author: Metcalf, J.

text:
    Smith, Appellee, v. Industrial Commission of Ohio, Appellant.
    (No. 216
    Decided December 4, 1948.)

      Mr. B. N. Larrimer and Mr. Forest E. Weinrich, for appellee.

      Mr. Hugh 8. Jenkins, attorney general, and Mr. B. Brooke Alloivay, for appellant.
   Metcalf, J.

Plaintiff’s decedent, Herdie L. Smith, on or about February 2, 1946, was employed by the Hocking Valley Brick Company at its place of business in Hocking county, Ohio, and was in charge of the process known as “salting down” the kilns in which ware was baked in the plant of the employer, the decedent being designated as “boss burner.”

Decedent had been employed by this company for approximately twenty-nine years and during that period lived in a house owned by the company, for which he paid a small rental, located directly across the highway known as U. S. route No. 33.

In addition to his regular shift of eight hours, decedent was at all times subject to call for the purpose of performing Ms duties as boss burner, wMch particular work lie had been performing for approximately two years preceding his death. The process known as salting down is employed for the purpose of setting the glaze on the ware inside the kiln and must be performed when the temperature therein reaches 1800 or 1900 degrees.

The record is clear that the test to be made and the determination of when the salting down was to be done were the sole responsibility of decedent. The record shows also that the ware in the various kilns may reach the proper temperature at any time during the day or night, and that at such times decedent was subject to call in order to make the test and decide when the kiln should be salted down. This was true regardless of the shift of workmen that was on duty at the time, and regardless of what shift the decedent had worked during the twenty-four hour period, he being subject to call around the clock. The testimony of decedent’s fellow workmen and foreman shows that decedent had been called many nights for the reason that in his absence no one else was authorized or had the responsibility of performing this duty. The evidence indicates further that the temperature had to be maintained at a constant level during the process of salting down, which required from two and one-half to three hours. Prior to this period it was necessary for decedent to make numerous tests before the salting down began. The Min foreman testified that the decedent was the chief burner and issued all orders in regard to the burning department, and that if decedent was not there, the foreman or head man on the shift had the duty of going to decedent’s home across the highway to get him.

The record indicates also that the decedent was often called to the kilns four or five times or more during the sixteen-hour period he was off his regular shift.

On the night of February 2, 1946, at about 11 p. m., in pursuance of the above arrangement decedent left his home, went across the highway and checked the kilns. On returning home a few minutes later, while crossing the highway, he was struck by a motor vehicle and killed.

Plaintiff, as the widow of decedent, filed with the Industrial Commission her application for compensation. The commission disallowed her claim. On rehearing the commission found that “the claim be disallowed on rehearing for the reason that the injury did not occur in the course of nor arise out of his employment.” From this finding plaintiff filed her petition as provided by law in the Court of Common Pleas of Hocking county, asking that she be allowed to participate in the State Insurance Fund.

The defendant filed an answer admitting that the Hocking Yalley Brick Company was an employer amenable to the Workmen’s Compensation Act but denying specifically that the decedent at the time mentioned in the petition was in the usual course of his employment. The cause was submitted to the Court of Common Pleas without the intervention of a jury, neither party having demanded the same, and upon consideration that court found upon the issues joined in favor of the plaintiff and that she was entitled to participate in the State Insurance Fund under the provisions of the Workmen’s Compensation Act and entered judgment accordingly. From this finding and judgment defendant appealed on questions of law.

There are four separate assignments of error but they all go to the one question, the answer to which determines this appeal, namely, did the injury and death of plaintiff’s decedent arise out of and in the course of his employment?

It is a well settled rule of law in Ohio that an injury suffered by an employee in going to or returning from the employer’s premises, where the work of his employment is carried on, except in special instances, is not occasioned in the course of his employment, nor does it arise out of his employment so as to entitle him to compensation. Industrial Commission v. Heil, 123 Ohio St., 604, 176 N. E., 458; Industrial Commission v. Gintert, 128 Ohio St., 129, 190 N. E., 400, 92 A. L. R., 1032; Industrial Commission v. Harkrader, 52 Ohio App., 76, 3 N. E. (2d), 61; Clark v. Industrial Commission, 55 Ohio App., 428, 9 N. E. (2d), 924; Walborn v. General Fireproofing Co., 147 Ohio St., 507, 72 N. E. (2d), 95; Industrial Commission v. Baker, 127 Ohio St., 345, 188 N. E., 560.

There is an exception to this rule found in cases where it is shown that the employee, although not at his regular place of employment, even before or after customary working hours, is performing, is on his way home after performing, or on the way from his home to perform some special service or errand or is discharging some duty incidental to the nature of his employment in the interest of, or under direction of, his employer. In such cases, an injury arising en-route from the home to the place where the work is performed, or from the place of performance of the work to the home, is adjudged by the courts as arising out of and in the course of the employment. Kyle v. Greene High School, 208 Iowa, 1037, 226 N. W., 71.

In Walborn v. General Fireproofing Co., supra, the Supreme Court held that where an employee is injured on a parking lot provided by the employer and before the employee had reached the situs of his employment, “the hazard must be peculiar to the work and not common to the general public in the community. ’ ’ The hazard in that case was caused by a general storm throughout the community during the preceding day and night, and, of course, the employee was not subjected to any hazard above and beyond that which the general public was subjected to.

In determining whether the employee is subjected to a peculiar hazard connected with his work not common to the general public, while traveling to and from his place of employment, it is important we keep in mind that the determinative factor is not that others are exposed to the same dangers of travel, but whether, with reference to the nature of the employment, the performance of a special service within the scope of such employment and in the interest of or by direction of his employer peculiarity subjects the employee to the added danger out of which the accident occurred. Stockley v. School District No. 1 of Portage Twp., 231 Mich., 523, 204 N. W., 715.

A case which this court feels sheds a great deal of light on the question presented is that of Industrial Commission v. Murphy, 50 Ohio App., 148, 197 N. E., 505, decided by the Court of Appeals for Hamilton county. The syllabus in that case reads:

“Where an undertaker’s employee who has no regular hours of employment but is subject to call at all hours, is struck by an automobile while responding to a call from his employer to hurry to the funeral home, the injuries thus received are sustained during and by reason of his employment. ’ ’

The statement of Judge Ross, speaking for the court, on page 150, is applicable here:

“It is the contention of the commission that the actual employment of the defendant in error did not commence until he arrived at the funeral home. We cannot so hold. It seems clear to us that there are many differences between the case under consideration and what is commonly styled a ‘coming and going case,’ where the employee has a fixed time to appear at his employer’s place of business. Up to the time the employee reaches such place he is his own master, can choose his route, engage in such private enterprises as he sees fit, take as much time as is consistent with his reaching his place of employment at the stipulated time, start when and from where he chooses, and, after he leaves his place of employment, go where he pleases, with no responsibility to advise his employer of his movements.
‘ ‘In the instant case it is perfectly apparent that immediately upon receiving the telephone call it became the duty of the employee to go directly to his place of employment as rapidly and directly as he could. His private affairs from the moment that he was advised that he was wanted must be put aside. Any action upon his part inconsistent with such direct and immediate response to his employer’s call would have been proper occasion for his discharge.”

Since the Court of Appeals in the Murphy case affirmed the judgment of the Common Pleas Court (see 32 N. P. [N. S.], 89), we think it proper to refer for a moment to the decision rendered by the trial court on a motion for a new trial, especially in view of the eminent judge who rendered that decision and who now is a member of the first district Court of Appeals, Judge Matthews. The syllabus reads:

“Where an employee is subject to call at all hours, there being thereby an implied agreement that his employment is not to be restricted to the time in which he is at his place of employment, the hazards of the journey from his residence in responding to a call, may be properly regarded as hazards of the service and hence within the purview of the compensation act.
“Plaintiff, a regular employee of an employer complying with the Workmen’s Compensation Act, had no regular hours of work but was under order to report on call from his employer at any time. While on his way from his residence to his place of employment by the shortest route in response to such call, he was struck by an automobile and injured. Held: It cannot be said as a matter of law that plaintiff’s injury was not occasioned in the course of his employment.”

The trial court in the Murphy case analyzed those cases in Ohio, which hold that as a rule the ‘ ‘ going and coming cases” are not compensable and then called attention to the divergence in facts from which the courts are called upon to determine whether the injury or death had been occasioned in the course of and arose out of the employment. The conclusion is reached that those cases involving injuries received in the zone of employment while going to or returning from the place of employment are not of prime assistance. Neither are those cases where the employee rightfully was in possession of some of his employers personal property at the time of the injury, but, as the court pointed out, they do demonstrate that the end sought in all such cases was the ascertainment of whether the employee’s injury had been occasioned in the course of his employment from a hazard of the employment.

In Industrial Commission v. Henry, 124 Ohio St., 616, 180 N. E., 194, the Supreme Court held that where a decedent had entered upon his employment in the early morning hours and thereafter left the premises of his employer to get his breakfast at a restaurant, in accordance with the custom acquiesced in by the employer, and, while returning to the premises of the employer by a direct and necessary route along a public thoroughfare, was struck by a train so immediately adjacent to the premises of the employer that the only way of ingress and egress was one of hazard, the accident arose out of and in the course of decedent’s employment. The court held further that in such case it is not reversible error for the trial court to charge that the jury should take into consideration the nature of the employment, the hours of service required of the decedent, the nature and condition of the premises where the deceased was employed‘and of the premises surrounding the same, and the natural and ordinary conduct of persons so employed during such hours while acting in such employment. Applying that principle to the facts in the instant case it seems that the conclusion of the trial court should not be disturbed.

In Kyle v. Greene High School, supra, a case very similar to the instant case, where a janitor of the high school who was subject to call at all hours of the day or night was killed by being struck by an automobile while walking in the street at night on his way to the school house in response to a call from the principal regarding the school lights, it was held by the Supreme Court of Iowa that the injury and death arose out of and in the course of his employment.

In the case of Sebek v. Cleveland Graphite Bronze Co., 148 Ohio St., 693, 76 N. E. (2d), 892, the third paragraph of the syllabus reads:

“To be entitled to workmen’s compensation, a workman need not necessarily be injured in the actual performance of work for his employer. It is sufficient if he is injured in a pursuit or undertaking consistent with his contract of hire and which in some logical manner pertains to or is incidental to his employment. ’ ’

Applying this principle to the activities, conditions and environment surrounding the employment and required duties of the decedent, we find that such employment and required duties had a causal connection with the injury which resulted in his death, and we are, therefore, forced to the conclusion that the same occurred in the course of and arose out of decedent’s employment.

Counsel for plaintiff urge that since the record discloses that not only the home in which the decedent lived, but the legal title to the land between the home and the plant of the employer, was vested in the employer and that the state of Ohio, by virtue of condemnation proceedings, has only an easement therein for highway purposes, this case should be affirmed, if for no other reason, on the theory that decedent lost his life while at the situs of his employment.

So far as the decedent in the instant case was forced to travel a certain and definite route between his home and the kilns where the ware was baked, there being no other entrance and no other approach to the entrance afforded him, there is some merit in this latter contention of claimant. It was held in Industrial Commission v. Barber, 117 Ohio St., 373, 159 N. E., 363, that an employee, who for the purpose of reaching his place of employment travels a course which affords the only unobstructed access thereto, enters upon the course of his employment within the contemplation of the workmen’s compensation law when he reaches the zone of such employment which is under the control of his employers, even though such zone be outside the enclosure of his employer. It was held further that the hazards of such zone growing out of the conditions and environment of his employment are hazards of his employment, and an injury received by an employee due to such hazards is compensable out of the industrial insurance fund under the workmen’s compensation law. As in that case, the decedent in this case was compelled, under his contract of employment, to enter or leave the. site of the kilns by crossing the highway at a definite place, there being no other unobstructed ingress or egress.

Considering the residence of the decedent, the necessity of being available at all times, his duties and the environment surrounding' his forced method of ingress and egress, this court feels that the case of Kasari v. Industrial Commission, 125 Ohio St., 410, 181 N. E., 809, 82 A. L. R., 1040, and the reasoning therein are applicable here. That case was decided upon the principle, as was the Barter case, supra, that the zone of the employment, the place where the accident happened, was under the control of the employer because it afforded the only unobstructed access to the employer’s premises. Both the Kasari and Barter cases are premised upon the fact that the only unobstructed means of ingress and egress is important only as showing that the employee was within the zone of the employment and, therefore, had entered upon the course of his employment. This court does not claim that those cases are final authority for the conclusion in the instant case but does feel that they support the principle that the decedent, Smith, was within the zone of his employment at the time of his injury and death, and that even though the highway was a public thoroughfare, so much thereof as ran through the employer’s premises was a necessary adjunct used in connection with its business and, to the degree herein demonstrated, was a part of the employer’s premises.

The contract of employment of plaintiff’s decedent whether express or implied, and the record substantiates that it was expressed, demanded that at all times he be subject to call regardless of the time of day or night. He had no time which he could claim as his own, whether asleep or awake, and he had no choice in the method, manner, or way of ingress or egress, or the time in which he reached the kilns. The interest of his employer demanded that he be there when the proper temperature of the baking process was reached. If error was made on the part of the foreman or head man, this might, and did, necessitate numerous trips to and from the kilns before the salting down process could start. At such times the necessity of returning home for sleep and rest was just as imperative as attending the burning, so that later he might return and do the same. Certainly the hazard which resulted in his death was peculiar to the work in which he was engaged and was not common to the general public in the surrounding community.

Under all the circumstances evidenced by the record in this appeal, and the law as this court understands it, it cannot be said as a matter of law that the injury which resulted in decedent’s death did not occur in the course of or arise out of his employment.

There is ample evidence to support the finding and judgment of the trial court and, there being no prejudicial error, none of the assignments of error being-well taken, the judgment is affirmed.

Judgment affirmed.

Gtllen, P. J., and McCurdy, J., concur.


source: Caselaw Access Project

author: Thompson, J.

license: Public Domain

text:
    Burpo et al., Appellees, v. The Resolute Fire Ins. Co., Appellant, et al.
    (No. 22216
    Decided November 19, 1951.)

      Mr. H. C. Wedren, for appellees Norman Burpo and Harrison Burpo.

      Messrs. Ulmer, Berne, Gordon & Glickman, for appellant.

      Mr. W. J. Papenhrock, for appellee National City Bank of Cleveland.
   Thompson, J.

This is an appeal on questions of law by defendant-appellant, The Resolute Fire Insurance Company, from a judgment of the Municipal Court of Cleveland, in favor of plaintiffs-appellees. The action was brought by two brothers, Harrison Burpo and Norman Burpo, against the insurance company to obtain recovery on an automobile collision insurance policy issued to Norman Burpo, after an automobile specified in the insurance policy had been demolished.

The amended petition, after reciting that plaintiffs were co-owners of a Ford automobile which was involved in a collision on July 17, 1949, stated that the company had insured one of the co-owners, Norman Burpo; that legal title was in Harrison Burpo ; that, although the interests of both plaintiffs were disclosed to the insurance company, the latter had issued its policy in favor of Norman Burpo only; that the automobile was demolished in the collision; and that the company, upon being notified of the accident, refused to pay the plaintiffs the amount of damage sustained.

The defendant company, in its answer, admitted that it had refused to pay plaintiffs the amount demanded and by way of defense asserted that, subsequent to the accident, the company learned that plaintiff Norman Burpo, to whom it had issued its insurance policy, was not the owner of the car and that plaintiff Harrison Burpo was the sole owner of such automobile and that he was not insured under the policy in question. The company further expressed its readiness to refund the premium of $76 which it had received at the time of execution of the insurance policy but denied any other liability to plaintiffs.

Upon trial in the Municipal Court of Cleveland, the insurance policy was introduced in evidence. Item 1 declared that the insured was Norman Burpo, residing at 10704 Pasadena avenue, Cleveland, Ohio. The occupations of the insured and his employer were stated; loss was to be payable to the National City Bank of Cleveland and a 1947 Ford sedan of stated motor number was covered, the insurance being for a one-year period from May 11, 1949, to May 11, 1950. For the period aforesaid, the company in its policy provided that in consideration of the payment of the specified premium and “in reliance upon the statements in the declaration and subject to the limitations of liability” it agreed to pay for direct and accidental loss or damage to the automobile, the actual damages occasioned by collision (less $50 deductible) during the term of the policy.

Among various provisions of the policy, item 5 of the declaration and paragraphs 11, 14 and 16 of the conditions are important.

Item 5 of the ‘ ‘ declarations ’ ’ of the policy provides:

“Except with respect to bailment, conditional sale, mortgage, or other encumbrance, the insured is the sole owner of the automobile, except as stated herein. No exceptions.”

Conditions stated in the policy and important to our inquiry are as follows:

“11. Changes: Notice to any agent or knowledge possessed by any agent or by any other person shall not effect a waiver or a change in any part of this policy, or estop the company from asserting any right under the terms of this policy, nor shall the terms of this policy be waived or changed, except by endorsement issued to form a part of this policy.”
“14. Fraud and Misrepresentation: This policy shall be void if the insured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof or in case of any fraud, attempted fraud or false swearing by the insured touching any matter relating to this insurance or the subject thereof, whether before or after a loss.”
“16. Declaration: By acceptance of this policy the insured agrees that the statements in the declarations are his agreements and representations, that this policy is issued in reliance upon the truth of such representations and that this policy embodies all agreements existing between himself and the company or any of its agents relating to this insurance.”

By leave of court, The National City Bank of Cleveland became a defendant in the case and filed an answer and cross-petition setting up its mortgage interest in the automobile and requesting that its interest be protected.

The testimony in the trial court revealed that, although the policy was issued in the name of Norman Burpo, the certificate of title to the automobile at the time of the accident, and at the time of the issuance of the policy, was in the name of Harrison Burpo only. The evidence further revealed that the insurance obtained in May 1949 from the defendant insurance company replaced previous insurance issued by The Progressive Mutual Insurance Company on the same automobile, at the time of its purchase in September 1948, carried in the name of Harrison Burpo and cancelled by the latter company in early May 1949 after three accidents involving the automobile had occurred.

On the witness stand, Harrison Burpo admitted that the notice of cancellation of the prior insurance was received by him on May 5, 1949, or thereabouts, and that he was then unemployed. The evidence further showed, in connection with the mortgage held by the bank, that the mortgage note had been signed by three brothers, Harrison, Norman and John Burpo; that the note had been executed in September 1948, and had been reduced to $619.94 at the time of trial in the Municipal Court. A bank employee testified that in May 1949 Harrison Burpo and Norman Burpo informed him of the cancellation of the insurance by The Progressive Mutual Insurance Company and that his bank then referred the Burpos to a Mr. Grove to obtain insurance in another company. Both Harrison and Norman Burpo thereupon called upon the latter and introduced themselves with the statement that they wished insurance on their ear. Grove asked who was paying for the insurance and Norman stated that he was. Grove was told he could get any further information he desired from the bank. The Burpos testified to no other conversation with Grove, but the latter when called as a witness by the insurance company told of receiving additional information from the Burpos as to cost of the car, the date of its purchase (May 1949) and the name of the mortgagee. Grove said he filled in all this information on an application form, and he later mailed to Norman Burpo a memorandum certificate of the insurance policy which was introduced in evidence. This certificate s'howed Norman as the owner of the car, and the date of its purchase as May 1949. Norman Burpo never called the defendant insurance company to complain of any inaccuracies after receipt of his copy.

The insurance policy was mailed direct to the bank. It was not until investigation of the damage to the automobile in July 1949 that the insurance company learned that the title to the vehicle was registered in the name of Harrison Burpo and not in Norman’s name, and that Harrison Bnrpo had been unemployed at the time the insurance was contracted for.

On September 2, 1949, Norman Burpo was informed by letter that no payment would be made by the insurance company “for the reason that the vehicle involved was owned by Harrison Burpo. When arrangements were made by you to purchase the insurance, you did not disclose the name of the owner but represented to the agent that you were the owner of the car. At the time these arrangements were made, the real owner of the car, Harrison Burpo was unemployed and insurance would not have been extended to him. As you have violated the provisions of the policy, and the declarations made by you were not correct, no payment will be made to you.”

Shortly after receipt of the foregoing letter, the two Burpo brothers filed suit against the insurance company. Upon trial to the court, the trial judge rendered judgment for the plaintiffs.

Various errors on the part of the trial court are urged by the insurance company in this court, but these can be reduced to the objection that the trial court erroneously rendered judgment for plaintiffs.

The question here involved is the right of recovery on an insurance policy where one of the declarations contained therein, namely, that the insured is the sole owner of the car, is in fact untrue, and where the policy provides further that it shall be void if the insured has concealed or misrepresented any material fact; that by acceptance of the policy the insured agrees that the declarations are his agreements and representations; and that the policy is issued in reliance thereon.

In order to reach its conclusion, this court has sought as much light as possible from the decided cases and has been impressed with the thoroughness and helpfulness of counsel who appear to have cited in their briefs all the cases we have found of any value in our inquiry.

The two cases most nearly analogous to the instant ease seem to be Republic Mutual Ins. Co. v. Wilson (1940), 66 Ohio App., 522, 35 N. E. (2d), 467, a decision by the Court of Appeals of the Fourth Appellate District, and Faris v. Travelers Indemnity Co. (1932), 278 Mass., 204, 179 N. E., 605, a decision by the Supreme Judicial Court of Massachusetts.

In Republic Mutual Ins. Co. v. Wilson, the first case cited, an insurance company paid a loss under an automobile insurance policy and subsequently learned that the insured had made certain misrepresentations in his application for insurance. Taking the position that under the terms of the policy the false statements prevented the policy from becoming effective, the insurance company filed suit against the insured to recover back the payment made in behalf of the insured. The case was tried to the court without intervention of a jury and resulted in a judgment for defendant. The insurance company appealed to the Court of Appeals on questions of law. The Court of Appeals reversed the judgment of Common Pleas Court and entered final judgment for the insurance company. The nature of the action differed in form from the present action, but the important point to note is the conclusion by the Court of Appeals that the incorrect statements made by the insured at the time he acquired the policy were material and prevented the policy from ever becoming effective. Item 7 in the application for insurance involved in that case, which was incorporated into the terms of the policy, provided as follows:

“By acceptance of this policy the named insured agrees that the statements in the declaration are his agreements and representations which, he warrants to be true, that this policy is issued in reliance upon the truth of such representations.”

It will be observed that the language quoted is very similar to condition 16 of the policy here in issue. Two points discussed in the opinion have importance in the case presently before us for decision.

Note that the misrepresentations were made in the application for the policy, but the questions asked of the insured were written down by the insurance agent. The argument was therefore advanced by the insured that the insurance agent, in filling in the answers, made the incorrect representations and that the insured was not thereby bound. The court declared, however, that when the insured signed the application he adopted and ratified all the statements appearing-above his signature and that he was bound by the statements contained therein. In its opinion, at page 524, the court declared:

“The material and essential facts of the case are not in serious dispute. The defendant, Wilson, attempts to avoid the effect of his answers to the interrogatories stated in his application for insurance by asserting that he did not verbally answer the questions propounded by the insurance agent at the time the application was made. When Wilson signed the application he adopted and ratified all the statements appearing above his signature and he is bound by all the statements contained therein.
“The policy provides that the statements as to material facts are warranted by Wilson to be true. We are of the opinion that aside from the express provisions of the policy as to warranties, the statements of Wilson in his application, as to other insurance, the cancellation of the same, and his past accidents, constitute warranties as to material facts which go to the validity of the contract of insurance. As the policy so provides in express terms there is no question but that these statements constitute warranties. If the statements as to material facts are false they void the contract of insurance regardless of the knowledge of their falsity or the intention of the defendant. In such case the policy is void ab initio. Ins. Co. v. Pyle, 44 Ohio St., 19, 4 N. E., 465, 58 Am. Rep., 781.”

A further matter of interest in that case was the argument that in order to avoid the policy the burden was on the insurance company to establish the fact that the misrepresentations were made deliberately and that Section 9391, General Code, was applicable. The Court of Appeals pointed out, however, that the section referred to is found in a chapter of the General Code dealing with legal reserve life insurance companies and that-it is inapplicable to other policies of insurance. Upon this point the court, on page 525, declared:

“Counsel for defendant has referred to Section 9391, General Code, as to false answers to interrogatories in application for insurance. This section of the Code has no application in the present case for the reason that it is in the General Code under the chapter with reference to life insurance and furthermore the present suit is not upon the policy but is a suit by the insurance company to recover back money paid. This section of the Code is applicable when a suit is brought upon a life insurance policy.”

We find that the case of Republic Mutual Ins. Co. v. Wilson, supra, is persuasive in the two respects mentioned. In view of the language of the insurance policy in the instant case (paragraph 16 of the conditions above quoted), in which, by acceptance of the policy, the insured agrees “that the statements in the declaration are his agreements and representations,” and that the policy is issued in reliance upon the truth of such representations, it seems to us immaterial that the representative of the insurance company, and not the insured, may have filled in the necessary information. Due to this provision of the policy before us for construction, the discrepancies in the stories of the Burpo brothers and of the insurance company’s representative as to how much information was actually supplied by the insured, how much by the bank, and how much by the insurance representative become unimportant. The vital point is that Norman Burpo was named as insured in the policy and that he paid the premium and promptly received a copy of the memorandum certificate of insurance. The memorandum certificate, introduced in evidence, contained all the information found on page one of the policy and set forth all the declarations of the policy including item 5 above. Furthermore, the insurance policy was mailed to Burpo’s bank and it was at all times available to him to examine. It is significant that he never made complaint as to any inaccuracies contained either in the memorandum certificate or in the insurance policy.

The second case we find helpful is Faris v. Travelers Indemnity Co., supra. There, an insured sought recovery on an automobile liability policy. The policy recited that the declarations were made a part of the policy. In item 3 of the declarations it was stated that “the named assured has complete ownership of all disclosed automobiles — except as herein stated: No exceptions. ’ ’ The policy recited also that the declarations were true and that the policy was issued upon such statements and in consideration of the provision of the policy respecting its premium. The actual fact was that plaintiff held conditional title only. In a suit upon the policy by the insured for recovery for damages to the automobile, it was held that, by reason of the express terms of the policy, the truth of the declaration by plaintiff that he had complete ownership of the automobile was a condition precedent to the attaching of the liability under the policy. The court held that plaintiff was bound by that condition and that since the declaration was a condition and not a mere representation or warranty, a Massachusetts statute providing that no misrepresentation or warranty made in the negotiation of a policy of insurance by the insured should be deemed material unless made with actual intent to deceive was inapplicable. In its opinion, on page 206, denying recovery on the policy, the Massachusetts court declared:

“The statement that the plaintiff had complete ownership of the motor vehicle was not true. He did not have complete ownership as the legal title was in the conditional vendor. This statement of the plaintiff was not a mere matter of form: the defect in his title, as was said in Harvey v. Pawtucket Mutual Fire Ins. Co., 250 Mass., 164, at page 166, ‘went to the essence of the contract of insurance.’ It was a condition of the policy. The policy provided that one of its conditions was the truth of the statements numbered 1-5, inclusive, in the ‘Declarations.’ ‘Item 3’ of the ‘Declarations’ stated that the plaintiff had complete ownership. Another provision was that the statements numbered 6-10, inclusive, were conditions to which the policy was subject, and in ‘Item 6’ the plaintiff reaffirmed and restated all the foregoing declarations except ‘Item 4.’ The statute, G. L. c 175, Section 186, cannot be relied on to defeat this condition in the policy. If this condition in the policy is not complied with the policy does not attach, and it is not open to the insured to show that a misrepresentation or warranty was not made with the intent to deceive or to increase the risk of loss. * * *”

In the Massachusetts case, the misrepresentations were as to title and the language of the Massachusetts case applies to the present situation. The policies in each case are similar. The Massachusetts case may be distinguished from the instant case on the ground that the misstatement was contained in the application signed by the insured while no application was signed in the instant case. Nonetheless, we find this distinction an insignificant one in the light of the language in the present policy whereby the insured ratified and made authentic the express declarations in the policy, regardless of whether written out or dictated by him or supplied by the company representative.

The two cases from which we have quoted appear to us sound and in line with the principles of insurance law set forth in 22 Ohio Jurisprudence, 603, Section 491, which provides:

“Absolute, Sole, and Unconditional Ownership— Stipulations requiring persons insuring property either to have absolute title or to be sole and unconditional owners, or to state in what respect their interest or title falls short of such a title or ownership, are common to policies insuring property. Nor is there any doubt that a stipulation in a policy that unless otherwise expressed therein or agreed and made a part of the contract by rider anything less than sole and unconditional ownership shall render the policy void is reasonable, valid, and binding upon the insured, there being no fraud. In fact, a stipulation that the policy shall be void if the interest of the insured be other than unconditional and sole ownership is material, reasonable, valid, and enforceable, and a breach thereof, in the absence of waiver or estoppel, prevents recovery. ’ ’

We see no reason why an insurance company and a party desiring insurance should not be able to contract in reliance upon the truthfulness of a given set of facts. It seems particularly logical that where insurance of specified property is contemplated, ownership of that property is a matter of prime concern. In agreeing to insure an automobile or household furniture or other chattels, an insurance company may well take the position that it will insure only the owner and that it may select, if it chooses, only a responsible owner, someone having sufficient interest to take the kind of care of the chattel ordinarily taken by an owner, someone having a monetary stake in the survivor-ship of the article insured. We are not dealing here with compulsory insurance required by statute for protection of third parties. We are considering rights as between an insurance company and an individual who desires to purchase insurance protection for himself with respect to property in which he presumably has an interest. We see no reason why such individual may not be required to state the nature of his interest in the property or why an insurance company and the insured may not contract that if that interest is misstated the policy shall be void. The fact is that even with respect to insurance of this character, as distinguished from insurance protecting third parties, the public has a vital concern, for insurance rates concern all persons and these rates are necessarily fixed on the basis of the risk involved.

Under the language of the policy involved in the case at bar, it is our view that the contract never became effective by virtue of the misstatement with respect to ownership contained in the declaration. We note also one other declaration recited in the policy, which the testimony in the trial court established as untrue. We refer to the declaration in item 4 that the automobile was purchased in May 1949. Although counsel for neither party stressed this point, we believe this declaration also was a material declaration which was untrue, constituting sufficient ground for avoidance of the policy. This incorrect statement undoubtedly helped to prevent the insurance company from learning earlier of the circumstances concerning the cancellation of the previous insurance policy based on the three successive accidents. If the insured had truthfully answered the question showing that the car had been acquired in September 1948, the insurance company would have been warned and could have inquired as to whether there had been previous insurance and why it had been cancelled.

Having reached the conclusion that the insurance contract involved in this case never became effective because of the incorrect declaration concerning ownership, we deem it unnecessary to extend this opinion by differentiating the various cases cited by counsel. We should observe, however, that the case of Washington Fidelity Natl. Ins. Co. v. Lacey, 45 Ohio App., 104, 186 N. E., 751, does not appear to us to be in point. That decision by our court was a suit on a life insurance policy, so that Section 9391, General Code, was applicable. Furthermore, the opinion pointed out that the particular statements claimed to have been incorrectly made by the insured were not shown to be clearly material and the record did not definitely establish that the company was thereby induced to issue the policy.

We have found it unnecessary to base our decision on cases arising under Section 6290-4, General Code.

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

Judgment reversed.

Skeel, P. J., and Hurd, J., concur.


author: Per Curiam.

text:
    The Leyman Corp., Appellee, v. Piggly-Wiggly Corp., Appellant.
    (No. 7350
    Decided May 21, 1951.)

      Messrs. Pech, Shaffer & Williams, Mr. A. J. Conroy and Messrs. Cottle, Campbell é D ruff él, for appellee.

      Messrs. Nichols, Wood, Marx $ Ginter, Mr. tlarry Kasfir, Mr. John Osoinach and Mr. Roy Holmes, for appellant.
   Per Curiam.

This cause was before this court on appeal in H. S. Leyman Co. v. Piggly-Wiggly Corp., reported in 68 N. E. (2d), 486, from an order overruling the plaintiff’s motion for an order making The Leyman Corporation a party to the action and clismissing the action on the ground that the plaintiff was not the real party in interest.

The notice of appeal which initiated that appeal recited that the appeal was on questions of law and fact, and the preliminary question as to whether, on the record, this court had jurisdiction to hear the case ele novo, on the issues raised by the pleadings, was raised. It was urged in support of our jurisdiction to hear and decide the final issues that the pleadings presented a chancery case. On the other hand, it was contended that the action was for money only, that the issues of fact were triable to a jury, and that, as no equitable relief was sought, no appeal on questions of law and fact was authorized. In view of the fact that there had been no trial on the merits in the Common Pleas Court, this court, following LeMaistre, Admr., v. Clark, 142 Ohio St., 1, 50 N. E. (2d), 331, held that no matter what the nature of the issues, whether legal or equitable, there could be no appeal on questions of law and fact. We, therefore, expressed no opinion as to the nature of the action. The judgment was reversed and the cause remanded for further proceedings.

In accordance with the mandate, The Leyman Corporation was made a party, and by pleading alleged that it was the beneficial owner of the cause of action which was the basis of this action.

At the trial, following the remand, the parties agreed that the case should be heard on the evidence that had been introduced at the first trial, supplemented by some additional evidence. At the first trial, the defendant had moved to require plaintiff to elect as to whether it would proceed on the theory of an action at law or as in equity. The court overruled this motion. This motion was repeated at the second trial following the remanding of the cause.

We are clearly of the opinion that the court did not err in overruling this motion. We know of no rule that requires a plaintiff to label his cause of action. Its classification is determined by the facts alleged.

Basing its contention on the overruling of this motion to require the plaintiff to elect, the defendant, however, contends that the court denied to it the right of trial by jury. The difficulty with the defendant’s position in this regard is that it never demanded a trial by jury, and went to trial to the court without a jury, without any protest because of the absence of a jury. By so doing it waived whatever right it may have had to have the issues submitted to a jury. Bonewitz v. Bonewitz, 50 Ohio St., 373, 34 N. E., 332, 40 Am. St. Rep., 671. We find this assignment of error to be without merit.

This is an action to enforce the liability for rent, taxes, etc., created by the express covenant of PigglyWiggly Stores, Inc., contained in a lease to it from Sam Matz and Max Matz, dated November 16, 1922, for a term of 25 years, commencing January 1, 1923. There is no doubt that, conditioned on the lessors keeping their coven.ants, the lease bound Piggly-Wiggly Stores, Inc., as lessee to pay the rent, and there is no doubt that that obligation still persists unless subsequent events discharged it. It is claimed on this appeal that by virtue of certain modification of the terms of the lease in 1924, upon the occasion of the sale or assignment of the lease to William A. Goebel, Piggly-Wiggly Stores, Inc., was discharged from its obligation by operation of law.

There is no doubt the parties to a lease, as parties to any other contract, may agree to the substitution of a third person in the place and stead of one of the original parties, so as to impose the obligation upon the new party and release the original party. Such substitution and release, however, depends upon the intent which may be implied from conduct, but no implication can stand against an express declaration to the contrary. And that is the weakness of the defendant’s position.

William A. Goebel imposed certain conditions in his offer to purchase this leasehold, which could be complied with only with the consent of the lessors. PigglyWiggly Stores, Inc., accepted this offer. The lessors agreed to waive the provision against assignment and to consent to the modifications so as to enable PigglyWiggly Stores, Inc., to assign the lease, and in this identical written agreement between the lessors and the assignee the lessors expressly reserved their right against Piggly-Wiggly Stores, Inc. The signature to this agreement was witnessed by an agent of PigglyWiggly Stores, Inc., who had conducted the negotiations for the sale of this leasehold.

The trial court held that Piggly-Wiggly Stores, Inc., had not been released from its express covenant to pay rent. We are of opinion that the evidence supports that finding.

It is also urged that, assuming that Piggly-Wiggly Stores, Inc., remained liable on its covenant, there is no liability on Piggly-Wiggly Corporation, a distinct corporation, organized under the laws of a state other than that under which Piggly-Wiggly Stores, Inc., was organized. And, of course, Piggly-Wiggly Corporation is not liable on the covenant of Piggly-Wiggly Stores, Inc., unless the evidence shows that it actually, expressly or by operation of law, or both, assumed such liability.

The facts are that Piggly-Wiggly Corporation, organized under the laws of Delaware, was the owner of a system or method of operating g-rocery stores. Piggly-Wiggly Stores, Inc., a corporation under the laws of Virginia, was organized to operate grocery stores. It was licensed by Piggly-Wiggly Corporation to nse its system and had about twenty stores in which the system was used. Both corporations were organized on the same day. Piggly-Wiggly Corporation owned one-fifth of the voting stock of PigglyWiggly Stores, Inc., from the beginning and at the time the lease which is the basis of this action was executed but finally acquired 98 per cent of such stock which it owned at the time of the institution of the proceedings to dissolve Piggly-Wiggly Stores, Inc.

In 1928, The Kroger Grocery & Baking Company obtained control of Piggly-Wiggly Corporation and thereby acquired control of Piggly-Wiggly Stores, Inc. Thereupon, all the directors of Piggly-Wiggly Corporation and Piggly-Wiggly Stores, Inc., resigned and their places were filled by nominees of The Kroger Grocery & Baking Company. At this same meeting of the directors of Piggly-Wiggly Corporation it was resolved to dissolve Piggly-Wiggly Stores, Inc., and Piggly-Wiggly Corporation officers were authorized to appoint proxies to vote the stock of PigglyWiggly Stores, Inc., owned by it in favor of such dissolution. It was,also resolved at that meeting that Piggly-Wiggly Corporation should purchase all the assets of Piggly-Wiggly Stores, Inc., “and assume all of the obligations and liabilities to its creditors of every name and nature and assume performance of all contracts by which Piggly-Wiggly Stores, Inc., was bound.”

In accordance with this resolution, steps were taken at once to dissolve Piggly-Wiggly Stores, Inc., under the laws of Virginia. All known matured debts were paid and the members of the last board of directors became trustees of its assets for administration and distribution purposes. Thereupon, Piggly-Wiggly Corporation made an offer to the trustees to purchase the remaining assets of Piggly-Wiggly Stores, Inc., less a deduction for estimated debts, for the net sum of $1,376,254.16. The deductions mentioned were six in number, one of which was described as “net loss on rent contracts $181,232.25.” The parties recognized that the amount assumed was indefinite.

This offer was accepted and a conveyance duly made in accordance therewith and the assets turned over to Piggly-Wiggly Corporation. While the transaction purported to be a sale for cash, as a matter of fact no cash was paid. This resulted from the fact that the purchaser owned 98 per cent of the vendor’s stock and was in effect buying from itself and on distribution would be entitled to receive back almost all that it had paid. The transaction was, therefore, limited to cross-entries on the books, with an arrangement under which Piggly-Wiggly Corporation supplied the money from time to time to the trustees of Piggly-Wiggly Stores, Inc., with which they satisfied the claims of the owners of the 2 per cent of stock owned by others.

During the process of 'dissolution of Piggly-Wiggly Stores, Inc., and the acquisition of its assets, no mention was made of any liability arising out of the lease from Matz to Piggly-Wiggly Stores, Inc. It was not listed as a liability on the books of Piggly-Wiggly Stores, Inc., and it is conceded that the officers of Piggly-Wiggly Corporation had no knowledge of its existence. While a reserve was established to take care of loss on rent contracts, it is conceded that rent under this lease was not contemplated by that reservation. However, the reservation of this amount was in harmony with its intention to assume all the liabilities of Piggly-Wiggly Stores, Inc., expressed in the resolution passed at the meeting at which it was determined that Piggly-Wiggly Stores, Inc., should be dissolved. It is clear that Piggly-Wiggly Corporation intended to assume all the debts of Piggly-Wiggly Stores, Inc., and this was so understood and acted upon by the latter. It was given a deduction from the purchase price because of its agreement to pay the debts. It was mistaken as to the amount of those debts. In view of the breadth of its expressed intent to assume evei’y obligation of whatever nature or description and in view of the fact that there was no recession from that position at any time, we are of the opinion that the trial court’s finding that Piggly-Wiggly Corporation’s actions in and about the dissolution of PigglyWiggly Stores, Inc., had the effect in law and equity of rendering Piggly-Wiggly Corporation liable for the obligations of this lease. This finds adequate support in the evidence of the conduct and expressed intention of the parties. The liability is based on a contract between Piggly-Wiggly Stores, Inc., and Piggly-Wiggly Corporation for the benefit of the creditors of Piggly-Wiggly Stores, Inc., which included the plaintiff. The liability of the promissor to the third-party beneficiary is well established in the law. In Section 136 of Restatement of the Law of Contracts, it is stated that ‘ a promise to discharge the promisee’s duty creates a duty of the promisor to the creditor beneficiary to perform the promise.” And, in section 139, it is said: “It is not essential to the creation of a right in a donee beneficiary or in a creditor beneficiary that he be identified when a contract containing the promise is made.”

The facts in this case present a situation requiring the application of other principles leading to the same conclusion. When Piggly-Wiggly Corporation took possession of and title to the assets of Piggly-Wiggly Stores, Inc., which upon its dissolution had become a trust fund, without paying anything therefor, it became a constructive trustee for the benefit of all those having enforceable claims against Piggly-Wiggly Stores, Inc. In 54 American Jurisprudence, 446, Section 576, it is stated:

“The beneficiary of a trust who is a party to the contract giving rise to a trust may recover damages for its breach. He may, where he is not a party to the contract, recover as a third-party beneficiary in a jurisdiction where third-party beneficiaries can recover for breach of a contract. Also, where a trustee withholds which in conscience he should not be allowed to retain, the beneficiary may recover on the common counts, at least where the amount due him has been established and made certain and is immediately owing to him. But it has been held that a trust cannot be enforced as such by an action in common counts on an implied promise. A transferee of trust property, not protected as a bona fide purchaser for value and in good faith, may be proceeded against for money had and receiyed.”

The imagination of counsel has conjured up situations where many stockholders had received assets and where many unpaid creditors existed scattered over many states, and has pointed out many difficulties that would ensue if a single, simple creditor were permitted to pursue a single stockholder. There is no doubt that when a debtor corporation dissolves and distributes its assets among its stockholders a difficult situation is usually presented to the creditors, notwithstanding the existence of all the remedies afforded by both law and equity. There is, however, no necessity for adding to those difficulties. In this case, there is just one creditor. It is not suggested that there is any other, except possibly one other having a claim of less than $50. It is admitted that the defendant received assets worth many times the amount of the plaintiff’s claim. Under such circumstances, we can think of no sound reason for requiring the plaintiff to institute an action against Piggly-Wiggly Stores, Inc., which no longer exists and has no assets, before it will be permitted to proceed against the defendant that is under obligation to the plaintiff and has the assets with which to respond.

As one of the defenses urged here is that the proceedings under the laws of Virginia, whereby PigglyWiggly Stores, Inc., was dissolved, constituted a bar to this action, it should be said that no matter upon which legal theory the defendant’s obligation is based, the Piggly-Wiggly Stores, Inc., dissolution proceedings could have no effect upon it. The liability of a promissor upon his promise to a promissee to pay a creditor-beneficiary is in no way dependent upon the continued existence of the promissee. If the promissee is a natural person, his death would be no defense to an action by the creditor-beneficiary against the promissor. The dissolution of a corporate promissee could have no greater effect. If defendant’s obligation is placed on the basis of receipt of assets without consideration, thereby imposing upon it by operation of law the duty of a constructive trustee, the obligation is likewise unimpaired by the dissolution of the promissee. The fundamental reason applicable under both theories is that the plaintiff is not seeking to enforce a duty of Piggly-Wiggly Stores, Inc. It is seeking to enforce an independent obligation of the defendant. We look to the original obligation of PigglyWiggly Stores, Inc., as the measure and terms of defendant’s obligation, and for no other purpose.

It is urged, however, that the defendant was released from this obligation by reason of the modifications in the terms of the lease at the time of the assignment by Piggly-Wiggly Stores, Inc., to Goebel. It is sufficient answer to this to say, as already noted, that there is ample support for the court’s finding that these modifications were made at its request and with the express reservation of the liability of Piggly-Wiggly Stores, Inc., upon its covenant to pay rent and that Piggly-Wiggly Stores, Inc., knew of this reservation at the time and consented to it.

It is also urged that the plaintiff, after default in payment of rent, re-entered the leased premises in its own right and thereby effected a surrender of the lease which would have the effect of terminating the obligation to pay rent which would otherwise accrue in the future. The trial court found that nothing the plaintiff did or failed to do after taking charge of ‘the premises was in violation of the terms of the lease, or released the original lessee, its successors and assigns from the obligations thereof. An examination of the record discloses that what the plaintiff did was for the purposes of preserving the property and minimizing the damage resulting from the default in the payment of rent and not for the purpose of accepting a surrender of the leasehold — and it did not have that effect in law.

Finally, it is urged that the statutes of Virginia or Ohio, or both, bar the action. That the Virginia statute is inapplicable, in our opinion, is manifest from what has already been said as to the nature of the defendant’s liability. The cause of action did not arise in that state. The breach occurred in Ohio. And as to any applicable Ohio statute, we are of the opinion that the unpaid balance of rent accrued well within the limitation imposed.

We find no error in the record, prejudicial to the appellant.

The judgment is affirmed.

Judgment affirmed.

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


author: Matthews, J.

text:
    Dunaway, Appellee, v. Torline et al., Appellants.
    (No. 7462
    Decided October 29, 1951.)

      Mr. Cedric Vogel, for appellee.

      Mr. Charles 8. Furber, Jr., and Mr. Joseph Lem-Jrnhl, for appellants.
   Matthews, J.

This action to recover under the Housing and Rent Act (61 Stats, at L., 199, Title 50, Section 1895 Appendix, U. S. Code), because of an alleged rental charge in excess of the maximum fixed under Section 204 of that act (Title 50, Section 1894 Appendix, U. S. Code), was begun by George Dunaway and Dolores Dunaway. There have been two trials, resulting in each instance in a verdict against the defendants.

At the first trial it developed that George Dunaway was a minor at the time the action was instituted and at the time of trial. Inasmuch as George Dunaway had not acted through a nest friend or guardian ad litem, the court was of the opinion that the action had not been properly commenced as to him. However, the court allowed the trial to proceed as to Dolores Dunaway. On the motion to set aside the verdict and for a new trial, the court concluded that inasmuch as George Dunaway, the minor plaintiff, had verified the petition and the action had been improperly instituted as to him, it was necessary to set aside the verdict, and the court did so on that' ground and also on the ground that the verdict was manifestly against the weight of the evidence. An order was made dismissing the action as to George Dunaway and allowing it to remain pending with Dolores Dunaway as the sole plaintiff.

In the petition filed by Dolores Dunaway and George Dunaway, they alleged that they had rented the premises from the defendants. After the dismissal of the action as to George Dunaway, Dolores Dunaway filed an amended petition in which she alleged that she had rented the premises.

The appellants contend that the court erred in not dismissing the action as to Dolores Dunaway, as well as to George Dunaway, when it was discovered that he was a minor. We do not stop to consider whether the court would have erred in dismissing the action as to George Dunaway if he had objected to such action. The fact is that he did not then object and is not now objecting. The case, therefore, stands as though two persons conceive that they have a joint action, and, upon discovering that one has no right, that one voluntarily withdraws, leaving the action to proceed on behalf of the sole owner of the chose in action. There is no error in this, but the remaining plaintiff is obliged, of course, to prove sole ownership. We have examined the evidence on this point and find that Katherine Torline testified that all negotiations for the rental of the premises were conducted between her and Dolores Dunaway and that the rental was to Dolores Dunaway. The defendants made no effort whatsoever to qualify this. We, therefore, find that George Dunaway was not a necessary party to this action.

There is no evidence that Dolores Dunaway did not authorize the filing of the original petition in this case. It was signed by a duly licensed attorney at law as her attorney. The presumption is that he was duly authorized by her. Summons was duly issued on it. That constituted the commencement of the action. The fact that the verification was defective did not destroy its character as a petition. If no verification had been attached the pleading would still have been a petition. Such defects may be cured by amendments.

The action having been commenced on August 5, 1948, and the last alleged excess payment of rent having been made on June 16, 1948, the action was commenced well within the statutory period after such last payment. No matter how the statute is construed, the amount of the recovery in the case is well within the breaches that occurred within the period of limitation.

We, therefore, conclude that whatever claim the plaintiff has is not barred by the statute of limitations.

The defendants acquired the title to this building, of which the room or apartment rented by plaintiff was a part, in 1945. This apartment or a part of it, known as ‘ ‘ apartment 2, ’ ’ had been leased by the prior owner for $7.50 per week. It, however, was unoccupied at the time of defendants’ purchase of the premises. It is undisputed that the defendants enlarged it to double its former size, put in a new General Electric refrigerator, new linoleum and bedroom and living room furniture, painted the apartment and put in a new sink with hot and cold running water. The defendants notified the Office of Price Administration of these improvements and were told to establish their own rent and bring down evidence of their expense of remodeling and that they would be told what amount to register it for.

During the making of these improvements, the plaintiff occupied another apartment in the same building and knew at least something of the improvements as they progressed, and, when defendant Katherine Tor-line returned from notifying the-Office of Price Administration, she had a conversation with the plaintiff, resulting in the plaintiff offering to pay $15 per week, which the defendants accepted. The plaintiff moved in and paid $15 per week for almost two years, when a disagreement arose about something other than the amount of the rent and the plaintiff vacated the premises. About two months thereafter this action was instituted under the Housing and Rent Act to recover treble the difference between $7.50 and $15 per week for the entire period of plaintiff’s occupancy and attorney’s fees.

After this action was commenced, the defendants filed a registration of this apartment at $15 per week. The rent inspector inspected the apartment and approved the rental. So whatever action was taken by the Office of Price Administration was in approval of this rental charge. However, the rent expediter took no affirmative action. It was at the suggestion of the inspector that the apartment was treated as a new unit and given a new designation (2-A) upon the records of the area rent office.

The jury found for the plaintiff for the amount of the actual difference and awarded no penalty or attorney’s fees. Judgment was rendered on the verdict.

It is from that judgment that this appeal was taken.

Various errors in the general charge and in the giving of two special charges are assigned. An examination of these special charges and the general charge discloses that they contain correct statements of the law to guide the jury in deliberating upon a case where the issue is whether the defendants had charged in excess of a maximum rent fixed by the housing expeditor. The difficulty with the charge is that if the record presents that kind of a case there was no issue of fact to submit to the jury excepting whether treble damages and attorney’s fees should be awarded, for the reason that if the rent charged for one-half of this apartment was to govern the maximum rent, the $15 per week collected by defendants was just twice the permissible rent.

The amount of the excess would have been a mere matter of mathematics and the court should have instructed the jury that in any event the plaintiff would have been entitled to that amount, within the statutory period of limitation, leaving only the issue of what, if anything, should be added as a penalty or for attorney’s fee.

But, as we view the record, the issue was not that simple. The whole contention of the defendants was that they had enlarged and made substantial improvements in “apartment 2” at considerable expense, which entitled them to an increase in rent; that they had notified the proper authorities, had fixed the rent as they had a legal right to do, and finally had registered the premises with the rent control office, which had approved it as, in effect, a new and different housing unit. This position of defendants was emphasized by motions for an instructed verdict and by a request at the close of the general charge for a further charge that “the rental approved by the area rent office is the valid rent for apartment 2-A and dated back to the time the apartment was first rented and that no disapproval having been made by the area rent office the amount of $15 was the correct rental for apartment 2-A.” The court refused to so charge and that is assigned as error.

It is manifest that the remodeling of- apartment 2 and transformation of it into apartment 2-A on the records of the area rent office is the vital fact upon which the rights of the parties turn. It is equally manifest that the maximum rent fixed by the housing-expediter for apartment 2 is not controlling as the maximum for the remodeled and enlarged apartment 2-A.

Now what is the law and procedure regulating the maximum charge for an apartment after it has been remodeled and enlarged to twice its original size?

It is clear that no authority has been conferred upon the courts to fix a maximum rent. Indeed, under the Constitution, no such authority could be conferred. It (fixing a maximum rent) is no more a judicial function than is the fixing a tax rate or a public utility rate. The authority over such matters is conferred upon the other departments of government. Under the rent control act Congress has delegated this power to the housing expediter, with right of appeal from his decision to an administrative board.

In Friedlander and Curreri on Rent Control, at page 193, speaking of the action of a tenant for treble damages because of a charge in excess of the maximum rent, based on reduced facilities, the authors said: “* * * Such an action will not lie until the federal rent control authorities have fixed a reduced maximum rent for the premises, since only such authorities have jurisdiction to prescribe decreased rents. The courts may not undertake to perform this function in place of the authorized administrative officials.” Here the authors were applying a general fundamental principle to a specific situation.

The judicial action must be based upon prior administrative action, and must be to enforce such administrative ruling, except in such cases as the administrative action, accomplished or threatened, is so arbitrary and confiscatory as to constitute the taking of property without due process of law in violation of the Fifth Amendment to the United States Constitution.

It is clear that the rent collected by a prior owner for apartment 2 is not the maximum rent fixed by the expediter for apartment 2-A, created by enlargement and improvements of a capital nature. Whatever action was taken by the expediter’s office indicates his approval of a maximum rent of $15. If such action was a fixing of $15 as the maximum rent, then there was no overcharge. If the action falls short of fixing a maximum rent, then further action by the rent control administration was necessary before the court would have jurisdiction to entertain an action by the tenant to recover the amount of any excessive charge.

No matter how this situation is viewed, the defendants, at least, had a right to have the rent control office determine whether the improvements and modifications constituted a major capital improvement justifying an increase in the maximum rent, and until such ruling is made no action can be maintained by the tenant in any court to recover an excess of payment.

In the Office of Price Administration rent control guide book, at page 200:806, it is said in ‘ ‘ Interpretation No. 9” headed “Determination of ‘Major Capital Improvement’

“Where housing accommodations have been substantially changed * * * by a major capital improvement * * * the maximum rent is the first rent after such change.”
“Under Section 5 (c) (1) the rent director may decrease this maximum rent to the rent generally prevailing in the defense rental area for comparable housing accommodations on maximum rent date. ’ ’
“Under the regulations orders in adjustment proceedings are not retroactive. ’ ’

While subsequent legislation has made the order of the housing expediter reducing the rent as fixed by the landlord after the major capital improvement retroactive, we know of no legislation withdrawing from the landlord the right to fix the maximum rent of a new housing unit or a unit transformed by a major capital improvement, subject, however, to an obligation to refund in the event that it should be determined by the rent control office that the rent so fixed was excessive.

As already noted, the rent control office has not determined that $15 per week was an excessive rent. Indeed, the landlord proceeded to fix the maximum rent under instructions from the rent control office, and that office has never questioned its validity. In this situation, it is our opinion that the plaintiff has no cause of action. If the plaintiff is entitled to any relief, it should be sought by action of the rent control office and not in the courts.

For these reasons, the judgment is reversed and the cause is remanded with instructions to dismiss the action.

Judgment reversed.

Hildebbant, P. J., Matthews and Boss, JJ., concur in opinion and judgment.


author: Middleton, J.

text:
    City of Lima, Appellee, v. Beer, Appellant.
    (No. 1000
    Decided November 29, 1950.)

      Mr. Lee VanBlargen and Mr. 1. B. Steele, for appellee.

      Messrs. Light & Siferd, for appellant.
   Middleton, J.

This is an appeal on questions of law from a judgment of the Municipal Court of Lima.

On February 28, 1950, an affidavit was filed in the Municipal Court of Lima, charging that the defendant “Walter C. Beer did unlawfully keep or exhibit for gain or to win money a gambling device, to wit, tips at Manhattan Cigar Store, West High street, Lima, Ohio * * * contrary to an ordinance of said city in such cases made and provided.”

To this charge the defendant, appellant herein, entered a plea of guilty, and, upon the plea of guilty, the court pronounced sentence as follows: “Fined $50 and court costs. Sentenced to thirty days in Toledo workhouse. Thirty days suspended provided the defendant cease and desist in the selling of gambling tickets known as tips. Violation of this order will result in thirty days in the Toledo workhouse by bench warrant. ’ ’

Thereafter, on April 18, 1950, a warrant for the arrest of the defendant was issued out of the Municipal Court upon the affidavit of the municipal judge charging the defendant with violating the order of the court suspending the execution of sentence in that he permitted and engaged in the sale of gambling devices known as tips, contrary to the order of the court.

The defendant was arrested upon such affidavit and brought before the court.

Upon hearing, the following procedure is shown by the record:

‘ ‘ The Court: On March 1st, 1950, this defendant in case No. 33603, Walter Beer, appeared in this court, plead not guilty to a charge of keeping gambling devices, under Chapter 20, Section 22, of the Lima City 1949 Code, and then, on the 13th day of March, 1950, the defendant with his attorney, appeared in this court and withdrew his plea of not guilty and changed his plea to guilty. Whereupon, the court fined him fifty dollars and court costs, and sentenced him to thirty days in the workhouse. The thirty days were suspended on condition that the defendant cease and desist in the selling of gambling tickets known as ‘tips’ in his store known as the Manhattan Cigar Store on West High street. Further admonition of the court was to the effect that the violation of this order will result in thirty days at the Toledo workhouse, by bench warrant.
“As of the 18th day of April, 1950, this court issued the bench warrant to the chief of police, stating that, whereas there had been a complaint filed with the court that there had been a sale of tips at the Manhattan Cigar Store on West High street, the court issued the bench warrant, stating that defendant herein had violated the order of the court in that he permitted and engaged in the sale of gambling devices known as ‘tips’; and which is contrary to the order of this court which was made on the 13th day of March, 1950.
“Does defendant have anything to say before the court passes sentence ? ’ ’

Counsel for defendant objected to such a summary disposition of the charge and asserted that until there had been shown a violation of the terms of suspension of sentence the defendant was not required to do or say anything.

The court thereupon called police officer Frankhauser who was sworn as a witness and was asked by the court whether he “produced to this court, evidence of purchasing gambling devices known as ‘tips,’ which were purchased at the store located on West High street, known as the Manhattan Cigar Store, owned and managed by one Walter Beer.” The officer stated that he did. He was then asked whether he had the tips in his possession and he replied that he had. The court then asked defendant’s counsel whether he desired to inquire of the witness. Upon cross-examination by defendant’s counsel, the officer stated that he did not purchase the tips himself; that they were given to him outside the store by someone who told him he had purchased them there; and that he had watched the purchase but he did not know the name of the man who made the sale. He was then asked by counsel: “Who was the man who purchased the tips!” The court refused to require the witness to answer this question, and stated: “The court is satisfied, if you please, Mr. Siferd, that the tips were purchased; that they were purchased in the Manhattan Cigar Store.” After some further cross-examination and a request by defendant that he be permitted to inquire the name of the person who purchased the tips, the court stated: “The court again states to eminent counsel for defense that the court is satisfied there was a sale and the court sees no need, because of the fact that the person or persons who purchased the tips are reputable persons, and therefore, this court, without further ado, is sentencing this defendant to thirty days in the Toledo workhouse.”

From this order revoking the order suspending the execution of sentence, appeal is taken.

The defendant sets forth five assignments of error, the first three of which will be considered together.

The authority of a court to suspend the imposition of sentence is found in the provisions of Section 13451-86, General Code, as follows:

“Any court sentencing a person for misdemeanor forbidden by statute or ordinance, may at the time of sentence remit the same or suspend said sentence in whole or in part, upon such terms as he may impose. ’ ’

The suspension of sentence in the instant case was made upon the expressed and definite condition, to wit, that the defendant cease and desist in the selling of gambling tickets known as tips.

Such suspension of sentence is valid and binding upon the defendant, whether made with or without his consent.

The suspension of sentence being upon expressed and definite conditions, the defendant had the right to. rely upon such conditions, and so long as he complies with such conditions suspension of sentence cannot be revoked.

Revocation of the order suspending the execution of sentence can be made only upon evidence of a violation of the conditions set forth in the order suspending the sentence. To hold otherwise would subject a defendant to the whim and caprice of the particular, judge presiding over the court.

The determination of the question of whether the defendant has violated the condition of his probation set forth in the order suspending the sentence must be determined by judicial inquiry. At such judicial inquiry the defendant has the legal right to know, first, the facts which it is claimed show a violation of the condition of the order of suspension; second, the right to fully cross-examine the witnesses against him; and, third; a reasonable opportunity to be heard and present evidence refuting the claimed violation of the condition of suspension of sentence. Unless such a procedure is followed it cannot be said that there has been any judicial inquiry into the claimed violation of the court’s order.

In the ease of Weber v. State, 58 Ohio St., 616, 51 N. E., 116, 41 L. R. A., 472, which decision was rendered prior to the enactment of the statute controlling the case at bar, the court stated: ‘ ‘ The suspension being in favor of the prisoner, is for his benefit, and is valid whether consented to by him or not. When the suspension is upon conditions expressed in the judgment, the prisoner has the right to rely upon such conditions, and so long as lie complies therewith the suspension will stand.”

Section 13451-8b, General Code, was enacted subsequent to the above-referred-to decision, and also subsequent to the decision in the case of Municipal Court of Toledo v. State, ex rel. Platter, 126 Ohio St., 103, 184 N. E., 1. This section was apparently enacted as a result of the latter decision so as to empower a court to suspend execution of sentence on definite conditions.

It clearly appears from the record that a full judicial inquiry was denied the defendant. He was denied the right to a full disclosure of the facts it was claimed established a violation of the order of suspension. He was entitled to know the name of the person who it was claimed made the purchase of tips, and a denial of this right was a denial of his absolute right to á full and complete cross-examination of the witnesses against him. Such refusal of the court to permit such cross-examination was prejudicial to the rights of the defendant.

The record is silent as to who sold the tips, silent as to who purchased the tips, and silent as to defendant’s connection with such sale or his knowledge that tips were being sold. In short, the record fails to show a violation by the defendant of the conditions set forth in the order of suspension of execution of sentence.

It may be said that the defendant was offered the opportunity to deny the sale of tips, but this opportunity was given the defendant after the court had revoked the order of suspension and sentenced him to the Toledo workhouse. Denial of such sale at that stage in the proceedings could be of no avail.

The court finds that there is error in the court’s judgment, prejudicial to defendant, in that the judgment of the court is contrary to law and also violates the due process of law guaranty of the United States Constitution.

The welfare of society requires not only that those who violate the law be required to answer for such violation, but also that the rights of such person to a full and fair hearing be protected.

The court finds no other prejudicial error set forth in the assignments of error.

For the reasons herein stated, the judgment of the court revoking the order of suspension is reversed, and the defendant discharged.

Judgment reversed.

G-uerhsey, P. J., and Jackson, J., concur.


author: Hunsicker, J.

text:
    Canterbury, Appellant, v. The Pennsylvania Rd. Co., Appellee.
    (No. 641
    Decided October 15, 1951.)

      Messrs. Young & Young, for appellant.

      Messrs. Flynn, Py & Kruse, for appellee.
   Hunsicker, J.

Nettie Jane Canterbury, appellant herein, filed an action for personal injuries against The Pennsylvania Railroad Company, appellee herein, and the canse proceeded to trial in the Common Pleas Court of Erie County. Two days of hearing ensued, when it was discovered that Nettie Jane Canterbury was a minor. Counsel for The Pennsylvania Railroad Company thereupon moved for a dismissal of the action.

Counsel for Nettie Jane Canterbury, by oral motion, sought leave of the trial court to amend the petition by inserting, by interlineation, the name of James Canterbury as husband and next friend, also to allow the next friend to verify the petition as so amended, and then to refile it; and asked that the case then proceed as though it had originally been commenced by the next friend.

The trial court denied the application of counsel for Nettie Jane Canterbury and granted the motion of the railroad company. It is from such judgment, dismissing the petition of Nettie Jane Canterbury, that an appeal on questions of law is before this court.

A minor has capacity to seek redress in the court for any wrongs committed against him, but such minor cannot prosecute an action in his own name. This was the rule at common law, and our statute, Section 11247, General Code, is in accord with this rule.

The statute (Section 11247, General Code) says an action by an infant “must” be brought by his “guardian or next friend.” Prom a reading of this statute it would appear that this is a mandatory requirement. The reason for such rule is to protect the interest of such minor, to have a party responsible for costs, and that the action shall be prosecuted in the interest of the minor. See: 21 Ohio Jurisprudence, Infants, Section 48, and authorities there cited.

The general rule in cases such as is herein considered is stated in 43 Corpus Juris Secundum, Infants, Section 108 b, to be as follows:

“It is not an absolute prerequisite to jurisdiction of an action by an infant that he should sue by guardian ad litem or next friend, and the suit or action is not void on that ground alone; it merely affects the regularity of the proceedings, and the defect is amendable; the judgment or decree is not void. ’ ’

This rule is sustained by the authorities there cited.

In the case of Urbach v. Urbach, 52 Wyo., 207, 73 P.(2d), 953, 113 A. L. R., 889, at page 891, decided by the Supreme Court of Wyoming in November, 1937, a situation arose similar to the case before this court. In such case, the trial court granted the motion to substitute, as party plaintiff, a next friend, when it was discovered that the plaintiff was a minor. The similarity of the statute in Wyoming and the other jurisdictions there cited, together with the similar statutes in Ohio for the correction of such mistakes (Section 11363, General Code), persuades us that the general rule should be followed in Ohio.

It is certain, from a reading of the pleadings and the bill of exceptions, that the action was being ably prosecuted for the benefit of the minor and in the interest of such minor.

We therefore determine that the trial court should have, in the furtherance of justice, granted the application of counsel for plaintiff, Nettie Jane Canterbury, for leave to amend and to substitute her husband as party plaintiff.

The judgment of the trial court is reversed, and the cause remanded for further proceedings in accord with this opinion.

Judgment reversed.

Fess, P. J., and Conn, J., concur.

IIunsicker, P. J., of the Ninth Appellate District, sitting by designation in the Sixth Appellate District.


author: Wiseman, J.

text:
    Robinson, Appellant, v. Parker, Appellee.
    (No. 4359
    Decided January 30, 1951.)

      Mr. Walter R. Hill, for appellant.

      Mr. Frank G. Shearer, for appellee.
   Wiseman, J.

This is an appeal on questions of law from a judgment of the Municipal Court of Columbus in an action in forcible entry and detainer in which that court rendered judgment for defendant.

It is conceded that the premises in question are under the control of the area rent director. The plaintiff applied for and was issued a certificate of eviction on June 2, 1949, effective immediately, for the purpose of remodeling under the provisions of section 825.6 (c) (3) of the federal housing regulations (24 C. F. R., 1950 Supp., 194). On June 14, 1949, the plaintiff served the defendant with notice to leave the premises on or before June 18, 1949. This action was instituted July 5, 1949.

At the trial the plaintiff introduced into evidence the notice to leave the premises and the certificate of eviction issued by the area rent director, and testified that defendant was personally served with such notice. An employee of the Columbus office of the housing expediter testified that the certificate of eviction had been issued. When plaintiff rested his case a discussion took place between counsel and the court relative to the proof required to sustain plaintiff’s cause of action.

The court sustained defendant’s motion to dismiss.

Several errors are assigned, the principal one being that the judgment is contrary to law. The two principal questions presented are:

(1) Must the notice to leave the premises specifically set forth the grounds upon which the landlord relies to evict the tenant and which were the basis for the issuance of a certificate of eviction?
(2) Must the landlord offer evidence in support of the grounds upon which such certificate of eviction was issued?

This court in Jackson v. Richards, 47 Ohio Law Abs., 631, 70 N. E. (2d), 692, answered both of these questions in the negative. Later, in Hile v. Besecker, 82 Ohio App., 301, 308, 50 Ohio Law Abs., 239, 79 N. E. (2d), 582, this court answered the second question in the negative.

Defendant contends that after those cases were announced section 825.6 (b) was amended effective April 1, 1949, and, therefore, that those cases cannot be considered as precedents.

Section 825.6 (b), in part, provides:

“ (b) Notice required. (1) No tenant shall be removed or evicted from housing accommodations by court process or otherwise and no action or proceeding shall be commenced for such purpose upon any of the grounds permitted in paragraph (a) of this section unless and until the landlord shall have given written notice to the area rent office and to the tenant as provided in this paragraph (b) (1).
“Every such notice to a tenant to vacate or sur render possession of housing accommodations shall state the ground under this section upon which the landlord relies for removal or eviction of the tenant, the facts necessary to establish the existence of such ground, and the date when the tenant is required to surrender possession. Where the ground for removal or eviction of a tenant is nonpayment of rent such notice shall include a statement of 'the rent due and the rental period or periods for which such rent is due. A written copy of every notice required by this paragraph (b) (1) shall be filed with the area rent office within 24 hours after such notice is given to the tenant.” (Emphasis ours.)

In our opinion this section applies where the landlord seeks to evict a tenant on one of the grounds enumerated in section 825.6 (a) and has no application where the landlord seeks to evict a tenant on one of the grounds mentioned in section 825.6 (c), where the landlord has secured a certificate of eviction. In the instant case the plaintiff seeks to evict the tenant under section 825.6 (c) (3) on the ground that the premises are to be remodeled. Under such circumstances the notice to leave the premises need not set out the ground for eviction; neither is the landlord required to offer evidence in support of the ground upon which the certificate of eviction is issued. We reaffirm our rulings in the cases of Jackson v. Richards and Hile v. Besecker, supra. See, also, the unreported case of Doney v. Harrison, No. 4378, Court of Appeals for Franklin county, decided March 9, 1950.

The judgment is reversed and the cause remanded for further proceedings according to law.

Judgment reversed.

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


author: Hildebrant, P. J.

text:
    Rush, a Minor, Appellee, v. Grevey, d. b. a. Gil J. Grevey Auto Sales & Service, Appellant.

      (No. 985
    Decided May 11, 1951.)

      Mr. Harry 8. Wonnell and Mr. Andrew W. Cherney, for appellee.

      Messrs. Andrews & Weiss, for appellant.
   Hildebrant, P. J.

Plaintiff herein disaffirmed Ms contract of purchase of a used automobile from defendant on the ground of the former’s minority and recovered a judgment for the return of the consideration less the cost of certain accessories furnished by defendant and less certain proved damage and an allowance for depreciation covering the period from date of purchase to time of filing suit. That is the judgment appealed from on questions of law.

The car was purchased September 22, 1948, with the certificate of title furnished the following day, and the suit based on disaffirmance due to minority was instituted December 29, 1948.

The record discloses that the automobile was returned to the possession of the defendant a few days after the purchase, where it remained in dead storage until the time of trial on May 3, 1950, at which time a certificate of title was tendered and delivered to the defendant enabling him to exercise ownersMp over the car.

Upon substantial evidence, the trial court made the following findings of fact :

‘ * 1. That at the time of the purchase of a 1940 model Chevrolet sedan by the plaintiff, Raymond Rush, from the defendant, Gilbert J. Grevey, in September, 1948, plaintiff was a minor of the age of 20 years.
“2. That the plaintiff at the time he purchased said-automobile in September 1948 represented to the defendant that he was over the age of 21 years; that this representation, coupled with the appearance of the plaintiff, his size, demeanor, etc. induced the defendant to believe that plaintiff was not an infant.
“3. That the plaintiff when he returned the car to the defendant’s place of business a few days after the purchase of the same, did not make known to the defendant that he was disaffirming the contract of purchase because of his minority.
“4. That the plaintiff did not at any time before the actual hearing of this cause, which was on May 3, 1950, tender back to the defendant a duly executed certificate of title for the automobile.
“5. That some time in October 1948 one of plaintiff’s counsel made a demand upon the defendant for the return of the consideration paid to him by plaintiff, because of his minority.
“6. No fraud or imposition was worked upon the plaintiff infant by the defendant in reference to the sale of this motor vehicle and that the contract of purchase was fair.
“7. At the time of the return of the car to the defendant it was damaged to the extent of $60, said damage taking place while the car was in possession of plaintiff.
‘ ‘ 8. The automobile declined in value on the market approximately $100 between October 1948 and January 1, 1949.”

In applying the law of Ohio as announced in Mestetzko v. Elf Motor Co., 119 Ohio St., 575, 165 N. E., 93, the trial court limited the allowance for depreciation or decline in market value of the car to the time between the date of purchase, September 22, 1948, and January 1, 1949, approximately the date of filing the petition on December 29, 1949, which the court viewed as conclusive notice of intention to disaffirm. A certificate of title was actually delivered to defendant on May 3, 1950, the date of trial, and counsel now agree that the sole question for decision here is as to the amount allowable to the defendant as a deduction for depreciation.

Although plaintiff pleads that he has at all times been ready, willing, and able to transfer title to defendant upon a return of the purchase price, it is clear, and the court so found as a fact, that no certificate of title was tendered prior to the date of trial on May 3,1950. Mere restoration of possession of the car and placing it in dead storage by defendant were not effective to restore the incidents of ownership parted with by the defendant at the time of sale, and of which he was deprived until May 3, 1950.

The courts recognize the legal right of the minor to disaffirm under the circumstances here, with or without restoration. But the legal right to disaffirm on the ground of minority, where no fraud or imposition has been worked upon the plaintiff, but, on the contrary, where the minor by his misrepresentation as to his true age induced defendant to deal with him, must proceed upon equitable principles, and the minor, treated as an adult, must be required to do equity in seeking equity.

Consonant with that view, the burden was on the plaintiff to tender the certificate of title without which mere restoration of possession of the automobile was ineffective to' constitute a complete restoration of ownership to the defendant such as would be recognizable in the courts in accordance with the holding in Mielke v. Leeberson, 150 Ohio St., 528, 83 N. E. (2d), 209, 7 A. L. R. (2d), 1342.

There is ample evidence in the record from which the court can find and allow the depreciation or the amount of decline in market value of the car between September 22, 1948, the date of sale, and May 3, 1950, the date of effective restoration of title to the defendant.

The judgment is, therefore, reversed and the cause remanded for further proceedings in accordance with this opinion.

Judgment reversed.

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