author: Stuart, J. By the Court.

text:
    Bender, Appellant, v. Board of Education of City School District of City of Toledo, Appellee.
    (No. 3989
    Decided January 17, 1944.)

      Mr. Wm. B. Guitteau, Mrs. Josephine L. Guitteau, Messrs. Eackett & Lynch, Mr. Moe L. Okun and Mr. Marvyn R. Lachin, for appellant.

      Messrs. Christensen & Christensen, for appellee.
   Stuart, J.

This is. an appeal on questions of law from the judgment of the Court of Common Pleas of Lucas county entered upon a verdict directed for the defendant, board of education of the city of Toledo, by the court at the end of the plaintiff’s case.

The plaintiff, Emma Bender, was appointed in 1930, by the director of schools of Toledo, to a position as janitress in the public schools, which appointment was duly confirmed by the defendant.

Immediately upon receiving her notice of employment she went to work for the defendant and performed her duties satisfactorily until her voluntary retirement in the year 1940. She was not dismissed for cause, the relation did not terminate until her voluntary retirement in 1940, and was never dissolved until her retirement. She sought to recover in that action the difference between the amount of salary paid her by defendant for the years 1931 through 1938 and the amount of salary which she claims should have been paid.

During the period of plaintiff’s employment, due to the financial depression throughout the country, the finances of the defendant were in a precarious and uncertain condition, chiefly because of nonpayment of faxes and assessments, and it was difficult for defendant to realize sufficient money to pay its obligations as-they became due and keep the schools open and in operation To meet this situation and to keep the schools functioning on the reduced funds available, the defendant, from time to time, adopted resolutions reducing the-salaries and pay of its employees below that which had been paid for such services at the time of employment.. The plaintiff continued to perforin her duties and, without protest, accepted the reduced payments from month to month during the entire period of these reductions. ' ■ •

- Plaintiff claims the evidence establishes that appropriations were made by defendant exceeding the amount of its expenditures for the identical period. However, it does not appear that the revenues of the defendant equalled the appropriations in these periods and, although plaintiff claims that receipts from thé payment of delinquent taxes exceeded the amount of the defendant’s certified levy for its general fund, it is clear that this apparent excess had been previously hypothecated by the issue of bonds in anticipation of the collection of these delinquent taxes.

It is the contention of the plaintiff that her appointment by the director of schools and confirmation by the defendant (Section 7695, General Code, 114 Ohio Laws, 167) constituted “a contract binding both parties” as provided in Section 7699, General Code (97 Ohio Laws, 360), and under it her salary status was fixed for the entire time she was so employed. The latter section was formerly a part of Section 4017, Be vised Statutes of Ohio, and the last attention given it by the Legislature was in the 1910 codification, when it was given a separate section number. ' '

-If that statute stood alone, plaintiff’s contention would seem to be well founded, but since the Legislature last gave attention to that law, the Constitution was amended in 1912, and there was adopted Section 10 of Article XV, requiring a civil service system which was promptly set up in 1913, by the Legislature in Section 486-1 et seq., General Code. By Section 486-1, employment such as’ plaintiff’s by “city school districts,” was included. By Section 486-8 (b) 2, such -employment was placed in the classified service as unskilled labor. The tenure of such employment was fixed by Section 486-3la as “during good behavior and efficient service.”

The whole law contemplates possible reductions in pay and Section 486-17 provides how they are to be made. So far as this record discloses, the spirit of that section was complied with in other -pay changes that were made by the defendant and there was no discrimination against plaintiff; in other words, all employees in her class were treated alike in respect to wages.

The security the civil service law brought to many public servants has been a great boon and has meant a whole-life employment to them. The scheme of the system with its tenure feature is such that the power of the appointing or supervising authority to revise wages from time to time to meet the changing exigencies created by depreciation of available public funds, .must of necessity be implied. In fact, the civil service law defines the entire employment status of all persons in the classified service, and it rendered Section 7699, General Code, inoperative as to such employees of a city school district.

It is interesting to note that in the school code act, which includes Section 4830 et secq., General Code, passed in 1943, Section 7699 was repealed and nothing analogous to it was enacted.

There being no prejudicial error in the record, the judgment is affirmed.

Judgment affirmed.

Lloyd and Carpenter, JJ., concur.

On Application for rehearing.

By the Court.

Since the decision was announced herein, the court has been furnished with a copy of an opinion of the Attorney General, No. 6621, dated January 17, 1944, in which he reaches the same conclusion with reference’to the authority of a board of education to issue delinquent-tax bonds. His opinion is lengthy, cites the various sections of the Code with reference to appropriations and budget procedure, and gives their application.

Adhering to our opinion, the application for a rehearing is denied.

Application denied.

Lloyd., Carpenter and Stuart, JJ., concur.


source: Caselaw Access Project

author: Ross, P. J.

license: Public Domain

text:
    Blakemore, Appellant, v. Cincinnati Metropolitan Housing Authority, Appellee.

      (No. 6300
    Decided November 15, 1943.)

      Mr. Walter K. Sibbald, for appellant.

      Mr. Francis T. Bartlett, for appellee.
   Ross, P. J.

This is an appeal on questions of law and fact from a decree of the Court of Common Pleas of Hamiltou county, Ohio, dismissing the petition of the plaintiff.

In the petition it is alleged that the defendant has filed its application in the Court of Common Pleas of Hamiltou county, Ohio, to assess compensation for the appropriation of the real estate of plaintiff; that in such application it declared its intention to appropriate such real estate for a public use; that such real estate was required by it as a site for the establishment and development by it of a public slum clearance and low-rent housing project; and that a resolution was thereafter passed directing the appropriation of plaintiff’s property to proceed. It is further claimed in the petition that plaintiff is not advised either of the necessity for such appropriation or the purpose for which her property is to be used. It is further stated that the notice later served failed to give such information. It is further alleged that the purposes- now adopted by defendant do not involve a public use of plaintiff’s real estate. It is further stated that plaintiff believes her real estate is to be used for the purpose of a private parking lot, appurtenant to such housing project, and that such use is not included within the purposes proposed or the authority of the statutes permitting the creation and operation of defendant. It is claimed further that such taking of plaintiff’s real estate is without due process of law, that she is without adequate remedy at law, and that she is irreparably damaged. Her prayer is that the defendant may be enjoined from appropriating her property and enjoined from proceeding with its application to assess compensation therefor.

In the second amended and supplemental answer of the defendant, it is admitted that in its application it was asserted by the defendant, by resolution adopted, that it did declare its intention to appropriate to public use property required by it as a site for the establishment and development by it of a public slum clearance and low-rent housing project, that it did direct the appropriation of plaintiff’s property for such purpose, that plans and specifications for the erection of such low-rent housing project were subsequently adopted providing for the erection of 53 buildings containing 1016 dwelling units, and spaces for off-the-street standing of any vehicles of tenants, of visitors, or other persons who might lawfully bring vehicles upon the property, and that such plans show .that a part of the site, designed for such parking space, includes the property of the plaintiff.

As a supplemental defense, the defendant charges that the plaintiff by participation and acquiescence in the appropriation proceedings has waived and abandoned her right to proceed in this action.

For reply, the plaintiff denies such acquiescence, waiver and abandonment, and charges that on the contrary she specifically objected to the final judgment of the court therein decreeing distribution of the funds.

This latter contention of the defendant may be disposed of immediately.

Only one issue was involved in the appropriation proceedings — the value of the property involved therein. Emery v. City of Toledo, 121 Ohio St., 257, 167 N. E., 889.

The plaintiff filed her action for an injunction the day the appropriation proceeding was called for trial. She, therefore, took timely advantage of her rights by application to a court of equity. In Emery v. City of Toledo, supra, the third paragraph of the syllabus is:

“An owner whose property is being appropriated by a municipality may, at any time before the issue of value is determined, invoke, the aid of a court of equity to determine whether the use is a public one, or whether the municipality in its legislative proceedings has complied with reasonable strictness with the statutes whereby the power to appropriate is conferred, or whether the municipality is acting in good faith or abusing its power.”

In Pontiac Improvement Co. v. Bd. of Commrs., 104 Ohio St., 447, 135 N. E., 635, 23 A. L. R., 866, the court, in the opinion at pages 453 and 454, states:

“It is claimed by the defendant that the plaintiff has mistaken his remedy and that injunction will not lie. We- think that that question has been conclusively determined by this court in two cases, P., C., C. & St. L. Ry. Co. v. City of Greenville, 69 Ohio St., 487, and C. & P. Ry. Co. v. City of Martins Ferry, 92 Ohio St., 157, which sustain the proposition that injunction will lie where an appropriation proceeding is being prosecuted in a court which is without authority to fully protect the property owner’s rights or adjudicate fully the question as to the necessity of the appropriation.”

' She objected through her counsel to final judgment being entered in the case and her objection is incorporated in the decree.

The fact that her counsel, representing other interests acquiesced in the decree of distribution, or in fact requested the same, may not work to the prejudice of the plaintiff. Although counsel of record may bind a party to an action, he cannot do so to her disadvantage, when it is obvious that he does not speak for her, and what he does say indicates no waiver of her rights or abandonment of her proceeding to contest the right of the court to'proceed. Neither does his statement that he intends to take no appeal for her constitute an abandonment since the question she now raises could not have been considered in such appeal. Her whole remedy, if any, lies in the action in equity. Emery v. City of Toledo, supra.

The chief, if not the only serious, problem presented in this case is whether the property of the plaintiff has been taken for private use or without due process of law.

Section 19, Article I of the Ohio Constitution provides-in part: “Private property shall ever be held inviolate, but subservient to the public welfare.”

It is only through the power of eminent domain that this right may be invaded. Enactments conferring such power are strictly construed. Pontiac Improvement Co. v. Bd. of Commrs., supra; United States v. Certain Lands in City of Louisville, 78 F. (2d), 684.

Certainly, the proceeding through which private property is appropriated to public use must constitute due process within the purview of the Fourteenth Amendment to the United States Constitution. Whether or not such is the case is a judicial question. City of Cincinnati v. Vester, 281 U. S., 439, 74 L. Ed., 950, 50 S. Ct., 360. The third paragraph of the syllabus in Pontiac Improvement Co. v. Bd. of Commrs., supra, is:

“The .phrase, ‘where private property shall be taken for public use,’ contained in Section 19, Article I of the Constitution of Ohio, implies possession, oceupation and enjoyment of the property by the public, or by public agencies, to be used for public purposes.”

Such judicial inquiry involves the constitutional aspect of the legislation authorizing the taking, whether the law has been strictly followed, what is the nature of the necessity and the public use claimed, and any other matter which may reflect upon whether the inherent and constitutional rights of the plaintiff in her property have been invaded. Snyder v. Board of Park Commrs., 125 Ohio St., 336, 181 N. E., 483.

■ Some of these questions may be disposed of at once. There can be no question that a “parking space” is a perfectly proper appurtenance to a project consisting of 53 buildings accommodating 1016 dwelling units. ■

It does not appear from the record that any irregularity which occurred in the time and form of resolution and the manner and time of serving notice amounted to any serious departure from the legal procedure prescribed. The purpose of the project was sufficiently explicit except as hereinafter noted.

If this purpose were confined simply to ‘ ‘ slum clearance” a question of fact would be presented. That is, was the area sought to be taken properly described as a slum area, its clearance having a direct relation to the health, morals and welfare of the public? This question will be reserved for later consideration herein.

It appears, however, that, in the act authorizing the creation of defendant, in its incorporation, and in the application for appropriation, the purposes are dual, if not triple, closely intermingled, and so associated as to indicate that they are complementary and interdependent.

In United States v. Certain Lands in City of Louisville, supra, the eighth paragraph of the syllabus is:

“National Industrial Recovery Act, so far as it attempts to authorize national government to condemn private property for low-cost housing and slum-clearance projects and for purpose of reducing unemployment, held unconstitutional, since such use is not a ‘public use’ (National Industrial Recovery Act, Sec. 201 (a), 202, 203 (a), 220, 40 USCA Sec. 401 (a), 402, 403 (a), 411 (Fourth Deficiency Act; Const. Art. 1, Sec. 8, cl. 1).”

An examination of the Ohio “Housing Authority Law,” Section 1078-29 et seq., General Code, 115 Ohio Laws, Pt. 2, 56 et seq., and those similar laws of other states noted in the authorities in State, ex rel. Ellis, v. Sherrill, City Mgr., 136 Ohio St., 328, 25 N. E. (2d), 844, at page 331, coupled with a review of the program of “federal bounty” incident to the housing program, demonstrates that what the federal government could not do directly, it is seeking to do indirectly. The language of Myers, Matthias and Hart, JJ., dissenting in the case of State, ex rel., v. Sherrill, supra, at page 333, is pertinent:

• “The so-called cooperation contract does not, in fact, provide for slum clearance as contemplated by the law but rather for the construction of large apartment buildings at low priced rentals far removed from slum districts. This plan illustrates present day trends in the extension of national governmental activities with a corresponding diminution of the rights of states and their governmental subdivisions. It is a surrender of state sovéreignty and local governmental power neither authorized nor intended by the state or federal Constitution.”

See, also, majority opinion.

However that may be, this court is confronted with multiple purposes in the act, incorporation, and application. As far as the act is concerned, this is directly contrary to the inhibition of the Ohio Constitution, fo.und in Section 16, Article II: “No bill shall contain more than one subject, which shall be clearly expressed in its title.” Most unfortunately, the effect of this mandate of the Constitution has been negatived by the holding that it is merely directory. Pim v. Nicholson, 6 Ohio St., 176.

The value of the constitutional provision is particularly apparent in the instant consideration, for by the decision of the Supreme Court in Columbus Metropolitan Housing Authority v. Thatcher, Aud., 140 Ohio St., 38, 42 N. E. (2d), 437, the property appropriated in the custody of the defendant developed as contemplated into a “housing project” becomes private property subject to taxation. At page 48 of the opinion the court says:

“It seems to us clear that where dwellings are leased to family units for the purposes of private homes, the use of such dwellings is private and not public. Under Anglo-Saxon law and tradition, there is nothing more private than one’s home. Broom’s Legal Maxims (9 Ed.), 283; Semayne’s Case, 5 Coke, 91, 77 Eng. Rep. R., 194. That every man’s house is his castle has not yet been erased from our laws.”

On the other hand, “slum clearance” has a direct relation to health, welfare, and morals of the public, and constitutes a perfectly legitimate public purpose. United States v. Certain Lands in City of Louisville, supra; State, ex rel. Ellis, v. Sherrill, City Mgr., supra.

At least two purposes are therefore involved; one, undoubtedly public in character, the other, purely private. The question now presented is: Are these purposes, one public, the other private, so closely and intimately identified that the presence of the ultimate private purpose destroys the right of appropriation for the incidental public purpose of slum clearance? The two purposes are, as has been noted, constantly associated throughout legislation, incorporation, and appropriation. The same is true of the federal National Housing Act. State, ex rel., v. Sherrill, supra, 331. Neither can he ignored. It must he noted although, that, after the area cleared is used for the private purpose of low-rent housing units, still the public purpose of slum clearance continues. Slums are not again created. The slums remain cleared of elements antagonistic to the health, morals, and welfare of the public.

In State, ex rel., v. Sherrill, supra, the Supreme Court, as has been noted before, inferentially sustained the constitutionality of the state housing act, although it confined itself to one question, to wit:

“An answer consisting of seven defenses was filed. The demurrer thereto was sustained as to all of the defenses except the third, which states in substance:

“First, that money in the sum of $7,100,000 to be loaned by the United States Housing Authority to the Cincinnati Housing Authority for the construction of two low-rent housing projects on vacant lands (one to be known as ‘Winton Terrace,’ comprising'750 dwelling units, and the other to be known as ‘English Woods,’ comprising the same number of dwelling-units), will not, as planned, constitute (a) ‘low-rent housing,’ or (b) ‘slum clearance’ as contemplated by the United States Housing Act.

“Second, that the proposed loan, being neither for ‘low-rent housing’ nor for ‘shim clearance,’ is unauthorized by the United States Housing Act.”

The opinion concludes with the following statement to which reference has been made heretofore:

“Since the passage of the United States Housing-Act, followed by necessary and appropriate enactments in different states to take advantage of the national bounty, frequent attacks have been made upon this legislation and the steps taken thereunder as to constitutionality and on almost every other conceivable ground. Such legislation and the ensuing activities have been upheld generally by the courts, as is shown by the following representative cases, recently decided: Housing Authority of County of Los Angeles v. Dockweiler (Cal. Sup.), 94 P. (2d), 794; Laret Inv. Co. v. Dickmann (Mo. Sup.), 134 S. W. (2d), 65; Matthaei v. Housing Authority of Baltimore (Md. App.), 9 A. (2d), 835; Allydonn Realty Corp. v. Holyoke Housing Authority (Mass. Sup.), 23 N. E. (2d), 665; Stockus v. Boston Housing Authority (Mass. Sup.), 24 N. E. (2d), 333; In re Brewster Street Housing Site in City of Detroit (Mich. Sup.), 289 N. W., 493; Romano v. Housing Authority of the City of Newark (N. J. Sup.), 10 A. (2d), 181; Chapman v. Huntington, W. Va., Housing Authority (W. Va. Sup. Ct. of App.), 3 S. E. (2d), 502. The writ as prayed for will issue.”

In Housing Authority of County of Los Angeles v. Dockweiler, 14 Cal. (2d), 437, 94 P. (2d), 794, the Supreme Court of California held that slum clearance and public housing projects for low income families were public uses.

In Matthaei v. Housing Authority of Baltimore City, 177 Md., 506, at page 515, 9 A. (2d), 835, of the opinion, the Maryland Court of Appeals states:

“To repeat, the statute, as the court construes it, has the single purpose of providing for removal of the conditions which threaten the health and safety of the community, new housing being an incident because removal of people from those conditions requires rehousing free from those conditions, and to some extent at least must require rehousing in new houses.”

In Allydonn Realty Corporation v. Holyoke Housing Authority, 304 Mass., 288, 23 N. E. (2d), 665, the Supreme Judicial Court of Massachusetts say at pages 292, 293, of the opinion:

“Frequently an object presents a double aspect in that it may in some respects result in conferring a benefit upon the public and in other respects it may result in conferring a benefit upon or in paying money to private individuals. In such instances the cases tend to distinguish between those results which are primary and those which are secondary or incidental and to classify the object according to its primary consequences and effects. At any rate it is plain that an expenditure is not necessarily barred because individuals as such may profit, nor is it necessarily valid because of incidental benefit to the public. See Horrigan v. Mayor of Pittsfield, 298 Mass., 492, 497, and cases cited. ’ ’

In Stockus v. Boston Housing Authority, 304 Mass., 507, 24 N. E. (2d), 333, it is stated in the opinion of the Supreme Judicial Court of Massachusetts, at page 508:

‘ ‘ Since the argument of this case, it has been decided that the housing authority law has two principal purposes — (1) the elimination of substandard areas or the abolition of slums, and (2) the furnishing of low-rent housing to families of low income; that the expenditure of public funds in a reasonable manner to rid a community of slums could not be said not to be for a public purpose; that the clearance of slums could be found to promote the public safety, health and welfare; that the construction and maintenance of low-rent housing for families of low income would avert hardship to those whose homes have been razed and would prevent overcrowding into other slums; that construction of new low-rent dwellings is not to be undertaken on a larger scale than the number of existing tenements eliminated by the clearance of substandard areas; and that the furnishing of new low-rent housing facilities was the means adopted to accomplish the abolition of slums. The -housing authority law was therefore held to be a valid enactment. Allydonn Realty Corp. v. Holyoke Housing Authority, ante, 288.

"The present bill cannot be sustained on the ground that the law is unconstitutional, and we must consider whether the bill sets forth a case where the defendants have exceeded their authority in attempting to take the premises of the plaintiffs, as it is the only remaining ground upon which the bill purports to be based.”

In the case of In re Brewster Street Housing Site, 291 Mich., 313, 289 N. W., 493, the Supreme Court of-Michigan stated in the opinion at page 334:

"Upon principle and authority, the State has no power and authority under the power of eminent domain, or otherwise, to take the property of one man and give it to another.”

Again, at pages 338 and 339:

"It is contended the legislation in question is class legislation and, therefore, violative of the Constitution. There can be no question but that the State, and the several municipalities thereof when authorized so to do, are vested with the constitutional power to acquire by the exercise of the power of eminent domain lands for the construction of jails for the incarceration of those convicted of crime. Through its several municipalities authorized to exercise it, the power of eminent domain may be employed for the acquisition of property for the erection of poorhouses-for the care of those who are indigent or unable to care for themselves. The legislation in question does not undertake to authorize the exercise of the power of eminent domain for these purposes, but it does undertake to authorize the exercise of the power of eminent domain for the purpose of acquiring lands, not only for the purposes of slum-clearance', but for the construction of so-called low-cost housing, — that is, for the purpose of erecting upon the lands so acquired buildings which may be leased to persons with low’ incomes. Though we may not agree with the economic reasoning lying back of the legislation, we are not prepared to say that it violates any constitutional limitation of the State, is class legislation, or denies to anyone the equal protection of the law. Legislation is not unconstitutional because it is legislation of a particular kind and character, or because it benefits a particular class. If the object and purpose of the legislation is legitimate and within the terms of the Constitution, the mere fact that there is a classification, so long as the law operates equally upon those within the particular class, does not render it unconstitutional. Lundstrom v. Township of Ellsworth, 196 Mich., 502, 162 N. W., 990; Haynes v. Lapeer Circuit Judge, 201 Mich., 138, (L. R. A. 1918D, 233). Classification schedules similar to those prescribed by the legislation here involved have been held not to be unconstitutional in States where living costs are both higher and lower than in Detroit. New York Housing Authority v. Muller, supra; State, ex rel. Porterie, Attorney General, v. Housing Authority of New Orleans, supra; Williamson v. Housing Authority of Augusta, supra; Rutherford v. City of Great Falls, supra; Edwards v. Housing Authority of City of Muncie, supra. The fact that many persons who frequently are inhabitants of the slums, such as indigents and criminals, are not allowed to become tenants does not make the classification unreasonable or discriminatory.”

In Romano v. Housing Authority of City of Newark, 123 N. J. L., 428,10 A. (2d), 181, in the Supreme Court of New Jersey, the housing authority was there sustained in constitutional action where it “found it necessary to acquire the prosecutors’ properties for the purpose of building a public housing project for families of low income.” The court seems to consider the housing project of paramount importance and the slum clearance merely incidental. It is also evident that the resulting buildings and- site are considered public property.

In Chapman v. Huntington, W. Va., Housing Authority, 121 W. Va., 319, 3 S. E. (2d), 502, in the Supreme Court of Appeals of West Virginia, a question approximating the one here under consideration was treated in the opinion. The action was a taxpayer’s suit, through which the entire proceeding under a housing authority act was sought to be enjoined. The state act considered was similar to the Ohio statute including two purposes — slum clearance and low-rent housing development. The court states at page 330 of the opinion:

“It seems to us from a reading of both acts that the primary purpose of Chapter 93 is slum clearance, and auxiliary thereto, low-cost-housing development.”

The court later finds, however, that the completed housing units hre public property, saying at pages 348, 349:

“The projects in question, when completed, will not belong to the tenants therein. On the contrary, the legal title will be held by the housing authority for a public purpose. They are public property within the meaning of the West Virginia Constitution, and should be exempt from taxation, * * *

“On the question of tax exemption, we must keep in mind that -the projects are made possible only by the use of United States funds and credit. The local housing authority - holds title thereto subject to the statutory control and supervision of the United States Housing Authority, a branch of the United States Government. In the latter authority, resides the power to foreclose in the event the contracts between it and the local authority are breached. Generally, the state or its municipalities cannot assess for local improvements property belonging to the United States Government. 2 Elliott, Roads and Streets (4th Ed.), section 677. This rule has been held to apply also to property upon which the United States has a lien securing a debt due to it. Copp v. State of West Virginia, 69 W. Va., 439, 71 S. E., 580, 35 L. R. A. (N. S.)’, 669.”

The opinion is in conflict with the position of our Supreme Court upon the question of the character of the completed project.

In Laret Inv. Co. v. Dickmann, 345 Mo., 449, 134 S. W. (2d), 65, Supreme Court of Missouri, it is held again that the completed project is public property and not subject to taxation. This result is reached because the Housing Act declares the Housing Authority to be a municipal corporation and the general laws of Missouri exempt the property of municipal corporations from taxation.

A review of these and other decisions of courts upon similar legislation shows a consistent upholding of slum clearance and low-rent housing legislation. Almost every* conceivable objection has been advanced, only to be swept aside by the highest courts of the states considering such acts upon one theory or another.

This is not a taxpayer’s suit. It is the action of the owner of private property, complaining that her property has not been taken for a public use. But it obviously has been taken primarily, at least, for a public use, the clearance of slum area. In this action, whether such property so lawfully taken is now being used illegally cannot now be considered. As far as the appropriation is concerned, the taking was for a public use, although ancillary thereto there existed a private use. The real objection of the plaintiff is that a limited number of persons are permitted to benefit by the taking of her property for public purposes. That objection may not be properly considered in this action.

In Pontiac Improvement Co. v. Bd. of Commrs., supra, at page 458 of the opinion it is stated:

“In Giesy v. C., W. & Z. Rd. Co., 4 Ohio St., 308, this court said at page 326: ‘If the legislature, by a^ direct exercise of authority, should undertake to appropriate property for purposes beyond the scope of this power; or if any subordinate agency, under a power properly conferred, should abuse the authority by using it irregularly, oppressively, or in bad faith, there can be no doubt of the power of the courts to furnish an effectual remedy against such illegal acts.’

“It must of course be conceded that where land is needed for public purposes, such as public buildings, public squares, parks, boulevards, streets or highways, ditches, drains or watercourses, there is full authority to appropriate the land; and the fee simple title may be taken, or a mere easement, such as a right of way; or a limited term or any interest less than a fee may be taken; but the use must always be a public use and tire land or the interest therein must be taken by the public. Where private property is taken against the will of the owner under the power of eminent domain, it is a prerequisite that possession, occupation and enjoyment of the property by the public, or by public agencies, is sought and is necessary.”

The case of City of Cleveland v. Ruple, 130 Ohio St., 465, 200 N. E., 507, 103 A. L. R., 853, is an example of the power of the courts to intervene where public property is used for private purposes. The third paragraph of the syllabus in that case is:

“A public underground exhibition hall, constructed with public funds for holding public exhibitions or to provide space for storage, garage or other public purposes and for all uses incidental thereto, may not lawfully be used by the municipality in carrying on a purely private garage business in competition with other private garage businesses in the vicinity, such use being an undue interference with the constitutional right of private property.”

This latter action was instituted by the plaintiff, a taxpayer, who also, as receiver of a neighboring garage, was directly prejudiced by the misuse of the public, property.

As far as the legislation is concerned, this court is bound to sustain such legislation as constitutional, if an alternative construction will justify such a course. Such alternative construction as indicated is here present.

In Seward, Dir., v. State, ex rel. Kratt, 129 Ohio St., 296, 195 N. E., 241, at page 298 of the opinion, the following is stated:

“Where two courses are open and one interpretation upholds the law as constitutional and the other defeats it, the courts must adopt the one that preserves the law’s validity.”

See, also, Columbus Metropolitan Housing Authority v. Thatcher, Aud., supra, at page 43; 37 Ohio Jurisprudence, 624.

The fact that a statute permitting the exercise of the power of eminent domain is involved does not affect the application of this rule.

While, at first, it may be considered that the holding in Pontiac Improvement Co. v. Bd. of Commrs., supra, is contrary to this conclusion, an examination of the legislation there considered will demonstrate that it was essentially faulty, in that it provided for regulation of property sought to be enforced through the power of eminent domain. No alternative constitutional conception of the statute was considered to exist. In that case it was held:

‘ ‘ To permit by an appropriation proceeding the en-grafting on the property of the plaintiff in this case of rights and privileges of the uncertain and indefinite character set forth in the petition would be a disregard of guaranteed rights of the plaintiff.”

The legislation involved is therefore sustained as constitutional. The appropriation proceedings are approved, for the reason that the plaintiff’s property was taken for a public purpose.

Turning to the record, was the area involved in the appropriation proceedings such as would be properly classified under Ohio legislation as being subject to “slum clearance”?

The question is not whether the particular property of the plaintiff was substandard or was such, if standing alone, would have been subject to slum clearance. This property may have well been above standard, but it is obvious that one or more isolated above standard properties may not stand in the way of the entire project of clearance of a larger area subject to slum clearance. In Stockus v. Boston Housing Authority, supra, at page 510, it is stated:

“Alleging that there is a reasonable provision for such facilities falls short of alleging that the dwellings in the area are in fact equipped with such facilities or that there is such ventilation, light and sanitation as is consistent with the preservation of safety, health or morals. The. fact that the dwellings of the plaintiffs have such facilities is immaterial, for the test is the área as a unit and not two dwellings located in the area. ’ ’

It cannot be said that the area in question did not come within the purview of the law permitting the clearance in the interests of the health, morals, and welfare of the community.

For the reasons given, a decree similar to that pronounced in the trial court may be here entered.

Decree accordingly.

IIildebrant and Matthews, JJ., concur.


author: Carter, P. J.

text:
    Galloway, Appellant, v. Barnesville Loan, Inc., Appellee.
    (No. 774
    Decided May 25, 1943.)

      Mr. J. H. Chaney and Mr. Gordon D. Kinder, for appellant.

      Mr. W. 0. Chappell, for appellee. .
   Carter, P. J.

A reading of the record discloses that E. B. Galloway, appellant, sold a garage to M. W. Henry and Edward Walton, the purchase price to be $2,500 cash. The money apparently was to be raised by the purchasers securing a loan from appellee, Barnesville Loan, Inc. A cognovit note was prepared by tbe loan company and was signed by the purchasers (Henry and Walton) and by Walton’s wife. The loan company refused the loan unless Galloway would place his name on the note, which he agreed to do, and he signed his name upon the back of the note under the following printed provisions thereon:

“For value received, the undersigned endorsers hereby guarantee the payment of this note when due or any time thereafter, and severally waive presentment, protest and notice of protest of non-payment of this note and do hereby jointly and severally authorize and empower any attorney-at-law of any court of record, to appear for us and in our name confess judgment before any court of competent jurisdiction in the State of Ohio, or elsewhere, for the amount of the within note with interest and costs with release of errors, waiving right of appeal.”

The proceeds of the note were credited to an indebtedness due the loan company by Galloway. The note bore date of May 31, 1939, due six months after date.

The record discloses payments made thereon, however, leaving a balance of $2,487 due as on the date of taking judgment thereon, to wit February 16, 1942.

In addition to the power of attorney found on the back of the note as indicated above there was also" a power of attorney to confess judgment on the face thereof.

The note not having been paid in accordance with its terms, Robert Lewis, president of the Barnesville Loan, Inc., wrote the following letter to Galloway, appellant :

“May 2, 1941.

“Mr. E. B. Galloway

“Arch St.

“Barnesville

‘ ‘ Ohio

“Dear Mr. Galloway:

“Please be advised that it'will be necessary for you to settle the note of M. W. and Helene Henry upon which you are co-signer for the garage in Flushing immediately. We would also like for your floor plan account to be settled up.

“If you will call at this office, the writer will talk to you with reference to the above.

“Yours very truly,

“Robert Lewis, President.”

In answer to this letter Galloway wrote to Mr. Lewis as follows:

‘ ‘ Barnesville Garage

“Barnesville, Ohio

“May 5th 1941 .

“Mr. Robert Lewis

“Barnesville, Ohio

“Dear Sir:

“In reply to your request for settlement of a note . upon which you say I am co-signer, will advise that I am in position of surety only on a note.

“I request that you bring suit on the principals on note and let them be first exhausted.

“Regarding my floor plan account. I will take care of that in thé near future.

“I am at a loss to know what it is that I have done to cause such a request without any knowledge whatever, surely you have not got seared about my notes, the balance on which is but $800 and I can assure you that I have $8,000 worth of new cars now.

“Yours very truly,

“E. B. Galloway”

On February 16, 1942, judgment by confession was rendered in the Common Pleas Court of Belmont county in favor of the loan company.

On February 27, 1942, Galloway filed his petition in the Common Pleas Court of Belmont county praying for vacation of the judgment. This action was taken during the term at which the judgment was rendered.

The grounds set up in the petition for vacation were as follows: That the judgment was taken for a much larger sum than was due the defendant (appellee), that at the time the judgment was rendered the plaintiff (appellant) was not indebted to the Barnesville Loan, Inc., in any way whatever; that Galloway was surety only on.the. note; that the loan company had from time to time extended the time of payment of the note without the knowledge or consent of Galloway; that after the note had become due,'plaintiff demanded in writing that the Barnesville Loan, Inc., bring suit thereon forthwith; and'that the loan company did not commence action thereon until the sixteenth day of February, 1942, the notice having been given on the fifth day of May, 1941. The prayer was that the judgment be vacated and set aside and that Galloway be allowed to file - his answer setting forth his defense thereto.

The ground alleged that the amount for which judgment was rendered was much larger than that duo is not urged in the brief of counsel for appellant. Neither was the claimed extension of time to the makers of the note without consent of Galloway urged in the brief of appellant. Galloway does allege and urge that he was surety on the note, and the principal matters urged in the brief and argument were that Galloway was surety on the note, that the loan company, having been requested by Galloway to bring suit, failed within a reasonable time thereafter to do so, and that by reason thereof Galloway was released thereunder by reason of the provisions of Section 12191, General Code, which provides:

“A person bound as surety in a written instrument for the payment of money or other valuable thing, if a right of action accrued thereon, may require his creditor, by notice in writing, to commence an action on such instrument forthwith, against the principal debt- or. Unless the creditor commences such action within a reasonable time thereafter, and proceeds with due diligence, in the ordinary course of law, to recover judgment against the principal debtor- for the money or other valuable thing due thereby, and to make by execution the amount thereof, the creditor, or the assignee of such instrument, so failing to comply with the requisition of such surety, thereby shall forfeit the right which he otherwise would have to demand and receive of him the amount due thereon.”

Is Galloway a surety on the note? We think not, and if not then he is not in position to claim the benefit of Section 12191, General Code, as this section deals with sureties only.

Above the name of Galloway is found in part the following:

“For value received, the undersigned endorsers hereby guarantee the payment of this note when due or any time thereafter, and severally waive presentment, protest and notice of protest of non-payment of this note.”

We believe that these provisions on the back of the note fix the status of Galloway as not only an endorser but guarantor as well.

Section 8168, General Code, provides that “a person placing his signature upon an instrument otherwise than as maker, drawer or acceptor is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity.”

Placing his name on the back of the note not only constituted Galloway an endorser but a guarantor also; an endorser with additional liability, that of guarantor. See 8 American Jurisprudence, 254, Section 547.

There is a distinction recognized between a surety and guarantor. While each are obliged to pay the obligation of another, a surety joins in the same promise as his principal and is primarily liable, while the guarantor makes a separate and individual promise and is only secondarily liable, his liability being contingent on the default of his principal and he becomes absolutely liable when such default takes place and when notified thereof.

It is stated in 29 Ohio Jurisprudence, 1063, Section 308:

“Liability of (Guarantor. The word ‘guaranty,’ in its strict legal and commercial sense, is said to mean ‘an undertaking by one person to be answerable for the payment of some debt, or the due performance of some contract or duty, by another person wdio himself remains liable to pay or perform the same.’ Again, it has been defined to be the contract by which one person is bound to another for the fulfilment of a promise or engagement of a third party. A guarantor is not an original contractor; his undertaking is merely collateral and secondary to that of the principal debtor, and is fixed only by the liability of the principal debtor to discharge the obligation for which he is primarily liable. Under General Code Section 8296, a guarantor is secondarily liable, not primarily, as is a surety.”

See, also, Leonard v. Sweetzer, 16 Ohio, 1; Clay v. Edgerton, 19 Ohio St., 549, 553, 2 Am. Rep., 422; Castle v. Rickly, 44 Ohio St., 490, 9 N. E., 136; and Crawford v. Turnbaugh, Trustee, 86 Ohio St., 43, 98 N. E., 858.

There was no error on the part of the court in rendering judgment against the parties in the original action; neither was there error on the part of the trial court in refusing to vacate and set aside the judgment theretofore rendered.

Judgment affirmed.

Phillips and Nichols, JJ., concur.


author: Hildebrant, J.

text:
    Bosken, Appellant, v. Holton, Appellee.
    (No. 6308
    Decided November 15, 1943.)

      Mr. David L. Shannon and Messrs. Ragland, Dixon & Murphy, for appellant.

      Mr. Harry H. Shafer, for appellee.
   Hildebrant, J.

This is an appeal on questions of law from a decree of the Common Pleas Court, based upon the pleadings, testimony and exhibits, and which dismissed the petition in an action for injunction against the claimed violation of certain restrictions contained in the recorded'plat and in the deeds to lot No. 61 of block E in an allotment of land made by plaintiff, known as Casa Loma Park.

Defendant’s title was obtained by conveyance once removed from plaintiff-alloter, which described the premises as being the same premises conveyed to her grantor by plaintiff-alloter and subject to restrictions therein contained. The restrictions as appearing in the recorded plat were copied into the deed from plaintiff-alloter to defendant’s grantor. The restrictions were as follows:

“Said premises shall be used for residential, purposes only and shall not be rented, leased, sold, transferred to any person other than of the Caucasian race. All buildings including porches shall be erected, placed and set back not less than thirty-five (35) feet from •the front line. No temporary structure will be permitted on said premises for occupany nor shall any unsightly structures be thereon at any time nor any outbuildings except the customary garage. All plans are to be submitted to the grantor for his approval. All excess dirt if not used on the premises shall be removed by grantee to the nearest hollow in subdivision. Houses must be brick; or stone; or brick, stone and stucco. No frame or all stucco houses to be built at any price. Any lot transferred will have minimum width and area substantially as shown on plat, and only one principal building will be erected on any such lot. Grantee, his heirs, executors, administrators and assigns, upon the completion of the building upon said premises, agrees at his or their expense to build under the supervision of the county engineer of Hamilton county, Ohio, concrete sidewalks of standard width and thickness.”

The petition alleges in part:

“Now comes the plaintiff above named and for himself and on behalf of all other property owners of lots on Leona drive, in block E of Casa Loma Park subdivision of sections 7 and 13, township 2, fractional range 2, Green township, Hamilton county, Ohio, and which are subject to the building restrictions imposed by the agreements hereinafter stated * *

Defendant moved onto the rear of her premises, from her former residence, a small, frame, neatly-constructed, painted building which was large enough to accommodate two sleeping cots and which was used by her on a physician’s orders as sleeping quarters for health purposes. Plaintiff claims this to be a violation of the restrictions against “any outbuildings except the cu s tomary garage. ’ ’

The answer contained two defenses: First, that plaintiff consented and permitted defendant to place such building on her land; and, second, that in a prior cause in the same court, wherein two lot owners in Casa Loma Park were plaintiffs, and defendant herein was defendant, an identical suit on behalf of the plaintiffs and all other property owners of lots therein, in which suit this plaintiff participated and was interested, was adjudicated against the plaintiffs and, therefore, is res judicata as to this proceeding. The petition in the former suit alleged in part as follows:

“Now come the plaintiffs above named and for themselves and in behalf of all other property owners of lots upon Ponce Land and Leona drive, and which are subject to the building restrictions imposed by the agreements hereinafter stated * * V’

Plaintiff herein was the main witness in the former* suit and testified herein that he was interested in the. outcome.

The court below found from the evidence that plaintiff'’s conduct amounted to a consent or waiver of the restrictions, and, no motion for new trial being filed herein, there is no question of the weight of the evidence involved. This court finds from the record that there was substantial evidence to justify the conclusion of the court below and hereby affirms the same.

The court also finds the second defense of res judicata, well taken. The two petitions are, in part, identical, showing a class suit. Plaintiff herein admitted-an interest in the result, and active participation in the former suit. The former decree merely finds for defendant. No grounds being stated, it is presumed1 that such decree determined every question which; might have been properly litigated in the case. Quinn, Aud., v. State, ex rel. Leroy, 118 Ohio St., 48, 160 N. E., 453, paragraph one of the syllabus.

23 Ohio Jurisprudence, 961, Section 730, states the doctrine of res judicata, as follows:

“Briefly stated, the doctrine of res judicata is that an existing final judgment or decree, rendered upon the merits, and without fraud or collusion, by a court of competent jurisdiction, is conclusive of rights, questions, and facts in issue, as to the parties or their privies, in all other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction. The rule has been said to be well expressed as follows: ‘The judgment of a court of concurrent jurisdiction directly upon the point is, as a plea in bar or as evidence, conclusive between the same parties, on the same matter, directly in question in another court. But neither the judgment of a court of concurrent or exclusive jurisdiction is evidence of any matter incidentally cognizable, nor of any matter to be inferred by argument from the judgment.’ ”

Plaintiff is a “privy” or was included as a party, within the meaning of the word as used in stating the doctrine. See 23 Ohio Jurisprudence, 1008 and 1013, Sections 793 and 796.

We, therefore, find from the record that plaintiff was so connected with the former decree by his interest as a lot owner, original alloter and common grantor in the chain of title, to all parties, and by actively participating in the former suit, that he occupies the position of being in privity thereto sufficiently for the doctrine of res judicata to apply. See, also, the application of the doctrine in Wright, Admr., v. Schick, 134 Ohio St., 193, 16 N. E. (2d), 321, 121 A. L. R., 882; Gibson v. Solomon, 136 Ohio St., 101, 23 N. E. (2d), 996, 125 A. L. R., 903. The decree is affirmed.

Decree affirmed.

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


author: Matthews, J.

text:
    In re Estate of Shafer; Evatt, Tax Commr., Appellant, v. Shafer, Exr., Appellee.

      (No. 870
    Decided November 10, 1943.)

      Mr. Thomas J. Herbert, attorney general, and Mr. Aubrey A '. Wenclt, for appellant.

      Mr. George G. Cummins, for appellee.
   Matthews, J.

This appeal presents the question of whether' an executor is under a personal liability to pay an inheritance or succession tax as fixed by the finding of the Probate Court when that finding was based upon a mistake as to the extent of the indebtedness resulting from an error in that respect in the executor’s petition to fix inheritance .tax and his innocent but mistaken representation as to the extent of the debts at the hearing on the petition.

The testatrix died on September 13, 1930. Her will was admitted to probate and letters issued to William C. Shafer on October 29, 1930. On November 17, 1931, lie filed the application for determination of inheritance tax in which he listed assets of the estimated value of $82,128.94 and liabilities of $60,336.84, leaving a net value of the estate of $21,792.10, which was sufficient to pay the specific legacies in full. All parties interested, including the Tax Commission, were notified and at the hearing the court, in accordance with the allegations of the petition, determined “the amount of tax to which each succession is liable, the date of accrual of tax, the person by whom such tax should be paid, and the township or municipality in which such tax originates” and this was followed by a schedule of the names of the successors, relationship, value of succession, exemption, balance subject to tax, amount of tax, date of accrual, person by whom tax should be paid and the township or municipality of testatrix’s residence at time of death. The court recited in this schedule that the successor should pay the tax on his or her succession. At no place did the court find or determine that William C. Shafer, either as executor or personally, should be charged with the payment of these taxes.

These taxes were not paid and nothing was done about the matter until November .13, 1942, when the executor filed an application to modify the findings made on November 17, 1931. Due notice was given.

The hearing on the. application to modify the determination of the tax disclosed these facts:

William C. Shafer was engaged in two or more distinct businesses, and in order to keep separate and distinct records, he adopted a different trade name for each business. He and the testatrix, who was his wife, owned two or three tracts of real estate, as tenants in common, the testatrix owning two-thirds and William C. Shafer the other one-third, and while the record is not very clear, it seems that in order to finance his business ventures they borrowed money from various banks on their joint and several promissory notes secured by mortgages on this real estate. The exact amount of this joint and several indebtedness was $37,762, as stated in the opinion of the trial judge.

William C. Shafer testified that in reporting debts for the purpose of determining the inheritance, he listed only half of this amount as the testatrix’s debt.

The finding as to the amount of the inheritance tax was predicated on this mistake.

It is agreed that after the testatrix’s death and before the petition for the determination of the inheritance tax, this real estate had been sold and the proceeds used in payment of the mortgages.

It is stipulated that in October, 1931, William 0. Shafer was insolvent, but the extent of his insolvency was not disclosed.

It is. a fair inference from the testimony that as between the testatrix and William C. Shafer, he was primarily liable and to the extent that the proceeds of her property were used to pay these mortgages, her estate was and is entitled to reimbursement from him.

The Probate Court on this evidence found that the executor was entitled to a modification and redetermination of the tax and then proceeding to a redetermination “adjudged and decreed that estate has no valué and no one succeeds thereto and that no tax should be levied thereon, and that the order of determination of inheritance tax heretofore made is modified to the extent that any successions thereon are exempt from the payment of any inheritance tax, and that said estate is nontaxable.”

It is from that order that this appeal was taken.

The first contention is that the Probate Court had no jurisdiction to make this redetermination. It is urged that Section 5339, General Code, is the only statute that could have any possible relation to a re-determination of inheritance taxes and that it is inapplicable here because it only applies when debts are proven after the determination, and in this case this debt was known to the executor at the time. It does not appear, however, that the executor was conscious that it was a debt. It is true that he knew the circumstances, but he did not know their legal implications. Furthermore, it does not appear that this debt was ever proven either before or after the determination of the tax. What happened was that the executor sometime after the determination of the tax was advised or at least learned that joint and several obligors are each and all liable for the entire debt. The general rule is that ignorance of the law does not affect the rights of parties.

However, we do not think it necessary to predicate our conclusion that the Probate Court had jurisdiction solely upon Section 5339, General Code. Under other provisions of the Probate Code, the Probate Court is given broad powers to declare rights and instruct fiduciaries. By Section 10501-53, General Code, it is given jurisdiction “to direct and control the conduct” of executors — “to render declaratory judgements” — “to direct and control the conduct of fiduciaries” — and it “shall have plenary power at law and in equity fully to dispose of any matter properly before the court.”

In view of this broad grant of power we are of the opinion that the court had jurisdiction and the fact that the executor conceived that he was proceeding under a particular grant of power did not n'arrow its jurisdiction.

Assuming jurisdiction, it is next contended that it was an erroneous exercise of that jurisdiction. It is urged that the determination of the tax partakes of the nature of a judgment and that the court could not rightfully disturb it after the lapse of more than eleven years.

It is true that by Section 10501-17, General Code, the Probate Court is placed on the same basis as Ihe Common Pleas Court so far as power to vacate or modify its orders or judgments is concerned, and by Section 10501-18, General Code, it is provided that “for the purpose of vacating or modifying its orders or judgments,” the year is divided into “three terms of four months each.”

As no ground is asserted which would justify a Common Pleas Court in modifying a judgment or order made by it after the expiration of more than thirty terms of court, we are confident that this subsequent order of the Probate Court can have no effect on the original determination and that it must still be regarded as in full force and effect according to the meaning under the law, of the language employed.

Now what did the court say in this order and what was its purpose?

It is apparent on a reading of the determination of the court that it contains no order or decree directing the executor to pay. Indeed it orders no one to pay. All it does is to determine ‘ ‘ the amount of tax to which each succession is liable, the date of accrual of tax, the person by whom such tax should be paid.” That is far even from the rendition of a judgment against the beneficiaries for the amount of the tax.

It is our opinion that this determination has none' of the attributes of, and was never intended to be, a personal judgment against anyone. We, therefore, hold that the rights and liabilities of the parties— executor and beneficiaries — under the statutes and the law have not been merged in any judicial determination and that we must look to the statutes and applicable law to determine them. We shall proceed to do so.

Sections 5336 and 5337, General Code, disclose the intent of the General Assembly as to the nature of the tax burden and the duty of the executor, administrator, or trustee. By Section 5336, General Code, it is provided that:

‘ ‘ Taxes levied under this subdivision of this chapter shall be due and payable at the time of the succession, except as herein otherwise provided, but in no case prior to the death of the decedent. Taxes upon the succession to any estate or property, or interest, therein limited, dependent or determinable upon the happening of any contingency or future event, and not vested at the death of the decedent, by reason of which the actual market value thereof cannot be ascertained at the time of such death, as provided in this subdivision of this chapter, shall accrue and become due and payable when the persons or corporations then beneficially entitled thereto shall come into actual possession or enjoyment thereof. Such taxes shall be and remain a lien upon the property passing until paid, and the successor and the executors or administrators of the general estate of the decedent, and the trustees of such property shall be personally liable for all such taxes, with interest as hereinafter provided, until they shall have been paid as hereinafter directed. Such an administrator, executor or trustee, having in charge or in trust for distribution any property the succession to which is subject to such taxes, shall deduct the taxes therefrom, or collect the same from the person entitled thereto. He shall not deliver, or be compelled to deliver, any specific legacy or property, the succession to which is subject to said taxes, to any person, until he shall have collected the taxes thereon. He may sell so much of the estate of the decedent as will enable him to pay said taxes in like manner as he would be empowered to do for the payment of the debts of the decedent. ’ ’

And by Section 5337, General Code, it is enacted that:

“If a legacy subject to such taxes is charged upon or payable out of real estate, the heir or devisee, before paying it, shall deduct the taxes therefrom and pay such taxes to the executor, administrator or trustee, and the taxes shall remain a charge upon the real estate until it is paid; and the payment thereof shall be enforced by the executor, administrator or trustee, in like manner as the payment of the legacy itself may be enforced, or by the prosecuting attorney as provided in this subdivision of this chapter. If such legacy shall be given in money to a person for a limited period, such administrator, executor or trustee shall retain the tax on the whole amount; and if it be not in money he shall make an application to the court having jurisdiction of his accounts to. make an ascertainment, if the case require it, of the sum to be paid into his hands by snch legatee on account of the taxes, and for such further order as the case may require.”

Sections that follow Section 5337, General Code, confer upon the Probate Court jurisdiction to determine questions arising in relation to the tax and specifically by Section 5341, General Code, power to direct the county auditor ‘1 to fix the actual market value of any property the succession to which is subject to the tax” and report his finding to the court.

In Wellman v. Cleveland Trust Co., 107 Ohio St., 267, 140 N. E., 104, the court had before it the application of those sections (5342 et seq.) relating to the tax on future, contingent, and conditional estates, and took occasion to comment on the meaning of the statute as a whole, saying at pages 275 and 276, that:

"These various provisions would warrant the construction that both the primary and ultimate liability to pay the taxes'was upon the respective beneficiaries, and that the liability imposed upon the administrator, executor, or trustee was imposed for the purpose of insuring his performance of his duty in the collection of the tax from the various beneficiaries, and could the act be made to work in such way as to secure payment of the taxes by the beneficiary forthwith out of the property passing, we would hold to such effect.”

In that ease the question related to the tax upon a bequest in trust to pay the income to various beneficiaries in succession and presented the problem of determining whether the tax should be paid out of the corpus or in some way computed and amortized out of the successive interests. The court held that it was payable out of the corpus of the bequest without any right of replenishment from the income. The status of the estate did not 'require, nor was there any attempt to charge the executor personally with the payment of the tax and what the court said on that subject was in arguendo, but must be given weight as must also the fact that the court said that our inheritance tax law was probably modeled after the New York Act and relied largely on New York cases construing the law of that state. We think we should therefore regard New York cases as having especial significance on the question before us.

In In re Application of Meyer, Exr., 209 N. Y., 386, 103 N. E., 713, the New York Court of Appeals held, as stated in the syllabus as reported in L. R. A., 1915 C, 615:

“1. A transfer tax cannot be set aside on the sole ground that the appraisement of the estate was inaccurate, and that there was in fact no transferable property.

“2. If, after appraisement of a transfer tax, the estate, without fault or delinquence on the part of the executor, shrinks, so that no money comes into his hands with which to pay the tax, he is not required to pay it out of his own funds, although the statute provides that he shall not be entitled to a final accounting of the estate unless he shall produce a receipt for the tax, and that he shall be personally liable for the tax until its payment.”

An examination of that case discloses that the court had under consideration a statute identical in language to our statute.

Montana has a similar statute. In Re Estate of Powell, 110 Mont., 213, 101 P. (2d), 54, the court held, as set forth in the svllabus as reported in 128 A. L. R., 116:

“An executor or administrator is not liable, either personally or in his representative capacity, for an inheritance tax in respect of property which he has never possessed or been in a position to reduce to possession, passing to persons having no other interest in the estate out of which the tax might be paid, as in the case of payments made under an annuity contract with the decedent directly to persons designated by him, who have no other interest in the decedent’s estate, where, though the inheritance tax statute declares that the executor or administrator of a decedent’s estate, as well as the recipients of the decedent’s property, shall be personally liable for the tax until its payment, and shall not be entitled to a final accounting unless he shall produce a receipt or file a bond for the payment of the tax, and empowers an executor or administrator to sell property of the estate to pay the tax in the same manner as he might sell for the payment of the decedent’s debts, the tax is not one upon the property of the decedent, but upon the privilege of acquiring property by will or inheritance, and the individual beneficiary is personally liable therefor, and the context indicates that the tax is payable by an executor or administrator only out of property passing to the person taxed.”

In 28 American Jurisprudence, 140, it is stated that:

“A personal representative is personally liable for the inheritance tax if he distributes the estate without paying the tax when there were funds available for that purpose, although he would not be liable where, after appraisement, an estate shrinks without his fault so that no funds come to his hands available for the payment of the tax, as where, pending administration, all of the property which could have been the subject of transfer is lost to the estate by a mortgage foreclosure.”

So we hold on these authorities that an executor or administrator is not personally liable to pay an inheritance tax notwithstanding the Probate Court has fixed the amount to be paid on succession, where, through no fault of his, there are no funds in the estate subject to the tax in his possession or control with which to pay, but that a personal liability does attach, where the estate is depleted through his fault and for that reason no funds of the estate, subject to the tax, are in Ms possession or under Ms control, with which to pay.

To what conclusion does that bring us in this case?

The record is obscure in many respects, but it certainly does not affirmatively appear that the.shrinkage of this estate was through no fault of the executor. It does not even appear that the shrinkage has proceeded to the point that there are no assets.

If the money realized from the sale of the testatrix’s interest in this real estate was used to pay the debts for which William C. Shafer was primarily liable (and so it appears) he became personally liable to the estate for the amount so used. . In fact it became assets in his hands as executor for which the surety upon any bond given by him for the faithful performance of his duties would be liable to respond. It is true that no bond was required in this case, but mention of the principle makes clear the dereliction of duty.

The stipulation that William C. Shafer was insolvent in 1931 does not prove that the claim against him was worthless. Any excess of debts over assets would satisfy the definition of insolvency, even though he might have assets sufficient to pay creditors ninety per cent or more.

Furthermore, this issue of no assets was raised after the lapse of eleven years and ten years after the court ordered the giving of a bond, and after four accounts had been filed, and where it had to be met if a discharge was to be obtained.

We find that the record falls far short of showing facts exculpating the executor for the absence of assets subject to this tax. As the order of the Probate Court could be sustained only on such a showing, the order is reversed and the cause remanded for further proceedings according to law.

Order reversed.

Ross, P. J., and IIildebrant, J., concur.


author: Hornbeck, J.

text:
    Suiter, Appellee, v. Suiter; McFarland, Appellant.
    (No. 3667
    Decided February 18, 1944.)
    Mr.- Waymon B. McLeskey, for appellee.

      Messrs. Hamilton & Kramer, for appellant.
   Hornbeck, J.

Tliis is an appeal on questions of law from a judgment dismissing the amended petition of defendant, Francis H. McFarland, appellant herein, after the court had sustained a demurrer to such amended petition.

Pour errors are assigned which may be epitomized as error in sustaining the demurrer to the petition of defendant McFarland, and error in sustaining the demurrer to the amended petition of such defendant. The first error assigned is not well' made for two reasons (1) It is not the subject of appeal in the notice filed by defendant; (2) the sustaining of the demurrer to the petition was not a final order because defendant elected to plead further and no judgment was entered against him in the entry journalizing the sustaining of the demurrer. Holbrook v. Connelly, 6 Ohio St., 199; Krause v. Stichtenoth, 15 C. C., 199, 8 C. D., 291; National Guarantee & Finance Co. v. Russell, 25 Ohio Law Abs., 483; Hendrickson v. Galbreath, 27 Ohio Law Abs., 422; Robbins v. City National Bank & Trust Co., 29 Ohio Law Abs., 647; Liesman, Admx., v. Brookville, 32 Ohio Law Abs., 343; Davies v. Columbia Gas & Elec. Corp., 34 Ohio Law Ábs., 473, 37 N. E. (2d), 675.

The fact pattern and questions of law presented by the second assignment of error on this appeal are unusual. The action was instituted by petition filed by defendant McFarland to vacate a divorce decree granted to plaintiff from her husband, Ellis Suiter, on September 30, 1921, to which original action the defendant McFarland was not a party. His petition to vacate was filed on June 2-, 1942, and the amended petition was filed on June 5, 1943.

Defendant’s .petition, in part, alleges that the plaintiff was married to Ellis Suiter on June 14, 1915; that she married the defendant McFarland on December 1, 1917, at which time she represented to the defendant that she was an unmarried woman, whereas, in truth and in fact, she was still married to Ellis Suiter; that on August 1,1921, plaintiff filed her petition for divorce in the Common Pleas Court of Franklin county, Ohio, in which she made affidavit that she had been continuously for more than three years last past a bona fid a resident of Columbus, Franklin county, Ohio; that such allegation was false and untrue and plaintiff was a resident of the state of Pennsylvania and had at no time been a bona fide resident of Columbus; and that on September 30, 1921, such court, not knowing the true facts and being misled and deceived by the false and untrue allegations of the petition and the evidence offered in support thereof, rendered a decree of divorce to the plaintiff from the defendant based upon the false and perjured allegations and the testimony of plaintiff and others. The petition alleges that such decree of divorce is void and should be vacated and set,,aside and that the petition should be dismissed because of the fraud practiced by the plaintiff upon the Common Pleas Court, and for the further reason that the court had no jurisdiction over the persons of the parties or of the subject matter, or to hear and determine the cause or to render final decree.

The trial judge sustained the demurrer for the reason that defendant McFarland was a stranger to the divorce action and had no standing as a party to seek the action of the court in vacating the divorce decree.

After the demurrer to the petition had been filed defendant filed an amended petition wherein he alleged that he did not become aware of the divorce proceedings between the plaintiff and her former husband until November-1, 1941, and that “on October 1, 1921, said Florence Fricker Suiter persuaded and induced this party defendant to go through another alleged marriage ceremony at Wellsburg, West Virginia, under the pretense that they would make a completely fresh start,” to which amended petition the second demurrer was filed and sustained.

The briefs are voluminous and discuss many aspects of the law related to the questions presented by the appeal. The plaintiff’s brief presents a keen and scholarly analysis of all phases of the questions presented and upon the substantive question the argument is arranged under several headings, as follows:

A. Divorce decree not subject to attack by anybody.

B. If decree subject to attack, it cannot be done by defendant, McFarland.

C. If defendant can attack this judgment, his petition is insufficient for that purpose.

D. The claim of defendant is barred by the statute of limitations.

E. Defendant has not sought equitable relief.

F. If defendant had sought equitable relief it would not have availed him anything.

G. The mischief of endless litigation.

H. This court is not concerned with the evidence on the merits.

All of these propositions are fully and ably briefed. Defendant McFarland’s brief, likewise, is comprehensive and, in the main, is devoted to the claim that he is a proper party to invoke the proceeding to vacate the divorce decree and that the amended petition states a cause of action because it pleads facts which, if true, establish that the court which granted the decree of divorce to the plaintiff was without jurisdiction either of the parties or of the subject matter. We briefly advert to some of the propositions presented by the appeal although not in the order set forth in the briefs.

E. Defendant has not sought equitable relief.

This conclusion, in our judgment, is sound. The proceeding here is statutory and based upon our sections of the Code relating to relief after judgment, particularly parts 4 and 10, Section 11631, General Code, although as to part 10 the allegations of the amended petition are insufficient because there is no averment that plaintiff has been convicted of the perjury charged.

I). The claim of defendant is barred by the statute of limitations.

The proceeding is not barred by any statute of limitation because of the averment in the amended petition that defendant did not become aware of the divorce proceedings until November, 1941. Obviously, if the defendant did not know of his rights until the time set forth, then the amended petition does not affirmatively disclose the bar of the statute, although it is difficult to reconcile the averment that the defendant, McFarland, knew nothing of the divorce proceedings until November, 1941, with his further statement that on October 1, 1921, one day after the divorce decree, plaintiff persuaded him to go through another alleged marriage ceremony (the second) at Wellsburg, West Virginia, etc.

We do not consider or discuss the question whether the divorce decree here under consideration may not be attacked by anybody, or the purely jurisdictional question, for the reason that, at this time, there is pending in this court on appeal a case wherein both of these questions are presented for determination. At the time that this latter appeal was argued orally, it was agreed by counsel and the court that the decision in this court would be withheld until the Supreme Court had passed upon the case of Slapp v. Slapp, No. 29655, which is now pending in that court and which, it is agreed, may be dispositive of that appeal. This decision will be germane to the jurisdictional question presented on this appeal.

We, therefore, coniine this decision to the one question, namely, is the defendant McFarland a proper party to the proceeding wherein he seeks to .set aside the divorce decree granted to the plaintiff in 1921. We are satisfied that he is not such proper party and that he is a stranger to the record in the divorce case.

At the outset it will be observed that the original action was in divorce wherein the wife sued the husband for dissolution of the marital union. Upon the face of the proceedings and upon the judgment entry the proceedings are regular and all essentials of jurisdiction of parties and subject matter appear. No property rights were involved, nor does the decree do more than to dissolve the marital relation and to divorce the parties thereto. The divorce action in its nature is personal. There is nothing in the divorce proceedings nor in the defendant McFarland’s amended petition which would give application to the doctrine of privity of title. The defendant McFarland had no right which he could have asserted at the time of the decree, nor did he then stand, nor has he since stood, nor does he now stand in the relation of either the plaintiff or the defendant in the original action nor has he succeeded to the rights of either. On October 1, 1921, he married the plaintiff for the second time when, if the divorce decree was valid, they assumed the marital status. As a result of this status he had no interest adverse to the defendant in the divorce suit and certainly none adverse to the plaintiff. This status, which it must be assumed he then desired to exist and acted upon, could only be maintained if the divorce decree.was supported. Insofar as the amended petition discloses there was no change in defendant McFarland’s relationship to his wife, the plaintiff in the divorce suit, until, as appears in his affidavit in support of his motion to vacate the decree, it is stated that he was separated from his wife on numerous occasions and that “in November, 1941, he was brought to Pittsburg, Pa., on tire charge of wife abandonment which charge was on the instigation of Florence Suiter McFarland.” The information which we have taken from the affidavit, of course, may not properly be considered in testing the amended petition on demurrer but the factual development therein set forth is illustrative of the adverse interest which the facts would develop between defendant McFarland and the plaintiff. This is not the type of adverse interest which is contemplated in making one, other than the original parties, a necessary or proper party to this suit.

It is a well recognized rule that third parties who are not parties or privies to the original litigation may not make a- direct attack on a judgment either at law or in equity. 1 Freeman on Judgments (5 Ed.), 521, 528, 636, 637, 639, and this principle is given full application to divorce decrees.

The subject is fully annotated in a note to Kirby v. Kent (172 Miss., 457, 160 So., 569), in.99 A. L. R., 1309, wherein the annotator states the general rule to ¡De in divorce cases:

“That strangers to the record have no standing on which to base an application to vacate a judgment.”

The annotation cites 9 Ruling Case Law, 455, and cases from six states and England in support of the rule, and, although there are some contrary decisions cited, they are based upon the proposition that the parties were not strangers to the judgment sought to be set aside because privies to one of the original parties, or rights of heirship or paternity were involved. 17 American Jurisprudence, 390; 27 Corpus Juris Secundum, 813.

The following cases support the proposition that the defendant McFarland is a stranger to the divorce proceeding : Tyler v. Aspinwall, 73 Conn., 493, 47 A., 755, 54 L. R. A., 758; Brokaw v. Brokaw, 99 Ind. App., 385, 192 N. E., 728; State, ex rel. Breuner, v. Superior Court, 166 Wash., 502, 7 P. (2d), 604.

In Kinnier v. Kinnier, 45 N. Y., 535, 6 Am. Rep., 132, it was held:

“The former husband of the defendant, a resident of Massachusetts, went to Illinois expressly to procure a divorce from her, commenced an action there in the proper court for that purpose, and she having appeared and permitted, by collusion with him, a decree of divorce to be granted against her, subsequently married the plaintiff here. Held, in an action here, brought to annul the last marriage on the ground of the defendant’s former marriage being still in force, that a complaint stating the above facts was insufficient, and a demurrer thereto must be sustained.”

Defendant McFarland urges that this case may not be given application because it was an independent proceeding, whereas here it is brought in the same' action. The authority has application because of the principle involved, the defendant’s rights here being predicated largely upon the same statement of facts as those found in the cited case.

To like effect is Ruger v. Heckel, 85 N. Y., 483, which has application, not because it is like the instant case in all particulars, but because of the basis of the judgment found in the opinion of the court at page 484. It is true that, as a premise to the judgment rendered in that ease, the court found that the court which granted the divorce decree had jurisdiction of the parties and the subject matter. In Hall v. Hall, 123 N. Y. Supp., 1056, 139 App. Div., 120, in the tenth paragraph of the syllabus, it is held:

‘ ‘ Since a stranger to a judgment can impeach it collaterally for fraud only when it injuriously affects him, where a man married a woman with knowledge that she bad a former husband, and believed that she had obtained a divorce from him, the fact that the divorce was voidable on the ground of her fraud did not authorize him to sue to annul the marriage until after the former husband had avoided the divorce for fraud.”

In Sorensen v. Sorensen, 220 N. Y. Supp., 242, 219 App. Div., 344, it was held that plaintiff who lived with his wife for twenty-one years with full knowledge of her divorce decree, could not attack its validity on jurisdictional grounds. At page 246 of the opinion it is said that the holding against the plaintiff ‘‘ does not proceed upon the theory of estoppel, but upon the ground that the attach on the decree must"be made by the parties to it, and cannot be made by the plaintiff, a second husband, claiming such decree, of which he liad full cognizance, to be invalid.” (Emphasis ours.)

One of the latest cases on the subject is Thomas v. Lambert, 187 Ga., 616, 1 S. E. (2d), 443, which holds that:

“A person hot party to divorce decree and not in relation with either of parties as to property right involved is not entitled to make direct attack on decree in divorce case itself or by independent equity suit in same court, where decree is not void on its face.”

That is a well considered opinion touching many phases of this case which, in its entirety, can be profitably read. Many other cases are cited, but we make no further reference to them.

We do not consider at length other cases cited or discussed by defendant McFarland because they are so interrelated to the jurisdictional question, which we do not pass upon, as to make it almost impossible to discuss them without expressing an opinion on the jurisdictional phase of the case. We are cited particularly to the second paragraph of the syllabus in Smith v. Smith, 23 Ohio Opinions, 283, 9 Ohio Supp., 49, opinion by Judge Bell now of the Supreme Court:

“Where a court has no jurisdiction of the parties or the subject matter, a judgment may be directly or collaterally attacked at any time or place by any one affected thereby.”

This pronouncement is, by reason of the eminence of the writer of the opinion entitled to much weight. The syllabus is taken from an expression found in the opinion. The qualification which distinguishes the application of the pronouncement to this case is the language “by any one affected thereby,” which must be construed as “affected” within the application of legal principles.

We hold that in this case even though the court had no jurisdiction to grant the decree which, of course, is not decided, the defendant McFarland did not stand in such relationship to the original suit as to be a proper party to institute the proceeding to set aside and vacate the decree. If the decree is void because granted without jurisdiction of the parties or of the subject matter, then in any proceeding to which the defendant McFarland is a proper party, the invalidity of the decree may be asserted or it may be disregarded altogether because it is without effect in law.

The judgment will be affirmed.

Judgment affirmed.

Barnes, P. J., and G-eiger, J., concur.

      143 Ohio St., 105.


text:
    The Wilson Freight Forwarding Co., Appellee, v. The Cleveland, Columbus & Cincinnati Highway, Inc., Appellant.
    (No. 6301
    Decided October 25, 1943.)

      Mr. George IF. Weber, Jr., for appellee.

      Messrs. Pogue, Relmholz, Culbertson <& French, for appellant.
   Matthews, J.

While both parties to this appeal are common carriers of freight, the case does not present any question peculiar to their special characters as such.

They were both corporations carrying freight over the public highways from the city of Hamilton, but in different directions. The plaintiff’s route extended to Pittsburgh, Pennsylvania, and eastwardly. The defendant’s route extended to Cleveland, and beyond. They employed the same independent contractor to bring the freight from the customer to the central point or dock belonging to the independent contractor, where each took charge of that which was consigned to places on its route. This independent contractor, as was its custom, collected cartons of blank bills of lading from the Hamilton Autographic Register Company for shipment to McKay Company, at York, Pennsylvania. In doing so, it is admitted that the independent contractor was acting for and on behalf of the plaintiff. And also, as was the custom, it took the cartons to its dock in Hamilton, where the plaintiff would have taken possession and carried them to York, Pennsylvania. This same independent contractor represented the defendant in collecting packages and placing them on the same dock for shipment by it.

It is admitted that both plaintiff and defendant were, ■ through their agent, present at the dock and in a position to take possession of these cartons. They should have been taken by the plaintiff to York, but actually some one took them to Cleveland and placed them, on defendant’s dock there.

The plaintiff had issued a bill of lading to the shipper, and, as the cartons were not delivered to the consignee, the shipper supplied other blanks to it, and made claim against the plaintiff for the loss The plaintiff settled with the shipper and took an assignment of its claim. Shortly thereafter, the defendant notified the plaintiff that the cartons were on its dock in Cleveland, and tendered them to the plaintiff. The plaintiff refused to accept their return and demanded reimbursement of the amount it had paid the shipper. On refusal, this action was brought.

The Municipal Court of Cincinnati found for the plaintiff. The Common Pleas Court affirmed the judgment and this appeal is from that affirmance.

There is no direct evidence as to how or by whom these cartons were taken from Hamilton to Cleveland, and it is asserted that because of that fact there is an entire failure of proof. But there is proof that the defendant was in Hamilton at the time the cartons were there and that at a later date it was in Cleveland, with these cartons in its possession. We believe that from these facts an inference of fact arises that it was the defendant that took them from Hamilton to Cleveland. Certainly, if this were a criminal prosecution, such an inference would arise.

In 20 American Jurisprudence, 220 et seq., it is said:

“It is well established that possession by the accused, shortly after the commission of a crime, of the fruit of the crime is a fact which may be shown against the accused as indicating his guilt. Such possession, if unexplained, is said in many cases to create a presumption or an inference of guilt. In other words, when proof is given that property recently stolen was found in the possession of a person, such person is presumed to be the one who stole it, unless he accounts satisfactorily to the jury for his possession. Some of the courts, in speaking of the character of evidence of unexplained possession of recently stolen property, characterize it as prima facie evidence. The strength of the presumption which possession of stolen property raises against the accused depends upon all the circumstances surrounding the case and is for the jury to determine.”

The distinction between a civil and criminal action is entirely irrelevant to the inquiry of whether an inference arises from proven facts. The only difference we can see is that the consequences of drawing the inference are graver in the one instance than in the other.

But it is said there is no evidence that the defendant knew the cartons were on its dock in Cleveland until it found them there just before it notified the shipper and that under such circumstances it cannot be charged with conversion. It is true that the defendant stated in its letters that it had just discovered the cartons on its dock and did not know how they had gotten there, but laying aside the rule against self-serving declarations, its assertion of lack of knowledge did not conclusively prove the fact and the trial court’s finding is in general terms for the plaintiff.

It should also be remembered in considering this phase that the defendant is a corporation acting-through agents. It might very well be that some agent consciously but under mistake or otherwise took these cartons from Hamilton to Cleveland and placed them on the dock. The defendant would be liable for such action by its agent, notwithstanding- its officers or other agents did not know the facts. The defendant’s possession is evidence that it transported the cartons intentionally.

We cannot say that this record is devoid of evidence that the defendant through its agents did not know of all the facts all the time as to how these cartons were transported from Hamilton to Cleveland.

Defendant relies on Dixon Bros. v. Millhorn, 55 Ohio App., 193, 9 N. E. (2d), 183, and Wellington v. Wentworth, 49 Mass. (8 Met.), 548. In the first case, the trier of the facts had found the issue of knowledge in favor of the plaintiff, and the judgment for the plaintiff was affirmed. In the second case, the issue of knowledge was found in favor of the defendant, and the judgment for defendant was affirmed. Applying the ratio decidendi of those cases to this record, the judgment for the plaintiff should be affirmed, as we find there is sufficient evidence to support the finding of knowledge.

It is finally urged that the defendant cannot be held for conversion of these cartons and contents because the action is based on negligence. If the premise were correct, the conclusion would follow, because conversion is based on affirmative acts and not on mere negligence or nonfeasance. 40 Ohio Jurisprudence, 22; 26 R. C. L. 1112. But the defendant was not merely negligent. Its action was more than nonfeasance. When it carried these cartons from Hamilton to Cleveland, it acted affirmatively and exercised an unjustified dominion over the shipper’s property. That constituted a conversion and the fact that it was done through mistake does not destroy its affirmative character. It was done intentionally and the motive — innocent or even praiseworthy in one sense — or culpable or even criminal — is immaterial. 26 R. C. L. 1112; Baltimore & Ohio Rd. Co. v. O’Donnell, 49 Ohio St., 489, 32 N. E., 476; 1 Restatement of Law of Torts, Section 244.

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

Judgment affirmed.

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