source: Caselaw Access Project

author: By McNAMEE, J:

license: Public Domain

text:
    OPDYKE, d. b. a. LEDOGAR-HORNER CO., Plaintiff-Appellants, v. SECURITY SAVINGS & LOAN CO. et al., Defendants-Appellees. JERGER, Plaintiff-Appellant, v. SECURITY SAVINGS & LOAN CO. et al., Defendants-Appellees. SABIN, Plaintiff-Appellant, v. SECURITY SAVINGS & LOAN CO. et al., Defendants-Appellees.
    Ohio Appeals, Eighth District, Cuyahoga County.
    Nos. 21963, 22014, 22016.
    Decided February 19, 1951.

      Pennell, Carlson & Reese, Lockwood Thompson, Cleveland, for plaintiffs-appellants.
    M. B. & H. H. Johnson, Cleveland, H. S. Duffy, N. Lancione, Columbus, for defendants-appellees.
   OPINION

By McNAMEE, J:

These appeals on law and fact apparently are the first cases of their kind to come before a reviewing court, if indeed they are' not the first such cases to be instituted in any court. The reports of decided cases in Ohio and elsewhere disclose no previous attempt by dissenting shareholders of a State Savings and Loan Association to enjoin the consummation of a plan of the majority to convert the corporation into a Federal Association. Hopkins Savings & Loan Assoc. v. Cleary, 296 U. S. 315, involved actions instituted by the State of Wisconsin to prevent the conversion of three State chartered Associations into Federal Associations without the consent of the State, but as expressly noted in the opinion of the Supreme Court, the dissenting shareholders were not parties to those actions.

Not only is this litigation primordial, but it presents important questions touching the subjects of statutory construction and corporate and constitutional law.

The defendant, Security Savings & Loan Association, was organized in 1916. By the year 1949 it had grown to substantial size and strength. The capital of the company on August 8, 1949 amounted to approximately $200,000.00 consisting of more than 1800 shares of permanent capital stock and about 47 shares of running stock. Each share was of the par value of $100.00. The deposits of the Association were in excess of $7,343,000.00, the major portion of which were insured by the Federal Deposit Insurance Corporation.

According to plaintiffs, the book value of each share, including reserves and undivided profits, was about $372.00. Per share earnings for the year 1948 were $22.79 and for the first six months of 1949 the corporation earned $13.39 per share. Notwithstanding its substantial earnings in those years the corporation was unable to pay dividends in excess of $3.00 per share. This limitation of distributable earnings resulted from the regulations of the Federal Deposit Insurance Corporation which required the maintenance of specified ratios between deposits and capital and between a total of capital and reserves as against deposits, which the corporation was unable to maintain. Because the ratios were below the designated proportions, the company was required to allocate twenty percent of its earnings to reserves before computing interest on savings accounts. Thus, in 1948, the corporation’s earnings before computing interest on deposits, were in excess of $177,000.00. Twenty percent of this amount, or approximately $35,000.00 was allocated to the reserve fund and after crediting interest on deposits there remained but $7200.00 of net profits available for distribution as dividends. Of this amount $6000.00 was paid in dividends and the balance of $1200.00 placed in the. undivided profits fund.

In the eight years prior to 1948, the Association paid dividends in varying amounts between $1.00 to $2.50 per share. For several years prior to 1940 no dividends were paid. The market price of the stock ranged from a low of $15.00 per share in the 1930’s to a high of about $100.00 per share except in the case of occasional sales at a higher price made under the influence of special factors.

Under date of July 15, 1949, the Security Savings & Loan Association notified its stockholders of a special meeting to be held on August 8, 1949, for the purpose of voting upon a plan to convert the corporation to a Federal Savings & Loan Association. Among other things, the plan provided for converting each share Of $100.00 par value stock into a with-drawable share account in the amount of $135.00. At the time of the notice of the special meeting, plaintiff Opdyke, in case No. 21963, was the owner of 182 shares of stock. Between the date of the notice of the meeting and August 8, 1949, Opdyke and his partner in the brokerage business, Schulte, doing business as Ledogar-Horner Company, purchased an additional 407 shares with their proxies, at a price of $160.00 per share. These shares were purchased pursuant to a special offer made by plaintiffs to all stockholders. During this period also, plaintiffs in Case No. 21963, opposed the plan of conversion in letters sent by them to all stockholders

At the meeting on August 8, 1949, more than fifty-one percent of the shares cast were voted in favor of the plan of conversion. Plaintiffs in case No. 21963 then commenced suit in Common Pleas Court.

In their petition, plaintiffs set forth three causes of action, in the first of which they asked the Court to enjoin the consummation of the plan on the ground (a) that the plan is inequitable; (b) that it was fraudulently promoted; (c) that it is illegal.

In their second cause of action, plaintiffs as dissenting shareholders, seek in the alternative to obtain the fair cash value of their shares, claiming to be entitled thereto under the provisions of §8623-72 GC and §693-1 GC.

The third cause of action avers that if relief be denied the plaintiffs on the first two causes of action, then the plan of conversion, and §9660-2 GC under which it is sought to be accomplished, are unconstitutional.

A separate appeal in case No. 22014 is taken by plaintiff, Etta Jerger, who is the owner of 21 shares of stock issued to her father in 1917 and 1918, the title to which passed to plaintiff by inheritance in 1939. In appeal No. 22016, plaintiff, Orrin Sabin, is the owner of five shares of stock acquired by purchase in 1930. In the last two mentioned cases, the plaintiffs make no claim similar to those set forth in the first cause of action in Case No. 21962, but as dissenting shareholders they seek to obtain the fair cash value of their stock and assert further that if such relief be denied the plan of conversion must be held unconstitutional, as constituting a taking of plaintiffs’ property without due process of law and impairing the obligations of their contracts as shareholders.

Counsel for the respective parties have submitted extensive and well reasoned briefs which have been supplemented by oral argument. A brief, amicus curiae, has been filed by counsel for the Ohio Savings & Loan League and we have been favored with copies of the able and exhaustive opinión of the trial judge. Being in agreement, generally, with the conclusions reached by the Common Pleas Court, we deem it unnecessary to duplicate here the detailed exposition of facts and arguments, the copious citation of authorities and the quotation of lengthy pertinent statutes that appear in the opinion of the trial judge.

In respect of the claim of fraud that is made in the first •cause of action in case No. 21963, it is sufficient to observe that we find the claim to be without substance. There is no evidence that any shareholder who voted for the plan was misled by the alleged misrepresentation or suppression of facts.

The claim of illegality is likewise devoid of merit. The procedure adopted to accomplish conversion was in strict compliance with the provisions of §9660-1 GC and §9660-2 GC, and the applicable provisions of the Home Owners Loan Act of 1933 and the rules and regulations of the Federal Savings and Loan System.

Sec. 9660-2 GC, provides in part:

“2. At such meetings a resolution to convert as aforesaid shall be adopted as provided in the Home Owners Loan Act of 1933 and amendments thereto.”

The pertinent provisions of the Home Owners Loan Act of 1933 are set forth in U. S. C. A. Title 12, Sections 1461 to 1468, inclusive and paragraph (i) of Section 1464 reads:

“(i) Any member of a Federal Home Loan Bank may convert itself into a Federal Savings and Loan Association under this chapter upon a vote of fifty-one percentum or more of the votes cast at a legal meeting called to consider such action; but such conversion shall be subject to such rules and regulations as the Board may prescribe and thereafter the converted association shall be entitled to all the benefits of this section and shall be subject to examination and regulation to the same extent as other associations incorporated pursuant to this chapter.”

Whatever may be thought of the provisions permitting a conversion upon an affirmative vote of fifty-one percent of the votes cast at a meeting rather than requiring a majority or higher percentage of the outstanding shares, this court cannot disregard the plain and obvious import of legislative language that is clear and free from doubt. Although the vote at the meeting of August 8, 1949 was relatively close, it is beyond dispute that more than fifty-one percent of the votes cast were registered in favor of conversion and that result cannot be changed by assuming the plan of conversion to be the equivalent of other corporate changes authorized under different sections of the General Code which require a higher percentage of votes of the outstanding shares as a prerequisite to their consummation.

Sec. 9660-2 GC authorizes a domestic savings and loan association to do that which can be accomplished under no other section of the General Code. That certain aspects of conversion as there authorized bear marks of similarity to other corporate changes such as reorganization, sale of assets, amendments to corporate charters or dissolution, is no 'warrant for considering a conversion to be the equivalent of any of these other procedures.

A reorganization as authorized by §893-1 GC which requires a vote of fifty-one percent of the outstanding stock contemplates the reorganization of an association that will thereafter continue in business under a State charter. This is true also of §8623-15 GC, authorizing under the General Corporation Act. In a conversion under §9660-2 GC there is no sale of assets as contemplated by §8623-65 GC. The converting association as a corporate entity receives no consideration for its assets from the successor Federal institution. The requirements of §8623-65 GC of an affirmative vote of two-thirds of the outstanding shares can have no application here. Nor is conversion tantamount to a dissolution of the State Association within the meaning of that term, as used in the corporation’s constitution which requires a vote of fifty-one percent of the outstanding stock to effect a dissolution. It is true that §9660-2 GC provides that upon its conversion to a Federal Savings & Loan Association the

“corporate powers of the association under the laws of this state shall cease to exist * * * and that its shares of incorporation shall be deemed to be cancelled and annulled.”

Sec. 9660-2 GC, also provides that the powers and authority of the Superintendent of Building & Loan Associations over and with respect to the property of a converted corporation shall cease. These provisions are efficacious to terminate the jural existence of a State corporation, but they do not operate to cause its functional demise. The corporation continues in business as a Savings and Loan Association. With the permission of the State that created it, and for the benefit of the people thereof, the Association continues to serve its original purpose under the aegis of the Federal Government. The Association as converted, continues to live and function. This is not dissolution. That term imports an end to corporate life together with a definitive cessation of corporate activity.

Plaintiffs assail the plan of conversion as being inequitable to the stockholders in that it provides that each shareholder shall receive a withdrawable share account in the converted association in the amount of $135.00 for every share of stock held in the State institution. The officers of the Security Savings & Loan Association endeavored to obtain a conversion price of $150.00 per share but the Federal Home Loan Bank refused to approve a price in excess of $135.00. The association as converted will be a mutualized Federal Association with no shareholders and a withdrawable share account in the amount of $135.00 is the equivalent of a deposit in that amount.

The conversion price of $135.00 per share was determined by the Federal Home Loan Bank as a result of allocating five percent of the corporation’s total assets to reserves and two percent of the assets to the undivided profits fund. Plaintiffs complain that this method was arbitrary and fails to give effect to the true value of the stock as reflected by its book value and potential earning power.

A Savings and Loan Association is a quasi-public institution engaged in the important business of receiving money on deposit. The interest of the depositors is paramount to that of the shareholders. Manifestly it was the duty of the Federal Home Loan Bank in approving the terms of a proposed conversion first to provide those financial safeguards best calculated to insure the safety and financial integrity of the converted association at all times. The Federal Home Loan Bank discharged its duty in this regard by providing for the allocation of assets to reserves and undivided profits in the indicated proportions. It has not been shown, nor is it claimed, that the percentage of assets allocated to reserves and undivided profits is unwarrantably high. Nor has it been demonstrated that the measure of financial safety thereby achieved can be maintained if the conversion price of the stock is increased above $135.00 per share.

In view of this, there exists no basis for a judicial determination of discrimination against the stockholders.

Plaintiffs’ claim that book valué and earning power of the stock are controlling factors in determining its value for purposes of conversion, is unsound. The book value per share as estimated by plaintiffs is more than $370.00. Their computation discloses also that included within this amount is a per share value of reserves in the amount of $178.35. These reserves, though substantial when computed on a per share basis, are insufficient to maintain the ratios between the reserves and deposits required by the Federal Deposit Insurance Corporation. Because of this there exists the necessity of allocating an unusually high percentage of annual earnings to the reserve fund. Under these circumstances the reserve fund which is designed primarily to afford depositor protection, is a sterile element of the book value of the stockholders shares.

If comparative tests have any probative value in determining the fairness of the conversion price of $135.00 per share, that figure must be considered in relation to dividends, both past and prospective. On this basis the conversion price of $135.00 is not only adequate but fairly may be considered as high. As compared with its market value over the years the price also must be considered as -fair. But of manifestly greater persuasiveness of the fairness of the conversion price are these factors: — the conversion price was determined in the first instance by a disinterested impartial government agency; — it was accepted as fair by the management of the Security Savings & Loan Association; — and in the face of vigorous opposition by the plaintiffs, its fairness was approved by those voting a majority of shares cast at the meeting of August 8, 1949. Whether continuance in business as a state charter would result in superior financial advantage to the shareholders can be of no concern to this Court. As. remarked in Cleveland Cliffs Iron Co. v. Anderson, 40 O. O. 130:

“Courts possess no veto powers over the purely business judgment of corporate officers or stockholders.”

We are unable to find that the plan is inequitable to the stockholders of The Security Savings & Loan Association.

As dissenting shareholders, plaintiffs in all three cases claim, to be entitled to the fair cash value of their stock, to be determined as provided in §8623-72 GC. This claim rests upon three grounds:

(1) That §9660-2 GC being silent on the subject of dissenting shareholders’ rights the court must apply either §693-1 GC, which expressly grants such rights upon the reorganization of a savings and loan association, or those subsections of the General Corporation Act that confer such rights upon the contingencies of major corporate changes.

(2) That the language of §9660-2 GC which preserves substantive rights generally must be considered as preserving to plaintiffs their appraisal rights as dissenting shareholders.

(3) Upon the facts of these cases, plaintiffs’ appraisal rights as dissenting shareholders exist independently of any statute. We shall consider these claims in the order stated.

(1) Sec. 8623-72 GC provides in part:

“Dissenting shareholders. Unless the articles otherwise provide, any dissenting shareholder who shall not have voted in favor of the proposals herein mentioned and by the provision of any section of this act (§8623-1 to §8623-188 GC) is entitled to relief when the Articles of Incorporation have been amended, or when all or substantially all of the property and assets of the corporation have been authorized to be sold, leased, exchanged, or otherwise disposed of, or when a consolidation or reorganization of the corporation has been authorized, shall be paid the fair cash value of his shares as of the day before the vote was taken authorizing any such action, excluding from such fair cash value any appreciation or depreciation in consequence of the consolidation or other matter which entitled him to such relief * *

It will be noted that the rights conferred by this section are limited to a dissenting shareholder who “by the provisions of any section of this Act (§8623-1 to §8623-138 GC) is entitled to relief” when one or more of the major corporate changes therein described has been effected. The provisions of the General Corporation Act referred to in §8623-72 GC are §8623-14 GC (Amendments), §8623-15(a) GC (Reorganization), §8623-65 GC (Sale of Assets), §8623-67 GC (Consolidation or Merger). In each of these sub-sections of the General Corporation Act there is an express and explicit grant of appraisal rights to dissenting shareholders. These sections, as well as §8623-72 GC, must be considered in the light of §8623-132 GC, which in part provides:

“Special provisions for Certain Corporations: in cases where special provision is made in the General Code for the incorporation, organization, conduct or government of any class of corporations, such special provision shall govern to the exclusion of the provisions of this act on the same subject, unless it clearly appears that the special provision is cumulative, in which case the provisions of this act also shall apply.” (Emphasis ours.)

Special provisions governing the incorporation, organization and conduct of savings and loan associations are set forth in the chapter including §9643 to §9674-3 GC. Included within this chapter are §9660-1 and §9660-2 GC which are the only sections of the General Code governing the conversion of state savings and loan associations into federally controlled institutions. These special provisions are not cumulative of any provision to be found in the General Corporation Act. Therefore, the legislative directive contained in §8623-132 GC applies and “such special provisions shall govern to the exclusion of the provisions * * *” of the General Corporation Act. This being so, the provisions of the General Corporation Act which authorize major corporate changes and expressly confer appraisal rights upon dissenting shareholders may not be considered in determining whether dissenting shareholders possess such rights under the exclusively applicable provisions of §9660-1 and §9660-2 GC.

Sec. 693-1 GC authorizes a reorganization of a savings and loan association and specifically provides for appraisal rights of dissenting shareholders to be exercised in the manner provided for in §8623-72 GC. As hereinabove noted, §693-1 GC, contemplates and provides for a reorganization of a savings and loan association that will continue to do business under a state charter.. This section can have no application to a conversion accomplished under §9660-1 and §9660-2 GC.

Sufficient to distinguish a conversion under §9660-1 and §9660-2 GC, from all other forms of corporate changes is the distinctive and unique result accomplished thereby. Conversion effects a transmutation of a state corporation to one under the exclusive control of the Federal Government. To accomplish this result the converting corporation must not only comply with State law but also with the laws of Congress and the regulations adopted pursuant thereto, and in addition, the approval of the designated Federal fiscal agency must be obtained. That a conversion may, in some of its characteristics and effects, bear a resemblance to a “reorganization” or a “sale of assets” may be of academic interest but this furnishes no warrant for importing into §9660-1 and §9660-2 GC the provisions of statutes that authorize essentially different corporate changes. Secs. 9660-1 and 9660-2 GC are complete, exclusive and controlling in all matters pertaining to the conversion of a State savings and loan association to a Federal association.

(2). Sec. 9660-2 GC outlines in detail the procedure necessary to effect a consummation of a plan of conversion. Among other things it provides that all of the property and assets of the State association shall, without conveyance, pass to and vest in the successor Federal corporation, subject to all liens against said property existing at the time of the conversion. This section also requires an assumption of all “debts and liabilities” of the State association by its Federal successor and further it is provided therein that:

“Nothing herein shall be held or construed to deprive any person, firm or corporation of any substantive right theretofore existing against such association, nor of the right to enforce the same by appropriate proceedings against the property and assets transferred by option of this paragraph, in the event and to the extent that such substantive right shall not be satisfied or adjusted by the successor federal savings and loan association in accordance with its charter or the resolution of assumption hereinbefore required.”

It is plaintiffs’ view that the “substantive rights” referred to in the above quoted language include appraisal rights of dissenting shareholders. But unless the quoted language be efficacious to confer, as well as to preserve, appraisal rights of dissenting share holders the argument must fail. It has been the settled and undeviating legislative policy of this state to confer dissenting shareholder rights in connection with a grant of authority to effect major corporate changes and to grant such rights in terms so explicit and clear as to admit of no uncertainty of legislative intent.

In the numerous sections of the General Code, including §693-1 GC, and relevant sub-sections of the General Corporation Act, as well as sections of the General Code relating to banks and railroads, there are express and definite provisions conferring appraisal rights upon dissenting shareholders. Not so with §9660-2 GC. This section makes no express reference to or mention of dissenting shareholders’ rights. This omission is significant. It is the basic canon of statutory construction that legislative intent is to be ascertained from the language used in the statute. “The law does not concern itself with the legislature’s unexpressed intention.” 37 O. Jur. 524, 525, Sec. 281.

The manifest legislative purpose expressed in the above quoted language of §9660-2 GC is the preservation of existing substantive rights against the converting corporation. No new substantive rights are created. Inasmuch as §9660-2 GC confers no rights upon dissenting shareholders, and no other statute authorizing a major corporate change has application, it must be held that “substantive rights” as those words are used in the preservation clause of §9660-2 GC do not include appraisal rights of dissenting shareholders.

(C) Plaintiffs in case No. 21962 urge with great vigor that appraisal rights of dissenting shareholders exist independently of statutes. In their reply brief they assert:

“It is plaintiffs’ contention that rights as dissenting shareholders existed before the passage of any statute thereof, exist parallel to the statutes at this moment, and must exist outside of the statute if the statutes can not be construed to-grant them.”

Plaintiffs claim too much. Before the enactment of statutes granting appraisal rights to the dissenting shareholders the rule of unanimity applied and it was within the competence of a dissenting shareholder to prevent a major corporate change except by unanimous action of the shareholders. In most-cases where the rule of unanimity was abolished by the legislature, dissenting shareholders were given rights to receive the fair cash value of their stock. Statutes permitting radical corporate changes by a vote of less than all the shareholders and conferring appraisal rights upon the dissenters became a part of the shareholders’ contract with the corporation.

A corporation is a creature of the state and the terms of a contract between a shareholder and a corporation must be such as are authorized by law. A dissenting shareholder’s rights like all other rights of shareholders, have their origin in the shareholder’s contract with the corporation. They derive from no other source. If statutory provisions authorizing major corporate changes confer no appraisal rights upon dissenting shareholders, such statutory provisions become a part of the shareholder’s contract and he is bound thereby. Appraisal rights of dissenting shareholders are not the inevitable concomitant of statutory authority to effect major corporate changes. The state may grant or withhold these rights, subject always to the constitutional guaranties that protect a shareholder against confiscation of his property or infringement of his vested rights.

In Fletcher on Corporations, Vol. 13, pages 263, 264, Sec. 5906, the author says:

“Of course a dissenter has no right to demand payment of the value of his stock where there is no statute providing therefor, if the act complained of was in all respects legal.”

See also: Mayfield v. Allen Ry. Gas & Elec. Co. 198 Ill. 525, 65 N. E. 100.

Ordinarily appraisal rights are granted to dissenting shareholders as a protection against the unjust use of the coercive power of the majority. In the case of a conversion from a State to a Federai savings and loan association, the reasons that warrant a grant of appraisal rights to dissenting shareholders are not present. In every other corporate change, except conversion under §9660-2 GC, the majority shareholders continue to be stockholders in the corporation effected or, as in consolidations or mergers the approving majority become shareholders in the new State corporation created thereby. In all such cases the minority stockholders have the option of remaining with the majority or withdrawing from the corporation and obtaining the fair cash value of their shares. But a much different situation obtains under a conversion from a State to a Federal savings and loan association. By virtue of such conversion, all shareholders, majority and minority alike, cease to be stockholders in the State association and do not acquire any equity interest in the successor Federal corporation. Because of this, provision is made in the Federal savings and loan association regulations for the-payment in withdrawable share accounts to all shareholders-of the State association of the present value of their stock.

Section 202.24 of the Federal Savings and Loan System. Regulations, provides in part: ■

“Plan of Conversion. The plan of conversion which shall be voted upon by the shareholders of the applicant must provide among other things as follows:
“(d) All holders of guarantee, permanent, reserve fund, or other nonwithdrawable capital stock shall be given share accounts of the Federal association of an aggregate value equivalent to the present value of their stock, after provision for appropriate reserves, as determined by the Board.”

In all cases where appraisal rights are granted to dissenting shareholders, the fair cash value of their shares is determined by an impartial board of appraisers as provided in §8623-72 GC. Where conversion is consummated under §9660-2 GC an impartial Federal fiscal agency determines the present value of the shares of all stockholders as directed in the Regulation quoted above, and this determination in turn is subject to the approval of the specified majority of shares.

In determining the fair cash value of shares under §8623-72 GC, the appraisers must ascertain their value as aliquot shares of a going business.

As stated in Condon v. Cleveland Cliffs Iron Co. Cuyahoga County Common Pleas Court No. 582990:

“The shares are to be valued as those of a going concern contemplating a continuance in business. While the intrinsic value of the shares is to be determined ‘from the assets and liabilities in the light of every factor bearing upon value’ this rule does not exclude consideration of general economic uncertainties and the risks and hazards peculiar to the particular business involved.”

The “present value” of a permanent stock in a converted savings and loan association is the going concern value of the shares after “appropriate provision” is made for reserves. The requirement in Sec. 202.24 of the Federal Savings and Loan Regulation that appropriate provision for reserves be made by the Board before determining the “present value” of the stock, is not in violation of the due process clause, nor does such requirement infringe upon any vested interest of a stockholder. In view of the quasi-public nature of a savings and loan association, it is within the power of the controlling Federal agency, acting with the consent of the State, to provide reserves in an amount- adequate to insure the economic stability of the converted association. A shareholder who -dissents from a plan of conversion may seek relief in a court of equity against an unfair valuation of the present -worth of his stock, resulting from an allowance of a disproportionate amount of the assets as reserves or other unfairness. But in view of the provisions for the ascertainment of the value of the shares of all stockholders by an impartial governmental agency, it is not difficult to understand the absence in §9660-2 GC of a provision granting dissenting shareholders additional appraisal rights.

The constitutional issue raised by plaintiffs requires but brief comment. Secs. 9660-1 and 9660-2 GC do not impair the obligations of plaintiffs’ contracts as shareholders, nor deprive them of their property without due process of law.

Article 13, Sec. 2 of the Constitution of Ohio provides:

“Corporation may be formed under general laws. But all such laws may, from time to time, be altered or repealed

This constitutional reservation of power is effective to permit amendments to corporate charters and to alter the terms of the contract between the shareholders and the corporation and the contracts between shareholders.

Allen v. Scott, 104 Oh St 436; Harbine v. Dayton Malleable Iron Co., 61 Oh Ap 1; Looker v. Maynard, 179 U. S. 46; Wright v. Minn. Mutual Life Ins. Co. 193 U. S. 657; Polk v. Mutual Reserve Fund L. Assoc. 207 U. S. 310.

The Security Savings & Loan Association was organized in 1916. Secs. 9660-1 and 9660-2 GC, were adopted by the General Assembly in 1934 as emergency legislation. The purpose of these sections is to enable State savings and loan associations to take advantage of the financial aid afforded such-institutions by the Federal Government. Plaintiffs in case-No. 21963 acquired their shares subsequent to the enactment. of §9660-1 and §9660-2 GC. They may not complain.

In Kirby v. Saginaw Hotels, 253 Mich. 308, the court said;

“Passing the question of the authority of the legislature"under its reserved power (Art. 12, Sec. 1, State Constitution) to alter, amend, repeal or abrogate all rights, privileges, or franchises of a corporation, we consider whether plaintiff may complain, having acquired her stock after the legislature had conferred on the corporation the right of consolidation. Under the weight of authority she may not.”

In case No. 22014, plaintiff’s predecessor in interest acquired his stock prior to the enactment of §9660-1 and §9660-2 GC. Orrin Sabin, plaintiff in case No. 22016, also acquired his stock prior to 1934. But by their contracts which included Art. 13, Sec. 3 of the State Constitution, these plaintiffs are bound by the amendment to the Corporation’s Charter effected by the enactment of §9660-1 and §9660-2 GC.

In Germer v. Gas & Oil Co., 60 W. Va. 143, the court said:

“The broad reservation to the legislature ‘to amend, alter or repeal’ the provisions of the statute under which corporations operate are as though written into every charter issued thereunder and every subscriber to the stock of any such corporation is charged with full knowledge of the provisions of the law then existing under which the legislature might, at any time, amend, alter or repeal the provisions of the law which were so made a part of the charter, and such subscriber must be held to have given his consent that such change might at any time be made by the legislature. This being true, it cannot be claimed with good reason that by such action the legislature would be impairing the obligation of any contract the subscriber entered into when he became a stockholder * * *.”

There can be little doubt that §9660-1 and §9660-2 GC being enacted pursuant to the constitutionally reserved power of the state, are a part of the shareholders’ contracts and that the plan of conversion was adopted in conformity with the shareholders’ contracts and cannot be considered as impairing any of the obligations thereof.

Provision having been made for the payment to the stockholders of the “present value” of their shares, there is no taking- of any stockholder’s property without due process of law.

Plaintiffs repeatedly, throughout their briefs and in oral argument, refer to and stress the concurring opinion of Turner J., in Roessler v. Security Savings & Loan Assoc., 147 Oh St 480, as authority for the proposition maintained by them that “there is and always has been, and always ought to be, a substantive right in a stockholder to the fair value of his stock as against persons who have no financial interest therein — in this case the depositors.”

In his concurring opinion in the Roessler case, Turner J., said:

“I concur in the reasons given for the decision in the majority opinion but I place my concurrence in the judgment on the further ground that inasmuch as the appellee corporation was one incorporated prior to the enactment of the General Corporation Act, and inasmuch as there was no provision in the articles of incorporation or otherwise to the contrary, a dissenting shareholder is entitled to the intrinsic value of his shares in the absence of an agreement when the majority of the shareholders authorize a consolidation of the corporation with another corporation. To hold otherwise would be to impair the obligation of contract between the shareholder and the corporation and to deprive the shareholder of due process of law.”

Considered in the light of the issue decided and the majority opinion, Judge Turner’s language cannot be interpreted as meaning that a statute authorizing a major corporate change but which confers no appraisal rights upon dissenting shareholders would be unconstitutional.

In the Roessler case the shareholders’ contracts which included §8623-67 GC and §8623-72 GC as applicable statutory provisions conferred appraisal rights upon dissenters in the event of a merger or consolidation. These appraisal rights entitled the dissenting shareholders to an award equal to the fair cash value of their shares. Judge Turner indicated his view that an award of any amount less than the “intrinsic value of the shares” would be in violation of the shareholders’ contracts and constitute a taking of property without due process. This squares with the majority opinion in the Roessler case which holds that “fair cash value” is the “intrinsic value” of the shares.

The expressions of the court in its opinion in Wildermuth v. Coal & D. Co. 138 Oh St 1, likewise do not tend to sustain the proposition here contended for by plaintiffs. Nor do Wheatley v. A. I. Root Co. 147 Oh St 127, and Shaffner v. Iron Co. 150 Oh St 454 afford any assistance to plaintiffs. These cases involved attempts by the majority to apply amendments to the corporate charter retroactively, the effect of which was to destroy the vested rights of preferred stockholders to cumulative dividends that had theretofore accrued.

It would profit little to further extend this opinion by a discussion of the many authorities from other jurisdictions cited and relied on by plaintiffs. We do not find these authorities to be applicable. Nor do we deem it necessary to comment upon defendants’ argument on the subject of the police power as furnishing ample warrant for the enactment of §9660-1 and §9660-2 GC.

We hold that it is competent for the State, acting within its constitutionally reserved power to consent to and provide for the conversion of a State savings and loan association into a Federal savings and loan association. Further that §9660-1 and §9660-2 GC, which are designed to accomplish this result are exclusive, complete and controlling and are not repugnant to the provisions of the State or Federal constitutions.

For the reasons hereinabove stated, a decree may be entered for defendants, upon the issues joined in all three cases. O. S. J.

SKEEL, PJ, HURD, J, concur.


author: By HORNBECK, J:

text:
    SCHWARTZ, Plaintiff-Appellant, v. BAKER, Defendant-Appellee.
    Ohio Appeals, Second District, Montgomery County.
    No. 2087.
    Decided April 14, 1950.
    John J. Froug, Dayton, for plaintiff-appellant.
    Gus W. Byttner, Dayton, for defendant-appellee.
   OPINION

By HORNBECK, J:

This is an appeal on questions of law from a judgment for the defendant on his cross-petition.

The issues as drawn on the pleadings and developed upon the facts, in the trial to a judge without a jury, grew out of a written contract. The contract provided for the purchase and sale of certain real estate which was the home of the defendant. The plaintiff agreed to purchase said property upon the following terms:

“We hereby agree to pay for the same the sum of $17,900.00 in the following manner, to-wit: $6,900 cash Bal. of $11,000.00 thro FHA, this offer is subject to $10,000.00 loan.”

Possession was to be given the last week in August. The contract was dated July 7, 1948. It further provided:

“In consideration of the purchase of same we have deposited as first payment the sum of $1,000.00 with Norman Baker, broker, as part payment and guarantee of good faith. It being understood and agreed that the deposit money is to be refunded if this proposition is not accepted. If this offer is accepted and we fail to fulfill our part of this agreement within 60 days after approval hereof, I, or we, agree to forfeit said deposit as liquidated damages.”

The defendant accepted the proposition and later by letter notified the plaintiff that he could secure a $10,000.00 loan on the real estate described and that he had another real estate transaction pending which involved the money which defendant was to receive from the plaintiff for the property. This letter was dated July 24, 1948.

There were two issues of fact determined by the trial judge as to both of which he held with the defendant. First, that the plaintiff had breached his obligation under the written agreement and second, that the defendant suffered damages thereby.

The defendant raised the issue as to his damages in two ways. First, by a general denial of the averments of the petition that plaintiff had performed his obligations under the contract and second, by cross-petition wherein he set up as special damages the claim that he sold his property to another purchaser for the sum of $17,900.00, the amount at which plaintiff agreed to buy it and to make the sale he was required to pay a broker’s commission in the sum of $895. The difference between this commission and the $1,000.00 deposit under the written contract was tendered into court and the judgment was for defendant for $895 with interest and costs.

Four errors are assigned, two of which relate to the weight of the evidence and that the finding and judgment are contrary to law. We may dispose of the first of these without comment because, if the judge was correct in construing the law of the case he had the full right to resolve the evidence in favor of the defendant.

The law of the case is involved in the other two assignments of error. One of which is that the court erred in the admission of testimony as to the meaning of that part of the contract referring to the manner in which the balance of the purchase price should be secured; the other, that the court improperly awarded special damages to the defendant because they were not the proper subject of special damages.

Upon the question of the ambiguity in the contract, it is the claim of the plaintiff that it is only uncertain in one particular, viz; the meaning of the initials of FHA, which was explained to mean Federal Housing Administration. The defendant asserted and the trial judge took the view that there was ambiguity in the language of the contract in two particulars. First, whether or not the loan was to be restricted to FHA. Second, as to the amount of the loan. The particular difference between the parties was as to the restriction of the loan to FHA only.

In our judgment, the trial judge was correct in permitting evidence to be offered to explain the meaning of the language of the, contract. It is not definite in the controlling question. It cannot be determined from the language of the contract alone whether or not the plaintiff was obligated to secure a loan, if possible, of $10,000 or $11,000.00 from any source other than FHA. It is established that he could not secure such a loan from FHA but it further appears that he made no effort to negotiate the loan elsewhere. This obligation, the trial judge held, was enjoined upon him under his contract and in that particular he breached his agreement.

The evidence respecting the transaction leading up to the written agreement and explaining what was said respecting the source of the loan came from five witnesses. Three for and two against the claim of the plaintiff. As we have heretofore said, the court had full prerogative to hold with the defendant upon this issue.

Upon the question of the amount of the damages, if any, which could be awarded to the defendant, plaintiff claims that the only damages which would be appropriate would be based upon the difference between the market value of the property at the time the transfer was to be made and the purchase price agreed by plaintiff to be paid for it.

It is our opinion that although the form of the judgment as to damages would be different if entered upon the issue drawn on the petition and amended answer the effect would be the same as upon the issue drawn on the cross-petition and reply. Such damages do not have to be asserted by cross-petition. Wessendorf v. Carter, 16 Abs 313.

In other words, this contract had an express provision for “liquidated damages” in the amount of the deposit. Courts avoid the enforcement of a provision for liquidated damages when it is in the nature of a penalty. But a provision for liquidated damages serves the purpose of evaluating the amount of the damage, if any suffered, by the defaulting party, the nature of which, many times, it is difficult to develop.

A provision in a contract similar to the one here under consideration was held to be for liquidated damages and not a penalty. Asia Investment Co. v. Levin, (Wash.) 32 A. L. R. 579, and from the annotation following and the cases cited it appears: That the basis for treating such a stipulation as a penalty instead of damages is the inequity which would result by the strict enforcement of the provision. It is proper for the parties to a contract of sale or purchase of real estate, to settle and agree as to the amount of damages to be paid upon a breach instead of leaving the amount to be fixed by a court. If the amount fixed as “liquidated damages” is patently in excess of the actual damages which could under any circumstances result from a breach, in such case, they are regarded as a penalty. It is said that an agreement for damages should be treated as a penalty only in those cases where it is obvious from the contract and the whole subject matter that the principle of compensation has been disregarded. Central Trust Co. v. Wolf, etc. (Mich.) 78 A. L. R. 843, and annotation following.

In any event, such a provision must be interpreted as favorably to the party for whose benefit it was intended as is reasonable and he should be entitled to all damages which naturally flow from the other party’s default. In this situation, under the facts as found by the trial judge, it is evident that the defendant suffered the damages in the amount claimed and the plaintiff could not have maintained his claim that he was entitled to the return of the full amount of the deposit.

The case which is recognized as setting forth the controlling rule, under two headings, as to the ascertainment of damages in breach of contract cases is Hadley v. Baxendale, 5 Eng. Rui. Cas. 502. Our facts come under the second classification under which damages are permissible in the situation here developed, namely, those which may fairly be supposed to have been contemplated by the parties as the probable result of such breach. It is logical to hold that where the parties have formally carried into their written agreement a provision for liquidated damages, they mean to include all damages including special damages which the injured party may suffer.

The trial judge could very properly have held that the damages awarded to the defendant were correctly designated “liquidated damages” in the contract and those which arose by reason of the breach of the contract by the plaintiff because defendant was selling his home, had purchased other property to be paid for with the proceeds from the sale to the plaintiff and was put to the necessity of producing the money to pay for his property by the default of the plaintiff.

The judgment may be affirmed upon the proposition that the damages suffered were special in character, as claimed in the cross-petition; that they were such as reasonably could have been' anticipated by the parties and that they were included within the language of the contract providing for liquidated damages and could have been awarded had the contract been silent as to damages.

It is basic that the injured party to a written contract is entitled to recover what he has lost by act of the other party Kasner v. Beacon Oil Co. (Conn.) 81 A. L. A. 97. He should have such a sum of money as will put him in the same position as if the contract had been fully performed. Kahn v. Schoen Silk Corp, (Md.) 44 A. L. R. 285; Selman v. Shirley (Or.) A. L. R. 1. Applying this rule, upon the findings of the trial judge, the defendant sustained the damages carried into the judgment.

The judgment will be affirmed. •

MILLER, PJ, WISEMAN, J, concur.


author: By JOHNSON, J.

text:
    DONGES v. AMERICAN AUTOMOBILE FIRE INSURANCE COMPANY.
    Common Pleas Court, Greene County.
    No. 25135.
    Decided September 18, 1950.
   OPINION

By JOHNSON, J.

This is an action to recover on an insurance policy for an alleged theft of an automobile, and came on for hearing upon the pleadings and the evidence before the court, a jury having been waived.

The evidence showed that John Rice was at the time hereinafter mentioned an employee of the plaintiff, Ralph H. Donges, as a houseman and general all around handy man. In April of 1947, Mr. Donges and his wife decided to go on a trip South. They had three small children and Mr. Donges made arrangements with his sister, Mrs. Collins, who lived in Dayton, to come to Xenia and look after the house and the children in their absence. Mr. Rice drove the car on many occasions for Mr. Donges, and he was instructed that during their absence he was to drive the car for Mrs. Collins at such times and to such places as she directed him. On April 24, she directed him to take her to Dayton. When she arrived in Dayton she told him to take the automobile back to Xenia and put it in the garage and instructed him as to certain work that he was to do that day. Instead of coming back to the Donges home with the automobile, he came back to Xenia and picked up a young lady by the name of Viola Blair and another couple and drove them to Springfield, Ohio, where they stayed for several hours. They then returned to Xenia and after the other couple left Mr. Rice took a ride out in the country with Viola Blair. While returning in the direction of Xenia on the Hook Road they turned over and the car was wrecked.

The part of the policy of insurance held by Mr. Donges which has application in this case reads as follows:

Coverage D-Comprehensive Loss of or Damage to the Automobile, except by Collision. To pay for any loss of or damage to the automobile hereinafter called loss, except loss caused by collision of the automobile with another object or by upset of the automobile or by collision of the automobile with a vehicle to which it is attached. Breakage of glass and loss caused by missiles, falling objects, fire, theft, explosion, earthquake, windstorm, hail, water, flood, vandalism, riot, or civil commotion shall not be deemed loss caused by collision or upset.

The sole question outside of the amount of damages in this case is whether or not the using of the car by Mr. Bice under the circumstances as above set forth was a theft within the meaning of the insurance policy. In the case of Toms v. Hartford Insurance Company, 146 Oh St., 39, 31 O. O. 538, the syllabus of the court is as follows:

1. A contract of insurance prepared and phrased by the insurer is to be construed liberally in favor of the insured and strictly against the insurer, where the meaning of the language used is doubtful, uncertain or ambiguous.

2. Where the term “theft” is employed but not defined in an automobile insurance contract, it is to be given the usual meaning and understanding accorded it by persons in the ordinary walks of life.

3. In an insurance contract insuring against the “theft” of an automobile, the term “theft” comprehends the wilful taking or appropriation of one person’s automobile by another wrongfully, without justification and with the design to hold or make use of the vehicle in violation of the rights of the owner, and recovery by the insured for loss due to “theft” may be had where a taking or appropriation of the insured automobile in the manner and for the purpose described is shown.

In the case of Block, et al v. Standard Insurance Company of New York, decided by the Court of Appeals of New York, and found in 54 Northeastern, Second Series, at page 821, the Court of Appeals reversed the findings of the Supreme Court and held the insurance company liable. In that case the plaintiff owner and her husband were driven by their chauffeur to Asbury Park, N. J. They were to stay overnight at a hotel there. At the end of the day, the chauffeur was told that the automobile would not be needed again that evening and to put it in a garage. The chauffeur then said that the room which he had obtained was some two miles from the hotel and asked for permission to drive the automobile there, park it overnight in a parking lot which was in front of the house in which he had his room and that he would avail himself of the opportunity to wash the automobile in the lot. He was then given money for his room, meals, parking lot rental and for a brush and soap to wash the car. The chauffeur was told not to go joy-riding and promised that he would not. At about 9 o’clock on the following morning the plaintiffs were notified that there had been an accident. The chauffeur was found in a police station in Middletown and the automobile was found in a gully about twenty miles, toward New York City, from Asbury Park.

In that policy loss or damage by collision is excepted, except plaintiffs may recover if the cause of the loss was the result of a larceny. The insurance company claimed that it was not a larceny. The court cited the penal law of New York, which provides as follows:

Any person who, under circumstances not constituting larceny as defined by any other section of this article, shall, without the consent of the owner take, use or operate or cause to be taken, used or operated, an airplane or other aircraft or an automobile or other motor vehicle, for his own profit, use or purpose, steals the same, is guilty of larceny and shall be punishable accordingly.

While the Ohio statute in reference to the same matter does not use the word larceny, it means the same thing. Sec. 12619 GC provides that:

Whoever steals any motor vehicle or whoever purposely takes, drives or operates any motor vehicle without the consent of the owner thereof, etc., shall be punished as provided in the section of the statute.

So that under the statute of Ohio, the unlawful taking without the owner’s consent and using it for the purpose of the taker constitutes the same thing as a theft.

In the New York case just above cited, the Court of Appeals held the insurance company under the evidence in that case liable. In the Toms v. Hartford Insurance Company case, the court says:

We think it may be accurately said that to “the man on the street” the word “theft” is of broader scope than “larceny” and comprehends essentially the wilful taking or appropriation of one person’s property by another wrongfully and without justification and with the design to hold or make use of such property in violation of the rights of the owner. In our opinion, where the word “theft” is used in an insurance policy, without definition, it should be interpreted as liberally as possible to protect the insured.

In the opinion of this court, Mr. Rice had only a limited use of Mr. Donges’ automobile. The only authority he had to use it on the day in question was to take Mr. Donges’ sister to Dayton, bring it back to Xenia and put it in the Donges garage. When he returned to Xenia he didn’t put it in the Donges garage but went on a joy-ride. The minute he started on this ride he was operating the motor vehicle without the consent of the owner thereof and was appropriating it wrongfully and making use of such property in violation of the rights of the owner. Therefore, in the opinion of this court, it was a theft within the meaning of the policy and the insurance company is liable under the policy.

The only evidence on the amount of damages is that of Mr. Lang, who testified that he had been in the automobile business since 1926; that he was personally familiar with the value of new and used cars having dealt in them all that time; that he had seen the Donges car on numerous occasions before the theft, and that in his opinion before that time it was reasonably worth from fourteen to fifteen hundred dollars; that he saw the car afterwards and that in his opinion it was then only worth five hundred dollars before being repaired. This evidence is undisputed. The defendant put on no witnesses to deny the testimony of Mr. Lang. In view of the fact, however, that he said that it was worth before the theft from fourteen to fifteen hundred dollars, the court, it would seem, would be bound by the lower figure, and the difference between what it was worth before the theft of fourteen hundred dollars and what is was worth afterwards of five hundred dollars would make the damages nine hundred dollars for which a finding is made by the court in favor of the plaintiff and against the defendant.


author: By THE COURT.

text:
    SMITH, Admr., Plaintiff-Appellee, v. PENNSYLVANIA RAILROAD COMPANY, a corporation, Defendant-Appellant.
    Ohio Appeals, Second District, Franklin County.
    No. 4465.
    Decided November 2, 1950.

      Porter, Stanley, Treffinger & Platt, Columbus, for defendant-appellant.
    Herbert & Dombey, Columbus, for plaintiff-appellee.
   OPINION

By THE COURT.

This is an appeal on questions of law from the Common Pleas Court of Franklin County, Ohio. The action is for damages for wrongful death of a railroad yard conductor, and was brought under the Federal Employers’ Liability Act. The case was tried to a jury which rendered a special verdict in the amount of one hundred thousand dollars. A motion for judgment non obstante veredicto was filed and overruled. Judgment was entered on the verdict. A motion for new trial was filed and overruled.

Seventeen assignments of error have been filed, which appellant has grouped and discussed under seven separate headings. The Court will briefly discuss in the same sequence the principal questions raised by appellant under these seven headings.

I.

Appellant contends that the form of the verdict submitted by the plaintiff and the instructions to the jury failed to fairly, properly and correctly present to the jury the issues of fact in the case; that the jury did not return findings of fact upon all issues presented by the pleadings and in dispute under the evidence; that the special verdict contains conclusions from the facts and conclusions of law which must be disregarded; that the special verdict is indefinite, uncertain and defective and contains findings and conclusions with respect to matters not complained of in the petition and the court erred in failing and refusing to require the jury to find the facts only with respect to all issues which the case presents as established by the evidence.

With respect to the issues involved the court charged the jury as follows:

“The issues of fact upon which the determination of the right of the plaintiff to recover or fail to recover depends are as follows:
“1. Did or did not the defendant, The Pennsylvania Railroad Company, exercise ordinary care, that is such care as an ordinarily prudent employer would have exercised or employed to provide the deceased, Robert P. Smith, who was a switching yard conductor, a reasonably safe place to work under all the conditions and surrounding circumstances existing at the time the decedent, Robert P. Smith, was killed, and if the defendant did not exercise such care did the same cause or contribute to cause the death of Robert P. Smith, the decedent.
“2. Did or did not the decedent, Robert P. Smith, who at the time just prior to his death was a yard conductor and was a member of and in charge of the switching crew engaged in switching cars in Yard C, exercise ordinary care, that is such care as a reasonably prudent person in his position would have exercised under the same or similar circumstances for his own safety, and if he did not exercise such care was the lack thereof the direct cause or a direct contributing cause of his death.
“3. What was the value in money of what the widow and the three minor children of the decedent, Robert P. Smith, could reasonably expect to receive from him had he lived considering the elements to be included and excluding those to be excluded as hereafter stated in this charge of the court.
“4. A finding by the jury of the amount by which the above total is to be diminished in proportion to the percentage by which the failure of the decedent, Robert P. Smith, to exercise ordinary care for his own safety contributed to cause his death, if the jury should find that there was any such failure on the part of the decedent, Robert P. Smith, to exercise such ordinary care and that such failure did contribute to cause his death, together with the amount remaining after making such deduction.”

While the trial court should have been more specific in its charge, we are of the opinion that the charge is not open to the same critisicm as was the charge in B. and O. Railroad Co. v. Lockwood, 72 Oh St 586, 74 N. E. 1071. A special verdict is defined in §11420-14 GC, as follows:

“A special verdict is one by which the jury finds facts only as established by the evidence; and it must so present such facts, but not the evidence to prove them, that nothing remains for the court but to draw from the facts found, conclusions of law.”

Sec. 11420-16 GC, provides that:

“When requested by either party, the court shall direct the jury to give a special verdict in writing, upon any or all issues which the case presents.”

In the instant case the defendant-appellant requested the court to direct the jury to return a special verdict in writing upon all the issues presented. The special verdict returned by the jury is as follows:

“We, nine or more of the jury in the above entitled cause, do find as follows:
“On February 21, 1948, at or about 10:15 P. M., the decedent, Robert P. Smith, an employee of the defendant Pennsylvania Railroad Company, while acting in the scope and course of his employment as a yard conductor in Yard C of the defendant company, and while said decedent and defendant were engaged in interstate commerce, the decedent was ordred and required to comply with a rush order to obtain three cars located on Tracks 12, 21, and 22, respectively; that decedent for the purpose of obtaining the car on Track 22 caused through himself and the members' of his crew to attach an engine and tender on to a cut of four cars located in said Track 22 in order to reach said car contained in said rush order; that in so doing decedent was required to work between said cars located on Tracks 21 and 22, and that:
“(1) There were ten or eleven cars parked on Track 21, which was designed by the defendant railroad company to accommodate twelve cars;
“(2) That the front end of the extreme northeasterly car located on Track 21 was parked approximately 64.5 feet southwest of the frog between Tracks 21 and 22, at which point the space was not sufficient to give reasonably adequate and safe clearance to the decedent while working between said tracks.
“(3) That the defendant railroad company, without notice to the decedent, Robert P. Smith, caused to be inserted among the cars on Track 22 a new type of car of more than sixty feet in length, when it knew that Tracks 21 and 22 were not designed to handle safely a box car of such length;
“(4) That the defendant railroad company failed to post any warning signs of the unsafe clearances between said tracks;
“(5) That the defendant railroad company failed to provide lights at the time and place of the accident, which in the exercise of ordinary care it should have done, thereby creating an unsafe and dangerous place in which decedent was required to work;
“(6) That the decedent at the time of the accident was in the exercise of ordinary care for his own safety;
“(7) That the foregoing acts and conduct of the defendant roalroad company was the direct cause of the death of the decedent, Robert P. Smith;

“(8) That the decedent, Robert P. Smith, at the time of his death left surviving him and dependent upon him a widow, Rosezella Smith, age twenty years; and three children: Jacqueline Louise Smith, four years of age; Theda Jane Smith, one year of age; and Barbara Pamela Smith, then unborn, now sixteen months of age, who by his death were damaged in the sum of $100,000.00.”

In a special verdict the jury makes a finding of fact, leaving it to the court to apply the law thereto. The jury in a special verdict is required to find ultimate facts, as distinguished from evidentiary facts. Pacts not found are regarded as not proved by the party which carries the burden of proof on such issues. Noseda v. Delmul, 123 Oh St 647, 653, 176 N. E. 571; Masters v. N. Y. C. Rd. Co., 147 Oh St 293, 298, 70 N. E. (2d) 898. However, on a factual basis a special verdict will support a judgment if it finds facts sufficient and essential to sustain the cause of action. A special verdict is not vitiated simply because it fails to find on every one of the issues of fact, or that it includes conclusions of law. In such cases conclusions of law are disregarded. Noseda v. Delmul, supra.

The jury was not required to make a finding as to the age of plaintiff’s decedent, his earnings per month, or the highest net rate of interest at which money could be safely invested. Such facts are evidentiary facts, as distinguished from ultimate facts. It was not necessary or proper to require a finding of evidentiary facts.

On the issue of contributory negligence the jury found as follows: “That the decedent at the time of the accident was in the exercise of ordinary care for his own safety.” Having found for the plaintiff on this issue the jury was not required to detail the acts of conduct of the plaintiff on which it based its finding. Nothing remained for the court to do but to draw a conclusion of law that the plaintiff was not guilty of contributory negligence.

II

The defendant-appellant contends that the damages awarded the plaintiff are grossly excessive, appearing to have been given under the influence of sympathy, emotion, passion or prejudice.

While the jury failed to make a special finding with respect to the age of plaintiff’s decedent and his life expectancy, there were facts found which we believe are sufficient on which to base the judgment.

We hold that it is not proper to deduct from the annual income of plaintiff’s decedent Federal Income Taxes in determining the amount which the decedent would have contributed to his wife and children had he lived. Such taxes are too speculative to be considered by the jury. Stokes v. U. S., 144 F. (2d) 82; Chicago & N. W. Rd. Co. v. Curl, 178 F. (2d) 497. While the verdict is larger than usual we find no basis for a conclusion that the verdict is so excessive that it appears to have been given under the influence of passion or prejudice. There is no factual basis to support this charge.

III

The appellant contends that in awarding damages, either the jury based its calculation of present worth on speculation or upon secret information obtained from unknown sources and not offered or admitted in evidence or the jury, in violation of law and the instructions of the court, failed to calculate present worth; in either event, its determination of the amount of damages is not based upon the evidence and defendant-appellant has been denied a fair trial and hearing and it has been deprived of its property without due process of law in violation of the Constitutions of the state of Ohio and the United States and in violation of the Federal Employers’ Liability Act.

Neither party introduced evidence as to the highest net rate of interest at which money can be safely invested. Defendant-appellant claims that the failure of the plaintiff to introduce such evidence is fatal to plaintiff’s case on the ground that an essential fact on which to make a calculation as to damages has not been proven. The lack of such evidence is not fatal. Louisville and N. Rd. Co. v. Holloway, Admr., 246 U. S. 525; Vicksburg, etc., Rd. Co. v. Putnam, 118 U. S. 545; Beam v. B. and O. Rd. Co., 77 Oh Ap 419, 68 N. E. (2d) 159. In our opinion the jury had sufficient evidence before it from which it could calculate the “present worth” of the amount which would have been contributed.

IV

Appellant contends that the trial court erred in excluding evidence offered by the defendant-appellant appertaining to dependency and to the contributions which plaintiff’s decedent would have made to his wife and children had he lived.

The court properly refused evidence as to payroll deductions made from the wages of plaintiff’s decedent for Federal Income Tax and Columbus Municipal Income Tax. We find no reversible error in the record in the exclusion of evidence.

V

Appellant contends that the trial court erred in its charge to the jury in that (a) it failed to separately and definitely state to the jury correctly the issues of fact made by the pleadings and in dispute under the evidence; (b) in refusing special charges requested by the defendant before argument; (c) in charging the jury as requested by the plaintiff-appellee before argument, and (d) in its general charge to the jury.

We find no error committed by the court in its general charge or in its failure to give special instructions requested by the defendant-appellant. The court very properly excluded the issue of assumption of risk. 45 U. S. C. A., Sec. 54. Other matters discussed under this heading have heretofore been disposed of.

VI and VII

The appellant contends that the trial court erred in refusing to direct the jury to return a verdict for the defendant at the conclusion of the evidence; that the verdict and judgment are against the manifest weight of the evidence and contrary to law; that the trial court erred in overruling motion for judgment notwithstanding the verdict and in overruling the motion for new trial.

After a consideration of the entire record, and because of the view this Court takes with respect to the principal questions raised, we find none of these claimed errors well made.

The record shows that this case was fairly and thoroughly tried, and that substantial justice has been done. Finding no error in the record prejudicial to the rights of the defendant-appellant the judgment is affirmed.

MILLER, PJ, HORNBECK and WISEMAN, JJ, concur.


author: By HORNBECK, J.

text:
    STATE, Plaintiff-Appellee, v. GUTILLA, Defendant-Appellant.
    Ohio Appeals, Second District, Franklin County.
    No. 4372.
    Decided January 18, 1950.
    Glenn E. Kemp, Police Prosecutor, Columbus, for plaintiffappellee.
    Isadore L. Margulis. Columbus, for defendant-appellant.
   OPINION

By HORNBECK, J.

The defendant was charged, tried, convicted and sentenced in the Municipal Court of the City of Columbus, Ohio, for the illegal practice of medicine.

Thirteen errors are assigned to the judgment. We will not set them out or consider them in detail, but coniine our opinion to those assignments which require comment.

The affidavit upon which the court took jurisdiction to try the defendant was made by Frank A. Dorsey, an inspector for the State Medical Board. It appears that Mr. Dorsey had no personal knowledge of the facts upon which the State rested its case against the defendant. Defendant moved to quash the complaint because the affiant did not have personal knowledge of the facts set out in the affidavit. The motion was overruled and this is assigned as error.

The court did not err for two reasons:

(1) The fact that affiant did not have personal knowledge of the subject matter of the affidavit was not developed prior to the time that the motion was overruled but was adduced at the trial when Mr. Dorsey testified as a witness for the State.

(2) The affidavit was in such form as required the issue of a warrant under §13432-9 GC. This section provides in part “when an affidavit charging the person with a commission of the offense is filed with a judge, clerk, or magistrate, if he has reasonable ground to believe that the offense charged has been committed, he shall issue a warrant for the arrest of the accused.”

The defendant’s claim is too exacting under our statute. Parker v. State, 4 Oh St 565; although he has support in The U. S. v. Carter, 14 Weekly Law Bulletin, 191, opinion from the U. S. Court, Southern District of Ohio.

The motion to quash also claimed that the affidavit did not apprise the defendant of what offense he was charged. The affidavit in this case is not subject to the charge of prolixity, which was the basis of the dissenting opinion in State v. Henning, 83 Oh Ap, 445; 51 Abs 459; 78 N. E. (2d) 588. The charge here is that the defendant did on the day alleged, unlawfully examine, prescribe, advise, recommend, and .administer certain treatment, etc. All of the qualifying terms Telate to, and may properly be associated with the professional treatment.

The defendant moved the court to require the State to provide the defendant with a bill of particulars, in order to apprise the defendant with a reasonable degree of certainty of the offense with which he is charged. This motion was denied and this action of the court was made an assignment of error.

Defendant relies upon §13437-6 GC under which, if applicable, we are of opinion, that the defendant had the right to have his motion sustained. State v. Collett, 44 Abs 225. It is our judgment, however, that the provision of §13437-6 GC “that the prosecuting attorney, if seasonably requested by the defendant, or upon order of the court, shall furnish a bill of particulars setting up specifically the nature of the offense charged” has no application. This provision is only applicable as to indictments or informations and the bill of particulars is to be given only by the prosecuting attorney. Thus, by the terms of the section of the Code, it appears that they were not intended to be applied in misdemeanor actions before Municipal Courts or Justice of the Peace Courts.

The one assignment of error, of substance, relates to the admission, over the objection of counsel for defendant, of proof of the conviction of the defendant for similar offenses as bearing upon the intent with which the acts charged were committed. That such convictions are admissible in a prosecution under §12694 GC is established by State v. Ensminger, 149 Oh St 289. The manner in which the convictions of the claimed offenses were introduced into evidence raises the serious question here.

The State’s claim was that the defendant had treated the prosecuting witness, after first examining her, by manipulation and rubbing of her back for which a charge of $3.00 was made. The defendant admitted giving, what he termed, a naturopathic treatment, denied that he received any fee for this treatment. It further appeared, that the prosecuting witness complained of some skin irritation to her hand and that the defendant gave her, in one bottle, some ointment to use and also another bottle containing some substance, in part, of vitamin content. The defendant asserted that he made a charge of $4.00 for the vitamins, nothing for the ointment.

An essential element of proof of the offense, was that the defendant administered the treatment for a fee. The State undertook to make proof of conviction of other prior offenses by the testimony of Mr. Dorsey by the following questions and answers:

Q. “Mr. Dorsey, let me ask you whether or not you had this defendant in this court and convicted him before of a similar offense that he is on trial here for today?”

Over objection to the question, motion that it be stricken and for a mistrial, the witness was permitted to answer, “I have.”

Q. “When was that?”

A. “1942, 1946, 1949.”

Q. “Three times?”

A. “Yes sir.”

Motion to strike these answers is overruled and exception noted.

Q. “And each time Mi-. Gutilla was convicted in this court on similar offenses to this one; is that right?”

A. “Yes sir.”

It is manifest that this testimony could not have been properly presented to the jury as heretofore indicated.

If the State desired to rely upon convictions of similar offenses as bearing upon the intent with which the offense alleged was committed it should have called the Clerk of Court, in whose office the records of such convictions were properly kept. Presentation of such records would have enabled the State to make proper proof of the convictions of the defendant and also permitted the court to determine whether or not such convictions were for related offenses.

The admission of this testimony from the source and in the manner appearing in this record was erroneous and manifestly prejudicial to the defendant.

Without further discussion we hold that no other error assigned is well made.

The constitutionality of the State Medical Act and the proceedings thereunder are challenged but they have been held to be constitutional. Triplett v. State, 23 O. C. C. (N. S.) 172; Katsafaros v. Agathakos, 52 Oh Ap 290, 3 N. E. (2d) 810.

The judgment will be reversed and the cause remanded for new trial.

MILLER, PJ, and WISEMAN, JJ, concur.

ON ASSIGNMENT OF ERROR

No. 4383. Decided January 18, 1950.

Richard W. Gordon, City Atty., Glenn Kemp, Police Prosecutor, Columbus, for plaintiff-appellee.

Isadore L. Margulis, Columbus, for defendant-appellant.

By THE COURT.

The defendant-appellant has assigned nine separate grounds of error. We have carefully considered each and every error assigned and after a careful examination of the entire record in this case and the law applicable thereto we are of the opinion that no error prejudicial to the rights of the defendant-appellant has been committed and that the judgment of the Common Pleas Court affirming the conviction of the defendant-appellant in the Municipal Court of Columbus, Ohio, should be and is hereby affirmed.

MILLER, PJ, HORNBECK and WISEMAN, JJ, concur.

APPEAL ON LAW

No. 4384. Decided January 18, 1950.

Richard W. Gordon, City Attorney, Glenn E. Kemp, Police Prosecutor, Columbus, for plaintiff-appellee.

Isadore L. Margulis, Columbus, for defendant-appellant.

By MILLER, PJ.

This is a law appeal from the judgment of the Court of Common Pleas affirming that of the Municipal Court, wherein the defendant was found guilty as charged in the affidavit. The affidavit charged as follows:

“Frank A. Dorsey, being first duly cautioned and sworn, deposeth and saith that one Anthony D. Gutilla on or about the 23d day of Oct. A. D. 1947, at the City of Columbus, County of Franklin, and State of Ohio, did unlawfully practice medicine and surgery before he had obtained a certificate from the State Medical (Board) of the State of Ohio as required by law, to wit, that he the said Anthony D. Gutilla did then and there examine and diagnose, recommend and administer certain treatments for the relief and cure of certain bodily injuries of one Charles A. Stehli, to wit, a sacro-iliac strain for a fee to him paid by Charles A. Stehli in the amount and value of eighteen dollars ($18.00) contrary to statute in such cases made and provided and against the peace and dignity of the State of Ohio, further deponent says not.

(Signed) Frank A. Dorsey.”

The only errors assigned which we deem worthy of our comment are those relating to the overruling of the motion to quash and the demurrer to the affidavit.

The record discloses that the defendant called the affiant, Frank A. Dorsey, who testified that the statements made in the affidavit were based upon information and belief and were not based upon his own personal knowledge. For this reason the appellant urges that the motion to quash and the demurrer should have been sustained. Reference is made to Volume 3 of the Ohio Jurisprudence, page 152, wherein the statement is made:

“A charge of crime upon mere suspicion or belief of the person making the charge is insufficient.” Citing United States v. Carter, (D. C.) 5 O. F. D. 592, 14 Bull. 191, which holds that an affidavit stating that the affiant “has good reason to believe, and does verily believe,” that the accused is guilty of the offense charged is insufficient.

But this is not our case. The affidavit makes definite and certain charges in the manner and form as set forth in §13432-18 GC. In all of the Ohio cases cited by the appellant the facts differ from those in the case at bar in that the affidavit did not state facts absolutely but merely upon information and belief.

It is also claimed that the ruling of the court violates the Fourth Amendment to the Constitution of the United States which provides:

“No warrant shall be issued for the seizure or arrest of any person charged with a crime or offense against the law of the United States, but upon probable cause supported by oath or affirmation.”

We find no violation here, as the charges are supported by the oath of Frank A. Dorsey, and the charges are positive in character. The record further discloses that there was “probable cause” for the issuance of the affidavit.

The appellant further urges that the record does not support the charge that the defendant was gulity of practicing medicine or surgery. The practice of medicine is defined by §1286 GC, the pertinent part of which provides:

“A person shall be regarded as practicing medicine, surgery or midwifery, * * v or who examines or diagnoses for a fee or compensation of any kind, or prescribes, advises, recommends, administers or dispenses for a fee or compensation of any kind, direct or indirect, a drug or medicine, * * * or treatment of whatever nature for the cure or .relief of * * * infirmity or disease.”.

The record discloses that Charles A. Stehli testified that he went to the defendant’s office after he had hurt himself while at work; that he explained the nature of his injuries to the defendant who diagnosed it as a sprain; that he caused him to lie upon a table and treated him by massaging with his hands along the spine; that for this first treatment a charge of $3.00 was made; that he told him it would be necessary to return for further treatments and that he did so taking a total of six; that he also gave him two bottles of vitamin pills as a part of the treatment. None of these statements are contradicted as the defendant did not take the witness stand. Te record further discloses that the defendant has no certificate from the State of Ohio authorizing him to practice Medicine and Surgery or any of its branches in this state.

We think the evidence clearly shows a violation of “practicing medicine” as defined by §1286 GC. We find no error in the record and the judgment is affirmed.

HORNBECK and WISEMAN, JJ, concur.


author: By HORNBECK, J.:

text:
    STATE ex CHRISTOPHER, Plaintiff, v. AMRINE, Supt., Defendant.
    Ohio Appeals, Second District, Madison County.
    No. 167.
    Decided July 3, 1950.
    Arthur L. Spielmann, Columbus, for plaintiff.
    Herbert S. Duffy, Atty. Geni., Alan E. Schwarzwalder, Asst. Atty. Geni., Columbus, for defendant.
   OPINION

By HORNBECK, J.:

This is an action in habeas corpus. It appears that one George Freemas was jointly indicted with the plaintiff for first degree murder. Freemas was tried separately, the petitioner testifying in behalf of the State. Freemas was convicted of murder in the first degree. After the conviction of Freemas, plaintiff, who was represented by counsel, entered a plea of guilty, was tried, convicted and sentenced in accordance with the judgment entry of the Court of Common Pleas of Franklin County for the September term, 1932, as follows:

“This day again came the Prosecuting Attorney on behalf of the State of Ohio, the defendant being in Court in custody of the sheriff and represented by counsel. Thereupon the defendant withdrew his plea of ‘not guilty’ heretofore entered and stated to the Court that he desired to waive a trial by jury. Thereupon the Court inquired of said defendant, what plea he would make to the indictment, the defendant thereupon entered a plea of guilty to said indictment, and by confession in open court stated that he is guilty of the general charge of unlawful homicide as he stands charged in the indictment. Thereupon the agreement of counsel for both the State of Ohio and the defendant, and by agreement of the defendant himself, the Court finds that the defendant by his own sworn testimony adduced in the trial of the State of Ohio v. George Freemas, is guilty of Murder in the First Degree as he stands charged in the indictment, and furthermore the Court recommends Mercy.”

The plaintiff was then sentenced to imprisonment in the Ohio Penitentiary for the period of his natural life and the prisoner thereafter was taken to the Ohio Penitentiary, there held upon a mittimus and later transferred according to law to the London Prison Farm on March 29, 1933. It is further stipulated that the waiver of a trial by jury set forth in the judgment entry heretofore quoted was not in writing and further that no testimony was taken by the trial judge following the entering of a plea of guilty by the defendant, the plaintiff here. It is the claim of the petitioner that he is illegally restrained of his liberty for three reasons.

(1) That no proper waiver of a trial by jury was signed by the defendant.

(2) That the plea of “guilty” “of the general charge of unlawful homicide” is unknown to the law of Ohio.

(3) The action of the trial judge in making his finding and entering judgment upon the testimony of the plaintiff in the case of State v. Freemas:

Considering the claims of the plaintiff in reverse order we are satisfied that the third will not support a judgment for the plaintiff. He is barred by the agreement in open court of himself and of his counsel that his testimony taken in the Freemas case should be considered by the Court as his testimony in the plea of guilty in his case.

The second claim, in our judgment, will not support the relief sought by the plaintiff for the reasons that it does not in the particular asserted establish the want of jurisdiction of the trial judge to enter the judgment against the plaintiff. The judgment entry first recites that “the defendant thereupon entered a plea of guilty to said indictment.” The judgment entry then continues “and by confession in open court states that he is guilty of the general charge of unlawful homicide as he stands charged in the indictment.” It is recognized that an indictment of first degree murder likewise includes the elements of a charge of second degree murder and manslaughter. So that, the defendant himself, and through his counsel simply said to the trial judge “We concede that the defendant is guilty either of first degree murder, second degree murder or manslaughter and we ask the Court to fix the degree and if it should be murder in the first degree then to determine if the defendant is entitled to mercy.”

Such procedure was specifically authorized at the time that the defendant was convicted by §13448-2 GC. This section, after defining the degrees of guilt of which a defendant could be convicted continues:

“If the offense charged is murder and the accused is convicted by confession in open court, the court shall examine the witnesses, determine the degree of the crime, and pronounce sentence accordingly.”

The offense charged included murder in all degrees and the defendant was convicted by “confession in open court” of murder. The judge then acted strictly within the intendment of the statute. The term “unlawful homicide” is synonomous with murder.

The difficult question .in this case is the first, whether the failure of the defendant to conform to the provisions of §13442-4 GC by signing a written waiver of his right to a trial by jury prevented the trial judge from assuming jurisdiction to try and determine the degree of murder o'f which he was. guilty and to pronounce sentence upon that finding.

In earlier times our Supreme Court had held that a defendant could not waive a jury trial and consent to be tried by the Court in a criminal case. Hern v. State, 1 Oh St 15; Haynes v. State, 12 Oh St 622. Later this strict construction was modified in situations developed in the following: Hanoff v. State, 37 Oh St 181; Simmons v. State, 75 Oh St 346; Hanaghan v. State, 51 Oh St 24, 28; State ex rel v. Baer, 103 Oh St 585; State v. Habig, 106 Oh St 151. This last cited case was decided in 1922. In 1929, the Legislature enacted certain sections of the Code fixing the right of a defendant to waive-his right to a trial by jury and defining explicitly the manner in which the waiver could be accomplished. In so doing it. placed a safeguard around the defendant by requiring as am essential of the waiver that it be made in writing, signed by the defendant, and in form, verbatim or in substance, as. set out in the section.

Sec. 13442-4 GC effective when plaintiff was tried in safar as pertinent provides:

“In all criminal cases pending in courts of record in this, state, the defendant shall have the right to waive a trial by jury and may, if he so elect, be tried by the court without a, jury. Such waiver and election by a defendant shall be in. writing, signed by the defendant and filed in said cause and
made a part of the record thereof. * * *”

This specific requirement was not observed in the trial of the charge against the defendant. Sec. 13442-5 GC then further provides:

“In any case where a defendant waives his right to trial by jury and elects to be tried by the judge of such court as provided in the next preceding section, any judge of the court in which such casé is pending shall have jurisdiction to proceed with the trial of said cause, and shall proceed to hear, try and determine such cause in accordance with the rules, and in like manner as if such cause was being tried before-a jury.” (Emphasis ours.)

It will be noted that upon the prerequisites of §13442-4 GC being met, §13442-5 GC provides that the judge shall then. have jurisdiction to proceed with the trial of said cause. Conversely, it may be said that without the observance of these prerequisites the trial judge did not have jurisdiction to try the case. The failure to observe the specific obligation as to the requirement that the waiver shall be in writing put the court in a status as though no waiver had been made.

Courts of Common Pleas are constitutional courts of general original jurisdiction in Ohio. They are expressly established by the Constitution, and are capable of exercising such jurisdiction as the Legislature may choose to confer. 11 O. Jur. 828.

There is no presumption of the jurisdiction of a court of general jurisdiction where it exercises special powers in a special statutory manner or not according to the course of the common law. 21 C. J. S. 151.

A court cannot, by an erroneous decision on a question of law, add to, or divest itself of its jurisdiction. 27 C. J. S. 115. The acts and proceedings of a court which is without jurisdiction in the particular case, or is acting in excess of its jurisdiction, are void. 27 C. J. S. 116.

In State ex rel Warner v. Baer, 103 Oh St 590, 591, Chief Justice Marshall discussed the right of a person accused of a crime to waive a trial by jury and consent to trial by the Court in the light of Sections 5 and 10 of Article I of our Constitution. He directs attention, p. 601, to the fact that at that time no statutes had been enacted making any provision for waiver of the right to trial by jury, that the Constitution only guarantees the right of a jury trial which may be waived. That the purpose of Sections 5 and 10 was to prevent the Legislature from enacting any statute which would deprive persons accused of crime of the right of a trial by jury. He points out that the sections under consideration are not self-executing. In the enactment of §13442-4 GC the Legislature defined the act which constitutes a waiver. At page 609 of the opinion is a very disconcerting statement affecting the question of jurisdiction.

“It has been urged in argument that these sections of the Bill of Rights (Sections 5 and 10) are jurisdictional and that jurisdiction cannot be conferred by consent, but we deny that this question has anything to do with jurisdiction. The Court of Common Pleas of Cuyahoga County had full and complete jurisdiction of the subject-matter of the trial. . The provisions relating to the right of jury trial refer only to the form and manner of the trial, and are in no sense jurisdictional in character. If a person has a right to jury trial and is deprived of such rights, it is an irregularity which constitutes error but does not present a jurisdictional question.” (Emphasis oursj

This statement was a pure obiter but is entitled to weight in this court. If the statement is sound then clearly the remedy of the relator here is not habeas corpus. In the Baer case the question did not affect the jurisdiction of the court as constituted, i. e. judge and jury but reached only the right by consent of the defendant to be tried by a jury of less than twelve men.

In Hanaghan v. State, 51 Oh St 24, Judge Williams writing the opinion called attention to the fact that a statute requiring express waiver in writing the effect of which was to deprive the defendant of certain of his rights, like other penal statutes cannot be enlarged by construction.

In Simmons v. State, 75 Oh St 346, it is said in the first syllabus, that,

“In a prosecution under Section 3718a, R. S. upon a plea of not guilty, before the justice can acquire jurisdiction to hear the complaint and render final judgment in the case without the intervention of a jury, the accused must waive his right to a jury trial.”

At the time that this case was decided the statute requiring a written waiver by the defendant had not been enacted and the court there held that any specific act of the defendant clearly indicating a purpose to waive his right to a jury trial would be sufficient. This case would clearly support the waiver here but for the statutes §13442-4 and 5 GC.

In the case of State v. Smith, 123 Oh St 237, the defendant in conformity with §13442-4 GC had waived a jury and elected to be tried by the court, and at the same time his counsel suggested his present insanity. The judge refused to accept the waiver, submitted the cause to a jury, which convicted the defendant of murder in the first degree without recommendation of mercy and he was sentenced to be electrocuted. Judge Jones in the opinion held that the trial judge had no authority to refuse to accept the waiver and that by the tender the judge of the court was given jurisdiction to proceed with the trial of the cause. At pages 240 and 241 of the opinion, referring to §13442-5 GC, it is said,

“There is no ambiguity in that language, nor is there any discretion given to the trial judge. By its express terms Jurisdiction has been conferred upon the judge to hear the criminal case in the event of the defendant’s waiver and election to be tried by the judge. * * * The jurisdiction of the trial judge, conferred by the Constitution, is that fixed by law. Article IV, Section 4. By the foregoing sections his. jurisdiction has been definitely fixed by the Legislature. The definition and punishment of crimes and the method of: criminal procedure are those and only those sanctioned by the State, and are embodied in its criminal legislation. Since-the judge had only such jurisdiction as given him by law, he-was required to follow the mandate of the statute.”

A fortiori, if compliance with the statute conferred jurisdiction on the trial judge to try the case, the failure to comply left the court without such jurisdiction.

It is suggested where there is a plea of guilty no written waiver is required and the statute requiring it is not controlling. We cannot agree to this contention in the situation developed in this case. Here the court, if jury was properly waived, had the right to make determination of factual matters which ordinarily is the peculiar province of a jury and to determine whether or not the defendant was guilty of murder in the first degree with or without mercy, murder in the second degree or manslaughter. This, in our judgment, was an exercise of the prerogatives of a jury. In every case which we have examined wherein a plea of guilty was considered as tantamount to a waiver of a jury the plea was to a specific offense and the judge upon such conviction exercised only the authority of a judge and not that of a jury.

We are impressed by the opinion of Justice Black in Johnson v. Zerbst, 304 U. S. 458, 82 L. Ed., 1461, 58 S. Ct., 1019 wherein he concludes that when a right guaranteed the defendant under the Constitution had been abridged the court had no jurisdiction to pronounce sentence upon his conviction. In the instant case we have defined statutory procedure which is essential to jurisdiction which was not followed.

We realize that the question presented is not free from difficulty but are of opinion that the trial judge in the trial of this case had not, in the absence of a written waiver as provided by §13442-4 GC, the jurisdiction to determine the degree of guilt of the defendant, the relator here, nor to pronounce sentence upon that adjudication and that the writ as prayed for should be granted.

It will be so ordered.

MILLER, PJ, WISEMAN, J, concur.