author: Carter, J.

text:
    Findley et al., Trustees, Appellees, v. City of Conneaut et al., Appellants.
    (No. 454
    Decided March 4, 1945.)

      Mr. J. E. Helman and Mr. George I). Kingdom, for appellees.

      Mr. James W. Simmons, village solicitor, Mr. Howard M. Nazor and Mr. Paul E. KigMlinger, for appellants.
   Carter, J.

This action is one for a declaratory judgment. Tbe case was beard in tbe Probate Court and a finding was made in favor of plaintiffs, appellees herein. Appeal on questions of law and fact is prosecuted to this court.

On or about March 1, 1920, George J. Record died, leaving a last will and testament, and after making disposition of certain portions of his estate he made residuary disposition of the balance thereof as found in item 10 of his will, which item is as follows:

“It has been my intention for many years, should my means prove to be sufficient, to establish a polytechnic industrial school to the Glory of God, the Creator of all materials and substances, the central Power and Originator of all energies and forces and the Pounder of all arts and sciences, to the end that man can be instructed and enabled to divine and make use of the materials and apply the forces God has created and that thereby his comprehension may be widened to a full appreciation and understanding of the unlimited preparations and provisions with which his Creator has blessed and surrounded him.
“I am not in sympathy with theoretical- religion. Solid facts innumerable are at hand and visible in all directions to be relied upon in formulating the faith and shaping the character, purposes and destinies of man, providing that these truths are properly brought home to man’s understanding. To teach the young these facts, to enable their purposes, to widen their comprehension of the real meaning of life, to give them a knowledge of their relations to God while learning the arts and sciences of which He is the Author, thus fitting them to meet the world’s demands, making them honest in purpose, noble in aspiration, reverent in faith, is the end which I have in view and desire to attain in making the devise set forth in this item of this my last will and testament.
“Therefore I hereby give, devise and bequeath all the remainder of said residue of my said estate left after all the foregoing provisions of this my last will and testament have been fully carried out, to The Guardian Savings & Trust Company, of Cleveland, Ohio, and to its successors, in trust, nevertheless, for the purpose of establishing a polytechnic industrial school as hereinafter provided.
“Said school shall provide practical education for students of both sexes in the useful arts and sciences and in connection therewith the teachings of the Holy Bible shall be made a prominent feature in bringing to the minds of the young the practical value of following its precepts in the attainment of success in every day life. Said school shall be Protestant in ethics and teaching, but otherwise undenominational and shall not exclude from its benefits those of any other faith. It shall be the rule of the school that all students, teachers and officers shall observe the Sabbath Day and attend Sunday school and preaching services and that each session shall be opened with scripture reading from the Bible and with prayer, and all students shall, as a condition to their admission to said school, pledge themselves to faithfully keep and observe these conditions which shall be rules of said school as well as all other rules consistent herewith which may be formulated for the government of said school.
“My said trustee shall first offer said remainder of said residue of my said estate to the corporate city of Conneaut, Ohio, to be used in the establishment of said school, on condition that said city shalhprovide therefor, free of cost to my estate, a suitable and ample site for said school, centrally located, and by the issuance of five (5) per cent bonds provide a sinking fund of one hundred thousand ($100,000) dollars to be forever maintained to provide income for the support and maintenance of said school, or otherwise secure to said school such fund as will at all times provide said school with an income of five thousand dollars ($5,000) per annum. If the foregoing mentioned proposition is not accepted within one year from the date of said offer, then my said trustee shall make the same offer to the village of Geneva, in Ashtabula county, Ohio, and if not accepted by said village within one year from the date of said offer, or if there be legal obstacles in the way of both said city of Conneaut and said village of Geneva accepting said legacy for the uses and purposes aforesaid, then and in that event my said trustee may by forming a corporation or by other lawful means in its discretion to be determined by it, proceed to and complete the organization of said polytechnic industrial school, or if it elects so to do may transfer and deliver over the remainder of said residue of my estate to some industrial school then well established, to be selected by it for the purpose of carrying out the principles and objects hereinbefore named.
“The school if established either in Conneaut, Ohio, or Geneva, Ohio, shall be known as the ‘Record Industrial School’ and if said remainder is given to an industrial school already established, it shall be known as the ‘Record Memorial Industrial Fund’ and the department to which it is applied shall be known as the ‘Record Memorial Industrial Department’ and shall be operated upon the basis and fundamental ideas and to the ultimate aim and purpose hereinbefore expressed.”

After a study of this item and the examining of many authorities applicable thereto, without further elucidation the entire court are in accord with the view that under the provisions found in item 10 the school desired to be established under this item is sectarian. It is clear that testator wanted established a private polytechnic industrial school in which the teaching* of Protestant religion was. to be á prominent feature. He so provides in item 10 wherein is found the following: “Said school shall be Protestant in ethics and teaching. ’5

There are further conditions found in this item. Testator provides that:

“My said trustee shall first offer said remainder of said residue of my said estate to the corporate city of Conneaut, Ohio, to be used in the establishment of said school, on condition that said city shall provide therefor, free of cost to my estate, a suitable and- ample site for said school, centrally located, and by the issuance of five (5) per cent bonds provide a sinking fund of one hundred thousand ($100,000) dollars to be forever maintained to provide income for the support and maintenance of said school, or otherwise secure to said school such fund as will at all times provide said school with an income of five thousand dollars ($5,000) per annum. If the foregoing mentioned proposition is not accepted within one year from the date of said offer, then my said trusteee shall make the same offer to the village of Geneva, in Ashtabula county, Ohio, and if not accepted by said village within one year from the date of said offer, or if there be legal obstacles in the way of both said city of Conneaut and said village of Geneva accepting said legacy for the uses and purposes aforesaid, then and in that event my said trustee may by forming a corporation or by other lawful means in its discretion to be determined by it, proceed to and complete the organization of said polytechnic industrial school, or if it elects so to do may transfer and deliver over the remainder of said residue of my said estate to some industrial school then well established, to be selected by it for the purpose of carrying out the principles and objects hereinbefore named.
“The school if established either in Conneaut, Ohio, or Geneva, Ohio, shall be known as the ‘Record Industrial School’ and if said remainder is given to an industrial school already established, it shall be known as the ‘Record Memorial Industrial Fund’ and the department to which it is applied shall be known as the ‘Record Memorial Industrial Department’ and shall be operated upon the basis and fundamental ideas and to the ultimate aim and purpose hereinbefore expressed.”

The city of Conneaut did not accept this offer according to the provisions in the will. The village of Geneva desired same and has proceeded, to some extent at least, to comply with the provisions of item 10.

The first question presented is: Does the corporate village of Geneva, Ohio, have any lawful authority to issue bonds or expend funds raised by taxation for the support of such a school as is provided for in item 10, to wit, that it issue 5 per cent bonds to provide a sinking fund of $100,000 to be maintained forever to provide income for the support and maintenance of the school? There appears to have been doubt in the mind of testator as to whether such a provision could be carried out, for further on in his will he states if there be legal obstacles in the way of both the city of Conneaut and the village of Geneva accepting the legacy for the uses and purposes aforesaid, then and in that "event such legacy was to be disposed of by other methods in the discretion of the trustees. Now if this is to be a sectarian school and we hold such is the case, then it is clear that a tax cannot be laid upon the property of residents of Geneva village to support and maintain such an institution. Such would be clearly, in our judgment, contrary to and in violation of the Constitution of Ohio. Section 7, Article I, Ohio Constitution, provides:

“All men have a natural and indefeasible right to worship Almighty God according to the dictates of their own conscience. No person shall be compelled to attend, erect, or support any place of worship, or maintain any form of worship, against his consent; and no preference shall be given, by Um, to any religious society; nor shall any interference with the rights of conscience be permitted. No religions test shall be required, as a qualification for office, nor shall any person be incompetent to be a witness on account of his religious belief; but nothing herein shall be construed to dispense with oaths and affirmations. Beligion, morality, and knowledge, however, being essential to good government, it shall be the duty of the General Assembly to pass suitable laws to protect every religious denomination in the peaceable enjoyment of its own mode of public worship, and to encourage schools and the means of instruction.” (Italics ours.)

Section 2, Article VI, provides:

“The General Assembly shall make such provisions, by taxation, or otherwise, as, with the income arising from the school trust fund, will secure a thorough and efficient system of common schools throughout the state; but no religious or other sect, or sects, shall ever have any exclusive right to, or control of, any part of the school funds of this state.”

In our judgment the levying of a tax to maintain and support the school in question would be clearly in violation of the above provisions; therefore compliance with the suggested bond issue as provided by the testator in item 10 is not available to the village of Geneva. However, testator provided an alternative to the city of Conneaut or the village of Geneva raising a fund to support and maintain the school by taxation when he inserted the following, “or otherwise secure to said school such fund as will at all times provide said school with an income of five thousand dollars ($5,000) per annum.”

In other words, an alternative method was provided in case the bond provision for any reason could not be carried out, and if such a fund could be raised otherwise than by taxation snch a course was open to the village of Geneva and if compliance with testator’s conditions is not met by the village of Geneva within a certain period of time, which will be designated further on in this opinion, then all rights of the village to the funds in question shall, at the expiration of such period as fixed by this court, terminate and the trustees are authorized to proceed to make disposition of the fund as in their discretion seems best in one or the other of the ways provided in item 10. Inasmuch as there are alternative provisions in item 10 as above indicated there is at this time no place for the application of the cy pres doctrine, that is, inasmuch as the creaing of a sinking fund by the issuance of bonds of the village of Geneva cannot be lawfully carried out for the maintenance and support of such school, provision is made that the fund for such purposes can be raised otherwise and the village should in our judgment have a reasonable period of time to raise such money otherwise than by issuance of bonds.

Now it is urged that under the provisions of Sections 3615 and 4001 et seq., General Code, the village of Geneva may secure the fund. No such provision is found in item 10 of the will; we must look to the plain ánd unambiguous terms of the will to determine what disposition is to be made of the fund. Testator designated clearly how and under what conditions such was available to the village. He had a right to so designate and the trustees cannot do indirectly that which may not be done directly. The trustees must be governed by the provisions of the will and the village in accepting same must comply with the legal conditions imposed before it is entitled to any portion of the fund. We can see no merit in this claim.

It also has been suggested that, inasmuch as this fund has been augmented through the years until it now approaches the million dollar mark, under these circumstances the fund may be used for the purpose of establishing, maintaining and supporting the school. No such provision is found in the will, that any portion of the fund in question may be used for the support and maintenance of the school. That burden was thrust upon the village. Nothing in the will by the wildest flight of imagination could be so construed, to the effect that the trustees without the aid of the village as provided by testator could turn over the fund to such village. The village is required to do certain things before it is entitled to any portion of the fund and neither this nor any other' court is authorized to release the village from the conditions imposed by testator. Augmentation of the fund is no reason why the imposed conditions should be relinquished by the trustees or by order of court. It is the duty of the trustees to carry out, not to ignore the provisions of item 10, and it is the further duty of the court in an action of this kind to instruct the trustees to carry out the will of testator. A liberal construction does not authorize changing the express provisions of the will or making material modification thereof.

The next question presented is: What if any interest or right has the city of Conneaut in the fund at this time? Our answer to this question is “none,” for the reason that the city of Conneaut did not ae-. cept same as required in the will and it is making no claim to the fund in this court.

The next question presented is: Did the passage of ordinance No. 771 by council of the village of Geneva constitute compliance or acceptance of the terms and conditions of the will of the testator? The council of the village of Geneva, by formal action, did accept the provisions, of the will, including all conditions enumerated therein. However, the trustees have no right or authority to turn over any portion of the fund to the village until compliance by the village of the conditions of item 10 which are susceptible of compliance.

The Probate Court permitted the village one year as a reasonable time for compliance with required conditions. This being a trial de novo in this court we are of the view that the village should be alloived a further time of six months from the date of filing in this court of a journal entry journalizing the finding, such entry to be approved by the court. It was certainly not the intention of the testator that after formal acceptance of the offer as contained in item 10 that compliance therewith should be of indefinite duration, but that compliance by the village should be within a ¿reasonable time. We are of the further view that it was not the intention of the testator to require compliance by the village of the conditions found in item 10 within the one-year period designated for acceptance. We think that condition applies only to the formal acceptance by the village of the legacy. If compliance of the conditions on the part of the village of Geneva are not fulfilled within the period herein designated, all rights of the village to the fund shall be terminated at the expiration of such period of time and the trustees shall be authorized to proceed under the alternative plans suggested in item 10.

Decree accordingly.

Phillips, P. J., concurs.

Nichols, J., dissents.


source: Caselaw Access Project

author: Matthews, J.

license: Public Domain

text:
    Samuels, Appellant, v. The United States Holding Co., Appellee, et al.
    (No. 6504
    Decided May 7, 1945.)

      Mr. Julius R. Samuels and Mr. Eli G. Frankenstein, for appellant.

      Messrs. Paxton <£ Seasongood and -Messrs. Cohen, TLuriig & Cohen, for appellee.
   Matthews, J.

The trial court sustained the motion of the defendant, The United States Holding Company, for judgment of dismissal at the close of the plaintiff’s opening statement, and this appeal on questions of law only is from that judgment. The other two defendants had been dismissed theretofore and the validity of such dismissals is not under review in this proceeding.

The opening statement is an elaboration of the allegations of the petition and it may be epitomized as follows:

The sole basis of the plaintiff’s rights, which he seeks to have protected, is his ownership of 106 and 12/13ths shares of the stock of The United States Holding Company, a corporation under the laws of Ohio, out of a total of 232,000 issued and outstanding shares.

It appears that The United States Holding Company was organized in 1923 under the name of The United States Shoe Company, to succeed to the business of five or six shoe manufacturing companies. Shortly after its organization, it encountered financial difficulties. As a result, it discontinued manufacturing shoes. The United States Shoe Corporation was organized with an authorized capital stock of 9,000 shares. In consideration of the transfer by The United States Shoe Company of part of its assets, The United States Shoe Corporation issued 4,410 shares of its stock to The United States Shoe Company. As the assets transferred constituted that which was used in manufacturing, The United States Shoe Company from that time was engaged in administering ifs assets and in holding the shares of stock of The United States Shoe Corporation which it had received, and in paying its debts of more than a $1,000,000, as it was able to do through the liquidation of its assets. It was at that time that its name was changed to more nearly describe its purpose, and perhaps its authorized purpose was also enlarged. There was also some change in the stock structure to conform to which the shareholders surrendered their preferred and common stock and received in lieu thereof common stock only. The plaintiff surrendered his original stock and received the stock which is the basis of the right which he seeks to assert herein.

Nothing is alleged that in any way challenges the validity of the original transaction between The United States Shoe Company and The United States Shoe Corporation, whereby the latter acquired certain assets of the former in consideration of the issuance of the stock to it.

The plaintiff’s complaint is :

(1) That The United States Holding Company has refused, notwithstanding repeated importunities, to wind up its affairs, basing its refusal on the unsound ground that it would cause income tax problems, whereas, as a matter of fact and law, the continuance of Thé United States Holding Company increases the amount of the tax, particularly to minority shareholders.

(2) That there is an interlocking directorate of the two corporations.

(3) That by refusal of The United States Holding Company to distribute to its shareholders their proportionate shares of the 4,410 shares of The United States Shoe Corporation owned by it, the shareholders are deprived of voting rights in the meetings of shareholders of The United States Shoe Corporation, and also of the greater market value and salability of the shares, and that the refusal to distribute the shares is based upon the desire of The United States Holding Company to retain the voting power and thereby perpetuate those in office for whom they vote.

(4) That The United States Holding Company by not dissolving has dissipated assets in the years 1940, 1941, 1942, 1943 and 1944, by paying taxes of $44,-722.14, legal services, $22,069.90, and office expenses, etc., making a total of about $90,000, in the administration of assets alleged to be of a value of more than $3,000,000.

The plaintiff alleged that The United States Holding Company was a trustee and that its conduct was in violation of its duty as a trustee.

The plaintiff prayed that The United States Holding Company be declared to be a trustee for its shareholders, that an accounting be ordered, and a judgment rendered on such accounting, that The United States Holding Company be ordered to distribute all of its assets to its shareholders, that a receiver be appointed, and for all other relief to which he is entitled.

The plaintiff sued on behalf of himself and all others similarly situated.

In his petition and opening statement, the plaintiff asserts that The United States Holding Company is a trustee and that plaintiff is entitled to a judgment declaring his rights against such trustee. There is no factual allegation from which the legal conclusion can be drawn that any other relation exists than that of corporation and shareholder. The entire title, both legal and equitable, to the assets was and is in the corporation. The plaintiff has rights as a shareholder, but he has no title of any sort to any of the assets of the corporation. There is no allegation that the whole title had been dissolved into its legal and equitable elements and that the corporation was the owner of the legal title and the shareholder was the owner of the equitable title.. The facts pleaded show just the contrary and the allegation that The United States Holding Company is a trustee is no more than an erroneous conclusion of law which must be disregarded.

The plaintiff relies on Harter Holding Co. v, Perkins, 69 Ohio App., 203, 43 N. E. (2d), 365, and Shuster v. North American Mortgage Loan Co., 139 Ohio St., 315, 40 N. E. (2d), 130, as supporting his position that The United States Holding Company was and is a trustee. We do not think they do so. The facts are entirely dissimilar. In those cases the parties deliberately created a trust relationship between the corporations and the holders of certificates of participation. The holclers of certificates of participation were not shareholders of the corporations. In contrast, in the case at bar the parties saw fit to create the relation of corporation and shareholder. Only by a disregard of the plain meaning of what the parties did can any other relation be brought into existence. That the court is not privileged to do.

So we hold that the plaintiff showed no right to relief based on the contention that the relation of trustee and cestui que trust existed between him and The United States Holding Company.

The plaintiff contends that even though it be found that he has disclosed no relationship other than that of shareholder and corporation, he is entitled to relief.

Undoubtedly, a shareholder may be entitled to relief against the corporation, and whether he is entitled, and to what extent and nature, always depends upon the facts pleaded and proven. But the question here is whether the plaintiff has pleaded and offered to prove a case for relief.

The principal complaint is that The United States Holding Company has not wound up its affairs, distributed its assets and dissolved. Treating the relation as that of trustee and cestui que trust, the plaintiff has alleged facts that show that the trustee has performed all the active duties imposed upon it and is now the trustee of a passive trust which the cestui would be entitled to have ended. But, as we have shown, that relationship does not exist. As already stated, the plaintiff is a shareholder and unless he has shown a violation of his rights as such, or a dispute as to such rights, and complies with the requirements for shareholder’s action, he has no cause of action.

Under Ohio law, the affairs of an Ohio corporation for profit, such as The United States Holding Company, are conducted by the board of directors elected by the shareholders. Its purposes are set forth in its articles of incorporation and within those purposes the honest discretion of the directors cannot be controlled by the shareholders. Their remedy is to elect other directors who will administer in harmony with their views.

We do not know, except very generally, the purposes and powers of The United States Holding Company, as stated in its articles of incorporation. _ We do not know that it was created for a limited period only. We do not know the powers of the board of directors, because they would be determined by the corporate purpose, which we do not know. In the petition, it is alleged that the sole function of The United States Holding Company is to carry out the objects set forth. That is alleged as a conclusion without any pleaded facts to support it, and the opening statement makes it clear that the conclusion is based on the assumption that the relation of trustee and cestui existed.

In such a situation, failure of, the directors to heed the wish of a shareholder cannot be regarded as a breach of duty on their part, or a violation of the rights of the shareholder.

An analysis of the opening statement leads to the .conclusion that the plaintiff’s complaint as to specific acts of the directors results not because they were wrong per se and a violation of his rights, but only became so because of their failure to distribute the assets of The United States Holding Company. As there is no showing that the failure to distribute violated any duty, the specific acts in the continued administration of the corporate affairs become innocuous. Standing apart, there is nothing asserted which would indicate any wrongful act.

And if any wrong is indicated it is a wrong of its officers against The United States Holding Company. Such officers are not parties to this action and would not be bound by the judgment. Furthermore, this is riot a derivative action asserting a right on behalf of the corporation.

But it is said that this is an action for a declaratory judgment, and that no matter what view the court might take on the merits of the plaintiff’s contention, he is entitled to a declaration of rights.

This is an action for a declaratory judgment only in the sense that every action seeking immediate relief involves a finding of law as well as of fact. What the plaintiff seeks is a distribution of assets at once — not a declaration of rights to control future action. Under such circumstances it would seem that a dismissal of the action upon the opening statement would be a' sufficient declaration that on the merits he has shown5 no cause of action.

Assuming, however, that the case can be classified as one for a declaratory judgment in the strict sense, the court is not bound under all circumstances to make a declaration. In Walker v. Walker, 132 Ohio St., 137, 5 N. E. (2d), 405, the court, at page 139 said:

“The declaratory judgment act is a salutary, remedial measure and should be liberally construed and applied, but, as in the instant case it does not require a court to render a futile judgment that ‘would not terminate’ any ‘uncertainty or controversy’ whatsoever. Under the circumstances here present it was proper for the trial court to dismiss the plaintiff’s petition.”

In 16 American Jurisprudence, 287, Section 14, it is stated:

“It is generally considered that the jurisdiction to render a declaratory judgment is discretionary in character. ’ ’

And at page 288:

“In general, the courts refuse to grant declaratory judgments unless it appears that such a judgment will fulfil the purpose of the declaratory judgments acts by being of some practical help in ending the controversy or stabilizing disputed legal relations.”

See, also, Schaefer v. First National Bank of Findlay, 134 Ohio St., 511, 18 N. E. (2d), 263.

The dismissal upon the opening statement was a declaration that the plaintiff has no cause of action for relief upon any theory of law applied to the facts. And as to a finding or declaration on the subject of trust relationship, the petition does not allege such a relationship. As to the relation of shareholder and corporation, that status was never in dispute. Not only was it admitted, but it was also found by the court. Under such circumstances, a declaratory judgment could be no more specific or efficacious than the Corporation Code itself.

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

Judgment affirmed.

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


author: Miller, J.

text:
    Brown, Appellee, v. Pennsylvania Rd. Co., Appellant.
    (No. 640
    Decided April 30, 1945.)

      Messrs. Murphy & Staley, for appellee.

      Mr. Baircl Broomhall and Messrs. Goubeaux do Goubeaux, for appellant.
   Miller, J.

This is an appeal on questions of law from the Common Pleas Court of Darke county, Ohio, wherein a verdict and judgment were rendered for the plaintiff for $500 for damages sustained by his automobile while crossing the tracks of the Pennsylvania Railroad Company and being struck by one of its passenger trains.

The assignment of errors is:

(1) The verdict of the jury and judgment of the court were manifestly against the weight of the evidence and contrary to law.

(2) The court erred in refusing to direct a verdict at the close of plaintiff’s testimony and at the close of all the testimony.

(3) The court erred in overruling the motion of the defendant for judgment notwithstanding the verdict.

The evidence discloses that on the morning of September 21, 1942, at about seven o’clock, Elizabeth C. Brown, the wife of the .plaintiff, drove him in his 1940 Chevrolet coach to the Greenville hospital where he was to undergo a tonsillectomy. This operation was performed somewhere between nine'and ten o’clock a. m. the same day, under a general anaesthetic.

Before the trip to Greenville that morning and before Mr. Brown was taken to the operating room, it was discussed and arranged that Mrs. Brown should go to Greenville and buy a lounging robe, a pair of house slippers and other items for her husband. Pursuant to that arrangement and with her husband’s permission and consent, Mrs. Brown drove to Greenville for the purpose of completing that errand while Mr. Brown was in the operating room. The Greenville hospital was located on Sweitzer street some distance from the Pennsylvania Railroad tracks. When Mrs. Brown left the hospital she drove north on that street toward the Pennsylvania Railroad crossing. When she was some distance south of the tracks she saw the flasher lights flashing at the crossing. She then continued and stopped at a short distance back of the crossing. No train arrived and she then drove closer to the tracks, looked both ways and saw no train. After another wait, no train approached, so she put her car in low gear and started over the tracks at the speed of about ten miles per hour. After her automobile was on the tracks her motor stalled and she was unable to start it. While in that position she heard the whistle of an approaching train and looking up she saw the train approaching about 75 feet distant and moving about 20 to 25 miles per hour. She escaped from the automobile which was struck by the train and demolished.

Plaintiff, as a basis for his recovery, charges the defendant with certain acts of negligence, to wit, failure to maintain and keep in repair the crossing as required by law; that the train was being operated at a speed in excess of 15 miles per hour in violation of the ordinances of the city of Greenville; that a whistle or bell was not sounded as required by law. The defense was a general denial and also contributory negligence.

It is not necessary to discuss the issue of the defendant’s negligence raised by the pleadings and evi-' dence, since the evidence on that issue was conflicting and the jury was justified in finding that certain acts of negligence were committed by the defendant. The chief legal question, as we see it, is whether the undisputed evidence discloses that the plaintiff was guilty of contributory negligence as a matter of law.

The plaintiff was the owner of the automobile which was being driven by his wife. The mere fact of the relationship between these parties raises no presumption of agency, but we find from the testimony of the plaintiff and his wife that she was acting in such a capacity.

Let us look at the testimony of Elizabeth C. Brown, wife of the plaintiff, on cross-examination, wherein she testified as follows:

‘ ‘ Q. And when this accident happened you were going down town on an errand for your husband? A. That’s right.
“Q. He had asked you to go down town for him? A. We had talked it over on the way into the hospital. He told me while he was in the operating room that I should go down, and I wanted him to wait until they had brought him back, but the nurse told me that he would be under the anaesthetic for quite sometime; that I should go then so that I would be back-by the time that he was.”

James E. Brown, the plaintiff, testified on cross-examination as follows:

“Q. You knew, however, that she intended to go down town? A. That is right. She said she would go down town that morning.
“Q. You knew that she was going to use your car to go? A. That’s right.
“Q. And the trip was made for your benefit? A. That’s right.
“Q. To get you a robe and slippers? A. Yes.”
“At common law, a married woman was held not liable for torts committed by her husband as her agent, because of her disability to contract. But under the modern statutes removing such disability and giving her the power to manage and control her property, the wife is now held responsible for- the torts of her husband committed within the scope of his authority as her agent. This rule is sustained by the weight of authority, and is the rule in Ohio.” 21 Ohio Jurisprudence, 406.

It is, therefore, our conclusion, from the undisputed testimony, that the wife was acting as the agent of the plaintiff, her husband, at the time the damage was sustained, and her acts will be construed as those of the plaintiff.

The record discloses that when she was approaching the railroad crossing, Elizabeth C. Brown saw the automatic signals flashing. She stopped at the track because they were flashing. She did not see a train, but other automobiles were crossing the tracks, so she drove on the crossing and her car stalled there. She says that she did not see the lights flashing just as she drove upon the tracks, but there is undisputed evidence that they were' in good condition, that they had been flashing a short time before the accident, and that they were also flashing after the accident, and it can reasonably be presumed that they were flashing when she drove upon the crossing. She did not see the lights flashing as she started to cross the tracks, but she does not say that she looked at the lights at this time. "We feel that it can be reasonably presumed that, since she was intent upon looking for a train, she did not look just before she started over the tracks to see if they were flashing at that time. The rule, we think, is well established in Ohio, that one who drives his automobile on a railroad crossing disregarding a bell, or flashing signals, or the watchman with a stop sign, is guilty of contributory negligence as a matter of law, when such automobile is struck by an oncoming train.

In discussing this question in the case of Pennsylvania Rd. Co. v. Farrell, Admx., 11 Ohio Law Abs., 342, the court said:

“So the question arises, can a motorist drive on to a grade crossing under such circumstances, into the path of an oncoming train, and be heard to say that his conduct did not contribute to the slightest degree to his injury? It has been held repeatedly in Ohio and other jurisdictions that ‘a disregard of a flagman has been held to be contributory negligence although defendant running at a speed in excess of ordinance.’ ”

The case of Lohrey v. B. & O. Rd. Co., 131 Ohio St., 386, 3 N. E. (2d), 54, is similar to the case at bar, except that crossing gates were used as a warning signal instead of flashing red lights. The facts in that case disclose that the driver of the plaintiff’s truck did not stop immediately as the crossing gates were being lowered. He got under the south gate before it was down and then gave his truck more gas and tried to get across three sets of tracks to the north gate. The gates were far enough back of the tracks so that he could have stopped before crossing any of them. He did not see the approaching train. One of the defenses was contributory negligence. At the close of all the evidence defendant moved the court for an instructed verdict on the ground that the evidence showed that the driver of the truck was guilty of contributory negligence as a matter of law. The trial court sustained the motion and a'verdict was returned in favor of the defendant. The case finally reached the Supreme Court which affirmed the judgment of the Court of Appeals which affirmed •the judgment of the trial court.

In the case of Lake Shore & Michigan Southern Ry. Co. v. Ehlert, Admr., 63 Ohio St., 320, 58 N. E., 812, the syllabus reads as follows:

“1. When the gates across a highway at a railroad crossing are closed they definitely warn the public that the crossing, whether it is of a single or a double track, is, for the time being, to be used for the passage of trains.
“2. One who, with knowledge of such warning, passes a closed gate and takes a position upon the crossing is guilty of negligence which will prevent a recovery for injuries ho may receive from a passing train.”

We are of the opinion that for the foregoing reasons the court should have directed a verdict at the close of the plaintiff’s evidence, or at the close of all the evidence, and that the motion for judgment notwithstanding the verdict should have been sustained.

The judgment of the trial court is reversed and judgment is ordered rendered for the defendant.

Judgment reversed.

Hornbeck, P. J., and Geiger, J., concur.


author: Doyle, J.

text:
    Taylor et al., Appellees, v. Ebert, Appellant, et al.
    (No. 193
    Decided June 1, 1945.)

      Mr. B. E. Snedclen, for appellees.

      Mr. W. W. Garver, for appellant.
   Doyle, J.

The proceeding in the Court of Common Pleas of Medina county was one to set aside a sale of real estate by the county auditor, consummated under the claimed authority of the delinquent land tax statutes (Section 5704 et seq., General Code).

The record shows that the plaintiffs, in the fore part of December, 1938, paid to the county treasurer all delinquent taxes, penalties and interest on the property in question. Such payment, however, did not include the taxes for the first half of the year 1938 and payable in December. On the 15th of September, 1939 (no further payments having been made), the property was certified delinquent by the auditor under authority of Section 5705, General Code.

After the expiration of three years — December, 1942 —(no further taxes having been paid), the county auditor submitted the delinquent property to a board consisting of the president of the board of county commissioners, the county auditor, and the county treasurer, which ordered that the lands be omitted from foreclosure proceedings (Section 5718-1, General Code). The lands were then forfeited to the state and summarily sold pursuant to the provisions of Section 5744 et seq., General Code (Chapter 15, forfeited lands).

The trial court determined that the. sale “be set aside and declared null and void.” It further found that the real value of the lands was $600, “and that a sale of such lands by judicial proceedings in foreclosure would have brought * * * much more money than required to pay all taxes, assessments and penalties thereon in arrears, together with costs of foreclosure,” and also that the board provided for in Section 5718-1, General Code, “did not use due diligence and discretion to ascertain value,” etc.

A motion for a new trial having been overruled, the case is before this court on appeal on questions of law. C. M. Ebert, one of the defendants, and the purchaser of the property at tax sale, is the only appellant.

The controlling question is whether there was a failure to comply with Section 5718-1, General Code, as enacted in 1941, and whether such fact, if true, justified the trial court in setting aside the sale.

Section 5718-1, General Code (as enacted in 1941), is as follows:

“Before making the certificates provided for in Section 5718 of the General Code, the county auditor shall submit the list of-lands on the delinquent list and subject to foreclosure, to a board composed of the president of the board of county commissioners, the county auditor and the county treasurer, and if, after investigation, in their judgment and discretion, such board is of the opinion- that such list- contains property or properties so certified which will not bring upon a sale a sufficient amount of money to pay all taxes, assessments and penalties thereon in arrears, together with costs of foreclosure, such board may order the same to be omitted from the foreclosure proceedings as herein provided * * *.” (Italics ours.)

The various statutes provide, among other things, two methods for tax sale. One method is through foreclosure proceedings in court, and the other by summary sale after having been “omitted from the foreclosure proceedings” under the provisions of the above-quoted section of the Code.

1. Did the board comply with the Code?

The evidence is that at the time of the tax sale to Mr. Ebert there was owing approximately $30 in delinquent taxes, assessments and penalties. The costs of a foreclosure sale would be “between $65 and $75” (witness McNeal, of the office of clerk of courts). Added together these sums amount to approximately $100. In contrast to this $100 figure, there is the testimony of various experts, who estimate the value of the property at from $400 to $800; the records of the county offices which show the property appraised at $430 for tax purposes; and the general location on a main public highway of four acres of land. The evidence further shows the statutory rule for “omission from foreclosure” was not, at least by all of the members of the board, followed in making their decision. There is evidence by one of the official members of the board who judged this property, that “There is no set rule I know of on vacant land; as I say, it goes by the size of the property; if it is a large acreage, * * # that would be on foreclosure, if a small area, a small acreage, a small parcel, we put it on forfeiture. I don’t know of any set rule, you have to use your own judgment.” (Italics ours.) •

Of course, the statute does fix a set rule. It provides that the board may omit it from foreclosure if in their judgment it will not bring upon sale a sufficient amount of money to pay all delinquencies plus the costs of foreclosure. If the board does not so find, then the property must be foreclosed. A board cannot act arbitrarily and without proper investigation. As we view the record in its entirety, and especially confronted with a record which shows a valuable property with an approximate $30 tax, assessment and penalty lien upon it, sold at summary sale for the sum of $85, we are of the opinion that the Common Pleas Court judgment was in all respects correct when it found that the board abused its discretion in omitting the land from foreclosure.

The record before us presents an interesting paradox. Public officers of the county appraised the property for tax purposes at $430, yet other officials of the same county inferentially determined that it did 'not have a value of one-fourth that amount.

2. Under such a showing, the Court of Common Pleas was fully justified in finding an abuse of discre-’ tion and setting aside the sale. Its order and judgment will be in all respects affirmed.

Judgment affirmed.

Washburn, P. J., and Stevens, J., concur.


author: Carpenter, J.

text:
    The Commercial Credit Corp., Appellant, v. Wasson, Appellee.
    (No. 494
    Decided March 13, 1944.)

      Messrs. Carpenter & Freeman, for appellant.

      Messrs. Young & Young, for appellee.
   Carpenter, J.

On June 23,1941, plaintiff took judgment against the defendant upon a warrant of attorney contained in a cognovit note of which plaintiff was a holder in due course. On October 11, 1941, after the term at which the judgment was taken, defendant, under Section 11631, General Code, filed a petition to vacate the judgment. It alleged that the note was a forgery and that he had no notice of the proceedings in which the judgment was taken until execution was served under it on September 16, 1941. A proposed answer was tendered with the petition which answer denied that any amount was due on the note.

The answer to the petition to vacate admitted that no summons was served on defendant or any notice given when the judgment was obtained. After trial on these issues, the trial court, by its entry finding the judgment was for more than was due and that no summons was served on defendant, vacated the judgment and gave leave to file the tendered answer. Plaintiff appealed on questions of law. The error assigned is that the judgment is contrary to law and unsupported by the evidence.

There was a sharp dispute as to whether the note was a forgery. Apparently the trial court concluded it was, or at least that a question was presented which should be submitted to a jury. Section 11637, General Code. If it was a forged note, defendant was not liable' on it for any amount and subsection 9 of Section 11631, General Code, applied. This court can not say that the court erred in its conclusion. Weaver v. Weaver, 15 Ohio Law Abs., 374, was a similar case and the same results were approved.

The order made by the trial court unqualifiedly vacated the judgment. The better and approved practice is to suspend the judgment pending trial of the issues, thereby preserving any liens or securities obtained under the judgment. Section 11637, General Code. In this respect the judgment is modified and as modified is affirmed.

Judgment modified and affirmed as modified.

Lloyd and Stuart, JJ., concur.


author: Hornbeck, P. J.

text:
    Plessinger, Gdn., Appellee, v. Bireley, Appellant, et al., Appellees.

      (No. 634
    Decided May 5, 1945.)

      Messrs. Murphy & Staley, for appellee.

      Mr. Joseph W. Sharts, for appellant.
   Hornbeck, P. J.

This case is in this court on an appeal on questions of law from a judgment dismissing a petition to open up a judgment against defendant, appellant herein, after the court had sustained a demurrer of plaintiff, appellee herein, to such petition.

The errors assigned are that the court erred in sustaining the demurrer and in entering judgment for plaintiff.

The petition is directed to an order of the Probate Court of Darke county, Ohio, of April 15, 1942, directing plaintiff as guardian of Ms then ward, Agnes Bireley, appellant, to sell real estate of his ward to pay her debts.

The petition is so framed that it may be predicated upon either Section 11580 or Section 11631, General Code, as it alleges generally, irregularity in obtaining the order of sale, abuse of discretion and fraud practiced by the guardian and others.

The plaintiff, Plessinger, guardian, prior to the order of sale, had been appointed guardian of the person and estate of Agnes Bireley, she having been adjudged an insane person. At the time of the institution of the petition here under consideration, she had been released from the disability, as of date March 31, 1943.

The proceedings incident to the appointment of the guardian of the incompetent were challenged appropriately in the Probate Court and the judgment of that court was made the subject of an appeal to this court and such appointment was found to be regular and valid.

This appeal is necessarily restricted to a consideration of the validity of the proceedings to sell the real estate.

In support of her petition to vacate, set aside the judgment and for a new trial, appellant sets up ten causes.

The plaintiff, appellee, interposed a general demurrer to the petition, which the court, upon consideration, sustained and thereafter entered judgment against appellant petitioner.

The trial court in a very brief opinion held that the causes assigned for vacating the order of sale were insufficient to state a cause of action in that they were but conclusions of law and not supported by the pleading of essential operative facts. '

We consider briefly the ten grounds assigned upon which appellant predicates her right to vacation of the judgment.

One and two relate to claimed irregularities in the appointment of the guardian; one as to the insufficiency of the service upon her of the notice of the application for appointment of a guardian and, two, failure to furnish sufficient bond upon appointment of the guardian. Both of these questions were considered and determined in the appeal prosecuted upon the appointment of the guardian.

“3. Said petition of said guardian falsely and fraudulently stated that said ward’s personalty amounted to only $100, and that she owed debts requiring sale of her real estate; whereas the reasonable value of the personalty was several times $100, and she owed no debts that the said personalty (if prudently marketed) and the rentals of said real estate were not ample to meet; and said suit was instituted in pursuance of a conspiracy between said guardian and others to squander, waste, and dissipate said estate.”

Obviously, the latter part of this specification is but a legal conclusion without any essential facts set out to support it. The first part of the third specification is likewise too general to support an order of vacation of the order of sale. The demurrer searches the record and it appears that not only the petition sets up there is insufficient personal property to pay the debts of the incompetent, but the formal judgment entry of the court so finds. The amount of the incompetent’s debts are not set out, nor is the value of her personal property stated, but the conclusion is drawn that her personalty was worth several times $100 and that she owed no debts that it, if prudently marketed, and the rentals of such real estate would not meet.

“4. Said suit was conducted throughout without a trustee for the suit appointed to defend the ward’s interests.”

It is true that a trustee eo nomine was not appointed for the incompetent. Instead a guardian ad litem was named. The record discloses that after the petition to sell real estate had been duly filed by the guardian, all parties duly summoned and the two parties defendants which held mortgages on the real property to be sold had answered, appraisement of the property made, approved and confirmed and bond ordered to be given by the guardian on the order of the sale of real estate, the guardian reported to the court that the incompetent had attempted personally to make a defense to the action and had filed an answer and that the issues raised by the answer had been considered by the court. The applicant sought the direction of the court whether a guardian ad litem or trustee for the suit should be appointed for the ward and her interests in all respects protected and conserved. Thereafter the court upon considering the application of the guardian appointed “Howard G-. Eley, an attorney practicing at the bar of this court, as guardian ad litem for and on behalf of the said ward, Agnes Bireley, and directs that said Howard G-. Eley do and perform such things as he may deem necessary and proper and make such a defense' as he may deem necessary and proper for and on behalf of the ward, Agnes Bireley, said duties, however, to be limited specifically to the proceedings to sell said real estate in this cause.”

The guardian ad litem qualified and filed an answer in the form of a general denial of each and every allegation in the petition and asked the court to fully protect the interests of the incompetent.

The court also, by the entry appointing the guardian ad litem for the incompetent, set aside the order of sale of the property theretofore made and the confirmation of the inventory and appraisement and thereafter provided that the report of the appraisers heretofore made be refiled and finding it in all respects regular and correct, approved and confirmed it, and ordered a new bond to be given by the guardian in the sum of $5,000.

Considerable discussion is indulged in the respective briefs as to the necessity of a “trustee for the suit” to defend the incompetent and if such-appointment is necessary, whether the appointment of a guardian ad litem is sufficient under the statute. We are cited to Hasty, Gdn., v. Weller, 33 Ohio Law Abs., 190, wherein Judge Wiseman of the Probate Court of Montgomery county held that, in an action by a guardian to sell the real estate of his incompetent ward to pay her debts, the guardian plaintiff can make defense for the ward as a party defendant, as guardian acl litem, and the court is not required to appoint another person as guardian ad litem or trustee, as such guardian is not personally interested. In Qur view of the situation here presented, it is not necessary for us to approve or disapprove the adjudication in the cited case.

Counsel for appellee urge that if necessary to name a representative to defend the incompetent, Section 10507-26, General Code, is applicable and that it was proper to name a guardian ad litem, as such, and not a trustee-.

Section 11249, General Code, provides that:

“The defense of an insane person must be by his legally appointed guardian, except that if there is no guardian, or he has an adverse interest, by a trustee for the suit, appointed by the court. * * *

The gist of Section 10507-26, General Code, is that a guardian of the person and estate of a ward shall act as guardian ad litem for such ward in any proceeding in the Probate Court, except suits or proceedings in which the guardian is personally interested.

The court in its action in naming a guardian ad litem other than the guardian of the person and estate, must have determined that Section 10507-26, General Code, did not have application. This being true, the appointee should have been designated a trustee for the suit under Section 11249, General Code.

No prejudice has resulted by the designation of the person appointed to defend the incompetent as guardian ad litem instead of trustee for the suit. There is no claim that the person named was not a qualified and disinterested person who was directed to make a proper and complete defense for the incompetent or that he did not make such defense under the title of guardian ad litem. He did everything which was necessary to protect the interests of the incompetent and the mere fact that it was done under designation, guardian ad litem, could not conceivably prejudice plaintiff’s rights.

'“5. It [the sale of the real estate] was without an appraisal required by law. ’ ’

This is but a conclusion of the pleader. An examination of the pleadings will not support the conclusion without more factual matter being set forth. The question sought to be raised arises because of the fact that after the guardian ad litem was named for the incompetent the court permitted ah appraisement which had theretofore been made to be refiled in the cause and upon examination found it to be regular and ordered it approved and confirmed. Without more, we could not hold that this was prejudicial to any substantial rights of the appellant.

“6. The additional $5,000 bond of said guardian, approved by said court on May 22, 1942, was without sureties who had made oath as to property, and who had sufficient visible unincumbered real estate.”

This is not an averment that the bond was insufficient. Nor are we prepared to say that, unless some jurisdictional defect in the proceedings appears in the petition, the insufficiency of the bond alone would support the setting aside of the sale.

“7. Said judgment entries of June 12 and August 6, 1942, approving and confirming sales, and all proceedings subsequent to April 15, 1942, were filed after a written notice of appeal bad been filed in said court by T. A. Billingsley, attorney for this petitioner, from the judgment entry of April 15, 1942, which appeal remained undismissed. ’ ’

The record discloses that Mr. Billingsley did act for the incompetent, filed an answer in her behalf, noted exceptions to the proceedings up to and including the order' of sale-and at the bottom of the judgment entry journalizing these orders gave notice of appeal. Nothing further appears respecting the notice. >

We presume that the averment as to the appeal is made upon the hypothesis that all orders subsequent thereto were invalid and should be vacated and set aside. This does not follow. The form of the notice of appeal, although vigorously challenged in the minority opinion, has been approved in Capital Loan & Savings Co. v. Biery, 134 Ohio St., 333, 16 N. E. (2d), 450. We must assume, inasmuch as nothing but the notice appears, that the appeal was on questions of law. If so, as we find no supersedeas bond,- there was no suspension of any order theretofore made and the court was free to proceed as though the notice of appeal had not been given. Goode v. Wiggins, 12 Ohio St., 341; Vail v. McMillan, 17 Ohio St., 617; Farrell v. Brazee, 9 Ohio App., 218.

“8. The proceeds of said sales were paid out, on order of said court, to cover said guardian’s alleged expenses of sale, attorney fees, compensation, fees of guardian ad litem, appraisers, and relator, without special application in writing specifying same in detail as required by Uniform Rules of Practice under G. C. Sec. 10501-13.”

“10. Said judgment entry of August 6,1942, author-' ized and ordered compensations for alleged services in said sale at percentages in excess of amounts set by law and by said rules of practice and ordered payment of alleged court costs in excess- of tbe sum fixed by law, to wit: * * V’

Specification 10 in conjunction with specification 8 is but tbe pleading of a legal conclusion. There is no statement of tbe percentages of tbe proceeds of tbe sale to wbicb tbe guardian acl litem, counsel and the court were entitled under tbe rules or tbe percentages upon wbicb their fees were fixed. If tbe fees were excessive, this would afford no reason to set aside tbe order of sale.

“9. Said sale of Tract I to Elizabeth Calloway on August 6, 1942, was made by said judge himself in open court and not upon an order of sale which bad been returned, approved and confirmed.”

This specification has caused us some concern. Tract I of tbe real estate owned by tbe incompetent was tbe one piece of considerable value. It was appraised at-$2,500. Tbe court found that it would be to tbe best interests of tbe ward to sell this tract at private sale and it was so ordered. Tbe guardian made report, in due form, of tbe sale of tract I to John H. Scbweiterman for tbe sum of $2,505 and in conjunction with such report filed an affidavit that tbe sale was made “after diligent endeavor to obtain tbe best price for said property, and that tbe sale reported is for tbe highest price that could be obtained.” Tbe entry on this reported sale recites that tbe cause came on to be beard “on the report of the guardian’’ and upon bis motion, to confirm tbe sale in obedience to.an alias order as to tract I. (Emphasis ours.) Tbe entry continues:

‘ ‘Thereupon, tbe court inquired as to whether or not any others desired to raise the offer of John H. Schweiterman, and, thereupon, came Elizabeth Calloway and offered to pay for said premises tbe sum of two thousand five hundred seventy ($2,570) dollars. Tbe court then inquired of said John H. Schweiterman whether or not he would meet said bid and said John H. Schweiterman, in open court, refused to pay as much as two thousand five hundred seventy ($2,570) dollars.
‘ ‘ The court, having carefully examined the proceedings of said guardian as to tract No. 1, finds that the proceedings are in all respects correct, but, finding that-said Elizabeth Calloway has offered to pay the sum of two thousand five hundred seventy ($2,570) dollars, that being more than said John H. Schweiterman would pay for the same, the court finds that said property should.be sold to said Elizabeth Calloway.”

It will be noted that this entry up to this point makes no reference to any report of the guardian that Elizabeth Calloway was the highest and best bidder that he could secure for the first tract. In fact he makes no further report or return whatever. The entry then continues :

“It is, therefore, by the court considered, ordered, adjudged and decreed that the proceedings of said petitioner is in all respects correct and according to law, and that said sale has been made for the best and highest price obtainable therefor, and that said proceedings of said guardian, with the exception of the sale of said premises to John H. Schweiterman, is hereby approved and confirmed, and, it is further, by the court, considered, ordered, adjudged and decreed that the sale of said premises to the said Elizabeth Calloway for the sum of two thousand five hundred seventy ($2,570) dollars, be, and the same is, hereby approved and confirmed.”

It will be noted that these proceedings because of failure of the guardian to report the sale are irregular but that the court secured a bidder who was willing to pay more than the highest amount the guardian had been able to secure from Schweiterman for the property and as to whom the guardian made affidavit that he was the highest bidder. There is no assertion in the petition that the property was not sold to the highest bidder, that it did not bring its fair market value, or that any purchaser was willing to pay more. The entry reciting as it does that the sale was made for the best and highest price obtainable and such determination evidently made in the presence of the guardian will bear the interpretation that it was sold at the highest price obtainable by the guardian..

The statute controlling provides that when an order for private sale is issued it shall be returned by the petitioner and that where ordered the real estate shall not be sold for less than the appraised value.

After careful consideration, notwithstanding the irregularity here found we have concluded the averment would not support the setting aside of the order of sale.

We have given this appeal more detailed consideration than the record alone would seem to require. We are, however, cognizant of the fact that we are passing upon the rights of a person incompetent at the time of the proceedings under review and whose situation is unfortunate. It may be that someone, if especially interested in appellee, could have taken her property and managed it so that it would have been saved for her and that it would have afforded her a means of livelihood which otherwise she may have great difficulty in obtaining. But, it must, also lie kept in mind that no one could say when, if ever, appellee would be restored to reason. Ñor are we unmindful of the fine purpose actuating appellant’s counsel in his efforts in her behalf, no doubt with little or wholly inadequate compensation therefor.

Testing the orders sought to be set aside by the law controlling, we are unable to find the petition asserts, or the record discloses, that appellant has been prejudiced in any of her substantial rights by the proceedings to sell the real estate.

The judgment will be affirmed.

Judgment affirmed.’

Geiger and Miller, JJ., concur.


author: By the Court.

text:
    Randolph, Appellant, v. Deibel, Sr., et al., Appellees.
    (No. 3768
    Decided February 2, 1945.)

      Mr. John A. Connor and Mr. John D. Connor, for appellant.

      Mr. Fred C. Rector and Mr..Henry A. Reinhard, for appellees.
   By the Court.

This is an appeal on questions of law -and fact from a judgment of the Common Pleas Court for the defendants on their motion for judgment on the pleadings.

The plaintiff is the owner of 18 shares of the capital stock of the defendant, The Modern Tool Die- & Machine Company, the total capital stock of which is some 600 shares, common, without par value. The .plaintiff ■instituted her action as a class suit on behalf of other shareholders, whose names and the amount of whose holdings do not appear in the pleadings.

We shall not attempt to set out in detail the averments of the petition, the answer and reply, upon which the issues were drawn and upon which the trial judge entered judgment for the defendants.

' Briefly, it is the claim of the plaintiff on her own behalf and on behalf of others similarly situated that she and they are entitled to have issued to them, upon payment of the purchase price therefor, 54 shares of stock now in the name of Joseph F. Deibel, Sr., on the books of defendant company, which stock was acquired by Joseph F. Deibel, Sr., by purchase from Ella Fallcenbach and William Falkenbach, who owned 25 and 29 shares, respectively, of the no par common stock of defendant company.

It appears that those owners proposed to the board of directors of defendant company to sell their shares of stock for the sum of $150 per share. The petition sets out that one of the regulations of the company provides as follows:

“In ease any member of the company desires to sell all, or part of stock owned by him, he shall notify the secretary of the company in writing, stating the amount of stock he desires to sell and the ma'rket value of same, when this company shall have an option on said stock for thirty days following such notice.”

The board of directors of the company declined to purchase the stock at the price quoted, but made an offer therefor of $100 per share, and lafer the owners notified the board that they would not sell at $100 a share. It is averred that Joseph F. Deibel, Sr., after the expiration of the option date, purchased the stock at approximately $110 per share and later without consideration turned portions of it over to certain named defendants and retained some of it. Later all this stock, after some objection and discussion among the members of the board, was transferred to the certificate holders on the books of the defendant company.

The plaintiff avers that she had no knowledge that the stock of the Falkenbachs had been offered for sale, until within a few days prior to the filing of her petition.

The amended answer asserts three defenses, the first of which, after admitting certain averments of the petition, is a general denial; the second is a claim that the suit was not properly instituted as a class suit; and the third is a claim that the plaintiff and those whom she claims to represent are estopped from objecting to the sale, purchase, transfer or ownership of the 54 shares of stock.

The cause is submitted to this court on the transcript of the docket and journal entries, including what is designated as a bill of exceptions and so signed by the trial court, and which is made up of statements of counsel, the letters of the Falkenbachs to the board of directors of the defendant company offering their stock for sale, the notification of the company to the 'agent of the Falkenbachs that the board of directors would not buy the stock at $150 per share but that the board would pay $100, and the reply of the agent of the Falkenbachs that they would not sell at $100 a share.

We have been favored with the written opinion of the trial judge whose viewpoint we are pleased to have although the matter comes to our attention originally. He was of opinion that plaintiff was chargeable with waiver of her rights, or laches. She pleads, however, that she had no knowledge of the transaction until a few days before her petition was filed.

In oral presentation and in the statements of plaintiff’s counsel in the trial court and in this court, there appear factual developments which are not found in the pleadings. Those statements raise a very serious implication that Deibel, Sr., was chargeable with a delict in conducting the transactions, after the board declined to purchase at $150 and offered $100, and in eventually purchasing the stock at $110 for himself. The nature and extent of the scope of the agency of Deibel to represent the board are not in the record. Just what transpired after the $100 bid was transmitted to the Falkenbachs does not appear. The occurrences arising in the interim between the notification of rejection of the bid and the purchase by Deibel, Sr., would be of some advantage in determining whether Deibel properly carried out his agency for the defendant company. Likewise, there might arise a nice legal question, if made, whether any proposal to sell stock at a lower price .than the $150, quoted by the Falkenbachs to the board, should not have been treated as was the original proposition and first tendered to the board of directors for its acceptance or rejection. Upon the meager record, that question is not definitely projected.

The determining factor, as we view it, assuming that the plaintiff has a right to prosecute a class suit, is that the right of purchase under the rule pleaded is in the company and not in the shareholders. The board of directors act for and on behalf of the company, or at least did at the time when this transaction was conducted. Sections 8623-20, 8623-36 and 8623-41, General Code; 13 American Jurisprudence, 504, Section 461'. It is not pleaded, nor could it be upon any fact appearing in the record, that the board of directors at any time indicated a purpose to insist upon the right to purchase this stock at the figure at which Deibel, Sr., bought it.

It impresses us that the rights of the shareholders rise no higher than the rights of the company as assertecl by its board of directors. Tbe mere fact tbat tbe board permitted tbe transfer of tbe shares of stock to the transferees would not have barred it from taking-legal steps to protect its interests if done promptly.

It is not alleged tbat plaintiff or any one wbom she represents called upon tbe board of directors to bring tbis suit. 13 American Jurisprudence, 500, 508, Sections 454, 464.

It is not- contemplated tbat tbe purchase right accorded to tbe company under tbe rule pleaded should be exercised by individual shareholders. Tbis appears to be tbe only practical construction of tbe rule. If it were meant tbat tbe tendered option of purcbasé of stock be exercised by tbe shareholders, there would develop a burdensome and difficult procedure. Then, if a majority determined to buy at tbe option price, it would be necessary for every shareholder to indicate a willingness to take bis proportionate share of tbe stock and to pay for it. If any one or more of tbe shareholders did not elect to purchase, then tbe seller would be left with some of bis stock unsold. Obviously, tbis would result in dissatisfaction and a seller could not be compelled to transfer anything less than all tbe shares which be bad to sell.’

The petition does not aver tbat tbe shareholders wbom tbe plaintiff claims to represent as a class have indicated a purpose to put up tbe purchase money and to take tbe respective shares to which they are entitled.

We have not discussed all of tbe questions presented in oral argument and in tbe briefs, but are satisfied tbat upon tbe averments of the petition tbe plaintiff may not maintain her action individually or as representative of a class.

Judgment accordingly.

Hornbeck, P. J., Geiger and Montgomery, JJ., concur.

Montgomery, J., of tbe Fifth Appellate District, sitting by designation in tbe Second Appellate District.


author: Washburn, P. J.

text:
    The State of Ohio, Appellee, v. Weekly, Appellant.
    (No. 1088
    Decided May 7, 1945.)

      Mr. Raymond 0. Morgan, acting prosecuting attorney, and Mr. Alton II. Etling, for appellee.

      Mr. George W. Biddle and Mr. K. E. Hoover, for appellant.
   Washburn, P. J.

Tbe defendant, Willard Weekly (appellant in tbis court), was found guilty by a jury-of tbe larceny of a bound dog, and was sentenced by tbe court to imprisonment in tbe penitentiary; and tbe case is before tbis court on an appeal on questions of law.

Counsel are familiar with tbe record, and we deem it necessary to simply state our conclusions in reference to tbe errors about wbicb complaint is made.

First, the admission of the testimony of the witness Charles Ling was error, but in view of the whole record such error was not prejudicial.

Second, the testimony of Oscar Jarvis and his wife was competent-

Third, we hold that a hound dog may be a'“thing of value” within the meaning of the general larceny statute (Section 12447, General Code), whether or not the dog is listed for taxation, and notwithstanding Section 5837, General Code, relating to damages for the malicious and unlawful killing of a dog, and therefore it was not error for the trial court to refuse to discharge the defendant as a matter of law.

The claim that a dog is not property and therefore cannot be the subject of larceny grows out of an English common-law conception and pronouncement.

Although the right of property in dogs was protected by common-law civil remedies, that same common law proclaimed that larceny could not be committed of a dog because of the base nature of a dog, which was kept for mere whim and pleasure and was unfit for food and of no intrinsic value; that dogs were not administered as property nor taxed as other property.

When such seemingly inconsistent views were established by the common law, the conditions and circumstances may have been such as to render such reasoning satisfactory; but when applied to present-day conditions, such reasoning is definitely not satisfactory.

Dogs have a prominent place in the history of the development of this country. In Alaska and other parts of the western world, they have a fixed market value as beasts of burden; the breeders of dogs, the trainers of dogs, the dealers in dogs, the hospitals for dogs, the manufacture of foods for dogs — these constitute a substantial business enterprise in every state of the Union ; dogs lead the blind and help, in the waging of war; they are so helpful to mankind in countless ways as to be commonly known as man’s best friend; tbey are required to be registered and they are taxed, tbeir owners are made liable for tbeir acts, and in most of tbe states of tbe Union, including Ohio, tbe common-law concept of dogs bas been repudiated and changed by statutes. Hence we bold, as hereinbefore stated, that in Obio a dog may be a subject of larceny under tbe general larceny statute.

Furthermore, we are of tbe opinion that tbe later enactment of an amendment to tbe taxation laws relating to dogs, which provides in Section 5652-7, General Code, that whoever steals a dog which bas been registered should be fined not more than $500 or confined in the' county jail for not more than 30 days, did not render inoperative tbe general larceny statute, but did provide for a greater penalty than under tbe general statute for tbe stealing of a dog of tbe value of less than $35, if tbe prosecution was under tbe taxation statute.

Fourth. Tbe finding of guilty by tbe jury is not only not against tbe weight of tbe evidence, but on tbe contrary is fully justified by tbe evidence in tbe record. ' ¡

Fifth. We have no common-law crimes in Obio. Only such acts are crimes as are made so by statute. Attention is called to tbe fact that there is no such an-offense as “grand larceny” mentioned in tbe statutes of Obio. On tbe question under consideration, tbe statute merely makes tbe stealing of anything of value tbe crime of larceny, and provides a penalty where tbe value of tbe property stolen is $35 or more, and a different penalty where the value is under $35.

All tbe procedure of trials of criminal cases is prescribed by statute. One of such statutes (Section 13448-3, General Code) provides that:

“When an indictment * * * charges an offense against property by larceny, # * * in case tbe value thereof shall determine tbe degree of tbe offense, or shall determine tbe punishment, tbe jury, on conviction shall ascertain and declare in their verdict the value of such property.”

This statute, as well as other criminal statutes, is to be strictly construed and applied.

The object and purpose of the Legislature in enacting said law was to require the jury to “ascertain and declare” in its verdict a fact which would determine the degree of the offense and the punishment, so as to enable the court to pronounce the sentence required by lawthe law having fixed one penalty if the value of the property stolen was “thirty-five dollars or more,” and a lesser penalty if it was “less than that sum.”

In the instant case the jury did not return the verdict required by the statute; it was not furnished such a verdict by the court.

The verdict returned reads, “We, the jury in this case, duly impaneled and sworn and affirmed, find the defendant, Willard Weekly, guilty of grand larceny, in manner and form as he stands charged in the indictment.”

There being no such statutory offense as “grand” larceny, the use of such word in the verdict is of no significance and cannot be considered as a compliance with the plain requirements of said statute; and a consideration of the evidence to ascertain the value of the property cannot be substituted for a finding of fact which the jury is required to “ascertain and declare” in its verdict.

The judgment must be reversed solely for the reason that the verdict did not form the predicate for a judgment.

Judgment reversed and cause remanded.

Judgment reversed.

Doyle and Stevens, JJ., concur.


author: Guernsey, P. J.

text:
    Cook et al., Appellants, v. The Hardin County Bank Co., Appellee.

      (No. 466
    Decided January 11, 1945.)

      Mr. Marcus G. Downing and Mr. J. E. Simpson, for appellants.

      Messrs. Price $ Price, for appellee.
   Guernsey, P. J.

This is an appeal on questions of law from a judgment of the Common Pleas Court of Hancock county, Ohio, being cause No. 27180 in that court, wherein the appellants herein, Chester 0. Cook, Carl G.- Cook, Cecil E. Cook and Esther R. McMullen, were plaintiffs, and the appellee herein, The Hardin County Bank Cpmpany, was defendant.

The action is one for forfeiture of the life estate of the defendant in certain real property described in the petition for waste alleged to have been committed by it, and also for damages for such waste.

The judgment from which this appeal is taken is a final judgment in favor of defendant and against plaintiffs.

It is contended by the plaintiffs that the judgment is contrary to law.

The action -in which the judgment was rendered is predicated on the provisions of Section 10503-23, General Code, which reads as follows:

“A tenant for life in real property, who commits or suffers waste thereto, shall forfeit that part of the real property of which such waste is committed or suffered, to the person having the immediate estate in reversion or remainder. Such tenant also will be liable in damages to the person having the immediate estate in reversion or remainder for the waste committed or suffered thereto.”

■ An action for forfeiture for waste was unknown both ■ to the common law and to equity and while equity reeognized and had jurisdiction of actions of accounting for waste, actions for damages for waste were unknown both to it and to the common law. Consequently the proceeding prescribed by the section mentioned is a special proceeding at law and the provisions of the section relating thereto must, therefore, be construed strictly.

It will be noted that, under the provisions of the section mentioned, the action therein prescribed may be maintained against a life tenant of real property only by the person or persons having the immediate estate in reversion or remainder in the real property.

Upon the pleadings and the evidence, an issue is made as to whether the plaintiffs have such an estate in the real property in controversy as will warrant them in maintaining this action; or, in other words, whether the plaintiffs have an immediate estate in reversion or remainder in the real property as prescribed by the section.

As, in the view we take of this case, a determination of this issue will be dispositive of the whole case we will confine our discussion in this opinion to the facts in evidence on such issue, and the rules of law applicable thereto.

Item 11 of the will of Chester 0. Cook which was duly probated in the Probate Court of Hancock county, Ohio, on the 17th day of April 1895, provides as follows:

“11. I give, devise and bequeath to Japies W. Poster (whom we raised) the following farm or tract of land on which he now resides — vis. the north-west quarter (%) of section twenty-five (25) township two (2) south, range eleven (11) east, containing one hundred and sixty (160) acres of land more or less — to have and to hold during his lifetime, then at his death to go to his children or heirs of his body. But should he die leaving no such heirs, then said farm or tract of land to go to my heirs.”

’•. 'James W. Foster mentioned in such will is now known as James W. Cook. He was married to one Maggie Cook, and the. plaintiffs in the instant action áre his only children.

The real estate described in such item of the will is the real estate in controversy in this action and such item in the will is the common source of title of both the plaintiffs and defendant in this action.

Between the dates of April 24 and December 2, 1916, the plaintiffs Chester 0. Cook, Cecil E. Cook, Esther B. McMullen, their respective spouses joining therein, executed and delivered to James W. Cook their respective quit-claim deeds of the premises described in such item of the will and in the petition herein, remising, releasing and forever quit-claiming the same to James W. Cook, his heirs and assigns forever, to have and to hold unto him and his heirs and assigns forever, which deeds are all duly recorded in the record of deeds in the office of the recorder of Hancock county, Ohio.

On April 30, 1929, the defendant, The Hardin County Bank Company, filed its petition in the Common Pleas Court of Hancock county, Ohio, in cause No. 22358 in such court, against James W. Cook and Maggie Cook, his wife, and Chester 0. Cook, Cecil E. Cook, Carl G. Cook and Esther B. McMullen, plaintiffs in this action, and others, asking for money judgments against certain of the various parties defendant for amounts due on certain promissory notes executed by such parties to it, and for the foreclosure of certain mortgages on and of the premises in the petition in the instant case described, executed and delivered to it. by certain of the parties defendant to secure the payment of the notes, and upon September 14,1929, a judgment was entered upon the journal of such court in:the cause, the pertinent parts of which are as follows:

“This cause came on and was heard this 10th day of September, 1929, on the demurrer to the cross-petition of the defendant James W. Cook. The court on consideration sustains the same and thereupon the defendant James W. Cook failing to plead further, the cause came on and was heard on the pleadings and evidence the court find that all of the defendants have been duly served with summons or have waived the service of summons in writing and that all defendants with the exception of James W. Cook herein are in default for answer or demurrer to the petition herein and that the allegations of the petition are thereby confessed by them to be true. * * *
“It is therefore considered ■ by the court that the plaintiff The Hardin County Bank Company recover from the defendants James W. Cook, Maggie Cook, Esther R. McMullen, Chester 0. Cook, Carl G. Cook and Cecil E. Cook, the sum of $2,622.56 on the note set out in plaintiff’s first cause of action, and its costs. It is further considered by the court that the plaintiff The Hardin County Bank Company recover from the defendants James W. Cook and Maggie Cook, the sum of $2,874.19 the amount found due to the plaintiff on the notes set out in its third and fifth causes of action herein, and its costs. And it is further adjudged and decreed that unless the defendants James W. Cook, Maggie Cook, Esther R. McMullen, Chester 0. Cook, Carl G. Cook and Cecil E. Cook shall within five days from the entry of this decree pay, or cause to be paid, to the clerk of this court the costs of the case, and to the plaintiff herein the sum found due as aforesaid, with interest from the 10th day of September, 1929, the defendant James W. Cook’s equity of redemption be foreclosed and the life estate of James W. Cook in said premises be sold and that an order of sale issue therefor to the sheriff of Hancock county, Ohio, commanding him to appraise, advertise and sell said life estate of James W. Cook in said premises according to law and report his proceedings to the court for further orders. Said James W. Cook was 68 years old April 23, 1929.
■ “It will be understood that the interest of said James :W.. Cook in the premises to be sold is an estate tail, and that his four children, Chester 0. Cook, Carl Gr. Cook, Cecil E. Cook and Esther R. McMullen have the immediate estate in remainder.
'■ “It is further ordered that the proceeding as against the part of the estate now represented by the prospective heirs, children of the said James W. Cook, be postponed until the death of the said James W. Cook on' account of the contingent interests involved and the prospect that other interests may intervene under the provisions of the will by which the property was devised, and that a sale could not now be had without manifest injury to the estate. Further proceedings herein are therefore continued until the death of said James W. Cook.”

Thereafter, pursuant to the judgment in cause No. 22358, the life estate of James W. Cook in the premises was duly offered for sale and sold to The Hardin County Bank Company, plaintiff in that action and defendant in this action, the deed of conveyance for such life estate was duly executed qnd delivered" by the sheriff of such county to The Hardin County Bank Company, and the title now held by The Hardin County Bank Company to such premises is the title vested in it by such deed of conveyance.

; It is contended by the plaintiffs that under the judgment and the proceedings in the cause had subsequent thereto, and by the deed executed by the sheriff to it, ,the defendant acquired a life estate only in the premises and the judgment constitutes an adjudication that the plaintiffs have the immediate estate in remainder in the premises which, under the doctrine of res judicata made applicable by the pleadings and proof, the defendant is estopped to deny in this action involving the same subject matter and the same parties.

On the other hand, the defendant contends that the judgment constitutes an adjudication that the interest of James W. Cook in the premises is an,estate tail which under the doctrine of res judicata the plaintiffs are estopped to deny. The defendant further contends that it acquired this interest of James W. Cook in the premises by virtue of such proceedings and deed executed to it, and being the owner of an estate tail in the premises it is immune from liability in an action for waste, as such action does not lie against the first donee of an estate tail or his successor in title.

“An interesting contrast' exists between a life estate and an estate tail. The interest of a first donee'in tail is not the same as that of a mere life tenant. The following summary was written by the Court of Common Pleas of Hamilton county:

‘ ‘ ‘ The incidents to a tenancy in tail were chiefly that he might commit waste; the wife had dower therein; the husband had curtesy of the estate tail; and the estate might be barred or destroyed by a fine, by common recovery or by lineal warranty descending with assels to the heirs * * *. A life estate has none of these incidents and although a life estate may be of identically the same endurance as the particular estate held by the first donee in tail, nevertheless, there is a wide difference in the characters of a life estate and a particular estate in tail, or the estate of the first donee in tail. When a life estate has been carved out and granted or devised to one, the remainder does not pass to those who take it as an estate of inheritance from and through the life tenant, but the remainder-men take from the grantor or devisor directly as an estate by purchase from the death of the life tenant. The fee is vested in the remainderman and not in the life tenant, whereas as heretofore pointed out, the fee in an estate tail is vested by the grant or devise in the first taker, the first donee in tail, and passes from him at death by operation of law to the immediate heirs of his body. In case of a life estate the life tenant cannot commit waste without forfeiting his estate; the wife has no dower in-such an estate; the husband has no curtesy therein; the estate cannot be barred by a fine or a common recovery.’ ” 16 Ohio Jurisprudence, 425, Estates, Section 44.

. ‘ ‘ The statute to restrict the entailment of real estate (S. & C. 550) does not change the nature of the estate in the first donee in tail from an inheritable estate to an estate for life merely. The object of the statute is to restrict the entailment to the immediate issue of such donee, and, on the determination of his interest in the estate, and of such rights as the law annexed to it while held by him, to enlarge the estate tail in the hands of such issue into an absolute estate in fee simple.” Harkness v. Corning, 24 Ohio St., 416.

An inspection of the judgment in question, in the light of the rules above set forth, discloses that the adjudication in such judgment “that the interest of said James W. Cook in the premises to be sold is an estate tail” is in direct conflict with the further adjudication “that his four children, Chester 0. Cook, Carl G. Cook, Cecil E. Cook and Esther B. McMullen have the immediate estate in remainder.”

The doctrine of res judicata is a branch of the law of estoppel. 34 Corpus Juris, 744, 745, Judgments, Section 1155. Where in a former action in which the fact or matter sought to be relitigated has been decided in such a manner that there is a direct conflict in the decision itself as to the fact or matter decided, the rule that “where, there is an estoppel against an estoppel, it ‘setteth the matter at large’ has been applied by some authorities, and in such case both parties may assert their claims anew.” 34 Corpus Juris, 749, Judgments, Section 1159.

The facts of the instant case bring it within the purview of the rule mentioned. We shall, therefore, proceed to consider the claims of the parties with reference to the title held by the plaintiffs in the premises, anew, in the same manner as if there had been no adjudication as to the title of the plaintiffs in the premises.

It is obvious that the title created in the plaintiffs by the item of the will mentioned was either an estate tail in expectancy or an estate in remainder. If it was an estate tail in expectancy the plaintiffs could not, during the lifetime of the first donee in tail, make a conveyance of the same effective in law. Dungan v. Kline, 81 Ohio St., 371, 90 N. E., 938. However, such conveyances, when made for a valuable consideration, are recognized in equity as being enforceable’ as soon as the assigned expectancy has fallen into possession. 1 Pomeroy’s Equity Jurisprudence (4 Ed.), 206, Section 168. Consequently, if the estate created in the plaintiffs by the will was an estate tail in expectancy their conveyances to James W. Cook did not, during the lifetime of James W. Cook, operate as a conveyance of their respective interests in the real estate and they still have an estate tail in expectancy in the premises and, such estate not being an immediate estate in reversion or remainder, they may not maintain this action.

On the other hand, if the title created in the plaintiffs by such item was a remainder, the quit-claim deeds executed by the plaintiffs and their respective spouses to James W. Cook had the effect of vesting in James W. Cook the entire interests of the plaintiffs in the premises described in the petition, and no title would remain in plaintiffs which would warrant them in maintaining this action.

In this situation, irrespective of whether the title created in plaintiffs by the item of the will was an estate in expectancy in tail or a remainder after the life estate, the plaintiffs do not have title of a character authorizing them to maintain this action.

For the reasons mentioned, the judgment of the Common Pleas Court will be affirmed, at costs of appellants, and the cause remanded for execution.

Judgment affirmed.

Jackson and Middleton, JJ., concur.