woodmen Accident Co., v. Conn., 116 Ohio St., 127, 156 N. E., 114; State, ex rel. Automobile Machine Co., v. Brown, 121 Ohio St., 73, 166 N. E., 903. In this connection the court, in the Martelli case, sets out a communication from Mr. Myron L. Duhl, Chief Automotive Supply Enforcement Branch of the OPA,. Washington, D. C., in which, in part, it is said,

“The next question is whether a dealer who refuses to live up to his warranty is in violation of the regulation. A warranted price may be charged for a warranted car as defined in Section 7. In Section 7, a, warranted car is defined as a car in good operating condition for which the seller furnishes to the purchaser the warranty set out in that section. Under this definition, if a warranted price is charged for a car not in good operating condition, the seller is in violation of the regulation to the extent that he charged a price which exceeds the ‘as is’ price. While the car must be in good operating condition at the time of sale, and evidence as to its condition on that date is of primary importance, the condition of the car after the date of sale may indicate, in some cases, whether it was in good operating condition on that date.”

We quote from that opinion somewhat at length because it may not be available to counsel. Further comment is made as showing administrative interpretation from statement of considerations involved in the issuance of Amendment 5 to Maximum Price Regulation 540, of date February 1, 1945, as follows:

“Six months’ operating experience under the regulation has disclosed that many sellers at warranted prices evade the obligations they assume when they sell at warranted prices. Cars needing reconditioning and repairing have been sold at snch prices, although such cars have not been reconditioned or repaired. * * * When purchasers returned faulty cars to such sellers they were told that the sellers would pay 50% of the cost of the repairing «and reconditioning. In others words, the sellers would bear this cost for work they should have done before the cars were sold at warranted prices and for which an allowance was included in the warranted prices. Such action has always teen a violation of the regulation. (Italics supplied.) Used cars have to be in good operating condition when sold at warranted maximum prices.”

The opinion in its entirety merits careful reading and consideration.

It is our conclusion, then, that upon plaintiff’s resting his case he had made a showing of a violation of the warranty in that the car was not in good operating condition at the time he purchased it; and further, that it was not in good operating condition at any time during the 30 days succeeding the date of purchase; nor had he operated the car 1,000 miles before the discovery of its condition.

If the interpretation of the warranty which we make is correct, the plaintiff would have been entitled to have the court adjudge his case upon a different concept of the law than was adopted by the trial judge, and if there were no other infirmity in plaintiff’s case, a reversal of the judgment would be required.

There is, however, in our judgment, material weakness in plaintiff’s case upon a demurrer to the. evidence in that there was no showing of the observance by him of the obligation enjoined by a part of paragraph (3) of Section 8449, General Code, as follows:

“"When the goods have been delivered to the buyer, he cannot rescind the sale * * *, if he fails to notify the seller within a reasonable1 time of the election to rescind, # *

The admitted fact testified to by the plaintiff is that when he returned the car to the dealer’s lot he did not then,- or at any* time thereafter, inform the dealer of his election to rescind under the warranty. In view of the prior conduct of the respective parties, the leaving of the car could not have been implied notice to the dealer of the intention of the purchaser. Proof of the observance of the provisions of Section 8449, General Code, was upon the buyer, the plaintiff, as a part of his case. Failure to meet this requisite of proof required the sustaining of the motion for a judgment as upon a demurrer to the evidence.

The judgment will be affirmed.

Judgment affirmed.

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