author: Skeel, P. J.

text:
    Zuber, Guardian, Appellee, v. Zuber, Appellant.
    (No. 22605
    Decided December 23, 1952.)

      Mr. C. C. Fowerbaugh, for appellee.

      Messrs. Garfield, Baldwin, Jamison, Rope & Ulrich, for appellant.
   Skeel, P. J.

This appeal comes to this court on questions of law from a judgment entered for plaintiff, appellee, on her petition filed in the Probate Court as guardian of her husband, an adjudged incompetent, seeking to change certain provisions in four insurance policies of her ward and husband, said provisions having to do with the payment of the proceeds of the policies to the beneficiaries named therein in the event of the insured’s death.

The contracts of insurance were between Louis Zuber, who had been adjudged incompetent prior to the filing of the petition, and The Northwestern Mutual Life Insurance Company. Three of the policies were issued on September 9, 1931, for $5,000, in which the wife of the insured, Ethyle Zuber, was named beneficiary. When issued, the policies provided that the face value of the insurance was to be paid to the beneficiary upon the death of the insured and provided further that the insured retain the right to change the beneficiary without notice. The other policy was issued on October 5, 1943, for $7,500, the beneficiary and the terms of payment being the same as the other policies first described. By indorsement on March 7, 1947, the insured requested and caused changes to be made in the beneficiary provisions of all the policies as follows: Ethyle Zuber, the insured’s wife, was made the direct beneficiary and six of the insured’s relatives and six of the wife’s relatives were made contingent beneficiaries. As to the $7,500 policy, it was provided that should the direct beneficiary survive the insured, $3,500 of the proceeds of the policy should be paid to her in accordance with “option A,” payable quarterly with the privilege of surrender and withdrawal, and that she should receive the balance in 120 or more monthly payments, but should the direct beneficiary predecease the insured the contingent beneficiaries were to be settled with in one sum. It was also provided that the 120 payments should be made even though the direct beneficiary did not live through the ten-year period and, further, that she was to continue to receive such payments during her full lifetime no matter how long she lived beyond the ten-year period. The other policies were changed so that their proceeds were to be paid in the same manner as was provided for the residue above $3,500 of the $7,500 policy.

Some time (about three years) after the assured changed the beneficiary provisions, he was adjudged incompetent and his wife, appellee herein, was appointed guardian. An attempt was made by a direct order of court in the guardianship proceeding to order the insurance company to change the beneficiary provisions of the policies so that the wife, should she survive the insured, would be entitled to payment of the proceeds of all the policies in a lump sum. The order was made, but the insurance company, not being a party to the proceeding, refused to be bound by the order. The petition upon which this proceeding is founded was then filed by the guardian making the insurance company and the contingent beneficiaries parties.

The petition alleges that the assets of the guardianship have been exhausted save whatever the value of the insurance policies (above described) on the ward’s life might be; that henceforth she would have to pay the premiums amounting to $1,266 annually out of her own personal funds if the policies were to be continued; that she had worked with her husband in his profession as chiropractor and mechanotherapist for more than twenty years whereby her efforts had, in part, made possible the purchase of the policies; and that it would be unfair to her estate to make the payments required by the policies unless the beneficiary provisions were changed so that she would be entitled to an immediate settlement of the face value of the policies should she survive her husband. The petition then prays the court to order the insurance company to change the beneficiary provisions so that in the event she survives her husband, she will be entitled to a lump sum settlement as to each of the policies.

A demurrer was filed by the insurance company, challenging the right of the guardian to maintain an action against her ward for her own personal benefit. The demurrer was overruled and the insurance company then filed an answer, admitting the issuance of the policies and entering a general denial as to all other allegations.

The contingent beneficiaries filed their individual consents to the change of the beneficiary provisions as prayed for and requested that such change be made. Upon trial, the court found for the petitioner and by its judgment ordered that the insurance company change the beneficiary provisions of all the insurance policies as prayed for.

The insurance company claims the following errors:

1. The court erred in overruling the insurance company’s demurrer.

2. The judgment is contrary to law.

3. The judgment is against the manifest weight of the evidence.

4. The judgment is unconstitutional.

After the case was appealed to this court, the ward died and a request was made to substitute the administrator as party plaintiff. Such request was refused as the court must take the case upon the record as it stood when the jurisdiction of this court was invoked. The death of the ward (insured) subsequent to the judgment below in no way changed the question here presented.

The first ground of error is well taken for three reasons. 1. A guardian has no right or power to maintain an action against her ward for relief which is solely for her own personal benefit on a matter which is not concerned with the administration of her trust. 2. The petition does not state a cause of action. 3. The court is without jurisdiction to grant the relief prayed for in the petition.

The Probate Court is a court of limited jurisdiction. Its power to appoint a guardian and the powers of the guardian to act under the authority of the court are fixed by statute. (Section 10507-1 to Section 10507-61, inclusive, General Code.) Subdivision 2 of Section 10507-15, General Code, in defining the duties of a guardian provides: “To manage the estate for the best interest of his ward.” The court is therefore without power to authorize the guardian of an incompetent to enter into contracts other than those made in the management and conservation of the ward’s estate and the protection of his person.

The relief which the plaintiff here seeks by her petition has absolutely nothing to do with the management of her trust as guardian of her husband. No benefit will come to the ward’s estate or to his personal comfort in the event the relief prayed for should be granted.

In 1947, the ward, while fully competent to contract and for reasons known to him, changed the beneficiary provisions of his insurance so that his wife as direct beneficiary, upon his death, would (upon the policies here being considered) receive $3,500 in a lump sum and monthly payments of the balance over a ten-year period, payments to be continued for ten years even should her death occur before the end of such period, it being provided also that such monthly payments were to be made to her until her death, even though she lived beyond the ten-year period. These were, in part, the terms of the ward’s agreement with the insurance company. These provisions create no benefit to, nor do they in any way concern the management of the ward’s estate. The court is, therefore, without jurisdiction to authorize the guardian or direct the insurance company to change the terms of the contract of insurance as to the payment of the proceeds of the policies coming due at the time of the death of the ward, he now being legally incompetent to agree thereto or make such request for what the beneficiary now believes would be more favorable to her.

Some claim is made by the plaintiff that because she will have to pay the premiums out of her personal estate, the funds of the ward now being exhausted, she thereby acquires a vested right in the policies. This claim is without merit. A beneficiary of an insurance policy has no vested right in such policy until the death of the insured where the insured has the right to change beneficiaries without notice. Katz v. Ohio National Bank, Ext., 127 Ohio St., 531, 191 N. E., 782; Atkinson v. Metropolitan Life Ins. Co., 114 Ohio St., 109, 150 N. E., 748. In making the premium payments she is a volunteer. Under the circumstances, what she does about keeping the policies alive must result from her studied judgment as to what would be best for her personal interest, as beneficiary. Nor does the fact that all the beneficiaries, both" direct and contingent, consented to the proposed change in the ward’s insurance contract with the insurance company vest power in the court, or its guardian, to make a new' contract with the insurance company which in no way was necessary or beneficial in the management of the ward’s estate.

We must therefore conclude that for the foregoing reasons, not only the first claim of error is well taken, but we must also sustain the other claims of error, the judgment being contrary to law and not in accord with due process. Final judgment is therefore entered for the appellant.

Judgment accordingly.

Hurd and Kovachy, JJ., concur.


source: Caselaw Access Project

author: Guernsey, J.

license: Public Domain

text:
    The State, ex rel. Smilack, v. Bushong, Supt.

      (No. 1025
    Decided June 12, 1952.)

      Mr. Jack B. Dworken, for petitioner.

      Mr. G. William O’Neill, attorney general, Mr. Ralph Bartlett, prosecuting attorney, and Mr. Tjarry Snyder, for Roy E. Bushong, superintendent.
   Guernsey, J.

Oscar Smilack filed his petition in this court for a writ of habeas corpus alleging that he was unlawfully restrained of his liberty by Dr. R. E. Bushong, Superintendent of Lima State Hospital.

The cause is incorrectly captioned as it is not brought upon the relation of the state of Ohio and should be captioned “In the Matter of the Petition for a Writ of Habeas Corpus by Oscar Smilack.” It was unnecessary to name anyone as defendant in the caption.

Upon the trial of this canse the only evidence introduced was a transcript of the proceedings had in the Common Pleas Court of Franklin County, under date of May 29, 1952, in the case of State v. Oscar Smilack, designated as number 32835 in such Common Pleas Court, which transcript is in the words and figures following, to wit:

“Mr. Barlett: 32835, State v. Oscar Smilack, and the charge is refusing to testify before a Committee of the General Assembly of the State of Ohio.

“Mr. Dworken: Your Honor, I am Jack Dworken of Cleveland. I represent the defendant in this case, and we enter a plea of not guilty and would like permission of the court to file pleadings raising the legal question involved in this matter, and we are willing to submit the case on the record.

“Mr. Bartlett: Your Honor—

“The court: You will be given two weeks in which to make—

Mr. Dworken: Thank you, sir.

“Mr. Bartlett: Now, Your Honor please, before passing over this case, I desire to make a statement to the court.

“The court: You may proceed.

“Mr. Bartlett: This defendant, Smilack, while charged with the same crime or misdemeanor that the others are, is in somewhat of a different situation. He seems to be the financial agent for the communists’here in this county, and he has given large sums of money from time to time. He has been milked, in other words, by some of these fronters for the outfit, to the extent that his own friends and family think that he has been made a sucker of.

“Several years ago his mother met a very violent death here in this county; an intruder going in the back door of the home, and the lady being later discovered in a brutally murdered condition, and, of course, there was a great amount of questioning of this defendant and other members of the family, as well as neighbors, etc. And it is the feeling of people that know the man well that he cracked up under those circumstances, and that he has never been the same since then. He has had psychiatric treatment from time to time since that tragedy, and yesterday his father called me and asked to come to my office to talk to me and I told my secretary to return the call and tell the father he could come to see me any time he saw fit. Shortly afterwards he appeared in my office, and he and I visited quite a while, because he came from Dunkirk, Indiana, within eight miles of where I was born, and we knew many people in common, people that he had worked with and he dealt with in the past. And while we were in the course of that visit, one of the secretaries in the office came and said the son of Mr. Smilack, who was in my office, was there and wanted to see his father, and it was very important. His father asked me if I would let him in, and I said, ‘I would rather finish my conversation with you, since you asked to come to see me, but you go on out and see what your son wants, and then come back. ’ So, after a while he came back and said the son was raising Cain, that he heard the father was there, and it was reported to me by someone in the prosecutor’s office after-wards that he raised Cain that his father was there, and that he shouldn’t tell me anything about the death of his mother or the fact that he was given care on certain visits from time to time, and that he said the father ought to be declared crazy. Now, this old man, the father, is a seventy year old man, and no more a communist than the court itself. A fine gentleman. He came back in and he said he would rather be called crazy than be called a communist. And at this time I am asking that the defendant, Oscar Smilack, be committed to Lima hospital for thirty days for observation and report as to his mental condition, and that the report made by them be placed in our file here in this case.

“Mr. Dworken: Of course, I object to that, Your Honor.

‘ ‘ The court: The court, in passing upon the request of the prosecuting attorney on the facts which he has brought to the attention of the court, it seems that this is clearly indicated, and the court will therefore—

“Mr. Dworken: Your Honor, may I say something?

“The court: Why, yes.

“Mr. Dworken: I spent a day with this man recently. He was at that time with his wife and two boys, and I discussed this entire controversy, and I must say, from the conversation that I had with him, that he is just as sane as I am, and probably as Your Honor is. The man knows what he is talking about. He is standing on his rights. The question that, was put to him, or the questions that were put to him, which he refused to answer, and, legally, he wasn’t compelled to answer them, and in addition to that there was no order by anybody, the chairman included, whereby he was ordered to answer the questions, and, Your Hon- or—

“The court: Oh, no, let’s don’t go into that. That is beside this point on which you are before me.

“Mr. Dworken: Now, I don’t think that Your Hon- or should go ahead and cause this man any more difficulty by ordering him to be examined at the Lima State Hospital, or at any other hospital. If Your Honor wants to have this man examined, we will have him examined by a competent physician right here, and either submit the report to you—

“The court: No, it is the order of the court that he be committed for a thirty-day period to the Lima State Hospital for observation and report, and an entry may be drawn accordingly.

“Mr. Bartlett: It will be filed, and he will go forthwith?

“The court: Yes.

“Mr. Bartlett: The sheriff’s office will take the man, remand him to the jail, where he will be transferred to Lima.

“The court: That is right, yes.

‘ ‘ Mr. Dworken: Just a moment, Your Honor. Isn’t this man allowed to have someone else examine him?

“The court: No, sir. I am sending him to Lima where we have psychiatrists that are trained and fully capable of making a proper examination, and reporting it to the court.

“Mr. Dworken: I would like to state he hasn’t shown any—

“The court: That is all. Call your next case.

“Mr. Dworken: He made no statement — he made no statement to—

‘ ‘ The court: Who was that ?

“Mr. Dworken: The defendant is here with me—

“Mr. Bartlett: Smilack the defendant.

“The court: No, now that is all. I have ordered the man committed, and an entry may be drawn accordingly. Call your next case.

“Mr. Bartlett: That is all, Your Honor.

‘ ‘ Mr. Dworken: Your Honor, can’t he have time in which to straighten out his affairs ?

‘ ‘ The court: I have ordered him to Lima.

“Mr. Dworken: All right.

“The court: That is all. Call your next case.

“Mr. Bartlett: The call list is completed, Your Honor. ’ ’

From the return of the superintendent of Lima State Hospital to the petition it appears that Oscar Smilack is restrained in said hospital by said superintendent under a mittimus issued by the Common Pleas Court of Franklin County in said cause, which, omitting caption and clerk’s certificate, reads as follows:

“This day this cause came on to be heard and the defendant, Oscar Smilack, being in court and represented by counsel, it was suggested to the court that the defendant is not now sane, the court upon consideration thereof and being fully advised in the premises finds that the defendant should be committed to the Lima State Hospital, there to remain under observation.

“It is therefore ordered, adjudged and decreed that the sheriff of this county forthwith safely convey the defendant, Oscar Smilack, to the Lima State Hospital and there commit him to the care, custody and control of said hospital, he, the said Oscar Smilack, there to remain under observation for a period not exceeding one month, pursuant to the provisions of Section 13441-4, of the General Code of Ohio.

“JohnR. King,

“Judge”

“Approved:

“/s/ Ralph J. Bartlett

“Ralph J. Bartlett

‘ ‘ Prosecuting Attorney (Seal) ’-’

The indictment pending against the said Oscar Smilack in the Court of Common Pleas of Franklin County is predicated upon the provisions of Section 12845, General Code, reading as follows:

“Section 12845. Whoever, having been subpoenaed or ordered to appear before, either branch of the General Assembly, or before' a standing or select committee of the General Assembly, or either branch thereof, fails so to do, or,, having, appeared, refuses'to answer a question pertinent to the matter under inquiry, or to produce, upon reasonable notice,.'books, papers or documents in his possession or under his control, pertinent thereto, shall be fined not less than one hundred dollars, nor moré than five.thousand dollars.”

It will be noted that the offenses charged in the indictment under the provisions of said section are misdemeanors and the penalty prescribed is a fine and not imprisonment.

While the mittimus above mentioned recites that Oscar Smilack is committed to the care, custody and control of the Lima State Hospital and there to remain under observation for a period not exceeding one month, pursuant to the provisions of Section 13441-4, General Code, the mittimus is also based upon the provisions of Section 13441-1, General Code.

The pertinent parts of said sections read as follows:

“Section 13441-1. If the attorney for a person accused of crime pending in the Court of Common Pleas, whether before or after trial suggests to the court that such person is not then sane, and a certificate of a reputable physician to that effect is presented to the court, or if the grand jury represents to the court that any such person is not then sane or if it otherwise comes to the notice of the court that such person is not then sane, the court shall proceed to examine into the question of the sanity or insanity of said person, or in its discretion may impanel a jury for such purpose. * * *”

“Section 13441-4. In any case in which insanity is set up as a defense, or in which present insanity of the accused is under investigation by the court or jury, the court shall have power to commit the defendant to a local insane hospital, or the Lima State Hospital, where the defendant shall remain under observation for such time as the court may direct not exceeding one month; * *

The petitioner contends that his commitment to the Lima State Hospital for observation, as prescribed therein, is void for the reasons:

1. That Sections 13441-1 and 13441-4 are in pari materia and should be read and construed together and, so read and construed, contemplate that before any person against whom an indictment is pending is committed to Lima State .Hospital for observation he shall have notice that his present insanity is under investigation by the court in which said indictment is pending and be afforded an opportunity to be heard and to present evidence upon the issue of his present insanity.

2. That unless so construed the provisions of said Sections violate the provisions of the 14th Amendment to the Constitution of the United States that no state shall “deprive any person of life, liberty, or property, without due process of law. ’ ’

3. That as shown by the transcript of the proceedings of the Common Pleas Court of Franklin County, which is in evidence in this case, petitioner was not given notice that his present insanity was under investigation by the court and was not afforded an opportunity to be heard or to present evidence upon the issue of his present insanity.

In considering these questions the following matters must be kept in mind:

1. While the Common Pleas Court is a court of general jurisdiction in criminal matters, it does not have general jurisdiction to commit to state hospitals either for observation or for definite or indefinite confinement, persons under indictment for the commission of offenses, and its exercise of jurisdiction in the respects mentioned is special and limited.

2. A distinction between a court of general jurisdiction and a court exercising limited or special jurisdiction is that in the first instance the judgment in and of itself presumes that all facts necessary in order for it to render a particular judgment existed and were duly found, and that every step necessary has been taken to give it jurisdiction. 21 Corpus Juris Secundum, 149, Courts, Section 96.

3. On the other hand, there is no presumption of jurisdiction where a court of general jurisdiction exercises, in a special statutory manner or otherwise than according to the course of the common law, special statutory powers not belonging to it as such court and not within its ordinary jurisdiction, since, under such circumstances the court stands, with respect to the special powers exercised, on the same footing with courts of limited and special jurisdiction, and the record of such court must show upon its face, a full compliance with the requirements in order to obtain jurisdiction. 21 Corpus Juris Secundum, 152, Courts, Section 96; Wilson v. Lasure, 36 Ohio App., 107, 172 N. E., 694; Lewis v. Reid, 117 Ohio St., 152, 157 N. E., 897; In re O’Leary, 32 Ohio Law Abs., 122.

4. Therefore the presumption as to the jurisdiction of a court of general jurisdiction is rebutted and overcome only by recitals in the record affirmatively showing lack of jurisdiction, and on the other hand no presumption exists whatever in favor of the jurisdiction of courts of limited or special jurisdiction. 21 Corpus Juris Secundum, 153, Courts, Section 97.

5. The judgments of courts of special and limited jurisdiction may be examined thoroughly for the facts and evidence necessary to sustain them, as their decisions do not furnish evidence of themselves to show jurisdiction and its lawful exercise and every requisite for either'jurisdiction or its lawful exercise must appear upon the face of the proceedings or they are a nullity. 21 Corpus Juris Secundum, 19, Courts, Section 2.

6. Excess of jurisdiction may be defined as the state of being beyond or outside the limits of jurisdiction as distinguished from the entire absence of jurisdiction. Although the proceedings are within the general jurisdiction of the court, its judgments are void with respect to a particular case because the conditions which alone authorize the exercise of the jurisdiction in that particular case are wanting, and hence the judicial power is not in fact lawfully invoked. Thus, a court may have jurisdiction of the subject matter and the party but its acts and order may nevertheless be in excess of its jurisdiction, as being something which it has no power to do, and in this manner any act of the court in violation of statutory requirements may be considered to be in excess of jurisdiction. 21 Corpus Juris Secundum, 37, Courts, Section 25.

7. Under commitment for observation to a state hospital the person committed is restrained of his liberty to the same extent he would be if committed to a jail or other public institution as penalty for an offense.

We turn now to a consideration of the provisions of Sections 13441-1 and 13441-4, General Code, upon which the commitment of petitioner is based.

It will be noted that Section 13441-1 prescribes the different sets of circumstances which must exist to warrant a Common Pleas Court in proceeding to examine into the question of the sanity or insanity of a person accused of crime pending in such court, while the pertinent provisions of Section 13441-4 prescribe that in any case in which insanity is set up as a defense, or in which present insanity of the accused is under investigation by the court or jury, the court shall have power to commit the defendant to a local-hospital for insane, or the Lima State Hospital, where the defendant shall remain under observation for such time as the court may direct, not exceeding one month.

It will be noted that the authority of the court to commit for observation exists only when insanity is set up as a defense or when present insanity is under investigation by the court or jury.

In the instant case such power could exist only if the present insanity of the accused is under investigation by the court, as insanity was not pleaded as a defense and a jury was not impaneled for the purpose of conducting such investigation.

The word, “examine,” as used in Section 13441-1, and the word, “investigation,” as used in Section 13441-4, each contemplates a judicial- inquiry.

“A ‘judicial inquiry’ investigates, declares, and enforces liabilities as they stand on present or past facts and under laws supposed already to exist. Ordinarily it involves a hearing and all that is thereby implied, including the reception of testimony. Action resulting from an inquiry judicial in nature must rest on legal evidence and be justified by established facts.” 50 Corpus Juris Secundum, 568.

The word, “examination,” as used in connection with legal proceedings is commonly understood to mean an examination under oath or affirmation. 32 Corpus Juris Secundum, 1147.

As the words, “examination” and “investigation,” are used in the sense mentioned the “present insanity of the accused” would not be “under investigation” until some evidence had been introduced before the court upon the subject, and until some substantial evidence was introduced tending to prove that a reasonable doubt exists as to the sanity of the accused the court was without authority to make such commitment.

A judicial investigation or examination of necessity implies, the same as if written in the statute, that the accused should have notice thereof and an opportunity to offer such evidence as he might desire to offer and to be heard upon his own behalf. ■

The judicial examination or investigation, in the particulars above set forth, and notice to the accused of such examination or investigation and an opportunity afforded to him to offer evidence and be heard upon his own behalf were essential conditions precedent to the court exercising its special and limited jurisdiction of committing the accused for observation.

None of these essential elements appear in or from the judgment entry committing the accused, and the fact of the nonexistence of such essentials appears from the transcript of the proceedings had in the Common Pleas Court, which transcript is in evidence in this court.

It is the duty of this court, if possible, to construe statutory provisions in such a manner as not to contravene Constitutional provisions of the United States and of this state.

The construction we have adopted provides the accused with notice and opportunity to be heard and consequently the statutes, as so construed, do not contravene the provisions of the 14th Amendment to the Constitution of the United States, above mentioned, which would be the case in the event that they should be construed as not providing for notice to the accused and opportunity to be heard. Walters v. McKinnis, 221 F., 746.

For the reasons mentioned, the Common Pleas Court was without jurisdiction or authority in law to commit the accused without giving the accused notice that the court was proceeding to examine into his sanity or insanity and without affording the accused the opportunity to present evidence and be heard upon his own behalf, and said commitment to the Lima State Hospital is void.

The petitioner will therefore be ordered discharged from the custody of Dr. B. E. Bushong, Superintendent of Lima State Hospital, and by him caused to be delivered into the custody of the sheriff of Franklin County, Ohio, to be held to answer said indictment, and subject to the orders of the Common Pleas Court of said county, and for further proceedings according to law.

It is further ordered that the state of Ohio pay the costs of this proceeding in the manner provided by law.

Judgment accordingly.

Middleton, P. J., and Ahl, J., concur.


author: Per Curiam.

text:
    Koehler, Appellee, v. Honerkamp, Appellant.
    (No. 7583
    Decided June 9, 1952.)

      Messrs. Cors, Scherer, Hair & Hartsock, for appellee.

      Messrs. Dickerson, Hermerding & Ahrens, for appellant.
   Per Curiam.

This is an appeal from a judgment for the plaintiff, rendered upon a verdict for $10,000 in his favor, which he alleged was due him for producing a ready, willing, and able buyer to whom the defendant sold his business.

In his amended petition, the plaintiff alleged that the defendant owned the capital stock of Honerkamp Motor Sales, Inc., an Ohio corporation; that on or about the. firgt day of April, 1950 (this date was later changed to March 16, 1950), the defendant entered into an oral agreement with the plaintiff, whereby the plaintiff was an agent to sell “the business herein-before referred to and known as Honerkamp Motor Sales, Inc., for and on behalf of the defendant, at a price of about $250,000, for which the defendant agreed to pay to the plaintiff a commission of $10,000, and that the plaintiff thereupon entered into negotiations with Walter E. Schott,” which resulted in Schott purchasing the business.

The plaintiff alleged also that he was excluded in the final negotiations, and, for that reason, did not know the price or the terms of the sale. However, he alleged that he had done all that he was required to do and prayed for judgment for $10,000.

The defendant entered a general denial.

It developed at the trial from the testimony of the plaintiff that in 1950, up to March 15th, he had been in the employ of Walter E. Schott and that it was as Schott’s agent and upon his express direction that plaintiff initiated negotiations with the defendant for the purchase of his business.

Early in February 1950, the plaintiff obtained an offer from defendant to sell his business to Schott for $250,000, which he later indicated he would reduce by $7,000 or $7,500. This was reported to Schott by the plaintiff, but Schott said the price was too high. This rejection was reported to the defendant about the middle of February 1950. Upon being informed of the rejection the defendant said, “Skip it, forget about it.” And this was reported to Schott, his employer, by the plaintiff.

Prior to March 15th, the plaintiff was a salaried employee of Schott. On that date his salary ceased, but it is clear that thereafter for some time there was some sort of a business relation existing between them. The plaintiff was furnished with or permitted to occupy as an office a room in a building owned by Schott, and devoted a part of his time to selling time-recording clocks, for-which he received a commission from Schott.

While the plaintiff was a salaried employee of Schott, he made a survey of several automobile agencies located,in Cincinnati for his employer, and reached the conclusion that upon the cessation of his employment by Schott he would engage in the business of a broker, selling, among other things, automobile agencies, using the information that he had acquired in making the investigation for Schott.

Sometime near March 24, 1950, the plaintiff called at defendant’s place of business and told tbe defendant that he had severed business relations with Schott and discussed with him the best method of selling his business. He recommended to the defendant that he try to sell the material, equipment, and stock for cash and rent the real estate upon which the business was conducted on a long-term lease, as under that plan the purchaser would not be required to pay so large an amount in cash at once, and also there would be a saving in income taxes. He testified that he convinced the defendant of the merits of the plan, whereupon the defendant asked: “ ‘How much would a deal like that cost me?’ I said, ‘You know when we sell businesses it is usually a ten per cent commission on businesses, in fact, there is ten per cent on the business form we use.’ He said: ‘That is a lot of money.’ I said, ‘Yes, I know that.’ I said: ‘I tell you what I will do, if we can come up with a deal, I will do it for $10,000. ’ He looked at me and he says, ‘O.K.’ ” The defendant imposed the condition that the plaintiff was not to make this offer to anyone unless and until the defendant gave his consent. He gave his consent that the plaintiff might approach one Schain and submit the proposal to him. The plaintiff did so, but no agreement was reached with him.

While he was negotiating with Schain he also talked to Schott. This occurred about the first of April, 1950, apparently in a conversation about business matters generally. On this subject, the conversation ran: “Walter I think you missed a good bet in not going further into that Honerkamp deal. He said, ‘ Charley, it is too much money. It is out of the question.’ I said, ‘Ed, in the meantime I have been in touch with Mr. Honerkamp and I have gotten Andy Schain interested in the agency out there.’ He said, ‘You have? ’ I said, ‘Yes,’ and I said, ‘I have also been able to talk with Mr. Honerkamp and convince him that maybe a long term lease arrangement with that building out there and buying the physical assets, such as equipment and so forth might work out a pretty good deal. I think you passed a good deal up.’ He said, ‘I didn’t know anything about that. Why didn’t you tell me about it?’ I said, ‘You have been away. I haven’t seen you, and that is the story out there.’ He said, ‘Gosh, I would be very much interested in that.’ ”

Upon Schott’s suggestion that they call on defendant, he called defendant by telephone and said to him: “We have got Mr. Schott showing a lot of interest in this; he just asked me if I couldn’t call you and make arrangements to meet you.” To this, the defendant answered, ‘ ‘ Sure, come on out. ’ ’

The plaintiff testified that as a result of this conversation, he and Schott went to the place of business of Honerkamp Motor Sales, Inc., consulted with the defendant, inspected the establishment and discussed the possibility of making a sale of the business with a long-term lease of the building, but no agreement was reached.

The defendant left for Florida the next morning after this meeting and did not return until April 23rd. While defendant was in Florida, Walter Schott, Jr., told the plaintiff his father was going to Florida and asked the plaintiff for defendant’s address which he gave him. The plaintiff telephoned to the defendant in Florida and told him that Schott, Sr., was in Florida, had asked for his address, and might call on him. He also told him of his continuing conversations with Sehain and that Schain had asked him to request the defendant not to do anything or close the deal until they could have another meeting. He also testified that “there were two after it and one of them ought to surely take it.” To this the defendant said, “O.K.” However, Schott, Sr., did not call upon the defendant in Florida.

After the defendant’s return from Florida, the plaintiff had no further conversation with him relative to Schott as a prospective purchaser, and learned of the sale to Schott only after the event. Two of Schott’s, associates did talk to him about the defendant’s business. The plaintiff testified to incidents which he construed as indicating a studied avoidance of him by the defendant and Schott.

The defendant testified that it was expressly stated that the plaintiff was to receive no compensation from him in the event of a sale to Schott.

The important provisions of the sale to Schott were agreed to about May 1, but evidently there were some details that were not concluded until near July 1, when the documents were executed.

An examination of the documents discloses that the contract contains none of the terms of a long-term lease as contemplated by the plaintiff and defendant. On the contrary, it discloses a rather studied effort to give to.the defendant a cash payment about equal to defendant’s original proposal made to Schott through the plaintiff while plaintiff was without doubt Schott’s agent and not defendant’s agent.

The contract, as agreed upon by the defendant and Schott, without any participation on the plaintiff’s part, provided that defendant would sell all the capital stock of Honerkamp Motor Sales, Inc., an Ohio corporation, for the sum of $200,000, as follows: $20,-000 upon the execution of the contract; $100,000 ten days thereafter, and $80,000 upon clearance by the Internal Revenue Department of payment of all taxes. Those were the main terms, but there were many provisions of a minor nature, one of which was that defendant would not engage in a competing business for five years within a distance of 50 miles. At the same time another contract was entered into, whereby the buyer employed the defendant for a period of two years at a salary of $1,000 per month,, and a payment of $10,000 at the expiration of the contract of employment. The buyer also agreed to employ the defendant’s son for two years at a salary of $275 per month.

It will be noted that plaintiff had no exclusive agency to sell the defendant’s business. It will be noted also that he had no general authority to go into the market seeking a buyer. In fact, his only authority was to negotiate with Schain in an effort to sell to him on a long-term lease basis. Before he could submit any proposal to any other prospective buyer it was necessary for him to obtain defendant’s consent. In other words, his agency was special, and his authority had to be conferred in each instance.

It should be noted also that in the beginning the plaintiff was the prospective buyer’s agent and approached the defendant in that capacity. Had Schott accepted at that time the offer which the plaintiff induced the defendant to make, or as modified, the plaintiff certainly would have had no basis for a claim for a commission against the defendant. The question is whether the plaintiff, by ceasing to be Schott’s agent and obtaining the special authority to sell, is now entitled to a commission from the seller on a sale that resulted from negotiations initiated by him as agent for the buyer.

As already noted, the plaintiff alleged that he produced a ready, willing, and able purchaser and founds his right to a commission thereon. However, for those facts to be effective to fasten a liability upon the defendant it must appear that the purchaser was produced during the term of the broker’s employment and while acting for and on behalf of the seller. If the purchaser was produced before the commencement of his employment by the buyer, and while he was acting for the seller, it is manifest that no obligation of the seller is shown.

We have already analyzed the evidence in this record and have failed to find any substantial evidence from which a reasonable inference could be drawn that plaintiff and defendant either expressly or impliedly agreed that the plaintiff should have a commission on a sale to Schott on terms resulting from modification of the original proposal, brought about by negotiations between defendant and Schott, in which plaintiff did not participate.

We have concluded that the court erred in overruling the defendant’s motions for an instructed verdict and for judgment. It is therefore unnecessary to pass upon the other assigned errors.

For these reasons, the judgment is reversed, and final judgment entered for the defendant.

Judgment reversed.

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


text:
    In re Estate of Julian: Department of Taxation, Appellant, v. Argus et al., Exrs., et al., Appellees.
    (No. 7588
    Decided June 30, 1952.)

      Mr. C. Wm. O’Neill, attorney general, and Mr. J. M. Burtch, Jr., for appellant.

      Mr. Edward J. Dempsey, Jr., and Mr. Harley 8. Hamilton, for appellees.
   Per Curiam.

Gertrude E. M. Julian, having transferred certain property to The National City Bank of New York on January 7, 1926, in trust for certain purposes, reserving the power to amend the trust instrument, exercised that power on the 16th day of March 1949, by amending Article I of the trust agreement. She died on March 25, 1949, testate, and her will was duly admitted to probate in Hamilton county, Ohio, on April 7, 1949.

We are not advised as to the terms of her will.

From the application for determination of inheritance tax and the entry fixing the inheritance tax, we learn that the net market value of her estate was $667,114.71. Of this estate, there are five beneficiaries receiving a total of $23,133, clearly subject to inheritance tax, and so charged by the Probate Court. The residue of the estate was divided among 13 institutions, all of which were held exempt from the inheritance tax.

The Department of Taxation of Ohio excepted to the exemption from taxation of the succession of $196,-699.90 to The American Humane Society and a succession of the same amount to the Archdiocese of Cincinnati. No exception was taken to the exemption of The American Red Cross. We are not advised by the record as to the basis of its exemption from the succession tax. We assume that the department was convinced that their purpose was exclusively public charity.

The Probate Court overruled these exceptions and certified the original determination to the auditor of Hamilton county. It is from that order that this appeal was taken.

It appears from the bill of exceptions (the certificate to which, however, is not signed by the trial judge) that at the hearing the Department of Taxation abandoned its exception to the exemption of the succession of The American Humane Society. No contention is made on this appeal that such succession is taxable. That reduces the controversy to the issue of whether the gift to the Archdiocese of Cincinnati is subject to inheritance tax. The executors of the estate and the archdiocese contend that it is exempt under the provisions of Section 5334, General Code, and that the Probate Court did not err in so holding. On the other hand, the Department of Taxation contends that the purpose of the gift is so broad that the fund could be dedicated to nonexempt purposes, precluding the application of the exemption provisions of Section 5334, General Code. To be specific, the department’s contention is that the exemption applies only to public charity, whereas the trust purpose is not so limited, and would permit the use of the fund for religious purposes, which are not exempt. That section, in part, provides:

“The succession to any property passing to or for the use of the state of Ohio, or to or for the use of a municipal corporation or other political subdivision thereof for exclusively public purposes, or public institutions of learning or any public hospital not for profit, within this state, or institutions of learning or any public hospital not for» profit within any state of the United States, which state does not impose an inheritance, estate or transfer tax on property given, devised or bequeathed by a resident thereof to an institution of learning, or any public hospital not for profit, within this state, or to or for the use of an institution for purposes only of public charity, carried on in whole or in substantial part within this state, or to an institution or organization not for profit and for the exclusive purpose of printing and distributing the Holy Bible, shall not be subject to the provisions of the preceding sections of this subdivision of this chapter.”

In the trust agreement, the testatrix, after providing that all taxes of every description should be paid out of the principal of her estate, and that there should be no apportionment of any part of such payment among the gifts, and after making certain specific gifts, some of which were exempt from and some subject to the inheritance tax, proceeded to dispose of the residue as follows:

“(1) One-third thereof to The American Humane Association, Albany, New York, to be used by it for the benefit of animals.

“(2) One-third thereof to The American National Red Cross of Washington, D. C., to be used by it for its general purposes.

“(3) One-third thereof to the Archdiocese of Cincinnati, in the state of Ohio, an unincorporated religious society, and the Roman Catholic Archbishop of Cincinnati and his successors in office, title and trust, as trustees for said archdiocese, to be used for the support and furtherance of such charitable, benevolent, scientific and educational works and activities of said archdiocese as may be desiginated by said archbishop of Cincinnati, his successors in office, title and trust, as such trustee.

“If at the time of the settlor’s death only two of said three charitable organizations shall be in existence and able and willing to accept the gift above made in this subdivision (h), said trustee shall transfer, pay over and distribute said rest, residue and remainder of said principal to such two organizations in equal shares, that is to say one-half thereof to each of them.

“If at the time of the settlor’s death only one of the three charitable organizations above named in this subdivision (h) shall be in existence and able and willing to accept the gift above made in this subdivision (h) said trustee shall convey, transfer and pay over the whole of said rest, residue and remainder of said principal to that one.

“If none of said three charitable organizations shall then be in existence and able and willing to accept the gift above made in this subdivision (h), then said trustee shall distribute said principal to and among such charitable corporations and/or purposes * * * and in such shares, amounts and proportions, as said trustee may in his absolute discretion deem proper. The determination of said trustee in this regard shall be binding and conclusive upon all persons and corporations having or claiming to have any interest in this trust fund, and shall fully protect said trustee with respect to any action taken by it pursuant to such determination. Without in any way limiting the absoluteness of the discretion thus conferred upon said trustee, the settlor requests that in selecting the charitable corporations and/or purposes to which said principal shall be distributed, said trustee shall endeavor to make such distribution in such manner as in its judgment will most nearly serve to carry out the general charitable objects of the settlor, as above expressed in this subdivision (h), and that approximately one-third thereof be devoted to promoting humane treatment of animals, that approximately one-third thereof be de-' voted to purposes similar to some part of the work now done by the Red Cross, and that approximately one-third thereof be devoted to support and furtherance of charitable, benevolent, scientific and educational works and activities in the area now embraced within the Archdiocese of Cincinnati. Without limiting the absoluteness of the discretion above conferred upon the trustee by this paragraph the settlor requests the trustee to give consideration to the advisability of distributing some part of the fund to American Friends Service Committee, of Philadelphia, Pa., to be used by it for its general activities in the United States. ’ ’

There were other provisions explanatory of her reasons for not making any relative a beneficiary, followed by her declaration that “her chief interest is in charity. ’ ’

It will be noted that this gift is to the Archdiocese of Cincinnati, in the state of Ohio, an unincorporated religious society, and the Roman Catholic Archbishop of Cincinnati and his successors in office as trustee for said archdiocese “to be used for the support and furtherance of such charitable, benevolent, scientific and educational works and activities of said archdiocese as may be designated by said archdiocese.”

We are of the opinion that the fact that the trustee of this fund is the archbishop of the archdiocese has some significance in determining the meaning of the words declaring the purpose of the trust, at least to the extent of limiting it territorially. It is true that the archdiocese is simply a geographical term indicating the boundaries within which the objects of the decedent’s bounty were to be applied, but it is also true that within the territory the archbishop administers to the religious, spiritual, and. bodily welfare of the parishioners therein located. There is no limitation by virtue of his occupancy of the position of archbishop that would preclude the occupant of that position from accepting this trust and executing it in strict accordance with the intent of the creator of the trust as expressed in the trust instrument. However, we do not conceive, and it is not claimed, that the manifold activities of the archbishop in other relations overrides or qualifies the trustor’s purpose, albeit his qualification to carry out that purpose was without doubt the reason for his selection.

Counsel agree that a gift to a church would be subject to an inheritance tax. Therefore, the fact that the trustee is the archbishop of the archdiocese, certainly is no basis for exemption. Neither is it a basis for imposing a tax. It is the purpose of the decedent that is decisive. Her declared purpose was to create a trust for the support of such charitable, benevolent, scientific, and educational works and activities of the archdiocese as might be designated by the archbishop.

It seems to be agreed that if this purpose establishes an exemption under Section 5334, General Code, it must be under the provision exempting successions to “public charity” only.

On behalf of the Department of Taxation it is contended that the purpose is broader and narrower than public charity only in the following respects:

(1) It permits the use of the fund for such charitable purposes as the archbishop may in his unfettered discretion select, limited only by the requirement that the object shall be within the archdiocese, thereby authorizing private as well as public charity; and (2) it also authorizes the use of the fund for any charitable purpose which includes religious purposes, the succession for which are not exempt from taxation under Section 5334, General Code.

In passing upon these claims, we believe it is agreed that as uniformity in taxation is the just and equitable rule, and, therefore, the general rule to be striven for, all departures therefrom must be strictly construed and no exemption from taxation can be claimed in the absence of a clear enactment to that effect. In 51 American Jurisprudence, 503, Section 495, it is said:

“It is the general policy of the law to make all taxable property share the common burden of taxation, and any claim for exemptions asserted by the owner, other than a public governmental body, must rest upon some definite provision of law granting him a tax exemption, and must be made in the advancement of the interests of the whole people. The presumption is against any grant of tax exemption, and any grant, whether by contract or by statute, is to be strictly construed against the taxpayer; the burden is upon him to point out a valid provision of the law supporting his claim. The law does not imply the tax exemption in favor of a private owner.” Ib., 522.

And, at 526, Section 524, the rule for construing exemptions is stated as follows:

‘ ‘ The fundamental theory of the tax structure of the several states is that all taxable property should bear its fair share of the cost and expense of government * * *. When the statute purports to grant an exemption from taxation, the universal rule of construction is that the tax exemption provision is to be construed strictly against the one who asserts the claim of exemption * * *.”

Reverting to Section 5334, General Code, as containing the exception to the general rule of taxability of successions to property, provided by Section 5332, General Code, let us consider its terms in the light of this statutory rille of interpretation.

The language is: “An institution for purposes only of public charity.” It is urged that this gift comes within that description. That this gift is for a charitable purpose is conceded by the Department of Taxation. That it is for purposes only of public charity is denied. Now what is meant by public charity? In 10 American Jurisprudence, 588, Section 5, it is said that “A public charity .is one in which there is a benefit to be conferred on the'public at large, or some portion thereof, or upon an indefinite class of persons.” The fact that it is for the benefit of a class does not destroy its public character “as long as the classification is determined by some distinction which involuntarily affects or may affect any of the whole people, although only a small number may be directly benefited.” Ib., 589, Section 5. That is the requirement as to the public nature of the charity exempted by Section 5334, General Code.

Now what about the purpose? It must be for charity. It is conceded that thq term as used in Section 5334, General Code, does not include religious purposes, and it would seem that the express provision exempting from taxation successions to institutions not for profit, and for the exclusive purpose of printing and distributing the Holy Bible would lend color to that interpretation.

So much for the statutory rule.

Now, reverting to the terms of the trust instrument, let us consider whether the trust thereby created answers the statutory description of the succession that is exempted from the inheritance tax.

The gift is to the archdiocese and Boman Catholic Archbishop of Cincinnati, as trustee, and the draftsman expressly described the archdiocese as “an unincorporated religious society, ’ ’ thereby making it clear that the decedent was conscious of the religious character of the society selected by her to administer her benefaction. She then specifically stated the purpose to be for the support and furtherance of such “charitable, benevolent, scientific and educational works and activities of said archdiocese as may be designated by said Archbishop of Cincinnati.”

(1) Is this language of the trust instrument broad enough to satisfy the requirement that the charity to be exempt must be public? In construing the language of the trust instrument on this subject, it seems to us that the character and customary activities of the trustee in administering charities must be taken into consideration. She knew of the methods pursued in the archdiocese. She knew that the archbishop could not as such archbishop bestow charity without having regard to the broad principles of universal benevolence thereby promoting the general welfare and excluding all considerations that are personal and private. She must be taken to have known that these were bestowed upon an indefinite number of persons, without regard to race, color, religion, or condition, limited only to those within the 19 counties of southwestern Ohio embraced within the archdiocese.

It seems to us that the objects of the trust construed in the light of the functions of the archbishop are broad enough to bring the charity within the meaning of public, as that term is used in Section 5334, G-eneral Code. Thus construed, it provides for infiltration into the class of beneficiaries of all those within the archdiocese found to be in need of charity. It seems to us that any deviation from that basis of administration would be a violation of the spirit and intent of the creator of the trust.

(2) We now come to a more critical analysis of the language declaring the purposes of this trust. They are four — charitable, benevolent, scientific, and educational. No contention is made that the last three purposes would prevent exemption from the inheritance tax, but it is strongly urged that the first purpose-charitable — includes religious activities and, that, for that reason, the general rule of taxability must be applied. So the problem finally resolves itself into a determination of the meaning of the word, “charitable, ’ ’ as used in this instrument. In defining a charity, it is said in 10 American Jurisprudence, 585, Section 3, that “* * * the most comprehensive and carefully drawn definition is that it is a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, by bringing their hearts under the influence of education or religion, by relieving their bodies from disease, suffering, or constraint, by assisting them to establish themselves for life, or by erecting or maintaining public buildings or works or otherwise lessening the burdens of government. ’ ’

Perhaps the Restatement is the most authoritative work on the subject of trusts. In 2 Restatement of the Law of Trusts, Section 368, it is stated:

“Charitable purposes include

“(a) the relief of poverty;

“(b) the advancement of education;

“(c) the advancement of religion;

“(d) the promotion of health;

“(e) governmental or municipal purposes;

“(f) other purposes the accomplishment of which is beneficial to the community. ’ ’

In determining the meaning of this trust, we are admonished by all the authorities that it should be strictly construed and its meaning not enlarged by implication. It must be clear that the tax exemption is required before it is allowed. In the light of this rule, it seems to us we must hold that this succession is subject to the inheritance tax. The ordinary meaning of charitable includes the religious purpose. We find no language restricting that meaning. On the contrary, it seems to us that the selection of the archdiocese and the archibishop and his successors in trust as the trustee and the express description of the trustee as a religious society militates against any interpretation excluding religion from the charitable purpose.

For these reasons, we hold that the succession is subject to the inheritance tax.

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

Judgment reversed.

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


author: Matthews, J.

text:
    Ratcliffe et al., Appellants, v. Indian Hill Acres, Inc., Appellee.
    (No. 7635
    Decided November 17, 1952.)

      Messrs. Barnhorn & Barnhorn, for appellants.

      Messrs. Taft, Stettinius & Hollister, for appellee.
   Matthews, J.

This is an appeal from a judgment for defendant in pursuance of a verdict returned in an action, brought by plaintiffs as owners against the defendant as an adjoining owner of land, for causing mud and seeds of weeds to be carried from its land in surface water accumulated in a natural watercourse and deposited in an artificial pond on plaintiff’s land, into which the stream emptied.

The bill of exceptions does not purport to contain any of the evidence upon which the verdict was rendered. It is limited to bringing upon the record five special charges, the general charge, and certain recitals, the legal sufficiency of which, as a predicate for a review of the alleged errors, is in dispute. These general recitals are that the cause came on to be heard on its merits on the amended petition, the answer thereto and the reply to the answer and “the issues made by said pleadings and was submitted to a jury” and that at the trial “the opposing parties presented, offered and caused to be introduced evidence to maintain such issues on their respective parts.” After the conclusion of the evidence, the court, on defendant’s request, gave the special charges to which the plaintiffs excepted, and, after arguments to the jury, instructed the jury generally, to which plaintiffs likewise excepted.

In this condition of the record, counsel urge that this court must assume that the verdict was predicated upon the admissions contained in the answer, and on those admissions alone. In view of the general recitals in the bill of exceptions that the cause came on to be heard on the designated pleadings and the issues made thereby, and that the parties introduced evidence to maintain (that is sustain, uphold, or support) those issues, we are of the opinion that we must test the correctness of the special jharges and the general charge on the assumption that the evidence justified the submission to the jury of material issues of fact, if any, raised by the pleadings. That, in effect, is the record which the trial judge has certified to this court.

Counsel cite Elser v. Parke, 142 Ohio St., 261, 51 N. E. (2d), 711, as requiring a bill of exceptions containing all tbe evidence to enable a reviewing court to pass upon tbe validity of a charge. We do not think the court intended to or did lay down any such universal rule. It is true that the court stated in the syllabus that: “Where the correctness of the charge of the court to the jury is dependent upon the evidence and the bill of exceptions does not contain all of the evidence a reviewing court cannot say that portions of the charge to the jury which are complained of were not properly given. ’ ’ But the syllabus must be interpreted against the background of the facts. The Court of Appeals had reversed a judgment in an action for damages on account of personal injuries received in a collision between two automobiles on a public highway. The reversal was on the ground that: “Upon the evidence submitted upon rehearing the two-issue rule is not applicable and the giving of Section 6310-22 of the General Code was prejudicially erroneous.” It was that judgment which was under review by the Supreme Court. An examination of the opinion and the record of the case in the Supreme Court discloses that there were two partial bills of exceptions before the Court of Appeals, neither of which purported to contain all the evidence. There was no certificate of the trial judge as to the nature or evidential tendency of the omitted evidence. The relevancy of Section 6310-22, General Code, depended on whether there was evidence tending to prove that defendant was turning at the time of the collision. Manifestly, in the absence of a complete bill of exceptions or a certificate of the trial judge that there was or was not such evidence, the court could not say that prejudicial error, or any error, was committed in the giving of the charge.

That the Supreme Court did not intend to declare that in all cases a complete bill of exceptions containing all the evidence is necessary to secure a review of the validity of a charge is made manifest by what it said on page 272: “Assuming that the present case presents an exception to the general rule,” and then the court proceeded to pass on the question of whether the alleged error would be prejudicial to the appellant on that assumption.

While there is some uncertainty in the law as to the sufficiency, under certain circumstances, of a partial bill of exceptions to permit an appellate court to review certain alleged errors, we are of the opinion that an analysis of the statutes and the cases found in 2 Ohio Jurisprudence, commencing on page 566, and especially sections 340 and 362, justifies our conclusion that the validity of an instruction may be tested on a bill of exceptions, such as is found here. Whether a bill containing only the charge would be sufficient, we are not required to decide.

We, therefore, turn to the pleadings to determine what issues are presented, to sustain which, the parties introduced evidence.

In their amended petition, after describing their property, the plaintiffs alleged that when they became the owners thereof, it was improved by a residence, an accessory outbuilding, and a large artificial lake, fed by spring water from beneath and by surface water flowing into it from all directions; that this lake was created by the construction of a barrier or dam at the lower level on plaintiffs’ land;'that during their ownership, the property had remainéd unoccupied; and that during their ownership they had altered and improved the residence and the land to make it a suitable home.

They alleged also that the defendant was the owner of adjacent land, the natural slope of which was downward toward and across the plaintiffs’ land, so that surface water flowed therefrom upon and across their land in a well-defined stream and emptied into the artificial pond or lake on plaintiffs ’ property.

The plaintiffs alleged also that they maintained the pond for the purpose of fishing, watering of live stock and beautification of the real estate.

The plaintiffs alleged further that the defendant “conducted various and extensive grading and excavating operations upon said lands and in so doing caused the said stream of water to become polluted with mud and other impurities which were carried onto plaintiffs’ land and deposited in plaintiffs’ above described lake. As a direct consequence of defendant’s said operations and of the manner of said operations, the plaintiffs’ lake became filled with mud, seeds and impure substances to the extent of almost its entire depth. ’ ’

The action was for damages-. It will be observed that there is no allegation of negligence or unreasonable or improper manner of using the defendant’s property.

In its answer, the defendant admitted the ownership, location, and description of the real estate, and the existence of the stream and artificial lake, as alleged by the plaintiffs, and then alleged that during the fall and winter of 1946 it had done some minor grading of its real estate, that the grading was conducted in the usual and reasonable way for the reasonable development of its land, and that it did not increase or decrease the drainage area or the flow of water into the stream which flowed into plaintiffs’ lake.

The plaintiffs, by reply, placed the affirmative allegations of the answer in issue. Construed most favorably, and perhaps too liberally in favor of the plaintiffs, the issues of fact raised by these pleadings are:

(1) Did defendant cause mud, seeds, and impurities to enter the stream that emptied into the plaintiffs’ artificial lake, and thereby cause the mud, seeds, and impurities to be deposited in the pond?

(2) Was the grading operation conducted in a usual and reasonable way in the reasonable development of defendant’s land?

(3) What damage did the plaintiffs’ suffer?

The trial court has certified that the parties introduced evidence in support of all these issues. The correctness of the charges must be determined on that basis. Then the further question presents itself that, assuming error in the charge, whether on the pleadings and the evidence the plaintiffs have established a right to have these issues submitted to a jury, whether, in other words, a finding of all of them in plaintiffs ’ favor would justify the entering of judgment for them. We are of the opinion that this further question is dis-positive of this case. .The defendant raised this question by demurrer to the plaintiffs’ amended petition. We are of the opinion that it should have been sustained. However, the same fundamental question is raised by a consideration of the whole record. That question is whether the owner of land has a right to use it in the usual, reasonable, and customary way, notwithstanding some incidental damage may result to adjacent land by reason of such use. Stated differently, must there be an allegation and proof of failure to exercise reasonable care in the manner of exercising the rights of proprietorship and in anticipating that harm would result to the adjoining land to justify a recovery?

In 1 American Jurisprudence, 505, Section 3, it is stated:

“It is not to be inferred from this statement of the rule that the law forbids any and all uses of property which may cause loss, damage, or inconvenience. Every person is entitled to make a reasonable use of his property. Therefore, while the rightful use of one’s own land may not infrequently have some effect to diminish the value of an adjoining estate, or to prevent its being used with the comfort which might otherwise have been anticipated, this is damnum absque injuria, as to which the law cannot interfere.”

At page 506, ibid., it is said:

“The test of the permissible use of one’s own land is not whether the use or the act causes injury to his neighbor’s property, or whether the injury was the natural consequence, or whether the act is in the nature of a nuisance, but the inquiry is, was the act or use a reasonable exercise of the dominion which the owner of property has by virtue of his ownership over his property, having regard to all interests affected, his own and those of his neighbors, and having in view also, public policy.”

Substantially the same statement of the law is found in 1 Ohio Jurisprudence, 413 et seq.

In the exercise of the rights of ownership, one of the usual and reasonable activities is the control and disposition of surface water and the facilitation of its final discharge in accordance with the contour of the watershed, and so long as no unreasonable or negligent act is committed by the owner of the dominant estate, the servient estate has no cause of action, notwithstanding he may suffer some incidental damage or his burden be somewhat increased. Mason v. Commrs. of Fulton Co., 80 Ohio St., 151, 88 N. E., 401, 131 Am. St. Rep., 689, 24 L. R. A. (N. S.), 903; McCoy v. Rankin, 42 N. E. (2d), 234.

There is no allegation that the defendant diverted onto plaintiffs’ land water that would not naturally reach it. Cases imposing liability under such circumstances are therefore inapplicable. This case is limited to a consideration of rights and liabilities of dominant and servient owners in surface water flowing into a natural stream from its natural watershed.

In 56 American Jurisprudence, 833, and, 834, Section 415, it is said:

‘ ‘ The use of a stream by upper owners for mill purposes, for irrigation, watering cattle, and the manifold purposes for which they may lawfully use it, will tend to render the water more or less impure. Cultivating and fertilizing the lands bordering on the stream, and in which are its sources, and their occupation by farmhouses and other erections, will unavoidably cause impurities to be carried into the stream. As the lands are subdivided and their occupation and use become multifarious, these causes will be rendered more operative, and their effects more perceptible. The water may thus be rendered unfit for many uses for which it had before been suitable; but so far as that condition results only from reasonable use of the stream in accordance with the common right, the lower riparian proprietor has no remedy. When the population becomes dense, and towns or villages arise along its banks, the stream naturally and necessarily suffers still greater deterioration. Highways crossing it, or running by its side, with their gutters and sluices discharging into it their surface water collected from over large spaces, and carrying with it in suspension the loose and light material that is thus swept off, are abundant sources of impurity, against which the law affords no redress of action.”

Stewart v. Birchfield, 15. Cal. App., 378, 114 P. 999, is dissimilar in its facts to the case at bar, but it seems to us to involve the same principle. The parties owned adjoining lots, the soil of which was sandy and dry. The wind blew over defendant’s land in the direction of plaintiff’s land. The defendant cleared his land of brush, and leveled it, and exposed and loosened the soil, resulting in quantities of soil being carried by the wind onto the plaintiff’s land and deposited thereon in mounds. The court held that the plaintiff had no cause of action, and at page 381, quoting from Sherman and Redfield on Negligence, the court said: “ ‘Every man may use his own land for all lawful purposes to which such lands are usually applied, without being answerable for the consequences, provided he exercises ordinary care and skill to prevent any unnecessary injury to the adjacent landowner. It is not, therefore, necessarily negligence on the part of a landowner to make a use of his land which inevitably produces loss to his neighbor; for as he may wilfully adopt such a course, and yet not be a wrongdoer, much less is he liable for unintentionally doing that which he has a right to do intentionally. ’ ’ ’

While there are several assignments of error, the only one argued in the brief or orally relates to the following statement in the general charge:

“It is a general principle of law that every person may make such use as he will of his own property but it does not limit the use of one’s property so as not to injure the property of others.”

That portion of the general charge was immediately followed by the further statement: “The reasonableness of the use and the convenience of the owner has been the test.” Following that statement the court proceeded to set forth the specific circumstances under which the plaintiffs would be entitled to recover, and the circumstances under which the defendant would be entitled to a verdict. We are of the opinion that the charge considered as an abstract statement of the law is free of error — certainly free of affirmative error.

However, as already noted, we are of the opinion that the issues presented by the pleadings were immaterial, that the demurrers should have been sustained,' and, therefore, that no prejudicial error could have resulted to the plaintiffs.

There is another reason, which, in our judgment, precludes the plaintiffs from recovering. It is alleged by the plaintiffs that this lake was created by the building of a dam or barrier upon their land across the stream. They thereby checked or stopped the normal flow of the water and caused it to overflow its banks and spread over their land. By thus interrupting, slowixig down, or stopping the normal flow of the water, they caused the mud and impurities to be precipitated. While the plaintiffs had a right to use the water to create the pond, provided they permitted it to reach the lower riparian owner in substantially normal flow, they cannot complain of damage resulting to them from their own act. See Rau v. Minnesota Valley Rd. Co., 13 Minn., 442.

For these reasons, the judgment is affirmed.

Judgment affirmed.

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


author: Skeel, J.

text:
    National Cash Register Co., Appellee, v. Malitz, d. b. a. Cedar Loan Co., Appellant.
    (No. 22698
    Decided March 2, 1953.)

      Mr. Richard H. Woods, for appellee.

      Mr. Myron D. Malitz, for appellant.
   Skeel, J.

This appeal comes to this court on questions of law from a judgment entered in the Municipal Court of Cleveland for the plaintiff. The original action was for the replevin of an adding machine. The defendant does not here contest the right of the plaintiff, as owner, to possession of the adding machine for the reason that no specific claim of right to possession is set up in the answer. The controversy here presented concerns the cross-petition filed by the defendant seeking damages for alleged acts of negligence on the part of the plaintiff in failing to report the theft of the adding machine for 21 months after it was stolen.

The cross-petition alleges that the defendant is a licensed pawnbroker in the city of Cleveland; that there is in Cleveland an agreement between the pawnbrokers and the police department that the police department will keep an up-to-date list of all property reported lost or stolen; that the pawnbrokers, before receiving in pawn any doubtful article of merchandise, will first check with the police department to see whether such property is on such list; and that such practice is designed to apprehend criminals, to recover lost and stolen property, and to prevent loss to the pawnbrokers.

It is alleged that plaintiff was familiar with this practice but negligently failed to report the theft of the adding machine; that when it was brought to the defendant’s place of business by one giving his name as Frank Payne, who sought to pawn it, the defendant checked with the police department and, finding that the adding machine had not been reported stolen, loaned $38 to Payne, receiving the machine as security for the loan. When Payne defaulted on the loan contract, the defendant conducted a private sale of the adding machine, claiming to act under the provisions of Section 6341-1, General Code, and purchased it himself for $38. Thereafter he resold it for $100 and when this action was commenced he was compelled.to return the purchase price. It is alleged that the plaintiff, having knowledge of the commercial practice between the police and the pawnbrokers, owed the duty to report the theft of the adding machine and, having negligently failed to do so, is now liable for defendant’s loss of $100, that is, for the $38 loaned to Prank Payne, together with $10.44 interest, and $51.56 profit.

Plaintiff demurred to the cross-petition.

The court, upon hearing, sustained the demurrer and the defendant not desiring to plead further, judgment was entered for the plaintiff on its claim for possession of the adding machine, and for the plaintiff on defendant’s cross-petition. The defendant claims the following errors:

1. In sustaining plaintiff’s demurrer to defendant’s answer and cross-petition.

2. In rendering final judgment in favor of the plaintiff.

The counterclaim of the defendant is (as is set forth in his brief) based on the doctrine of equitable estoppel. That is, that by the failure of plaintiff to report the adding machine stolen to the police, the plaintiff is estopped from making a claim of ownership thereto. If this be true, then defendant’s action could not be one for damages. Such a claim would be a defense to plaintiff’s right of possession of the adding machine, and if the plaintiff had taken possession upon giving bond as required by Section 12056, General Code, then upon judgment for the defendant and the refusal of the plaintiff to return the machine to the defendant, the defendant would be entitled to damages based on the value of the machine, but in no event to exceed his possessory interest- It should be noted that to come to this result, the claim of estoppel would be a defense as provided by statute and a counterclaim would be wholly unnecessary. The facts pleaded and the relief prayed for, therefore, do not invoke the doctrine of equitable estoppel.

The counterclaim also attempts to make out a case for damages on the ground of negligence. We, therefore, are faced with the inquiry as to whether or not the facts alleged in the cross-petition state a cause of action in negligence. Does the owner of property who is informed of the manner in which pawnbrokers do business owe a duty to make public reports of stolen property by notifying the police so that those who deal with the thief or those who acquire possession from or through the wrongful acts of the thief will have notice of the owner’s rights in the property? We know of no such rule of law.

The gasoline credit card and charga plate cases referred to by the defendant give no support to his cause. Certainly one who is given possession of a token for purposes of identification, which token is, to the knowledge of the possessor, the sole means by which he is to be identified by the issuer in extending credit to the holder, owes an absolute duty to notify the issuer when such token has been lost or stolen. But that is far different from the facts in this case where no act of the plaintiff on which the defendant had the right to rely induced him to loan money on the security of plaintiff’s stolen adding machine.

In the case of Second National Bank of Toledo v. Walbridge, 19 Ohio St., 419, 2 Am. Rep., 408, the court held, as shown by the syllabus:

“1. A warehouse receipt is not, in a technical sense, like a bill of exchange, a negotiable instrument;' it merely stands in the place of the property it represents; and a delivery of the receipt has the same effect in transferring the title to the property as the delivery of the property.

“2. A warehouseman, on application of the owner, by mistake issued to the latter, at different dates, two warehouse receipts for the same property, the last of which the owner assigned for value to the plaintiff, to whom the defendant, the warehouseman, on demand delivered the property. Afterwards, the assignee of the first receipt recovered the property in replevin from the plaintiff. The plaintiff instituted the present suit to recover from the defendant the value of the property. Held:

‘ ‘ There being no privity of contract between the defendant as maker and the plaintiff as assignee of the receipt, the defendant, in the absence of all fraud, is not estopped from showing as against the plaintiff the mistake in the giving of the last receipt, as a defense to the action.”

At page 426, the court said:

“In the present case, it is to be observed, that we have, in this state, no statute affecting the rights of the parties; and, in the absence of such statute, we are of opinion that the defendant is not estopped from showing, as against the plaintiff, the mistake in the issuing of the receipt as a defense to the action.”

While the rule of this case has been changed by the Uniform Warehousemen’s Act, we know of no statute which comes to the aid of the defendant in the case now before us. We must conclude, therefore, that the defendant’s cross-petition does not state a cause of action.

There is still another reason why, from the face of the record, the defendant is not in a position to press his counterclaim in this case. Section 6341-1, General Code, provides the manner in which a pawnbroker may proceed to sell the property pawned, upon default. Its provisions require a fair sale to the highest bidder. It must be evident that a sale of the property here involved by the defendant to himself for $38, the exact amount of the loan without interest, and the resale of the property shortly thereafter for $100, and his present claim for damages alleging $100 to be the reasonable value of the adding machine, show that a fair sale was not conducted. Phillips v. Ideal Securities, Inc., 51 Ohio App., 241, 200 N. E., 527.

For the foregoing reasons, the judgment of the Municipal Court is affirmed.

Judgment affirmed.

Hurd, P. J., and Kovachy, J., concur.


text:
    Ehrlich, Appellant, v. Willis Music Co., Appellee.
    (No. 7554
    Decided May 19, 1952.)

      Mr. Robert A. Goldman, for appellant.

      Messrs. Aronoff & Young, for appellee.
   Matthews, J.

In his amended bill of particulars, the plaintiff alleged that he purchased an Admiral television set and paid the purchase price of $23.17 in full therefor, that the defendant refused to deliver said television set to him, and that, by reason thereof, he had been damaged in the sum of $274.95, for which he prayed judgment.

The defendant answered, denying that it had sold to the plaintiff a television set and alleging that if its employee accepted $23.17 and gave a receipt in full, it did so under a mistake of fact and law, resulting from the misrepresentation of the plaintiff.

It appears from the bill of exceptions that on Sunday, the 30th day of September, 1951, the plaintiff read in the Cincinnati Enquirer an advertisement as follows:

“Television

“ ‘16’ Admiral Console T. V.

“$22.50

“Including federal tax and parts warranty “The Willis Music Co.

“124 E. 4th St.”

It is not contended that this advertisement constituted an offer. It was no more than an invitation to patronize the store. I Restatement of the Law of Contracts, 32, Section 25, comment a.

The plaintiff was present at the defendant’s store when it was opened the following morning and entered before all the personnel had arrived and before they were organized for business. He was the first customer to enter. A salesman having charge of the television department arrived at 9:17 a. m., and seeing the plaintiff asked him what he wanted. The plaintiff showed him the advertisement and told him he would like to see the Admiral. The salesman told him there was no Admiral in that store, but that the defendant had such a set in another of its stores in Covington, Kentucky.

The plaintiff was asked this question on cross-examination: “You were already told it was a mistake at that time, weren’t you?” And he answered: “The gentleman had said it was a mistake but he would stand behind it as 1 told you. ’ ’

The evidence is clear that the plaintiff is an intelligent, educated man, with considerable business experience. He knew that $22.50 was not one-tenth the price of an Admiral television set of the type described. His haste in seeking to take advantage of the advertisement justifies the implication that he knew there was some mistake — and the salesman expressly told him that there had been a mistake.

There is no evidence that the salesman had authority to fix the price, other than the fact that he was in the store, clothed with apparent authority to sell in the ordinary course of business. That ordinarily would be sufficient.

There is other evidence that tends to prove those with whom the plaintiff dealt had authority, but, as already stated, we are concerned on this appeal in determining whether there is substantial evidence to support the court’s conclusion of lack of authority.

The question is whether that apparent authority arises when the customer suspects, or has reasonable grounds to suspect a lack of authority, and is also told that the salesman is acting on an apparent authority created by a mistake.

In 1 Restatement of the Law of Agency, 159, Section 65, comment a, it is said: “Unless otherwise agreed, authority to sell does not include authority * * * to make a gift” of the subject matter.

While this case does not involve the authority of a selling agent to make an outright gift, it-does present a case of an agent disposing of his principal’s property for less than one-tenth of its market value to one who has full knowledge of the inadequacy of the price, and in addition knows that the agent is acting under the belief that compliance with a mistake in the advertisement requires his action. It seems to the court that the same principle that excludes a selling agent from making a gift of the subject matter precludes the plaintiff from deriving any advantage against the defendant under, the circumstances here presented.

That there are or may be limitations upon the apparent authority of an agent is clear from the authorities.

In 2 American Jurisprudence, 80, Section 99, it is said:

“Accordingly, the general rule is that one who deals with an agent, knowing that he is clothed with a circumscribed authority and that his act transcends his powers, cannot hold his principal; this is true whether the agent is a general or a special one, for a principal may limit the authority of one as well as of the other. Whether one who dealt with an agent had notice of limitations on his authority is ordinarily a question for the jury.”

And, at page 85, Section 103:

“The apparent or implied authority of an agent cannot be so extended as to permit him to depart from the usual manner of accomplishing, what he is employed to effect. Nor can he enlarge his powers by unauthorized representations and promises. Of course, the principal, is not bound where the agent exceeds the scope of his apparent authority and his want of authority is known to the person dealing with him, or if the third person actually knows, or should know, the limitations.of the agent’s authority.”

We also quote the rule on this subject from 2 Corpus Juris Secundum, at page 1188, Section 92:

“In so far as a third person has notice or knowledge at the time of dealing with an agent of the inconsistency between the powers which the agent has and those which he assumes to exercise, the authority of the agent is deemed not to extend beyond that actually conferred upon him, to the exclusion of whatever apparent authority might exist in the absence of such notice or knowledge.”

And, further, at page 1189:

‘ ‘ The third person need not know or be charged with notice of the precise limits and extent of the agent’s authority or of the exact tenor of the qualifying instructions; whenever, under all the facts or circumstances such third person knows, or has good reason for knowing or believing, that an act undertaken by the agent or a matter with which he assumes to deal is in excess of the authority conferred, such an act or matter falls altogether beyond his authority of whatsoever character or kind as to the third person.”

The facts and circumstances of which the plaintiff had knowledge at the time would justify the reasonable conclusion that he should have been warned thereby that the apparent authority of the agent did not extend to a sale for one-tenth of the market value.

We are of the opinion that it was a question of fact whether únder the circumstances the selling agent had authority to bind the defendant to make this sale, and that there is substantial evidence in support of the trial court’s conclusion that the defendant was not bound.

For these reasons, the judgment is affirmed.

Judgment affirmed.

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