author: By DRUFFEL, District Judge.

text:
    DuMONT LABORATORIES, INC., Plaintiff, v. NATIONAL FACTORS, INC., Defendant.
    United States District Court, S. D. Ohio, W. D.
    Civ. No. 3552.
    Decided May 19, 1958.
    William T. Bahlman, Jr., Paxton & Seasongood, Cincinnati, for plaintiff.
    Philip J. Schneider, Waite, Schindel, Bayless & Schneider, Cincinnati, for defendant.
   OPINION

By DRUFFEL, District Judge.

Findings of Fact

1. Plaintiff, Allen B. DuMont Laboratories Inc., was at the time of the filing of this action and at all times material hereto, and still is, a corporation organized and existing under the laws of the State of Delaware and is a citizen of said state.

2. Defendant, National Factors, Inc., was at the time of filing of this action and at all times material hereto, and still is, a corporation organized and existing under the laws of the State of Ohio and is a citizen of said state. Its principal place of business is located in the City of Cincinnati, Hamilton County, Ohio, in the Southern District of Ohio and Western Division thereof.

3. The matter in controversy exceeds, exclusive of interest and costs, the sum of $3,000.

4. Plaintiff is and was at all times hereinafter referred to in the business, among other things of manufacturing and selling television sets at wholesale.

5. Defendant is engaged in the financing business in Cincinnati, Columbus, and elsewhere, and is the wholly owned subsidiary of Welfare Finance Corporation, an Ohio corporation.

6. Mid-State Distributing Company (herein called “Mid-State”) was an Ohio corporation, with its principal office and place of business located in Columbus, Ohio, and until March of 1955 was engaged in the distribution at wholesale of various appliances to dealers.

7. Mid-State in July of 1954 was attempting to secure the franchise to distribute plaintiff’s television sets to dealers. Mid-State’s officers who were active in this endeavor were Albert F. Cameron, Jr., Treasurer and Stanley Paige, Secretary.

8. Mid-State applied to the defendant for financing in the operation of its business, and defendant insisted to Mid-State that Lawrence Warehouse Company establish on the premises of Mid-State a field warehouse for the storage and protection of merchandise shipped by manufacturers to Mid-State.

9. Defendant also insisted to Mid-State upon an agreement with Mid-State whereby all of Mid-State’s accounts receivable were to be factored by defendant.

10. Mid-State, as depositor, entered into a field warehouse agreement, dated July 8, 1954, with Lawrence Warehouse Company (herein called “Lawrence”). July 12, 1954, the installation of the warehouse had been completed. This warehouse storage agreement provided Mid-State employed Lawrence to establish and operate a field warehouse in Columbus, Ohio, and agreed therein to lease to Lawrence adequate warehouse storage space therefor, and to pay Lawrence certain charges for the installation and operation of said storage warehouse. Lawrence was and is a corporation engaged in the business of operating field warehouses and issuing warehouse receipts for merchandise placed in such warehouses, with offices for its mid-continent division located at Chicago, Illinois.

11. Mid-State in July of 1954 had capital of only $10,000. Plaintiff was unwilling to franchise Mid-State as a distributor of plaintiff’s television sets unless Mid-State was able to obtain outside financing. Mid-State told defendant that plaintiff was waiting a reply from Mid-State as to the decision of defendant on the application of Mid-State for warehouse and accounts receivable financing.

12. On July 20, 1954, defendant advised Mid-State that it was willing to enter into a financing agreement to cover the financing of DuMont products. Subsequently, on August 11, 1954, defendant and Mid-State executed two agreements, one of which related to the financing of Mid-State’s inventory through warehouse receipts, and the other of which provided for the factoring by defendant of Mid-State’s accounts receivable.

13. Under date of July 29, 1954, plaintiff appointed Mid-State the authorized exclusive distributor of plaintiff’s television sets under terms defined in a written distributor franchise agreement.

14. On the same date Mid-State signed and forwarded to the plaintiff its written order for the purchase of 550 television sets on or before September 12, 1954.

15. Defendant was unwilling to finance Mid-State’s inventory of television sets unless defendant had obtained from plaintiff a “repurchase agreement,” which provided plaintiff was obligated to purchase from defendant television sets which defendant might have on its hands in event of default by Mid-State in repayment of sums advanced by defendant for the purchase of television sets from plaintiff. On August 13, 1954, defendant signed such a repurchase agreement and by letter requested that plaintiff also sign the agreement.

16. Before signing the repurchase agreement requested by defendant, plaintiff asked for and received a financial statement from defendant. Defendant on August 14, 1954, in compliance with plaintiff’s request sent plaintiff the financial statement of its parent, Welfare Finance Corporation. In the letter forwarding its financial statement, defendant in turn requested a financial statement of plaintiff, and on August 18, 1954, plaintiff mailed to defendant a copy of its annual report.

17. On August 20, 1954, Paul Wieck, Credit Manager of plaintiff’s Television Receiver Division had a telephone conversation with William H. Bosse, Assistant Secretary of the defendant, who was authorized to act on behalf of defendant. Mr. Wieck advised Mr. Bosse that plaintiff wanted to and intended to bill defendant for merchandise shipped to Mid-State and that due to the poor financial condition of Mid-State, plaintiff could see no other way of shipping them. Mr. Bosse agreed to this method of billing and so advised Mr. Weick. Mr. Wieck, contemporaneously and in the ordinary course of plaintiff’s business prepared a written memorandum of this conversation directing that all bills for DuMont merchandise shipped to Mid-State should be invoiced to defendant in accordance with an agreement between defendant and Mid-State and that the merchandise should be shipped to Mid-State in Columbus. This memo was mimeographed and copies were circulated to plaintiff’s personnel in charge of handling shipments of plaintiff’s television sets to Mid-State.

18. On August 26, 1954, plaintiff returned to defendant the repurchase agreement duly signed by plaintiff. The repurchase agreement limited plaintiff’s obligations to repurchase to a total of $30,000, but this sum was not a limitation on the amount of defendant’s liability to plaintiff for television sets shipped to Mid-State.

19. On August 27, 1954, plaintiff made out an invoice for shipment of 103 television sets. The invoice stated at the top,

“Sold to National Factors Inc.

616 Walnut Street, Cincinnati 2, Ohio

Attn: Wm. H. Bosse”

“Ship to Mid-State Dist.

82 N. Grant Avenue Columbus, Ohio”

The amount of this invoice was $17,406.89, and the television sets referred to on this invoice were shipped by plaintiff to Mid-State.

20. The invoice was mailed to defendant and received by it, and no invoice was sent by plaintiff to Mid-State, Defendant on or about September 1, 1954, learned that no copy of it had been mailed to Mid-State.

21. On or about September 1, 1954, Mr. Bosse of defendant called Mid-State to inquire as to the whereabouts of the warehouse receipt to be issued by Lawrence covering the television sets shipped on plaintiff’s invoice of August 27, 1954. Mr. Cameron of Mid-State told Mr. Bosse that the warehouse receipt could not be prepared since no copy of the invoice had been sent to Columbus and it was impossible to compute the values to be assigned on each warehouse receipt to each television set without a copy of the invoice, which showed excise taxes and other items which had to be prorated among the television sets.

22. September 3, 1954, Mid-State wrote to plaintiff, advising that it had asked Mr. Bosse to send a duplicate copy of the invoice to Mid-State so that the warehouse receipt could be prepared, and requested that in the future duplicate copies of each invoice be sent to Mid-State for this purpose.

23. September 3, 1954, Mr. Wieck, in the ordinary course of business, prepared and circulated a memorandum to DuMont personnel advising that the necessary signatures had been obtained to enable DuMont to finance Mid-State through defendant, that the agreement was with defendant and that for the protection of plaintiff it was imperative that billings should be made to defendant; and that shipments should go to Mid-State.

24. After receiving Mid-State’s letter of September 3, Mr. A. G. Evans, Assistant General Sales Manager of plaintiff, talked over the telephone with Mr. Bosse of Defendant, some time prior to September 13. Mr. Evans asked Mr. Bosse why copies of plaintiff’s invoices were wanted in Columbus, and Mr. Bosse stated that copies were to be used in connection with the preparation of warehouse receipts and Mr. Bosse requested that copies of plaintiff’s invoices be sent to Columbus for this purpose.

25. Plaintiff was not concerned with nor did it have anything to do with the issuance of the warehouse receipts by Lawrence to defendant as warehouse receipt holder, but as an accommodation to defendant it agreed to mail copies of its subsequent invoices to Mid-State to assist in the preparation of warehouse receipts. The original of all invoices concerned in this action were mailed to defendant, and copies were furnished to Mid-State only for the purpose of information and assistance in preparation of warehouse receipts.

26. The following is a record of thirteen (13) shipments of television sets made by plaintiff to Mid-State. In each case invoices therefor were sent by plaintiff to defendant on the dates shown and were received by defendant in due course of the mails, - and all such invoices were made out in the manner stated in Paragraph 19 hereof:

Invoices

Shipments Date 1954 No. of Invoice Number of Tele-sets Amount of Invoice

1 Aug. 27 804236 103 $17,406.89

2 Sept. 10 804812 104 16,677.52

3 Oct. 6 805768 90 15.932.15

4 Oct. 13 806255 133 22,967.50

5 Oct. 29 806838 99 16,565.06

6 Nov. 12 807750 61 11,507.18

7 Nov. 16 807835 67 12.718.16

8 Nov. 17 807852 52 7,743.47

9 Nov. 18 807909 64 12,172.80

10 Dec. 6 808736 58 10,256.63

11 Dec. 22 809507 104 17,963.30

12 Dec. 28 809647 1 715.27

13 1955 Jan. 14 810676 11,714.13

27. Plaintiff has received payment in full on the first seven shipments of television sets, of the total invoice price of $113,774.46, covering 657 television sets. Payments of each of these seven invoices were mailed to the plaintiff by the defendant, which sent to plaintiff its own check for 85% of the amount of each invoice, together with a check of Mid-State, for the balance.

28. The dates of the payments made by defendant to plaintiff on each of the shipments are as follows:

Invoice

Shipments No. Date

1 804236 Sept. 14 — 1954

2 804812 Oct. 8

3 805768 Nov. 4

4 806255 Nov. 16

5 806838 Dec. 2

6 807750 Dec. 10

7 807835 Jan. 7 — 1955

29. Shipments of television sets were made by plaintiff to Mid-State in accordance with a dealers quota arrangement; a specific quota being assigned quarterly by plaintiff to its individual dealers. Mid-State executed its quota sheets on July 29, 1954 for 550 television sets, on September 27, 1954, for 707 television sets and in December, 1954, for 433 television sets. Only 1004 television sets were shipped by plaintiff to Columbus and invoiced to defendant. Each quota, accepted by Mid-State, constituted an order therefor from Mid-State to plaintiff. Plaintiff never submitted to defendant any such quota, and defendant was not requested, either by plaintiff or Mid-State, to sign, countersign, agree to or approve any such quota. Plaintiff shipped television sets to Mid-State on the basis of the quota sheets signed by Mid-State.

30. Plaintiff’s books charged defendant as account debtor at the time each of the thirteen (13) shipments of television sets were made. Plaintiff at the same time carried a separate account for Mid-State to which was charged Mid-State’s open account purchases of television sets and parts therefor.

31. Defendant and Mid-State set up a system for processing of television sets upon their arrival at Mid-State’s premises. The system was that upon receipt of a shipment in Columbus, the television sets would be placed in the field warehouse of Lawrence and Lawrence would issue warehouse receipts to defendants, equal in face amount to the total of plaintiff’s invoice. Mid-State would forward its check for 15% of the amount of the warehouse receipt to defendant. Before any television sets could be released from the warehouse and disposed of by Mid-State, Mid-State was to prepare a release form for defendant’s signature, showing the value as per warehouse receipt of the merchandise to be released, together with Mid-State’s check for 85% of such amount.

32. About December 15, 1954, defendant discovered that television sets had been released from the warehouse without its authorization and without having been paid therefor. The effect of the improper releases created a shortage of television sets in the field warehouse of the declared value of $28,000. Defendant held outstanding warehouse receipts for television sets of this value which Lawrence was unable to deliver because of the improper release thereof.

33. Defendant did not advise plaintiff that these irregularities had been discovered or that there was a shortage in the warehouse.

34. Lawrence at some time between December 22, 1954, and January 2, 1955, padlocked the warehouse on Mid-State’s premises so no merchandise could be placed therein or removed therefrom. Defendant iearned of this as soon as it was done, but defendant did not advise plaintiff thereof.

35. On December 21, 1954, plaintiff wrote defendant and asked defendant to advise plaintiff of the “amount presently owing to your bank” under the repurchase agreement referred to in paragraph 15 hereof, “to assist us in determining the extent of our repurchase agreement liability with your bank for Mid-State Distributing Company.” Plaintiff was asked that this information be furnished shortly after the first of each month in the future. Defendant made no reply of any kind to this letter, although it was defendant’s custom to reply to such letters.

36. Defendant on January 7, 1955, forwarded checks in payment of plaintiff’s invoice No. 807835, which was paid in the same manner as the previous six invoices, without comment and apparently in due course.

37. As a result of a telephone call from Mr. Stanley Paige, Mr. Wieck and Mr. Evans came on February 2, 1955, to the office of defendant in Cincinnati, where they conferred with defendant’s officers, Roy Hummel, Assistant Secretary, Mr. Bosse and Mr. Whitehead, Assistant Secretary and defendant’s Field Auditor. Mr. Hummel had principal charge and these other personnel of the defendant participated in the course of dealing of defendant with plaintiff and Mid-State.

38. Plaintiff first learned of the irregularities in Columbus on this date, and defendant’s representatives assured plaintiff that Mid-State was solvent. Plaintiff made no shipment to Mid-State after January 14, 1955.

39. The conference continued in Columbus at Mid-State’s premises on the next day. Mr. Wieck inquired as to payment of its invoice No. 807909, and Mr. Whitehead, after telephoning defendant’s office in Cincinnati, stated that this invoice was being processed and that plaintiff would receive its remittance. This remittance was never made.

40. Plaintiff with the knowledge and acquiescence of defendant, repossessed certain television sets from the premises of Mid-State in Columbus on February 4, 1955. Credits were duly issued by plaintiff to defendant for the invoice price of the television sets so repossessed, amounting to $25,059.05.

41. On March 11, 1955, an involuntary petition in bankruptcy was filed against Mid-State, and Mid-State was adjudged a bankrupt on April 7, 1955..

42. From the first shipment of August 24, 1954, until the collapse of Mid-State in February, 1955, defendant did not object to plaintiff that it was being invoiced for the television sets shipped by plaintiff.

43. Defendant knew that plaintiff was relying on its credit in making shipments of television sets, and that plaintiff not only was not relying on the credit of Mid-State but believed its capital to be inadequate and its credit unreliable.

44. Plaintiff and defendant did not ever agree on a dollar amount which would be the limit of credit to be extended by defendant for television sets shipped by plaintiff. Defendant was fully informed of the nature and extent of its liability by the original invoices for each shipment of television sets which plaintiff sent to defendant.

45. From late January 1955, until May 26, 1955, the field warehouse on the premises of Mid-State was padlocked, and no television sets were removed therefrom except 141 sets which were repossessed by plaintiff on February 4, 1955, as heretofore stated in Paragraph 40.

46. On February 24, 1955, plaintiff secured permission from Lawrence .to enter the warehouse and made an inventory by physical count of television sets in the warehouse. Plaintiff also recorded the serial numbers of each television set and the invoices on which each set was shipped.

47. Of the 111 television sets in the warehouse on February 24, 1955, 30 sets were shipped on invoices for which plaintiff to date has not been paid. One of these sets had been shipped on plaintiff’s invoice 807852 of November 17, 1954, 16 of these had been shipped on plaintiff’s invoice 807909 of November 18, 1954, 5 of these had been shipped on plaintiff’s invoice 808736 of December 6, 1954, 7 of these had been shipped on plaintiff’s invoice 809507 of December 22, 1954, and one (1) of these had been shipped on plaintiff’s invoice 810676 of January 14, 1955. The total invoice price of these 30 sets was $5,522.22.

48. On May 26, 1955, defendant knew that the warehouse contained television sets which were not identified with any warehouse receipt and for which plaintiff had not been paid. Lawrence also knew that the warehouse contained television sets which were not identified with any receipt.

49. Beginning in December of 1954 and through May of 1955, defendant and Lawrence cooperated in a full investigation of the warehouse inventory, the extent of outstanding warehouse receipts of which defendant was the holder, the history of releases of television sets from the warehouse, and defendant demanded of Lawrence that the merchandise on outstanding warehouse receipts be turned over to it. This demand was made March 11, 1955, at a conference in Columbus, at which Mr. Charles O. Butler, Vice President and General Counsel of Lawrence, represented Lawrence.

50. On May 10. 1955, defendant filed with the Honorable Gail Butt, Referee in Bankruptcy for the United States District Court for the Southern District of Ohio, Eastern Division, its petition for an Order directing the Trustee in Bankruptcy of Mid-State to disclaim certain property, including certain television sets listed therein.

51. The said petition listed the television sets, shipped by plaintiff and invoiced to defendant, which had been under padlock in the warehouse of Mid-State’s premises since the end of January, 1955.

52. Also listed in this application were seven (7) television sets which had not been carried in the inventory made on behalf of the plaintiff on February 24, 1955. These seven (7) additional sets were returned in March of 1955, by dealers to whom they had been delivered by Mid-State.

53. The said petition, signed under oath by Richard F. Whitehead, Assistant Secretary of defendant, stated that, with respect to all of the television sets listed in said petition, the ownership was in defendant .and that Mid-State did not then and never had had title thereto. This petition was prepared by defendant’s counsel in Columbus in consultation with counsel for Lawrence and Mr. Whitehead.

54. On May 24, 1955, as a result of the said petition, the Referee in Bankruptcy entered an Order directing that the Trustee in Bankruptcy of Mid-State disclaim title thereto and that the said property should be released to defendant.

55. On May 26, 1955, defendant signed and delivered to Lawrence receipts for the television sets then in the warehouse. These receipts listed by quantity and model the television sets to which defendant claimed title. One hundred and twenty three (123) sets were included, among them being the 111 television sets inventoried by plaintiff on February 24, 1955, and the 118 television sets listed in the petition to the Bankruptcy Referee filed May 10, 1955. 43 of these sets had never been placed under warehouse receipt.

56. The receipt given by defendant to Lawrence states that television sets were included thereon which were not under warehouse receipt.

57. Defendant disposed by sale of the television sets released from the warehouse on May 26, 1955, and received the proceeds of such sale.

58. Of the 206 television sets, the purchase price of which has not been paid to plaintiff, at least 43 were included among those released from the warehouse on May 26, 1955. One hundred and forty three (143) of these sets were disposed of by dealers, and the proceeds of these sales, amounting to $23,666.23, were received by defendant under its factoring agreement with Mid-State.

59. The proceeds of these sales were assigned to defendant from time to time between November 24, 1954, and February 14, 1955, and defendant knew or should have known that it was receiving proceeds from television sets which had not been warehoused according to its records and for the price of which plaintiff had not been paid. Among these sets were 34 on plaintiff’s invoice of November 17, 1954, 19 from its invoice of November 18, 1954, 30 from its invoice of December 6, 1954, 50 from its invoice of December 22, 1954, and 7 from its invoice of January 14, 1955.

60. Defendant exercised complete dominion over the television sets shipped by plaintiff and for which defendant was invoiced, and treated the television sets as its property. Mid-State had no title to the television sets shipped to it except to the extent that defendant or Lawrence permited Mid-State to deal with them as its own.

61. Defendant is estopped by its conduct and representations from denying that title to the television sets shipped by plaintiff passed to it, or that it is just debted to the plaintiff in the amount of $35,677.19.

62. Bach 28 days beginning at the end of August, 1954, and through February of 1955, plaintiff invoiced defendant showing the total balance due on all shipments unpaid to the date of such statement. Defendant received these invoices and did not object to plaintiff that the invoices were sent to defendant nor as to the amount shown due on any of them, until after it was apparent that Mid-State was insolvent.

63. All of plaintiff’s invoices were due and payable on the dates stated on the respective invoice.

64. The defendant is indebted to the plaintiff in the sum of $35,677.19, with interest at the rate of 6% per annum from February 23, 1955.

Conclusions of Law

Upon the basis of the facts in this case the court concludes:

1. The court has jurisdiction over the parties and the subject matter of this action.

2. Plaintiff’s exhibits 250 and 251 are relevant, admissible and are admitted in evidence.

3. Title to the television sets shipped by plaintiff to Mid-State and invoiced to defendant, passed to defendant upon delivery of the television sets to the carrier or to Mid-State.

4. Defendant assumed the obligation to pay to plaintiff the purchase price of television sets shipped to Mid-State.

5. Defendant is estopped by its conduct and representations from denying that title to the television sets passed to it, or that it is indebted to the plaintiff in the amount of $35,677.19.

6. The plaintiff is not precluded from recovering against defendant in this action by the statute of frauds.

7. Plaintiff is entitled to judgment against defendant in the amount of $35,677.19, with interest at the rate of 6% per annum from February 23, 1955, and for its costs.


source: Caselaw Access Project

author: By BRYANT, PJ.

license: Public Domain

text:
    STATE, ex rel. GEM COAL COMPANY, Relator, v. YOUNG, Admr. Bureau of Workmen’s Compensation et, Respondents.
    Ohio Appeals, Tenth District, Franklin County.
    No. 6170.
    Decided August 4, 1959.

      James D. Hapner, Columbus, for relator.
    Mark McElroy, Atty. Geni., William G. Carpenter, Asst. Atty. Geni., Columbus, for respondents.
   OPINION

By BRYANT, PJ.

The Gem Coal Company, an Ohio corporation, relator herein, filed a petition for writ of prohibition in this court. Named as respondents were James Young, Administrator, Bureau of Workmen’s Compensation, herein called administrator, the Industrial Commission of Ohio, herein called commission, and Joseph T. Ferguson, herein called treasurer.

Relator objects to the holding of a hearing held on April 1, 1959, by the commission at which an offer of a compromise settlement was considered after which, on April 6, 1959, a complete and final settlement of a death claim was approved by the commission and accepted by the claimant, who at the time, was given a check for the full amount of the award.

On April 9, 1959, three days after the settlement above referred to, relator filed his petition for writ of prohibition in this court. In substance, it alleges that on March 26, 1956, one C. E. Byers, then an employee of relator, was injured and thereafter on April 21, 1957, died. The widow, Mary D. Byers, filed a claim for compensation which had been heard by the administrator and a regional board of review and was pending on appeal before the commission.

Relator says that the hearing on April 1, 1959, devoted to considering the compromise settlement, was objected to by relator and held without its consent. Relator further objects that the decision or final order accepting the compromise offer on April 6, 1959, was without its knowledge or consent.

Relator contends there was no causal connection between the injury and the death, that there was not even any question about it sufficient to warrant a compromise settlement, and that unless the employer agrees thereto, the commission lacks jurisdiction to consider or accept the compromise offer.

The answer of the commiission admits that the Byers’ claim was pending before it on appeal and that the various procedural steps previously had been taken; denies allegations in the petition not admitted to be true and enlarges upon the circumstances concerning its actions. The commission says a hearing on the question of settlement was held April 1, 1959, that prior thereto notice was given to the parties, that the issue was taken under advisement and was decided on April 6, 1959, in a lengthy order which is pleaded in full. The commission determined that decedent suffered a hernia while working for relator, that such injury occurred during the course of and arising out of his employment with relator and that there is some question as to the causal relationship between the injury and death. The order makes a death award of $6,000 to the widow as a compromise settlement. The answer also sets forth the release signed by the claimant in which she accepts the compromise and acknowledges receipt of a warrant or check for $6,000 in full settlement of the claim. The release was dated April 6, 1959.

Relator has demurred to the five defenses in the answer of the commission, which defenses are in substance d) the commission did not exceed its jurisdiction; (2) prohibition will not function retroactively and cannot halt an order or decision made before the suit was filed; (3) that relator has an adequate remedy at law and may, at the proper time, contest the validity of any illegal increase in premiums or contributions; (4) that relator lacks the legal capacity to maintain an action in prohibition and has no interest in the distribution of the state insurance fund, and (5) that a writ of prohibition may not be used to control the exercise of discretion by the commission.

As above pointed out the prayer of the petition is in the alternative and the final relief sought against the commission is to prevent it from “effectuating” its order of April 6, 1959, or charging the payment of the claim against relator’s account.

The demurrer to the answer admits all of the well pleaded allegations therein contained and it must be assumed to be true, that a hearing on the question of settlement was held on April 1, 1959, that all parties entitled to notice were duly notified and that the various steps detailed were taken as alleged in the answer. Of particular interest here is the fact that after considering the question for five days, the commission made a death award of $6,000 in final settlement, that claimant accepted this and received a check of the state of Ohio in full payment, and all of this was done April 6, 1959.

The first defense is a denial that the commission exceeded its jurisdiction and while the general denial earlier in the answer may have been sufficient, we see nothing harmful in denying specifically an allegation set forth in the petition. That is the main issue in the case. Sec. 4123.65 R. C., contains this provision:

“Before any final settlement agreement is approved by the industrial commission, application therefor shall be made to the commission. * * *”

Relator contends that the agreements above referred to must be made by someone other than the commission and infers that it refers to agreements between the claimant and employer and that the commission lacks jurisdiction to consider any other kind of final settlement. This narrow interpretation is not supported by other provisions of the law dealing with this subject. For example, in §4121.12.1 R. C., the administrator at any time may recommend to the commission a final settlement whether or not the claim is then pending before the commission. Paragraph J of said §4121.12.1 supra, R. C., reads as follows:

“(J) The administrator may at any time recommend to the commission * * * the final settlement of a claim whether or not the claim is then pending before the commission whereupon the commission shall hear and determine the matter in accordance with §§4123.64 and 4123.65 R. C.”

Further, in §4121.31.1 ft. C., the commission is given general power to determine applications for final settlement, the said section providing in part as follows:

“The industrial commission * * * shall * * * determine applications for final settlements as provided in §§4123.64 and 4123.65 R. C., * * .”

The demurrer to the first defense is not well taken and must be overruled.

The second defense in substance is that the petition was filed too late and that prohibition will not lie to prohibit an order or decision which already has been made. From the facts of the answer, which for the purpose of this demurrer are admitted to be true and the facts as shown in the petition, it appears that every step which could be taken by the commission including the hearing, the decision, the entry of the order, the payment in full of the death warrant, the acceptance by the claimant and the execution of the receipt and release had been fully accomplished three days before the petition was filed. The demurrer to the second defense therefore is not well taken and must be overruled. See State, ex rel. The Ohio Stove Co., v. Coffinberry et al, Industrial Commission of Ohio, 149 Oh St 400, in which the syllabus reads as follows:

“Prohibition will not lie to prevent the enforcement of an order of the Industrial Commission, claimed to have been rendered without jurisdiction, where at the time such writ is sought the order is a fait accompli.”

In substance, the third defense is that prohibition will not lie because relator has an adequate remedy at law. Stated another way, it is claimed on behalf of the commission that if relator’s premiums in the future are increased illegally, relator may at that time raise the question of illegality thereof. This view finds support in State, ex rel. The Cleveland Co-Operative Stove Co., v. Coffinberry et al, Industrial Commission of Ohio, 150 Oh St 516, in which Hart, J„ who wrote the opinion, said at page 523 thereof:

“Finally, relator in the instant case does not allege that its merit-rating has been or will be affected by the allowance of Kanz’s claim. If that time ever arises, it may assert a remedy at law in resisting a payment of alleged illegal premiums.”

The demurrer to the third defense is not well taken and must be overruled.

We observe that the fourth defense is substantially similar to the .third defense and that the fifth defense appears to be substantially identical with the first defense. No further discussion of these two defenses need be made. The demurrer to the fourth and fifth defenses will be overruled.

For the reasons above set forth, the demurrer as applied to each of the five defenses set forth in the answer is not well taken and must therefore be overruled. But we are not permitted to stop there for the demurrer searches the whole record and reaches the first pleading defective in substance. This is a well settled rule. There are only two pleadings and we have held that the demurrer is not well taken as to the answer.

In Volume 41 of American Jurisprudence, Pleading, §232, p. 455, it is said:

“It is a familiar rule that a demurrer searches the whole record and will be carried back to the first substantial defect; judgment will be given against the party who committed the first fault in pleading, or which will usually produce the same result, for him who, upon the whole record, appears entitled to judgment.”

In Volume 31, O. Jur., Pleading, §108, p. 670, it is said:

“Effect of Demurrer to Search Record. — While a demurrer reaches only defects appearing upon the face of pleadings, the court is not restricted to the particular pleading against which a demurrer is directed; it is, on the contrary, an elementary principal of pleading that a demurrer searches the whole record, and reaches the first pleading defective in matter of substance, but does not raise any question as to defects in some matter of form in the earlier pleading. It searches the pleadings of the parties to the end that the judgment shall be given against the party whose pleadings are first defective in substance.”

What then of the petition when tested by demurrer? Does it allege facts sufficient to set forth a cause of action in favor of the relator?

We well recognize that the petition and its several allegations must be liberally construed in favor of the pleader when testing it on demurrer.

The petition was filed on April 9, 1959, and by its express terms, seeks to prohibit performance of acts which were fully and finally performed three days before to wit, on April 6, 1959. The hearing on the question of a final settlement was held and concluded on April 1, 1959, after notice to all parties. The decision setting forth the reasons in detail was made and entered upon the journal of the commission on April 6, 1959, and on the same date the terms of the settlement were accepted by the claimant who executed a release and receipt therefor. In addition, the commission caused its check to be drawn and delivered to the claimant. A writ of prohibition cannot prohibit that which has already been fully and finally performed.

The only question remaining relates to the alleged effect of the settlement of the claim upon relator’s merit-rating and as we have already pointed out, relator in the event of an illegal increase in premium at some future day, may at that time challenge such increase.

We conclude therefore that relator’s petition fails to set forth a cause of action and must be dismissed at the costs of the relator and the temporary injunction heretofore issued must be dissolved.

DUFFY, J, concurs.

MILLER, J, not participating.


author: By CECIL, District Judge.

text:
    STATE, ex rel. KLAPP, Pros. Atty., Plaintiff, v. DAYTON POWER & LIGHT COMPANY, an Ohio Corporation et, Defendants.
    United States District Court S. D. Ohio, W. D.
    Law No. 847.
    Decided August 2, 1957.
    R. K. Wilson, Director of Law, Piqua (successor to Bernard S. Keyt), J. H. DeWeese, Pros. Atty., Troy, Haveth E. Mau, Robert Houston French, Cincinnati, for plaintiff.
    Franklin L. Shipman, Troy, Julian De Bruyn Kops, Jr., J. R. Newlin, Dayton, for defendants.
   OPINION

By CECIL, District Judge.

This is an action in Quo Warranto brought by the State of Ohio on the relation of Paul T. Klapp, Prosecuting Attorney of Miami County, Ohio. It was originally filed in the Court of Appeals of Miami County, Ohio. Thereafter, the Knickerbocker Trust Co., and the Irving Trust Co., both New York corporations, were made parties defendant to the action and the case was removed to this court by reason of diversity of citizenship.

While pending in this court the claims of the parties shifted somewhat, which resulted in a confused state of the pleadings. In order that the claims and supplemental claims which had developed be consolidated in one set of pleadings for the convenience of the court, the parties were directed to file amended pleadings.

The amended complaint was filed in February, 1955, by James H. DeWeese, successor in office to Paul T. Klapp, Prosecuting Attorney. The amended answers of The Dayton Power and Light Company and the Irving Trust Company were filed in December, 1955, after the trial on the merits, in June.

The amended complaint challenges the authority of The Dayton Power and Light Company as a public utility to distribute light, heat and power in the City of Piqua, Ohio, and seeks to have an order requiring the company to remove all of its poles, wires and equipment and to cease operating in the city.

The amended answer of the Irving Trust Company adopts the defenses of its codefendant. The Dayton Power and Light Company sets up 17 defenses in its amended answer.

The case was tried and submitted to the court on the amended pleadings, the stipulations of facts, the evidence, oral arguments and briefs of counsel.

One of the principal contentions of the Dayton Power and Light Company, hereinafter called the Dayton Company, is that this court or any court does not have jurisdiction of the subject matter of the action. It is claimed that §§4905.20 and 4905.21 K. C., commonly called the Miller Act, are controlling and that the City of Piqua, hereinafter called Piqua, must make an application to the Public Utilities Commission of Ohio for an order.

The court finds the facts to be as set forth in the stipulations and that the facts thus found are sufficient to support the conclusions herein reached.

The origin of the relationship of Dayton and Piqua is an ordinance of Piqua passed January 29, 1884, marked Ex. A., attached to the stipulations of April 15, 1954, and which reads as follows:

“An Ordinance

“XI144

“Granting the Edison Illuminating Company the right of way for poles and wires through the streets of the City of Piqua.

“Sec. 1. Be it ordained by the City Council of the City of Piqua, that the Piqua Edison Illuminating Company and their successors are Hereby granted the right for the purpose of furnishing illuminating light and heat and power to erect their poles and stretch their wires thereon through the streets, alleys, and public ways of said City of Piqua; Provided, and this grant is made on these conditions, that said poles and wires shall be so placed as not to interfere with the ordinary course of travel in said City of Piqua, and that said company shall promptly repair all damages done to any streets, alleys, public ways, gutters, curb or sidewalks by the erection of said poles.

“Sec. 2. This ordinance shall take effect and be in force in ten days after the first publication thereof. Passed Jan. 29, 1884. W. P. Orr, President; J. H. Hatch, Clerk.”

The Dayton Company is the successor of the Edison Illuminating Company.

On January 16, 1933, the City Commission of Piqua passed the following Resolution:

“Be it resolved by the commission of the City of Piqua, Ohio, three-fourths of all members elected thereto concurring:—

“Section 1. That the Director of Law of said City be, and he is hereby authorized and directed to commence such action in the proper court so as to prohibit The Dayton Power and Light Company from occupying public streets, alleys and other public places for Distribution System.

“Section 2. This Resolution shall take effect and be in force from and after its passage.”

By the third defense of the Dayton Company it charges that the ordinance of 1884 was invalid for the reason that at that time the State had not granted power to cities to exercise such control over their streets and alleys. This issue was not presented when the court decided the motion for summary judgment although it was a pertinent issue then as now.

Whether or not a contract existed in 1933 between the parties as a result of this ordinance is important. This court previously held in a decision (January 19, 1955), on a motion for summary judgment, that a contract between a city and public utility company entered into before the passage of the Miller Act was not governed by it and that such a contract without a termination date being specified was terminable at will of either party. It was held in East Ohio Gas Co. v. City of Cleveland, 106 Oh St 489, 140 N. E., 410, that to apply the Miller Act under such circumstances would impair the obligations of a contract.

The revised Municipal Code of 1878, 75 Ohio Laws, p. 161, gave certain powers to cities and villages and it is claimed by counsel for Piqua that these powers are broad enough to authorize the ordinance of 1884.

This might be persuasive except that the courts have held that cities and villages had no power to pass such ordinances in 1884.

“Under the Constitution, previous to the amendment in 1912, municipal corporations in their public capacity possessed such powers, and such only, as were expressly granted by statute and such as might be implied as essential to carry into effect those which were expressly granted. Ravenna v. Pennsylvania Co., 45 Oh St 118, 12 N. E., 445.” Billings v. Cleveland Railway Co., 92 Ohio St 478, 482, 111 N. E., 155, 156.

“The first enactment touching the power of companies organized for the purpose of supplying electricity for lighting streets, etc., was passed May 12, 1886 (83 O.. L., 143), and authorized such companies to construct lines for conducting electricity for power and light purposes through alleys, etc., ‘with the consent of the municipal authorities of the city, village or town, and under such reasonable regulations as they may prescribe.’ Prior to 1886 there was no statute conferring power on the municipality to grant to an electric light company the right to erect poles.” Hardin-Wyandot Lighting Co. v. Village of Upper Sandusky, 93 Oh St 428, 438, 113 N. E., 402, 404.

“First, as to the Brush Electric Light Co. The ordinance of the city council, granting to it the right to erect and maintain in the streets, avenues, alleys and public grounds of the city, poles and appurtenances necessary for furnishing light by means of electricity, was passed March 3, 1882. At that time there was not, nor until May 12, 1886 (83 Ohio L., 143) was there any statute of the state, which expressly conferred upon the municipal authorities of a city the right to make such a grant — and we are of the opinion that in no one of the clauses of §1692 R. S., which is the general statute pointing out and enumerating the powers granted to municipal corporations, or by the provisions of §§2492, or 2640 to which our attention has been called by counsel for the plaintiffs, is any such power conferred, even by implication. The clear doctrine of the law is, that municipal corporations have such powers only as are expressly conferred by the legislature, ‘and those which are necessarily or fairly implied in, or incident to the powers expressly granted, or those essential to the declared objects and purposes of the corporation- — not simply convenient, but indispensable. Any fair, reasonable doubt concerning the existence of the power, is resolved by the courts against the corporation, and the power is denied.’ 2 Dillon on Municipal Corporations, 4th Ed., 145; 45th Ohio St 118.” Brush Electric Light Co. v. Jones Bros. Electric Light Co., 5 Ohio Cir. Ct. R., 340, 341. See also City of Wellston v. Morgan, 59 Oh St 147, 52 N. E., 127 and Toledo Electric Street Railway Company v. Western Electric Light & Power Company, 10 Ohio Cir. Ct. R., 531.

The court must conclude that this ordinance was ultra vires Piqua at the time it was passed.

Did it ripen into a contract through use and mutual consent? In the Wellston case, supra, it was held that where a city attempted to make a 99-year contract which was not authorized, it could not be construed as a 10-year contract which was authorized. A contract requires a meeting of minds and the court cannot make a contract for the parties. Neither can a contract be made by occupancy and lapse of time. Dayton was an occupant at sufferance. Toledo Electric Street R. Company v. Western Electric Light & Power Co., supra.

“A void contract is no contract at all; it binds no one and is a mere nullity. Accordingly, an action cannot be maintained for damages for its breach. It requires no disaffirmance to avoid it and it cannot be validated by ratification. 12 Am. Jur., Contracts, Sec. 10, p. 507.”

Counsel for Piqua argue that Dayton is estopped to deny that there was a contract.

Estoppel has been applied in a number of cases between cities and public utility companies where there was a lack of power in the city to make a contract. In all of these cases that have come to the attention of this court the matter involved was an acceptance of benefits and a denial of obligations. In most cases a refusal to be bound by rate provisions.

The Court of Appeals for the Sixth Circuit said in Smith v. Price Bros. Co., 131 F. (2d), 750, at page 754, “On the other hand, under the Ohio precept of the rule, in order to create estoppel by acceptance of benefits, it is essential that the person against whom estoppel is claimed, should have acted with knowledge of the facts and of his rights, and that the party claiming estoppel should have been without knowledge or means of knowledge of the facts on which he based his claim and that he was misled to his prejudice.”

Clearly, here both parties had access to the facts and certainly Dayton did nothing to mislead Piqua to its prejudice.

“Equitable estoppel or estoppel in pais is the principle by which a party who knows or should know the truth is absolutely precluded, both at law and in equity, from denying, or asserting the contrary of, any material fact which, by his words or conduct, affirmative or negative, intentionally or through culpable negligence, he has induced another, who was excusably ignorant of the true facts and who had a right to rely upon such words or conduct, to believe and act upon them thereby, as a consequence reasonably to be anticipated, changing his position in such a way that he would suffer injury if such denial or contrary assertion were allowed.” 19 Am. Jur., 634.

“Generally speaking, however, equitable estoppel is a rule of justice which in its proper field prevails over all other rules.”

“The doctrine of estoppel in pais is founded upon principles of morality and fair dealing and is intended to subserve the ends of justice.” 19 Am. Jur., 640.

The court should invoke the rule of estoppel when applicable to prevent an injustice. But what injustice will Piqua sufier if the doctrine of estoppel is not invoked?

By applying the rule of estoppel one is precluded from asserting the truth but estoppel can not create a contract where none existed. If there is no contract no question can arise under the constitutional prohibition against impairing the obligations of a contract. The East Ohio Gas case, supra, cannot be stretched beyond the narrow limits of the principle decided.

The court takes the position that a valid contract entered into prior to the effective date of the Miller Act would not be governed by the Miller Act because of East Ohio Gas case, supra. If no valid contract existed in 1933, the Miller Act would apply.

The Miller Act is a regulatory measure and was passed under the police power of the State. The theory behind it is that it is for the protection and benefit of the health and welfare of the people. Therefore, the citizens of Piqua have a stake in the controversy and it is not purely a dispute between Piqua as a corporation and the Dayton Company.

The Legislature of Ohio has deemed that the interests of the people can best be served by the application of the sections of the Miller Act above quoted to terminations, abandonments or withdrawals. of services of public utilities.

It is the duty of the court to apply the law of Ohio and not to evade it.

The second paragraph of §4905.21 it. C., reads in part as follows:

“Upon the hearing of said application, the commission shall ascertain the facts and make its findings thereon, and if such facts satisfy the commission that the proposed abandonment, withdrawal, or closing for traffic or service is reasonable, having due regard for the welfare of the public and the cost of operating the service or facility, it may allow such abondonment, withdrawal, or closing; otherwise it shall be denied, or if the facts warrant, the application may be granted in modified form.”

The court can see no injustice to Piqua in the application of this procedure. The court finds that the doctrine of estoppel is not applicable and that there is no necessity to invoke it.

There being no contract, the court is of the opinion that the rule would be the same as where a contract had expired and the utility continued to operate. Lake Shore Electric Ry. Co. v. State, ex rel. Martin, 125 Oh St 81, 180 N. E., 540.

The court concludes that the ordinance of 1884 is void as constituting a contract between Piqua and Dayton and that the sections of the Miller Act above quoted are applicable. Consequently, Piqua must seek its remedy before the Public Utilities Commission and the Amended Complaint will be dismissed.

Having arrived at this conclusion, it is not necessary to consider the other 16 defenses.

The court considers that the facts and conclusions of law are sufficiently stated herein to comply with Rule 52 of the Rules of Civil Procedure, 28 U. S. C. A.

Counsel for Dayton will prepare an Order and submit it to opposite counsel and to the court for approval.

ON MOTION for a New Trial.

This case is before the court on a motion of the plaintiff for a new trial.

The only question argued by counsel for the plaintiff, either orally or by brief, concerns the application of the doctrine of estoppel. Counsel insist that the Dayton company is estopped to deny that the relationship between the Dayton company and Piqua created by the ordinance of 1884 was not a valid contract.

As a result of this ordinance the predecessor of the Dayton company entered the City of Piqua and installed poles, wires and equipment for the purpose of furnishing electric light and power to the city and its residents. Thereby mutual and reciprocal rights, benefits and obligations were established between the parties. This relationship continued for forty-nine years and each party received its benefits and performed its obligations according to the mutual understanding between them.

It was Piqua, not the Dayton company, that terminated the relationship. On January 16, 1933, Piqua, after establishing its own electric plant, and when it no longer needed the services of the Dayton company, passed a resolution terminating the alleged contract. Piqua then sought by Quo Warranto proceedings to tell the Dayton company that it no longer had any authority to remain in the City of Piqua and that it must take every last pole, wire and piece of equipment and get out.

This is not a case of the Dayton Company quitting and attempting to take with it or keep something such as land or other benefits acquired through the relationship. Piqua had the alleged contract as long as it wanted it and got from it all of the benefits it wanted. If Piqua prevails in its Quo Warranto action the Dayton company goes out with nothing except the salvage value of its equipment and the expense of dismantling it.

The question is a matter of procedure. Shall Quo Warranto apply as would be the case if the ordinance of 1884 created a valid contract? Or shall Piqua seek its remedy before the Public Utilities Commission as is the case where there is no contract and when the contract was made after the Miller Act, commonly called, was enacted?

This is purely a legal question and not an equitable one.

The court should endeavor to apply the law of Ohio and not evade it as was stated in the decision of August 2, 1957.

It is the opinion of the court that counsel for plaintiff wrongly apply the doctrine of estoppel. The motion for new trial in its entirety, will be overruled.


author: Per CURIAM.

text:
    STATE, ex rel. KLAPP, Prosecuting Attorney, Appellant, v. DAYTON POWER & LIGHT CO. et, Appellees.
    United States Court of Appeals, Sixth Circuit.
    No. 13516.
    Decided January 22, 1959.

      J. R. Newlin, Dayton, Franklin L. Shipman, Troy (Julian De Bruyn Kops, Dayton, on the brief), for appellees.
    Robert H. French, Cincinnati (Richard K. Wilson, Piqua, Haveth E. Mau, Robert Houston French, Cincinnati, on the brief), for appellant.
    Before ALLEN, Chief Judge, SIMONS, Circuit Judge, and GOURLEY, District Judge.
   OPINION

Per CURIAM.

In an action quo warranto originally filed in the state court the District Court, after removal and eventual hearing on the merits, gave judgment for defendant. Defendant, ard its predecessors, electric light and power companies, had operated in Piqua, Ohio, for nearly 50 years in accordance with an ordinance of the city. In this action the city sought to oust defendant from the streets and public places of the city and to force defendant to remove its poles and other equipment from such streets and public places upon or over the ground. A later stipulation joined in by the city excepts from the prayer for removal equipment used to carry electric power through Piqua on its way to points beyond the city.

Relator, representing Piqua, joined a nonresident trust company incorporated in New York State, successor to defendant’s mortgagee and trustee for bondholders, as defendant in the action. The nonresident mortgagee and trustee in turn removed the case to the District Court. A motion by relator to remand the case to the state court was later denied. We think this action was correct. The mortgage which defendant executed to secure funds partly used for the operation in Piqua, was executed prior to the filing of this action. Defendant’s mortgagee was therefore entitled to have its rights adjudicated in federal court. The successor mortgagee and trustee was entitled to the same remedy. Chase National Bank v. City of Norwalk, opinion by Mr. Justice Brandeis, 291 U. S., 431, 54 S. Ct., 475, 78 L. Ed., 894. If the nonresident mortgagee is entitled to have its rights adjudicated in the federal court a fortiori the mortgagee or its successor is entitled to removal.

In the original action defendant’s answer relied upon the alleged fact that a valid contract or franchise to operate in Piqua was embodied in an ordinance duly enacted in 1884 and accepted by defendant’s predecessor. After numerous amendments and supplemental proceedings defendant shifted its position on this point and asserted in its final answer that the ordinance of 1884 was invalid, that no contract between defendant and Piqua existed and that the city had not applied to the Public Utilities Commission of Ohio for relief, as required by §§4905.20 and 4905.21 R. C. These sections require that in case abandonment, withdrawal or closing of service of a public utility is sought, permission must be secured from the Public Utilities Commission of the State of Ohio for such withdrawal or abandonment. If the contract was valid and existed when this action was filed the Miller Act would not apply, for under such circumstances the application of the sections cited would impair the obligation of the contract. East Ohio Gas Company v. City of Cleveland, 106 Oh St 489, 140 N. E., 410. The District Court held that no valid contract existed between the parties when the action was filed and that this point disposed of the case.

Relator in its original petition had denied the existence of any valid contract between the city and defendant, but in its final amended complaint it shifted its position and claimed that the contract was valid but had been terminated by the city in 1933. It attacks the judgment herein upon the ground that the contract was valid and that defendant was estopped to plead the invalidity of the ordinance and the contract.

We do not discuss this contention at length but refer to the scholarly opinion of the district court after trial upon the merits, with its excellent discussion of the legal questions involved. As rightly found by the court, the city was in no way misled by defendant’s shift in position. The city itself had radically altered its theory of the ease for the purpose of trial on the merits and neither party was prejudiced by this mutual change of position. Both defendant and the city had derived advantages from defendant’s use of the streets of Piqua. Moreover, as found in effect by the district court, the equities preponderate in favor of defendant. If ordered to remove its equipment defendant will have nothing but the salvage value and it is estimated that its loss will be $425,000.

The conclusion of the District Court that the ordinance of 1884 was invalid is supported by the applicable Ohio law. Ohio cities had no power in 1884 to pass an ordinance bestowing a franchise upon a public utility company for the use of the city streets. Ravenna v. Pennsylvania Company, 45 Oh St 118, 12 N. E., 445; Billings v. Cleveland Railway Company, 92 Oh St 478, 111 N. E., 155. The long use of the streets by defendant and its predecessors did not create a valid contract. Since in 1933 no contract existed between the parties, the Miller Act, §4905.21 R. C., applies and the city is required to seek from the Public Utilities Commission permission for the proposed withdrawal of service by defendant. Cf. City of Cincinnati v. Public Utilities Commission of Ohio, 137 Oh St 437, 19 O. O. 143, 30 N. E. (2d), 797.

The judgment is affirmed upon the grounds and for the reasons stated in the decision of the District Court filed August 2, 1957, and in the decision overruling motion for new trial filed December 11, 1957.

      . The parties will be denominated as in the court below.


author: By BAYNES, J.

text:
    STATE, Plaintiff, v. BRASKETT, Defendant.
    Common Pleas Court, Madison County.
    Nos. 4477, 4528 and 4600.
    Decided September 24, 1959.
    Forrest E. Sidener, Pros. Atty., London, for plaintiff.
    James B. Patterson, Jr., London, for defendant.
   OPINION

By BAYNES, J.

Defendant stands indicted in three consecutive indictments by the April 1958, September 1958 and September 1959, terms of the Madison County Grand Jury for failure to provide for his minor child Jeffrey Lynn Braskett under the age of 18 years (now six years of age), under favor of §3113.01 R. C. This substantially identical section was designated §13008 GC.

The cases upon motion of the Prosecuting Attorney were ordered consolidated for trial, under favor of §2941.04 R. C., upon defendant’s pleas of not guilty. The defendant, under claim of indigency, was assigned counsel to represent him, under favor of §2941.50 R. C.

Defendant’s counsel filed identical motions in each case to require Jeffrey Lynn Braskett and his mother Mary Lou Braskett, now Mary Lou Swarm, to submit to a blood grouping test under favor of §2317.47

R. C., which provides:

“Whenever it is relevant in a civil or criminal proceeding to determine the paternity or identity of any person, the trial court on motion shall order any party to the action and any person involved in the controversy or proceeding to submit to one or more blood grouping test

A memorandum accompanies the motion. Defendant relies on State v. Snyder, 157 Oh St 15, 104 N. E. 2d 169, 47 O. O. 24, wherein a conviction for failure to provide was reversed, when the trial court overruled defendant’s motion for a blood grouping test.

The question in the instant case arises, however, as a result of the memorandum contra filed by the Prosecuting Attorney wherein it is pointed out that the defendant in eases numbers 3965 and 3973 entered a plea of guilty to the charge of failure to provide for Jeffrey Lynn Brasket, which charges were subject of entries filed May 28, 1953. It is the prosecution’s contention that the question of the paternity of Jeffrey Lynn Braskett was determined by the former pleas and judgment of this Court thereon.

In essence the question is, can a defendant in a criminal proceeding, under the facts of this case, be estopped to deny his paternity of the child which the indictment alleges is defendant’s duty to support?

It is undisputed law of Ohio that where material facts or issues were judicially determined in a former suit by a court of competent jurisdiction they are res judicata and cannot again be litigated in any future action between the same parties in the same or any other court. See 32 O. Jur. 2d 58, Sec. 307. The doctrine is applicable to judgments in criminal prosecutions. See 15 O. Jur. 2d 442, Sec. 259.

But there are no annotated cases in Ohio, and we are unable in a search of the Digest System from 1916 to the most recent advance sheet to find any reference to the instant question, and nothing helpful otherwise in Ohio reported cases.

It is recognized in Federal jurisprudence that the doctrine of res judicata applies to criminal as well as civil cases and operates to conclude those matters in issue which the verdict determined even though the offenses be different. See Seafton v. U. S., 68 S. Ct. 237, 239, 322 U. S. 575, 92 L. Ed. . The same rule has been enunciated in at least seventeen states and applied in others.

It is technically precise to say in the instant case that the determination of the question raises the doctrine of estoppel by judgment and not the doctrine of res judicata. The difference was clearly enunciated in State, ex rel. Water Co. v. Sanitary District, 169 Oh St 31, 157 N. E. 2d 116, 8 O. O. 2d 150, Bell, J., speaking for the court said:

“In the case of estoppel by judgment, only those issues actually litigated and determined in the preceding action are foreclosed so far as subsequent determination is concerned.”

The facts of the motion for blood grouping test were established when defendant was arraigned on indictment number 4600, which are:

1. Indictments numbers 3965 and 3973 are based on identical offenses as numbers 4477, 4528 and 4600.

2. All indictments are prosecuted by and on behalf of the State of Ohio.

3. That the child, Jeffrey Lynn Braskett, is one and the same child named in each indictment.

4. That the defendant, Gene (aka Eugene) Braskett, is one and the same person named in each indictment.

5. That Jeffrey Lynn Braskett was found to be the legitimate child of the defendant in cases numbers 3965 and 3973, and the same was reduced to judgment.

If it is the law of Ohio, and we find it so to be, that estoppel by judgment is applicable to the issue of paternity, it meets the test in that the estoppel relates to the same matter in a physical sense as that which was subject of judgment in former proceedings. It also raises an identical question of law or issue of fact which was expressly determined by such former judgment.

In construing §2317.47 E. C., as to whether defendant is entitled to an order of blood grouping tests, the key word is “relevant.” Paternity of the named child is, of course, relevant to the indictment. But it is a separate question as to whether it is relevant in so far as it is available to defendant as a defense so that he would be entitled to introduce evidence thereon. The precise question has been the subject of judicial decision which is referred to in 147 A. L. R. 991, at 1004, where on questions of paternity the following is said:

“A former conviction of the defendant for neglecting to provide for the support of a certain minor child, in which the paternity of the child was necessarily involved, was held to be conclusive evidence that the defendant was the father of the child and to estop the defendant, in a subsequent prosecution for failure to support the same child, from setting up the illegitimacy of the child as a defense or from introducing evidence to that effect. Com. v. Ellis (1893) 160 Mass. 165, 35 N. E. 773.

“Similarly, a former conviction in a prosecution for failing to provide for a minor child, necessarily involving a finding that the defendant was the father of the child, was held to be conclusive on the defendant, in a subsequent prosecution for a similar offense, on the question of parentage, and to render incompetent the defendant’s evidence that he was not the father of the child. People v. Majado (1937), 22 Cal. App. (2d) 323, 70 P. (2d) 1015.”

We are disinclined to a general application of sociological theories of jurisprudence. But in a case such as this, it will not do for the paternity of minor children to be put in issue more than once. Certainly if the issue had, at a former trial, been resolved in defendant’s favor a special plea would properly be, and no doubt would be, immediately forthcoming. The legal justification of the Ellis and Majado cases, above ouoted. are. of course, cogent enough, standing alone. We, therefore, conclude that the motion of the defendant is not well taken and that same should be overruled.

The Prosecuting Attorney on behalf of the State of Ohio is directed to prepare an entry accordingly submitting same to defendant’s counsel and to the Court for approval, according to rule, noting defendant’s exceptions.


author: By KERNS, J:

text:
    COOK, Plaintiff-Appellee, v. CRABILL et, Defendants-Appellant.
    Ohio Appeals, Second District, Greene County.
    No. 543.
    Decided May 6, 1959.
    Wead & Aultman, Xenia, for plaintiff-appellee.
    Miller & Finney, Marshall & Marshall, Xenia, for defendants-appellant.
   OPINION

By KERNS, J:

This is an appeal on questions of law and fact from the Common Pleas Court of Greene County, Ohio.

The petition originally filed by the plaintiff-appellee, Alma Hilt Cook, sought to have certain property partitioned. An answer and cross-petition were filed by defendants-appellant asking for the construction of the will of David Hilt and for other relief. A reply and answer were filed wherein the plaintiff-appellee joined in the prayer of the defendants-appellant for the construction of the will of the decedent, David Hilt.

The plaintiff-appellee, Alma Hilt Cook, is the adopted daughter of Henry Hilt, who was the son of David Hilt. The defendants-appellant are the natural lineal descendants of David Hilt.

The plaintiff-appellee was adopted by Henry Hilt on February 7, 1912. The will of David Hilt was executed on January 24, 1925, and he died on April 1, 1925. Henry Hilt died on November 3, 1952, leaving his adopted daughter, Alma Hilt Cook, as his survivor and sole heir at law.

The fifth item of the will of David Hilt reads as follows:

“I give, devise and bequeath to my son Henry Hilt and to my daughter Lizzie Crabill my home place consisting of 148 acres of land, more or less, and in case of the death of either without living issue then the equal share of the deceased shall revert to my living children or their heirs in equal amounts.”

At the outset, it is deemed necessary to determine the nature of the estate which Henry Hilt took from his father, David Hilt, under the language above quoted. The plaintiff-appellee contends that said language devises the undivided one-half of the farm to Henry Hilt in fee simple absolute. However, this contention appears vulnerable. The language undoubtedly contemplates the taking of the property and the enjoyment thereof by Henry Hilt, but the second clause of said provision also clearly discloses that the title devised to Henry Hilt was to be a determinable or qualified fee, not passing absolutely in fee simple, but made subject to the contingency that “in case of the the death of either without living issue then the equal share of the deceased shall revert to my living children or their heirs in equal amounts.” Had the testator intended to devise the property without qualification, he could very easily have done so by concluding the provision after the first independent clause thereof. However, having expressly superadded the condition of reverter in the second clause, a determinable or qualified fee was created.

This conclusion merely recognizes the fundamental rule of construction that the language deliberately used in a will is presumed to have been placed there for a purpose and cannot arbitrarily be ignored. For the rule of property involved, see the case of Piatt v. Sinton, 37 Oh St 353, where the second branch of the syllabus reads as follows:

“Where there is a devise in fee, with a provision in the will that in case the devisee should die without leaving any legitimate heirs of her body, then the estate should go over to persons named, the fee taken by the first devisee is determinable only on the contingency of her dying without leaving such heirs living at the time of her death. Niles v. Gray (12 Oh St 320), followed.”

See also Collins v. Collins, 40 Oh St 53, and Restatement of the Law of Property, Section 267.

The plaintiff-appellee contends that the testator, David Hilt, referred to the date of his own death when he used the explanation “and in the case of the death of either without living issue,” in the fifth item of his will, and therefore, since Henry Hilt and Lizzie Crabill were both living at the time of the death of David Hilt, they both took title in fee simple absolute at that time. While the authorities of many jurisdictions would look favorably upon such contention, it is completely shattered in Ohio by reference to the case of Steinbrenner v. Dreher, 140 Oh St 305, which approves and follows Briggs v. Hopkins, 103 Oh St 321, and Ohio National Bank v. Harris, 126 Oh St 360. The first branch of the syllabus of the Steinbrenner case reads as follows:

“When a testator wills a specified part of his property equally to designated beneficiaries and provides that in the event of the death of either without issue that one’s share shall go to the others, the phrase ‘in the event of the death of either without issue’ has reference to the time of the death of the beneficiary, unless a contrary intention on the part of the testator is plainly apparent.”

See also Parish’s Heirs v. Ferris, 6 Oh St 563, and Gaston v. Moore, 38 Oh Ap 403.

We must therefore determine what the testator meant when he used the term “living issue” in the fifth item of his will. And the answer depends, of course, upon his intention. The term “issue” normally designates descendants and according to Bouvier’s Law Dictionary, Century Edition, includes “all persons who have descended from a common ancestor.”

However, this restricted definition becomes oblivious after reading many applicable eases. As stated in the case of Cochrel v. Robinson, 113 Oh St 526, at page 533:

“The word ‘issue’ has several meanings in the law of decedents’ estates. What its meaning may be in a given case depends upon the circumstances under which it is used, whether it be found in a will, a contract, or statute. Its primary signification imports descendants and has to do with the blood of the ancestor, but by general use the word ‘issue’ has often a wider signification and may include not only •children’ but ‘grandchildren,’ ‘descendants,’ and ‘adopted children.’

“In other jurisdictions the word ‘issue,’ in the statute of descents, does not limit the right of inheritance to lawful children, but is held to include children whose relation depends on statutory enactment, such as a child by adoption or a designated heir.”

The opinion then cites many authorities to show that the word “issue” is held to include children whose relation depends upon statutory enactment, such as a child by adoption or a designated heir.

At this point it is well to recall that the plaintiff-appellee was adopted in 1912, or almost thirteen years before the testator executed his will. During these years, the testator lived near his son, Henry, and was able to observe the mutually acknowledged relationship of father and daughter which existed between his son and the plaintiff-appellee. There is nothing in the will to indicate that David Hilt disapproved of the adoption of plaintiff-appellee by his son. On the contrary, he named his son as one of the executors of his will, with full knowledge of the adoption, thus expressing a continued confidence in his judgment. And the fact that Henry Hilt’s sister, Lizzie Crabill, was to be affected in the same manner by the language used in the fifth item of the will of David Hilt lends favor to a belief that the term “living issue” was not used purposely with the design to exclude the adopted daughter of Henry Hilt because Lizzie Crabill was the mother of a natural-born child at the time of the execution of the will.

Although the instant case involves testamentary rather than legislative intent, applicable statutes may be helpful in determining the testamentary intent. The presumption exists that the testator in drawing his will has knowledge of the law which will control the distribution of his estate (Flynn v. Bredbeck, 147 Oh St 49, 41 O. Jur., 649, Section 520).

Under the language used in the fifth item of his will, David Hilt must therefore be charged with the knowledge that the estate devised to his son, Henry, would be determinable upon the death of said son, and that the legal status of the plaintiff-appellee would be fixed at that time.

Sec. 8004-13 GC, 124 Ohio Laws, 178, was effective at the time of Henry Hilt’s death and provided that “for all purposes under the laws of this state, including without limitation all laws and wills governing inheritance of and succession to real or personal property and the taxation of such inheritance and succession, a legally adopted child shall have the same status and rights, and shall bear the same legal relationship to the adopting parents as if born to them in lawful wedlock and not born to the natural parents.”

Said statute provides further that “for the purpose of inheritance to, through, and from a legally adopted child, such child shall be treated the same as if it were the natural child of its adopting parents, and shall cease to be treated as the child of his natural parents for the purposes of intestate succession.”

The plaintiff-appellee is undoubtedly “issue” within the contemplation of this statute.

By the terms of an earlier version of the statute (Sec. 10512-19 GC), which was much narrower in scope, the Supreme Court held that the word “issue” embraces an adopted child. (Flynn v. Bredbeck, supra.)

It reasonably follows therefore that the plaintiff-appellee is living issue within the meaning of the will of David Hilt.

The defendants-appellant contend that the law as it existed at the time of the death of the testator should prevail.

Sec. 8030 GC, 109 Laws of Ohio, 179, was in effect when the will of David Hilt was executed and remained in effect until after he died. Under the provisions of the adoption statute at that time, the adopted child was entitled to inherit from the adopting parents the same as if born to them in lawful wedlock, but' there was no provision for the adopted child to inherit through the adopting parents.

Even if we were to indulge in the presumption that said statute is applicable in the instant case, we still could not conclude that the plaintiff-appellee was not looked upon as “living issue of Henry Hilt” because the testator had observed this parent-child relationship for thirteen years at the time of the execution of his will and is presumed to have known that the plaintiff-appellee was entitled to inherit from Henry Hilt.

In the case of Smith v. Hunter, 86 Oh St 106, the court looked favorably upon an adopted child although there was no adoption statute in effect at the timé of the execution of the will of the decedent. The syllabus of said case reads as follows:

“1. The rule that in the interpretation of a will the testator must be presumed to have meant what he said requires that a devise of a remainder ‘to the heirs at law’ of a beneficiary for life be regarded as including an adopted child of the beneficiary, although there was not, when the will was executed, any statute for the adoption of children.

“2. In such case it is not required that the testator appears to have had the specific intention that the succession should be to an adopted child of the beneficiary for life if it appears that such child, it having been adopted in pursuance of laws enácted before the succession, is within the terms by which the testator declared his general intention.”

We have examined item three of the will before us and recognize the merit to the argument that all of the natural grandchildren have been acknowledged therein with a specific bequest, whereas the plaintiffappellee is not included. However, even if we assume that the testator did not consider the plaintiff-appellee as a “granddaughter,” it does not necessarily follow that she was not looked upon as “issue” of Henry Hilt. The doubtful import of this provision cannot change the language of the fifth item of the will.

The testator also expresses a desire in his will that his children share equally in his real estate. This expressed intention would not be consistent with an unwarranted restriction upon the descent of the share of Henry Hilt.

We have carefully examined the many cases cited by counsel, and find that the facts before us are not favored with conclusive precedent. However, the language of the will shows no intention that the plaintiffappellee be disinherited, and all legal presumptions are in her favor.

We are therefore of the opinion that the plaintiff-appellee is “living issue” of Henry Hilt and is entitled to the real estate in question.

A decree may be drawn accordingly.

WISEMAN, PJ, CRAWFORD, J, concur.


text:
    HUBBARD, Admr., Appellant, v. PENNSYLVANIA RAILROAD CO., Appellee.
    United States Court of Appeals, Sixth Circuit.
    No. 12661.
    Decided April 18, 1956.
    J. W. Brown, Ben Gettler & Jerome A. Lischkoff; Cincinnati, for appellant.
    John W. Hudson, John H. Clippinger, Cincinnati, for appellee.
    Before SIMONS, Chief Judge, and ALLEN and MILLER, Circuit Judges.
   OPINION

Per CURIAM.

In this action, appellant, as the administrator of the decedent William E. Hubbard, charged the appellee railroad company with the negligent operation of an engine and its tender, causing a collision on U. S. Highway 42 near Hageman, Ohio, between the train and a truck being driven by the decedent. The driver of the truck was killed in the collision. At the close of appellee’s case, the district judge sustained appellee’s motion for a directed verdict.

Appellant contends that there was negligence on the part of appellee in backing its engine and tender slowly across the highway so as to block the highway in front of the on-coming truck. But the evidence also conclusively showed that the engine and tender, moving at approximately four or five miles per hour had completely preempted the highway prior to the time of the impact and that the decedent so operated his truck as to crash into the side of the tender while traveling at a high rate of speed under conditions of good visibility and cautionary warnings of the existence and proximity of the crossing, constituting contributory negligence as a matter of law. See Jackson v. Frederick, 152 Oh St 423, 40 O. O. 423, 89 N. E. (2d), 645. We are of the opinion that the District Judge was not in error in directing a verdict for the appellee. See Reed v. Erie R. Co., 134 Oh St 31, 35, 11 O. O. 411, 413, 15 N. E. (2d), 637; Canterbury v. Pennsylvania R. Co., 158 Oh St 68, 76, 48 O. O. 34, 37, 107 N. E. (2d), 115.

The judgment is affirmed.