author: By McBride, J.:

text:
    SPARGUR, and MAYFLOWER INSURANCE COMPANY, Plaintiffs, v. DAYTON POWER AND LIGHT CO. et, Defendants.
    Common Pleas Court, Montgomery County.
    Nos. 109913, 109914.
    Decided September 15, 1958.

      Iddings, Jeffrey & Donelly, Dayton, for plaintiffs.
    Landis, Ferguson, Bieser & Greer, Robert S. Newlin, Dayton, for defendant, The Dayton Power and Light Company.
    Curtner & Brenton, Dayton, Wise, Roetzel, Maxon, Kelly and Andress, Akron, for defendant, Poston Construction Co.
    Marshall & Smith, Dayton, for defendant, Poston Gas Lines, Inc.
    Pickrel, Schaeffer & Ebeling, Dayton, for defendant, H. C. Huber Construction Company.
    Vradelis & McCray, Dayton, for defendant, Southern Hills Pit, Inc.
   OPINION

By McBride, J.:

As a result of an explosion and fire in a new home Mrs. Spargur was seriously burned. The residence and the household effects were totally destroyed. Four separate suits were filed- One for personal injuries, one for medical and similar expenses, and two for property damages in which the Spargurs joined with their insurers. The same attorney represents all of the plaintiffs in these four actions.

In each case a buckshot petition was filed against The Dayton Power and Light Company and four other defendants, builders and subcontractors, whom we shall describe as defendants number two through number five.

Two cases. No. 109911 and 109912, filed by the Spargurs individually, were consolidated and tried. Defendants number two through five were dismissed on motion for a directed verdict because of a failure to establish any negligence. This order was not appealed and is final. The Spargurs recovered judgments against The Dayton Power and Light Company totaling $135,000.00. These judgments are pending on appeal.

In the property damage cases, No. 109913 and 109914. defendants number two through number five filed supplemental answers alleging the splitting of the damages and res judicata as a result of their dismissal by direction and final order in the personal injury cases. By reply the joint plaintiffs admit the pendency of the other actions but otherwise entered a general denial, denying portions of the record in the consolidated cases.

By stipulation counsel agreed that the court recognize and consider the amended pleadings, the docket, and entries in the first two cases, which as indicated resulted in judgment for personal injuries in favor of the plaintiffs as to one defendant and in final judgment against the plaintiffs as to defendants number two through number five.

The property damage cases are submitted to the court on motions of the four defendants for judgment on the pleadings, supplemented by the above stipulation,, in Cases No. 109913 and No. 109914.

The presence of five corporate defendants may have been necessary because of the inability of plaintiffs to ascertain the facts surrounding this unusual explosion and fire in a dwelling just ten days old. however their presence increased the length of the trial, some of which would have been avoided if a summary judgment procedure existed in Ohio. The trial demonstrated that the courts receive the complaints when the legislature fails to provide the machinery which will enable the judiciary to accomplish its business efficiently.

The instant motions are inspired by the decision of the Supreme Court, announced while these cases were waiting trial, in the case of Rush v. Maple Heights, 167 Oh St 221, in which the court reversed paragraph four of the syllabus in the case of Vasu v. Kohlers, Inc., 145 Oh St 321, 30 O. O. 542, In effect plaintiffs were retroactively prohibited from splitting damages into separate actions as had been the approved practice The new rule states that where

“a person suffers both personal injuries and property damage as a result of the same wrongful act, only a single cause of action arises, the different injuries occasioned thereby being separate items of damage from such act.”

By way of dictum the Supreme Court preserves the right of the assignee of a portion of a tort action to proceed independently:

“Upon further examination of the cases from other jurisdictions, it appears that in those instances where the courts have held to a majority rule, a separate cause of action is almost universally recognized where an insurer has acquired by an assignment or by subrogation the right to recover for money it has advanced to pay for property damage.” p. 233.

In a subsequent case the Supreme Court affirmed the “indivisible chose in action” theory and held that the injured party who had assigned the property damage claim to his insurer was entitled to proceed and litigate the whole claim, including the assigned interest; further, that upon request the insurer must be made a party even though the statute of limitations expired as to such insurer. Holibaugh v. Cox, 167 Oh St 340.

As. a result of these decisions the injured party who fails to include all of his damage in a single action clearly waives the items omitted and he is not protected by the exception which recognizes a separate right of action in the assignee.

The rule reverses the practice of requiring the insured to join with his insurer when a separate action is filed by the assignee in cases involving deductible and incomplete coverage in subrogation cases. The reason which required such joinder — that property damage constituted a separate cause of action — no longer exists. Instead of a separate cause of action for property damage there exists only a separate right of action exclusively in the assignee “to prosecute a separate action against the party causing such injury for reimbursement for indemnity monies paid under such contract.” Syl. 6. Vasu v. Kohlers, supra.

An injured party may now maintain but one action against a tortfeasor for all damages resulting from a wrong act. Rush v. Maple Heights, supra.

An injured party who files his own action for personal injuries is no longer a proper party in a separate action by his insurer for that portion of the property damage previously assigned to such insurer. It is a fundamental principle of law that “when the reason ceases the rule ceases.” There no longer being any reason that permits the joinder of the insured for his excess or deductible interest in a second action by the insurer, the statutory provision requiring joinder of parties with an interest in the subject matter of the litigation has no application. Sec. 2397.18, 2307.20 R. C. Travelers v. Moore, 304 Ky. (466), 456.

And where the injured party obtained a judgment for personal injuries all of his claims are merged in that judgment and he may not continue as co-plaintiff with his insurer in a separate action for any portion of his damage.

If joined in a separate action against the same defendants, commenced prior to the decision in the Maple Heights case, a final judgment in the personal injury action adverse to the injured party is an estoppel by judgment against such insured. He may never relitigate the same indivisible action against the same defendants. Syllabus one, two, and five, Vasu v. Kohlers, supra.

Syllabus 6 of Vasu v. Kohlers, supra, is consistent with the suggestion- of the Supreme Court in Rush v. Maple Heights, supra, that the insurer may proceed alone in a separate action to recover money paid under its contract, unless an action for the full loss was previously filed by the injured party. Holibaugh v. Cox, supra.

* * # * *

The final question involves the effect of an adverse judgment against the injured party upon the rights of his assignee in a separate action for property damage against the same tort-feasor. This question is one of considerable interest. It caused an equal amount of concern to the court and to counsel who argued the subject for over two hours. The problem is complicated by the recent reversal and by the irreconcilable concepts of privity announced by the Supreme Court. ' Public policy is a strong influence, especially after a lengthy trial in the principal case, however every effort was made to avoid this consideration in view of the new guide posts available.

The four successful defendants press for judgment against the insurers in the property damage cases based generally upon two theories: (1) that an assignee of a part of a claim is in privity and is bound by a final adjudication in the assignors’ action in which event those issues, which have been adjudicated, are conclusive in the action by the insurer; (2) that under the “indivisible” cause of action theory the assignor may control the action for all damages, as indicated in the Cox case, and therefore the assignee is similarly bound in estoppel either by judgment or as to those rights and issues which were finally adjudicated.

The court will discuss the two points separately although at times they inevitably overlap.

The rule that an assignee whose rights are in privity and derivative in character is bound by a decision adverse to his assignor is a familiar one. The Vasu case seems to restrict this rule unconditionally to interests acquired after the commencement of the action. The restriction protects the integrity of a decision and it appears to eliminate or neglect the general rule of res judicata.

Under facts of the Vasu case, the predecessor in interest is not estopped by a judgment adverse to the successor unless he was a party or unless he acted for or on behalf of his successor in the prosecution of the action. In the words of syllabus seven and eight of Vasu v. Kohlers, supra:

“Parties in privy, in the sense that they are bound by a judgment, .are those who acquired an interest in the subject matter after the beginning of the action or the rendition of the judgment; and if their title or interest attached before that fact, they are not bound unless made parties.”
“A grantor or assignor is not bound, as to third persons, by any judgment which such third persons may obtain against his grantee or assignee adjudicating the title to or claim for the interest transferred, unless he participated in the action in such manner as to become, in effect, a party.”

In other words, the law of Ohio is that the injured party or assignor is not bound by estoppel in a separate action as a result of an adverse decision in the assignee’s action in which the assignor was not a party.

He may become bound by estoppel in pais. 19 Amer. Jur. 634. This latter rule, is expressed in syllabus eight which forbids one to speak in his own behalf under the circumstances suggested. The mere joinder of the insured and the insurer in a separate action prior to the announcement of the Maple Heights decision- does not constitute an estoppel in pais. Assuming for the purpose of argument that an estoppel in pais .did arise it would be inequitable to apply this doctrine as a result of a retroactive change of the law. In view of the final conclusion of the court it is unnecessary to decide the subject of estoppel in pais which arises in this case only because the injured party and the insurers were represented by the same attorney. This alone does not appear to be sufficient to create an estoppel in the absence of facts that the insurer supplied the representation and controlled the conduct of the insured’s trial so as to, in effect, become a party. At best this condition could only charge both the injured party and -the insurer with knowledge of the existence and conduct of the respective actions.

Syllabus eight of the Vasu case may be. distinguished because it is limited to a “grantor or assignor” and does not apply to an assignee. The unique definition of privy in syllabus seven appears to have strayed into the case because, within the facts set forth therein, the grantor or predecessor could not have been in privy with his successor. Since privity did not exist the definition of privity is not a part of the law of the case.

Privity is a succession of interest or relationship to the same thing whether created by deed, by contract, by other act, or by operation of law. ■ Privity is dependent upon a succession in interest. Hence, one who has succeeded to an estate or interest is to that extent in privity with his predecessor. Another common form of privity arises where one person holds property, or some interest in property, in subordination tp the other.

“But there is an important difference between privity by succession and privity by subordination. In privity by succession the privy takes, commonly at least, as a volunteer, i. e. without value; hence a party, by joining in a collusive judgment, could bind the mere privy. In privity by subordination, however, the privy, commonly at least, has taken for' value; hence the fraud of the party to a collusive judgment would not bar him. Fraud bars the wrongdoer and volunteers under him,- not innocent purchasers for value. ,
“The rule, however, under either aspect of privity, is that a valid judgment is conclusive, not only against the. actual parties to the particular litigation, but also against all persons who claim under them as privies.” Bigelow on Estoppel, 6th Ed., 160.

On the subject of indemnitors, and others affected by a judgment because of contract or other legal duty, Freeman on Judgments, 5th Ed., 972, states:

“In many instances, the relation of the nominal parties to the suit to other persons is such that the latter are conclusively bound by a judgment against the former, in the absence of fraud or collusion, although they are not notified of the pendency of the suit, and are not called upon to conduct its prosecution or defense.

However (page 969), Freeman states:

“A predecessor in interest, as such, is of course not in privity with his successor in interest, and a judgment against the latter whether before or after the transfer should therefore not estop the former on mere grounds of privity. Hence a grantor or vendor is not bound as to third persons by any judgment which they may obtain against his vendee adjudicating the title, unless he participated in the action in such a way as to become in effect a party.” (Emphasis added to point out similarity with the Vasu syllabus.)

In support of syllabus seven in the Vasu case the opinion cites Section 89 of the Restatement on judgments. Section 89 covers “a person who, after the beginning of an action, succeeds to the interest of one of the parties.” Obviously he is entitled to and bound by the res judicata rule unless he is a holder in due course of a negotiable instrument or unless the judgment was rendered in fraud of his interests. The general rule as to privies commences at section 83.

“A person who is not a party but who is in privity with the parties in an action terminating in a valid judgment is, to the extent stated in sections 84-92, bound by and entitled to the benefits of the rules of res judicata.” Section 83, Restatement on Judgments.
“Where a judgment is rendered in an action in which a party thereto properly acts on behalf of another, the other is
“(a) bound by and entitled to the benefits of the rules and res judicata with reference to such of his interests as at the time are controlled by the party to the action;
“(b) not bound by or entitled to the benefits of the rules of res judicata with reference to his interests not controlled by the party to the action.” Section 84, Restatement on Judgments.

One who purchases a right after suit is commenced is technically in privity as a party in the litigation because that is the condition of his purchase. Litigation is not essential to the creation of privity. Privity is created by the act of the parties or by operation of law and not by the commencement of an action.

The rule of privity has always been relied upon to prevent the impeachment of a judgment but the important application of the rule is not limited to that specific purpose; it extends to the sound rule of public policy of avoiding vexacious litigation where the relationship of i privity exists prior to the commencement of the action.

In the usual situation privity arises upon payment to the insured, at which time the insurer acquires a legal or equitable interest in an “indivisible” cause of action. The insurer’s interest is derived from and in privity.with the insured and what he receives is not an interest in litigation, so as to make him a technical “privy” to a pending action, but a portion of a single claim which is no better than his predecessor possessed. If a man bought the wrong half of a horse he should not complain what his predecessor does with the other half, nor should his predicament force the courts to decide twice who should feed it with possibly contrary and embarrassing results. The failure to apply estoppel to the assignee in the insurance field has produced equally absurd situations. .1

As pointed out in Mansker v. Dealers Transport Co., 160 Oh St 235, 52 O. O. 119, the trial court may rely too heavily on one part of a syllabus and fail to apprehend the significance of other portions. Syllabus five recites:

“A right, question or fact in issue which was necessarily determined by a court of competent jurisdiction in a judgment which has become final, cannot be disputed or litigated in a subsequent suit between the same parties, although the subsequent suit is based upon a different cause of action.” (Emphasis added.)

Read in connection with the general if not universal rule the foregoing statement may be amended to include not only the same parties but others not parties who are in privity. This merely returns the court to the question of privity.

Of serious concern is the question whether Vasu v. Kohlers, supra, controls the instant situation. The opinion itself states that the “question has heretofore been before this court on a single occasion but was not decided.” In that single occasion the trial court “had rendered-judgment on the pleadings in favor of the defendant on the ground that a judgment in favor of the defendant in a former personal injury action brought by the car owner and set up in defendant’s answer, was a bar to the second action by the insurer of the car for property damage.” The court of appeals reversed on other grounds, and indicated that res judicata did not apply. The Supreme Court affirmed “because the record did not properly present the issue sought to be raised.” North River Ins. Co. v. Redman, 16 Abs 516, affirmed, 128 Oh St 615, 193 N. E. 347. Thus it appears that the only case precisely in point escaped any ruling in the Supreme Court during those years when the two causes of action theory was in existence.

In the Vasu case the assignee had first obtained an adverse judgment. It became necessary to determine ■ whether the claim of the assignor “is so related to the claim of the assignee * * * that the judgment rendered against the latter in favor of the defendant on the issues of negligence * * * is a bar to the present action of the plaintiff by way of estoppel.” The court then stated (344) that the claims were not identical (under the former rule) and therefore that a judgment as to one is not res judicata. This explains the careful use of the word judgment in syllabus seven.

The court proceeds in the Vasu case to discuss the defendant’s claim that if not estoppel by judgment at least the issues of negligence are common in both actions and the finding in the action by the assignee should inure to the benefit of the defendant as against the assignor, citing several cases of the Supreme Court which applied estoppel to parties and their privies.

At this point in the decision the court furnishes syllabus seven and cautions in the final sentence of the same paragraph that—

“It is essential to privity, as the terms is here used, that one person should have succeeded to an estate or interest formerly held by another.” (Emphasis added.)

In other words, to quote the opinion, “* * * the extent of the estoppel, so far as the privity is concerned, is limited to the controversies affecting this estate or interest.” (Emphasis added.) Privity, then, as thus construed and as stated in syllabus seven does not apply to the assignor who did not succeed to an estate or interest formerly held by another. As indicated in the authorities referred to earlier, this is the generally accepted definition of privity. The assignee is the party in privity, but the assignor is not. Estoppel is limited to the estate or interest transferred.

This points up the importance between acts of the assignee of a part of a claim and those of the owner of the whole from whom the assignee’s rights flow. In the Vasu case the facts, and consequently the statements announced, are limited to an assignee who never acquired any right or interest in the whole. How then could the assignor be in privity? Whether by succession or subordination the privy is the assignee or the grantee, not the assignor or the grantor. Recognition by the Vasu case of the inability of the assignee to bind the assignor is implicit in the general rule of law that the contrary is true; the assignor may bind his assignee by his acts and if those" acts amount to a final adjudication the assignee is estopped. As already indicated this position is expressed by Freeman on Judgments and the Restatement on Judgments, both of which were cited in the Vasu case. Having concluded that the grantor was not in privity, syllabus seven of the Vasu case is a gratuitous and a misleading statement.

The court finds that the assignee of a claim for property damage is in privity with the assignor and is bound by a final adjudication adverse to or in favor of the injured assignor in a personal injury action.

This conclusion is not inconsistent with the facts and therefore the law as announced in the Vasu case that the injured assignor is not bound by a final adjudication adverse to or in favor of the assignee. Whether the Vasu conclusion is still the law of Ohio on this situation in view of recent decisions is not presently before the court.

* * * * *

The second argument in support of a judgment on the pleadings against the assignee, based upon the indivisibility of the action, is strengthened by the more recent Cox case which recognizes the right of the assignor to file and control the total claim, including the rights of the assignee. '

Defendants argued, under syllabus one and two of the Vasu case, that the Spargurs having obtained a judgment against one defendant on a single or “indivisible” cause of action, their claims and those of their assignees became merged in the judgment in cases number 109911 and 109912; that the insurers must now seek recovery from their assignors even though the Spargurs did not include property damages in their cases and even though the insurers filed (jointly with their assignors) in cases number 109913 and 109914 for the property damage. In this connection it cannot be forgotten that the “single cause of action” described in the Vasu case means the then existing separate cause as described in the now reversed syllabus four. Also that in the Cox case the plaintiff sought recovery for the full amount after property damages had been assigned to the insured. Certainly if the assignor acts for another he must account as trustee, however where the assignor does not do so he should not be required to account for that which he did not request and did not receive, nor under what appears to be the existing law does the insurer lose his right of action because the injured party failed to include the assignee’s interest. This argument begs the rule of indivisibility with an exception, such as prevails at the moment.

Defendants are within reason when they argue that if the injured party may sue and recover for all damages and thereby benefit the assignee, why should not that same assignee be similarly bound in a separate action by an adjudication on the issues of negligence? Holibaugh v. Cox, 167 Oh St 340. The assignee cannot receive the advantages of his relationship without accepting the disadvantages. If the assignor has sufficient interest in the assigned portion of the claim to recover thereon, does he not stand in a stronger position than required to merely estop the assignee on a part (negligence) of the action? Having recognized the right of the assignor to control the whole, can any part be denied? The answer does not appear to be subject to doubt.

In this connection it is interesting to examine the minority opinion in Ohio prior to the reversal in Rush v. Maple Heights. In Le Blond v. Auto Ins. Co., 34 Oh Ap 478 (1929), the dissenting opinion of Judge Ross, now infused with life, forcefully presents the defendants strongest argument:

“Thp decided weight of modern authority in this country supports the view that damages resulting from a single tort, even though such damages be partly property damages and partly personal injury damages, are, when suffered by one person, the subject of only one suit as against the wrongdoer.
“It is also a well settled law of this state, and it seems to be universally elsewhere so considered, that a claimant will not be permitted to split a single claim or cause of action, which he may possess, and thereby put his opponent to the possible defense of two or more suits thereon.
“Neither the doctrine of subrogation nor the operation of an assignment can be invoked to subject the wrongdoer, though such he be, to splitting of the cause of action and the prosecution of separate actions for each separate item of damage.”

The general rule of estoppel has repeatedly been affirmed in Ohio. As In Conold v. Stern, 138 Oh St 352, 20 O. O. 449, the rule of estoppel operates not only between parties to an action but between parties, and others not parties, as to the derivative rights of the latter which flow from those who were adversary parties in the action. Other decisions cited in the Vasu ease are not listed here. Others touched upon by counsel in argument include: Hixson v. Ogg, 53 Oh St 361; Rabin v. Horstman (2d District) 99 Oh Ap 217, 58 O. O. 391. In the latter case the court points out that the fact that different damages, as to amount or character, were involved does not affect the validity and force of an adjudication of the initial issue common and controlling as to both.

More pertinent to the immediate question are the decisions of other states which have adopted the majority rule and which support the conclusion that the assignee-insurer is in privity and subject to estoppel. Travelers Indemnity Co. v. Moore, 304 Ky Reports 456, 204 S W 2d 7; Levitt v. Simco Sales Service, 135 A. 2d 910; Saber v. Supplee-Wills Jones Milk Co., 124 A. 2d 620.

By adopting the majority rule that an action in tort is indivisible, the Supreme Court initiated a course which requires a series of other changes in pleading and procedure and which relieves the courts of unnecessary litigation and public criticism. True, the court intimated that it will continue to preserve a right of action in the insured. The preservation of this right is not decsive of the application of res judicata. Res judicata arises when a party has a right of action in a separate suit. It is logical and well within public policy that an adverse finding on either the issue of negligence or contributory negligence in the principal action should estop the insurer in the separate action. This will avoid contrary decisions within an “indivisible” cause of action and prevent a return to the litigious chaos that the former rule promoted.

Here, as in practically all such situations, the assignees were fully aware of the pendency of the actions by the injured parties. The assignees had a right to participate in their assignors’ actions and having failed to exercise that right they may not complain irrespective of the outcome of the principal cases.

Where two separate suits arise out of a single cause of action but do not involve the same claim the parties and their privies are not “bound by the judgment” but they may not relitigate similar issues and they may litigate those issues which were not or could not have been resolved in the original action. 32 O. Jur. 2d 58, 30A Amer. Jur. 403. In a subsequent action the insurer and the wrongdoer are bound by a finding on the issue of negligence and contributory negligence. If the finding is adverse to the wrongdoer the court merely assigns for trial the subject of the assignment or subrogation and the extent of the damages.

The four motions of the defendants number two through number five for judgment on the pleadings is sustained as to all of the plaintiffs. Vendrell L. Spargur, Marcia C. Spargur, American Insurance Company and Mayflower Insurance Company.

Since the Spargurs became improper plaintiffs by reversal of law it is only proper to order their dismissal with prejudice, as to the Dayton Power and Light Company, sua spontc to avoid quibbling over the reason or method of their departure from these cases. Since the judgments in Cases No. 109911 and 109912 against the Dayton Power and Light Company are not final, no further action may be taken at the present time as to the first defendant.


source: Caselaw Access Project

author: By HUNSICKER, PJ.

license: Public Domain

text:
    STANN, Jr., Appellant, v. JACK P. TAUS & ASSOCIATES, INC., and THE BAIRD-FOERST CORP., Appellees.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 24475.
    Decided July 16, 1958.
    John R. Crossen, for appellant.
    McConnell, Blackmore, Cory & Burke, for appellees.
    (HUNSICKER, PJ, DOYLE, J, of the Ninth District, HORNBECK, J, of the Second District, sitting by designation in the Eighth District.)
   OPINION

By HUNSICKER, PJ.

On August 20, 1954, at or about 9 o’clock in the morning, William C. Stann, Ji., was driving an automobile east on Wallings Road, Cuyahoga County Ohio, intending to turn north on State Road. A traffic light controls traffic at the intersection of Wallings Road and State Road. At the time Mr. Stann was driving east near this intersection, Edward S. Graczyk, an employee of The Baird-Foerst Corporation, was driving a truck south on State Road. A collision occurred in this intersection between these two motor vehicles.

Mr. Stann filed an action against the appellees herein to recover damages for the injuries he alleged that he received as a result of the negligence of Graczyk.

At the conclusion of the evidence in behalf of Stann, the trial court directed a verdict for the defendants. It is from the judgment entered on that verdict that an appeal on questions of law is lodged in this court.

The sole question to be determined by this court is, Did the plaintiff below, appellant here, Mr. Stann, under the facts set forth in the record, establish a prima facie case of negligence against the appellees?

Does the evidence introduced by appellant, Stann, construed most favorably to him, justify a determination that reasonable minds could come to but one conclusion, and such conclusion being adverse to the appellant, Stann?

Could reasonable minds reach a different conclusion herein, when we consider all of the evidence?

The rule is well stated in 4 O. Jur. 2d, Appellate Review, Sec. 1085, as follows:

“* * * upon a motion to direct a verdict, if the trial court, after construing the evidence most strongly in favor of the person against whom the motion is directed, finds that upon any essential issue reasonable minds could come to but one conclusion upon the evidence submitted and that such conclusion is adverse to such party, it should direct a verdict against him, and not allow the jury to speculate upon the question; but if reasonable minds may reasonably reach different conclusions, or draw different inferences upon any question of fact, the motion should be denied and the case submitted 'to the jury. * * *”

Stann said that he entered the intersection at a rate of speed of between 20 and 25 miles an hour, and that 15 or 20 feet from the intersection he noticed the traffic light change to the yellow, or caution, color. This light was green prior to the change to yellow. He did not stop, but continued on into the intersection.

The only other witness to the collision, who testified, was the driver of the truck, Edward Graczyk. His deposition was offered by counsel for Stann.

This witness said he was 300 or 400 feet from the traffic light when he first saw it, at which time it was red for north-south traffic; and that he was 75 to 100 feet from that light when he first saw Stann, at which time the light was green for north-south traffic. Stann, at' that time, was almost underneath the light, and Graczyk kept his speed at 30 to 35 miles an hour.

Later in his testimony he said the light turned green when he was about 50 or 60 feet away, at which time he was still going 30 to 35 miles an hour. He also said Stann was directly ahead of him in the intersection when he was “a little further” than “50 feet or so back.”

The evidence thus unfolds to show the following, when construed most favorably in behalf of Stann:

The appellant sought to get through the traffic light on the yellow, or caution, color, knowing that it was a light that changed fast from yellow to red. Graczyk, who was driving at a rate of speed one-third faster than Stann, saw Stann in the intersection underneath the traffic light 50 to 60 feet ahead of him, at which time that light just turned green. At no time did Graczyk slacken his speed before entering the intersection, after observing Stann in the intersection.

Stann said Graczyk did not enter the intersection on the green, or go, signal. Graczyk said he did enter the intersection on a green, or go, signal. If Stann was in that intersection lawfully, then under the terms of §4511.13 (A) (2) R. C., Graczyk was required to “yield the right of way to vehicles * * * lawfully within the intersection * *

We then must determine whether Stann was lawfully ■ within the intersection.

To say that Stann was within the intersection lawfully is to say that one may enter an intersection upon a yellow or caution light, and secure thereby the benefit of the right of way granted to one who enters the intersection under favor of §4511.13 (A) (2) R. C.

Judge Skeel, of this court, sitting by designation in the Supreme Court of Ohio, said, in the case of Indianapolis & Southeastern Trailways, Inc., v. Cincinnati Street Ry. Co., 166 Oh St 310, at page 318: “ ‘Lawfully within the intersection’ refers to traffic that has moved into the intersection upon the ‘green’ light being displayed by the automatic traffic signal directing such traffic.”

This does not say that one entering an intersection on a yellow light is in the intersection unlawfully. The traffic law, with respect to the duty of one proceeding on the yellow, or caution, light, has been amended by eliminating the ■ requirement for traffic to stop when the yellow, or caution, light is displayed. See former §6307-13 GC.

Judge Hornbeck, when interpreting this amended statute, said, in Case v. Carter, 103 Oh Ap 11 at p. 14:

“The section .clearly requires one who has the ‘go’ signal to yield the right of way to vehicles lawfully within the intersection. The statute does not require an automobilist to stop at an intersection when faced with a yellow light. It puts such motorist upon notice that a red signal will follow immediately which, in itself, would require caution in entering or in moving through the intersection after entering. Inasmuch as it is the implication of the statute that the automobilist moving into the intersection on a yellow light has the right to so enter, it follows that he entered lawfully and had a right to continue through the intersection. This construction is strengthened by the fact that §4511.13 R. C., before its amendment, effective September 11, 1951, carried a prohibition against entering the intersection until a green or ‘go’ sign is shown alone.”

Stann, although he moved into the intersection on the yellow light, was in the intersection lawfully, and Graczyk was then required-to yield to him the right of way.

Graczyk, who said he was travelling at a speed of 30 to 35 miles an hour (Stann fixes Graczyk’s speed at a higher figure), saw Stann under the traffic light. It is obvious, when we construe this evidence most favorably to Stann, that Graczyk was not then exercising that degree of care accorded one to whom he owed the duty to yield the right of way. “Right of way” is defined by subdivision “(RR)” of §4511.01 R. C., as follows:

“ ‘Bight of way’ means the right of a vehicle, streetcar, trackless trolley, or pedestrian to proceed uninterruptedly in a lawful manner in the direction in which it or he is moving in preference to another vehicle, streetcar, trackless trolley, or pedestrian approaching from a different direction into its or his path.”

We think it follows that, whether Stann was proceeding straight through the intersection, or making a turn to go north on State Road, he was entitled to all of the rights given to one lawfully in the intersection.

We determine, therefore, that the trial judge was in error when he directed a verdict for the appellees at the conclusion of the case in chief. The judgment entered on that verdict should be reversed, and the cause remanded to the trial court for further proceedings according to law.

DOYLE and HORNBECK, JJ, concur.


author: By BAYNES. J.

text:
    RADCLIFFE, Plaintiff, v. KOSTANDEN et, Defendants.
    Common Pleas Court, Madison County.
    No. 20761.
    Decided May 20, 1958.

      Dresbach, Crabbe, Newlon, Collopy & Bilger, Columbus, Otis B. Core, Washington C. H., for plaintiff.
    Wiles, Doucher, Tressler & Koons, Arthur W. Wiles, of Counsel, Columbus, for defendants.
   OriNION

By BAYNES. J.

At the pre-trial conference of this case the remaining defendant moved for judgment upon the state of the pleadings of the case.

Plaintiff stated her cause of action in the petition as follows: She was a passenger in an automobile being driven easterly on Route 40 on that section of highway (a four lane divided highway). The defendant Kostanden was operating his automobile in a westerly direction on his section of the highway.

Kostanden attempted to and did pass a tractor-trailer truck being operated on his westbound section of the highway at a speed of 70 m. p. h. striking the rear of the automobile of defendant Dietsch as he was making a left turn into the eastbound lane at an “access point” (provided for that purpose).

The Dietsch vehicle blocked the path of the vehicle in which plaintiff was riding, which collided with the Dietsch vehicle causing plaintiff personal injuries.

Defendant Kostanden was charged with failure to have his vehicle under control so as to stop within the assured clear distance ahead; traveling at 70 m. p. h.; and for failing to avoid colliding with the Dietsch vehicle.

Defendant Dietsch was charged with failure to have his vehicle under control and in making a left turn so that said movement obstructed the path of traffic in the eastbound lanes of traffic.

The petition was filed on 21 February 1958, and defendant Dietsch* answer was filed on 20 March 1958. It admitted the operative facts of the petition, otherwise generally denying the allegations of the petition. He refers to the “access point” of plaintiff’s petition as a “cross-over.”

Answer day w,as 22 March 1958 and defendant Kostanden filed a motion to strike certain allegations from the petition. Prior to rule day on the motion, 12 April 1958 the following entry was filed:

“Now comes plaintiff and dismisses her action as to the defendant, Andy S. Kostanden, at her costs with prejudice to a future action but this case will proceed as to the remaining party defendant, Otto H. Dietsch.”

The pre-trial order specified that motion for summary judgment might be entertained. Attending the pre-trial were counsel for defendant Dietsch, plaintiff and local counsel for plaintiff. Other of plaintiff’s counsel failed to appear. Notice of the matters possibly to be considered and the question of law — and not of disputed fact — raised by the motion does not run contra to the ruling of the Court of Appeals of this District in Universal C. I. T. v. Stires, 103 Oh Ap 405, 145 N. E. 2d 541, 3 O. O. 2d 418, as we view it.

Plaintiff’s counsel urges that the operative facts show defendant Dietsch to have been concurrently negligent or could be found to be concurrently negligent by a jury. That a jury would or could determine that the concurrent negligence of each of the defendants was a contributing proximate cause of plaintiff’s injuries.

, Defendant’s counsel urges that no negligent act of Dietsch is alleged until after his vehicle was propelled by' Kostanden’s act of striking the rear of Dietsch’s vehicle at 70 m. p. h. In other words that no act of Dietsch is alleged which caused Kostanden to be confronted with a sudden emergency and therefore, to some extent at least, cut down Kostanden’s assured clear distance ahead. Further that no facts are alleged to show that Dietsch could have avoided being struck by Kostanden.

’ Whether facts alleged constitute negligence where the facts are not in controversy raises a question of law. A party is not answerable in damages for the reasonable exercise of a right. A liability arises only where it is shown that the right was exercised negligently, unskillfully or maliciously; 29 O. Jur. 596, Sec. 124. Whether any, and what duty, rests upon a defendant is a question of law; 29 O. Jur. 712, Sec. 196.

Assuming for the purpose of argument that some inference of negligence could be attributed to defendant Dietsch, plaintiff’s injury must have been the direct result of Dietsch’s wrongful act or omission. If, construing the pleading liberally for plaintiff, it does not disclose an accident resulting proximately from defendant’s negligence, or if proximate cause is left in doubt, manifestly, as a matter of law, neither pleading or proof would be sufficient to create liability; 29 O. Jur. 615, Sec. 141. Where controlling facts are undisputed and do not justify a reasonable inference that the acts or failure of defendant constitutes the proximate cause of an injury the question is for the court; 29 O. Jur. 746, Sec. 207; see also 6 O. Jur. 2d 673, Sec. 352; Lawrence v. Terminal Co., 154 Oh St 335, 340, 96 N. E. 2d 7, 43 O. O. 241.

It should also be pointed out, in considering the question of law, that plaintiff is bound by the undisputed alleged facts, and cannot have the benefit of some theoretically possible testimony which would make inferences less strong as to Kostanden’s alleged negligence and more strong as to Dietsch’s alleged negligence or perhaps impute some other act of negligence to Dietsch not stated or attempted to be stated in the pleadings as they now stand.

A driver who, through ■ another’s negligence, looses control of his vehicle, causing a subsequent collision, is not liable unless that driver in the exercise of ordinary care could have regained control; Middleton v. Seither, 131 So. 504, 14 La. Ap. 471. Query, how could defendant Dietsch, in no alleged unlawful or negligent manner in the process of making a left turn, being struck in the rear at 70 m. p. h„ have regained control of his vehicle within the distance of the width of the ‘’access point” or “cross-over” and the eastbound two lane section of the highway? See cases noted in Blashfield on Automobile Law v. 4, 144, Sec. 2644.

We therefore conclude that no concurrent acts of negligence are alleged by plaintiff with respect to defendant Dietsch and, though it were otherwise, no conceivable causal relation can be attributed to the lack of control by Dietsch over the course taken by his vehicle within the time and space alleged.

The Court appreciates the raising of the question of law prior to the time a jury was seated for it too frequently happens that a counsel will permit time, trouble and expense to be incurred without public benefit and to its detriment in proceeding to trial where there actually is no dispute as to facts. Likewise the assistance of counsels’ oral comment was helpful in the consideration and determination of the motion.

Counsel for defendant Dietsch is directed to prepare an Entry dismissing the petition at plaintiff’s costs submitting same to plaintiff’s counsel and the Court according to rule, noting exceptions. ir


author: By THE COURT.

text:
    STICKLEY et, Appellants-Appellees, v. BOARD OF LIQUOR CONTROL et, Appellees-Appellants.
    Ohio Appeals, Second District, Franklin County.
    No. 5235.
    Decided June 18, 1956.
    James W. Williamson, Wauseon, Robert N. Gorman, Cincinnati, Hugh Jenkins, Leonard J. Stern, Isadore Topper, Columbus, for appellants-appellees.
    C. William O’Neill,.Atty. Genl., Kiehner Johnson, Robert Krupansky, Asst. Attys. Genl., Columbus, for appellees-appellants.
   OPINION

By THE COURT.

This is an appeal from an order of the Common Pleas Court reversing an order of the Board of Liquor Control suspending appellees’ liquor permits.

We have held this case for opinion until after the decision of the Supreme Court in Westerhaus Company, Inc., v. City of Cincinnati, 165 Oh St 327. The decision in the Westerhaus case is dispositive of the three principal assignments of error on this appeal and requires us to hold with the appellant Board on all three of the issues presented and argued in its brief.

They are:

I. Does the Board of Liquor Control have authority to enact a regulation, Regulation 53, prohibiting gambling in and upon premises of any retail business authorized under permits issued pursuant to the Liquor Control Act, and upon a violation of the same revoke or suspend such permits.

II. Is the pinball machine, and similarly constructed and operated mechanisms, a mechanical device within the meaning and contemplation of §2915.16 R. C., the use of which upon a permit premises is a violation of Regulation 53.

III. Is this pinball machine, and similarly constructed and operated machines, a device or apparatus within the meaning and contemplation of Regulation No. 53 of the Board of Liquor Control, which can or may be used for gambling or wagering.

Upon the assignment that the trial judge erred in refusing to admit the testimony of Professor E. E. Kimberly, although probably not essential to proof of appellant’s charge, we also hold with appellant. The testimony was probative that the result of the operation of the pinball machines of appellees was determined principally by chance.

On the claim of the appellant that appellees waived the right to object to this testimony, because not urged before the Board on the appeal from the department, we hold against the appellant board. The appeal to the Common Pleas Court was on law and fact and therefore, the trial proceeded de novo. Andrews, Jr., et al., v. Board of Liquor Control, 164 Oh St 275.

The judgment will be reversed and cause remanded.

MILLER. PJ, HORNBECK, J, concur.

WISEMAN, J, not participating.


author: By THE COURT:

text:
    CLARK, Plaintiff-Appellee, v. CHAMBERS, Defendant-Appellant.
    Ohio Appeals, Second District, Champaign County.
    No. 146.
    Decided December 28, 1956.
    Richard P. Faulkner, Pros. Atty., Urbana, for the motion.
    J. Harvey Crow, Urbana, contra the motion.
   OPINION

By THE COURT:

Submitted on motion of appellee to dismiss the appeal on questions of law and fact and to retain it as on questions of law. The reason for the motion is that there was a stipulation in the Common Pleas Court that determination should be made upen a preliminary question of res judicata and that, if it was held that this issue was dispositive, no further presentation of evidence would be had,, unless and until a higher court reversed the Common Pleas Court on this issue. The stipulation is appended to the motion.

An examination of the transcript of docket and journal entries discloses that a final injunctive order was made enjoining the defendant as prayed in plaintiff’s petition.

The appeal is noted on questions of law and fact. In the situation thus presented, the stipulation in the trial ■ court is without effect in this court.

The effect of an appeal on questions of law and fact is well stated in the text, 3 O. Jur. 2d, paragraph 356, pages 259 and 260:

“In Ohio when a case is appealed on questions of law and fact it no longer remains in the court below. The whole case goes up for trial de novo. The appeal on such questions terminates the jurisdiction of the trial court; the perfecting of such an appeal removes the entire case to the Court of Appeals and the court below loses all power to do anything in the case.”

It is probable that the issue of res judicata would be determined as a question of law without respect to the form of appeal and, if it is dispositive of the right of the plaintiff to judgment, no other question will be presented. If any development in the trial should require additional testimony, it will be adduced in this court. Whether or not the parties by agreement and by the consent of the court first submit the issue of res judicata can be determined when the cause is ready to be heard. There is no provision in the law whereby issues in a case can be reserved in the trial court if an appeal on questions of law and fact is properly perfected.

The motion will be denied.

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


author: By WEICK, District Judge.

text:
    MORRISON-BARNHART MOTORS, INC., Bankrupt, In re.
    United State District Court N. D. Ohio, Eastern Division.
    No. 70936.
    Decided June 19, 1956.

      Donald D. Wick, Archie M. Marks, Cleveland, for the trustee.
    Morris R. Blane, Cleveland, for landlords.
    Francis J. Talty, Cleveland, for the bankrupt.
   OPINION

By WEICK, District Judge.

This case comes before the court on petitions by the bankrupt’s landlord and the trustee' in bankruptcy to review the judgment of the referee in bankruptcy.

The landlord filed with the trustee in bankruptcy a claim for $480 for use and occupancy of premises by the receiver and trustee during the pendency of the bankruptcy proceedings. The premises had, theretofore, been leased by the landlord to the bankrupt by written instrument of lease.

The trustee in bankruptcy filed with the referee written objections to the allowance of such claim and a counterclaim in which he sought to recover from the landlord $3,600 previously deposited by the bankrupt with him as security for the performance of the lease, and $700 profit claimed to have been made by the landlord in selling the leased premises for an amount in excess of the option price stipulated in the lease.

The landlord had re-entered the leased premises on or about January 12, 1954 during the pendency of the bankruptcy proceeding and before the expiration of 60 days from the adjudication, during which time the trustee in bankruptcy had the right under Section 70, sub. b, of the Bankruptcy Act, 11 U. S. C. A. Section 110, sub. b, to elect to assume or reject the lease. Also during said 60-day period and without the knowledge or consent of the trustee in bankruptcy or the referee, the landlord entered into a contract to sell the leased premises.

The referee in bankruptcy held that he had jurisdiction and proceeded to enter judgment against the landlord for the return of the deposit plus the profit on the sale less deductions for past due rent and sums due from the trustee for use and occupancy.

In holding that the Bankruptcy Court had summary jurisdiction to determine the conflicting claims to the deposit, the referee was clearly right.

The money deposited by the bankrupt with the landlord was property belonging to the bankrupt and subject to administration in the bankruptcy proceeding. The landlord held the bankrupt’s money as trustee or pledgee to secure the performance of the provisions of the lease. Glidden v. Mechanics’ National Bank, 53 Oh St 588, 589, 42 N. E., 955, 43 L. R. A., 737. When the bankrupt’s obligations under the lease had been fulfilled, the landlord had a clear duty to return the deposit to the bankrupt.

That the Bankruptcy Court has summary, jurisdiction to determine the conflicting claims to money deposited by the bankrupt with his lessor to secure performance of the lease was held in the recent decision of In re Muntz T. V. Inc., 7 Cir., 229 F. (2d), 228.

The case at bar is strengthened by the fact that the landlord had filed a claim for $408 with the trustee in bankruptcy. He thereby voluntarily submitted to the jurisdiction of the Bankruptcy Court to determine the validity and amount of his claim which necessarily included any setoffs or counterclaims existing in favor of the trustee in bankruptcy. Floro Realty & Investment Co. v. Steem Electric Corp., 8 Cir., 128 F. (2d), 338; In re California Eastern Airways, D. C., 95 F. Supp., 348; Florance v. Kresge, 4 Cir., 93 F. (2d), 784; In re Gillespie Tire Co., D. C., 54 F. Supp., 336. Authorities on this point are collected in certificate filed by Referee Friebolin in the case of Park Electric Co., Bankrupt, No. 66897 this court.

Coming now to the merits of the case, it is the claim of the landlord that the trustee in bankruptcy has no interest in the lease because of his failure to assume or reject the lease within a period of 60 days after the adjudication as provided by Section 70, sub. b of the Bankruptcy Act, Title 11 U. S. C. A. Section 110, sub. b.

Burns Trading Co. v. Welborn, 10 Cir., 81 F. (2d), 691, 106 A. L. R., 285, certiorari denied 298 U. S., 672, 56 S. Ct., 936, 80 L. Ed., 1394; In re Northern Indiana Oil Co., 7 Cir., 180 F. (2d), 669.

Our case is different because here during the 60-day period provided by Section 70, sub. b of the Bankruptcy Act, the landlord without the knowledge or consent of the Bankruptcy Court re-entered the leased premises and contracted the sale thereof.

The trustee was not given an opportunity to assume or reject the lease. In fact he had no knowledge either of the lease or of the sale.

In Suter v. Farmers’ Fertilizer Co., 100 Oh St 403, at page 411, 126 N. E., 304, at page 306, the Supreme Court held: “Even where the liability depends upon a condition precedent, one cannot avoid his liability by making the performance of the condition precedent impossible, or by preventing it.”

The re-entry by the landlord operated as a surrender of the lease and the bankrupt was relieved from liability for rent accruing thereafter.

This was held by the Court of Appeals in Lanson Consol. Store Service Co. v. Bowland, 6 Cir., 114 F., 639, where the court said: “Resumption of possession by the lessor of the thing leased operates as a surrender of the lease, and puts an end to the lessee’s liability for future installments of rent, unless otherwise plainly provided.”

In the case at bar, the referee ordered payment of the rental in arrears and for use and occupancy during the bankruptcy proceedings out of the deposit of $3,600.

The landlord has, therefore, been paid in full and made whole for all rentals accruing up to the date of re-entry of possession. He has no further claim. No rents could accrue to the landlord thereafter as he sold the premises and, in any event, the bankrupt would not be liable therefor. To permit the landlord to keep the deposit after all of his claims under the lease have been fully satisfied would be unconscionable.

The landlord is, therefore, in the position of holding $2,600 of the bankrupt’s money and the referee very properly entered judgment against' him therefor including interest.

In 32 American Jurisprudence 452, §547, the author states the rule governing deposits to secure performance of leases: “He (tenant) is entitled to the balance remaining after the claims of the landlord have been satisfied.”

In re Barnet, 2 Cir., 12 F. (2d), 73; See: authorities in notes in 22 A. L. R., 1302; 45 A. L. R., 717; 106 A. L. R., 292-318; Nash v. Bailey, Fla., 58 So. (2d), 680; Kaplan v. Katz, Fla., 58 So. (2d), 853.

Since the lease was terminated on January 12, 1954 by the re-entry of possession of the landlord, the trustee in bankruptcy would not be entitled , to the profit of $700 claimed to have been made by the landlord in selling the property. The option was extinguished. Furthermore, there was no profit because included in the sale of the real estate was certain personal property which the landlord had acquired from the trustee in bankruptcy at a cost of $840.

The referee was also right in.disallowing the claim of the landlord for $250, representing the cost of repairs to the outside of the building which the lease required the landlord to make.

The points raised by the petition for review of the trustee in bankruptcy related to the allowance by the referee of the claims for rent and use and occupation which the court has found were properly allowed.

The judgment of the referee will, therefore, be modified so as to exclude and disallow the claim of the trustee in bankruptcy of $700 plus interest for profit in connection with the sale, and as modified will be affirmed.


author: By MILLER. J.

text:
    FROWINE CONSTRUCTION CORPORATION, Plaintiff-Appellee, v. PACKARD, Defendant-Appellant.
    Ohio Appeals, Tenth District, Franklin County.
    No. 5845.
    Decided April 29, 1958.

      Earhart, Robertson & Savage, Daniel S. Earhart, of Counsel, Columbus, for plaintiff-appellee.
    Eagleson & Laylin, Freeman T. Eagleson, of Counsel, Columbus, for defendant-appellant.
   OPINION

By MILLER. J.

This is an appeal and cross-appeal on questions of law from a judgment of the Common Pleas Court rendered in favor of the plaintiff-appellee for the sum of $2896.20 and costs of suit.

The facts are fully and well stated in the opinion of the trial court, which for the purpose of this review may be briefly epitomized as follows:

The Frowine Construction Company, the plaintiff herein, was the general contractor on a highway construction job which it had entered into with the State of Ohio; that the part of the contract which called for certain landscape work was sublet to the defendant-appellant, Frank L. Packard. This subcontract, among other things, called for the planting of 2150 dwarf willow trees, which the defendant agreed to furnish and plant at the unit price of $1.80 per tree, the same to be done in accordance with the specifications submitted by the State of Ohio in the general contract which had previously been entered into between the plaintiff and the State. These specifications called for an inspection of the materials to be furnished, of the work as it progressed, and further provided that no planting was to be done between the dates of June 1st and September 1st.

On or about May 26th the plaintiff ordered the defendant to do the planting which order, if complied with, would require most of the work to be done in June in violation of the specifications. The defendant most strenuously objected to this for the reason that the plantings would not live if they were made this late in the season. However, the State concurred in the plaintiff’s request and the planting was done in complete accord with the specifications.

The specifications further provided that plantings were to be watered and maintained until further inspection by the State. The record reveals that the plantings were watered by the defendant and when the inspectors discovered that the plants were dying the defendant was requested to do more watering, some of which he did, but still many of the plantings did not survive. The plaintiff urges that the lack of sufficient water was the cause of the loss, but we think the record supports the conclusion that the loss was occasioned by the planting being done too late in the season, as the work was completed around the middle of June.

Partial payments were made by the State to the general contractor as the work progressed, who in turn made similar payments to the defendant on the work that he had performed. Final inspection of the subcontract work was made and accepted by the inspectors for the State, on October 31, 1952. No complaint was made to this defendant of any dead plantings, who then moved his equipment away to another job, as the defendant was of the opinion that the work had been satisfactorily completed.

On March 12, 1953, the plaintiff paid the defendant the sum of $101“.50 as settlement in full for the balance due on the contract, making the total sum of $3870.00 paid to the defendant for the entire job. The defendant urges that this settlement constitutes an accord and satisfaction. The plaintiff denies this conclusion, claiming that it had no knowledge of the dead plantings and for this reason is not bound by the settlement. However, we think the record does not appear to support the fact that the plaintiff had no knowledge of the loss when the balance on the contract was paid. Henry L. Minert, a State Inspector, testified that he made an inspection on August 8, 1952, and “it was reported to the general contractor that they (the plantings) would have to be watered and replaced.” It also appears that on July 25, 1953, the plaintiff made a final settlement with the State for the performance of the general contract at which time the State deducted for the dead willow trees, 1609 in number, and the plaintiff is now attempting by this action to recover from the defendant the amount it had paid him for these dead plantings, amounting to the sum of $2896.20. Section L-14.33 of the Specifications provided:

“Before completion and final acceptance of the project all trees not alive, or normally healthy or that have died back beyond the normal pruning line shall be replaced by the Contractor at his expense with trees of the specified species or variety, size and quality and meeting these Specifications.”

Now, the record shows conclusively that at no time was the defendant ever informed by the State or any of its inspectors, nor by the plaintiff that a number of the trees had died and a request made for a replanting as provided in said specifications. The defendant testified that the replanting could have been done by him at a cost of $500.00, while the plaintiff is seeking $2896.20, which is the amount it paid to the defendant based upon the assumption that the trees were growing. Since the State Inspectors accepted these plantings on October 31, 1952, some five months after the work had been completed, we are of the opinion that when the change of conditions became known the defendant should have been informed of the change, the order of acceptance withdrawn or cancelled, and the defendant given the opportunity of replacing the dead trees in accordance with Section L-14.33 of the Specifications. The defendant testified that he was ready and willing to make the'replantings if he had only been given the opportunity, at a total cost of $500.00, which is considerably less than the sum the plaintiff is attempting to deduct from the contract price, by this action.

Should the parties agree to a remittitur of $2396.20 from the judgment of the trial court, leaving a balance of $500.00 due from the defendant, the judgment will be affirmed; otherwise, it will be reversed as being against the manifest weight of the evidence, and the cross-appeal dismissed.

PETREE, PJ, BRYANT, J, concur.


author: By SKEEL, PJ. By KOVACHY, J.

text:
    STATE, ex rel. CORRIGAN, Relator, v. CLEVELAND-CLIFFS IRON CO., Respondent.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 24445.
    Decided July 29, 1958.

      John T. Corrigan, Pros. Atty., Saul-Danaceau, Asst. Pros. Atty., for relator.
    Seth Taft, for respondent.
   OPINION

By SKEEL, PJ.

The action here considered is on# in quo warranto invoking the original jurisdiction of this court. The petition of the relator alleges that acts of the respondent (an Ohio Corporation organized for profit) contravene the laws of Ohio, especially §§5733.27, 3517.10, 3517.11, 3517.12 and 3599.03 R. C., and the provisions of Title XXXV R. C., in that it contributed five hundred dollars of its corporate funds to a1 committee organized for the sole purpose of supporting and seeking the adoption of certain propositions and issues submitted to the voters of Cuyahoga County at a General Election held November 5, 1957. The issues and propositions consisted of a proposed County Home Rule Amendment to the Constitution of Ohio and various proposed tax levies and bond issues to support or provide for or finance County, Metropolitan Park Board, City of Cleveland, Cleveland School-Board and Library Board governmental functions. The answer admits that the relator is the duly elected and qualified prosecutor of Cuyahoga County, admits its corporate capacity and that it contributed the sum of five hundred dollars of its money to “The Citizens Committee for City and County Issues,” a voluntary association of persons organized to collect money to be used by such committee in its work to promote the adoption of city and county issues and propositions which were submitted to the voters of the City of Cleveland and the voters of Cuyahoga County, Ohio, at the General Election held November 5, 1957. The answer then lists the thirteen propositions or issues by name. Attached to the answer is a copy of each proposition or issue in printed form as presented to the voters by the Board of Elections of Cuyahoga County.

A stipulation is contained in the record as follows:

“The relator and the respondent, waiving trial, hereby stipulate as follows:
1. The sum of $500 delivered by respondent to The Citizens Committee For City and County Issues on September 17, 1957, referred to in the respondent’s Answer herein, was money of the respondent.
2. The aforesaid sum of $500 was spent in advocacy of propositions or issues- submitted to the voters.
3. The propositions or issues in advocacy of which the said sum was spent were the issues set forth in the respondent’s Answer herein.”

The code sections prohibiting certain corporations, as enumerated by §5733.02 R. C., from using corporate funds for “Political Purposes,” and requiring that corporations shall cause affidavits to be filed asserting that tnej did not expend funds for political purposes, are §§5733.27 and 3599.03 R. C. Sec. 5733.27 R. C., provides:

“Every corporation required by law, to make returns, statements, or reports to the tax commissioner shall file therewith, in such form as the commissioner prescribes, an affidavit subscribed and sworn to by a person or officer having knowledge of the facts setting forth that such corporation has not, during the preceding year, directly or indirectly paid, used or offered, consented, or agreed to pay or use any of its money or property for or in aid of any political party, committee, or organization, or for or in aid of any candidate for political office or for nomination for any such office, or in any manner used any of its money or property for any political purpose whatever, or for the reimbursement or indemnification of any person for money or property so used. Such forms of affidavit as the commissioner prescribes shall be attached to or made a part of the return, statement, or report required to be made by such corporation.”

Sec. 3599.03 R. C., provides:

“(A) No corporation engaged in business in this state shall, directly or indirectly, pay, use, offer, advise, consent, or agree to pay or use the corporation’s money or property for or in aid of a political party, committee, or organization, or for or in aid of a candidate for political office, or for a nomination thereto, or use such money or property for any other partisan political purpose, or violate any law requiring the filing of an affidavit respecting such use of such funds.
“Whoever violates division (A) of this section shall be fined not less than five hundred nor more than five thousand dollars.
“(B) No officer, stockholder, attorney, or agent of such corporation shall violate division (A) of this section, participate in, aid, or advise such violation, or solicit or knowingly receive money or other property in violation of division (A) of this section.
“Whoever violates division (B) of this section shall be fined not more than one thousand dollars, or imprisoned not more than one year, or both.”

These provisions in somewhat different form came into the law of Ohio in 1908 in an Act entitled “To prevent the corruption of elections and political parties by corporations.” The statute then passed, as is true of those above quoted, required certain corporations to file affidavits (as a part of their annual reports as required by law), that such corporations had “not directly or indirectly during the preceding year paid or contributed to the funds of any political organization, committee or candidate or used its money or property in violation of section I of this act.” Section I of the Act prohibited a corporation from using or offering or consenting or agreeing to use “any of its money or property for, or in aid of, any political party, committee or organization, or for, or in aid of, any candidate for political office or for nomination for any such office, or in any manner use any of its money or property for any political purpose whatever * * Section 3 of this Act provided a penalty for a violation of either section. It must be noted the title of the Act was to prevent, first, the corruption of elections; and second, the corruption of political parties.

The sections of the Act of 1908 were divided upon recodification of the Ohio Code in 1910, section 2 of the original act becoming a part of the statutes dealing with taxation of corporations and which is now §5733.27 R. C., as above quoted, and sections 1 and 3 becoming part of the Election Code found now in §3599.03 R. C. It is to be noted that the only material change in the substance'of section 1 of the Act of 1908 came in 1929 when the phrase “for any political purpose whatever” was amended to read “for any other partisan political purpose.” Though now separated, the purpose of these sections was and still is to exclude corporations from participating in or financially supporting political activities. They must be read in pari materia in seeking their true meaning, purpose, and the extent of the prohibition against corporation participation in politics. In giving consideration to the full meaning of these sections, three other sections found in Chapter 3517 R. C., must be kept in mind. Chapter 3517 R. C., is headed “Campaigns; Political Parties.” Secs. 3517.10 and 3517.11 R. C., dealing with the necessity of a candidate, or committee supporting a candidate seeking election to public office or nomination for such office, require such candidates or committees to file a statement of receipts and expenditures used to promote such candidate. The first sentence of §3517.12 R. C., then provides:

“The provisions of Title XXXV R. C. relating to the contributions, receipts, and expenditures of money or other things of value in elections in the case of candidates, the filing of statements relative thereto, and the violations of any such provisions shall apply with equal force and in all details to the contributions, receipts, expenditures, and obligations incurred by persons, committees, and associations in advocacy of or in opposition to the adoption of any proposition or issue submitted to the voters.”

The legislature here provided that the giving of financial support for or against issues or propositions submitted to the voters, at an election is political in character and is, therefore, circumscribed by the same rules as is true of candidates and parties.

The question presented then is whether or not from the foregoing statutory provisions, a corporation is restricted from giving financial aid only to political candidates seeking election to public office and political parties acting in the interests of candidates for office, using these words in a strict party partisan sense, or does the prohibition include restrictions against financing a campaign in support of other political questions which are by law then to be submitted to the voters for determination at a public election. The phrase of §5733.27 R. C. (the affidavit section), involved is: “* * *• or in any manner used any of its money or property for any political purpose whatever, * * This phrase follows the need to report by affidavit that such corporation had not used any of its money or property in aid of a political party, committee or organization or in aid of a candidate seeking public office or nomination for such office. The phrase found in §3599.03 R. C., directly-involved, is “* * * or use such money or property for any other partisan political purpose, * * This phrase follows the identical language just noted in §5733.27 R. C., which is the use of corporate “money or property for or in aid of any political party, committee or organization or for or in aid of any candidate for political office or for a nomination * * *” thereto, and is prohibited.

Both of these phrases, if the sole purpose of the statute in which they are found was to prohibit corporations from giving financial aid to political parties or candidates, would be wholly unnecessary and clearly surplusage because such subjects were otherwise fully covered in each of the sections before the phrases with which we are here concerned appeared. It must, therefore, be evident that each phrase intends to prohibit corporations from giving financial aid to or for other political purposes than political parties or candidates. The word “partisan” as used, when considered in the light of the provisions of the section involved, does not restrict its meaning to candidates for office but means, in the context as used, a political issue subject to political controversy by vote of the people.

The meaning of the phrase “political purpose” received judicial interpretation in the case of Green v. Cleveland (City), 33 Abs 72, 33 N. E. 2d 35 (Court of Appeals— 1940), on page 74, where this court said:

“The words ‘political purpose’ in their natural meaning would include any purpose to be attained at an election whether the voters at such election are asked to vote on issues or for or against candidates, and such a construction carries out the evident intent and purpose of this provision of paragraph 140 of the charter.”

The words “political purposes” are all inclusive in defining activities involving the body politic in control of the function of government by the people. There are no other words than can be substituted to completely describe this function of our social, or our public activities. These words are not restricted in their use to elections of public officers supported by organized political parties or otherwise. Every activity encompassing the deciding of issues or adopting of propositions as a part of the democratic process by a vote of the people is in furtherance of and accomplishes a “political purpose” and in the use of these words, such purpose must have been so intended by the legislature.

It must follow, therefore, that financially supporting or contributing funds to be used in seeking to defeat issues or propositions in the process of submitting such questions to the voters, to use monies or property in an attempt to influence the voters to vote for or against issues or propositions legally presented at an election, is clearly an act in furtherance of a “political purpose.”

The respondent, being a corporation organized for profit, under the laws of Ohio, and doing business in this state, is prohibited from using its money or property for “Political Purposes” as here defined, arid to do so, as admitted by the pleadings and stipulations, is in violation of law. Such acts are outside the powers of its corporate franchise.

•Writ to issue as prayed for.

HURD and KOVACHY, JJ, concur.

CONCURRING OPINION

By KOVACHY, J.

The historical background of Corrupt Practices Acts has significance to the question presented in this case.

At common law, the courts applied strict rules of evidence in cases involving corruption, fraud, bribery, coercion or intimidation so that such prosecutions were attended with great 'expense and practical difficulties. This led to the enactment of the Corrupt and Illegal Practices Act of 1883 in England. Such laws were not considered in America until the close of the 19th Century when, with the growth of big business, the political parties became dependent upon large corporations as a source of revenue to conduct their campaigns. It became apparent that contributions from corporations were made to further some interest of their own rather than to promote the best interests of the party or the welfare of the people. Special privileges were bought and paid for in that way.

New York was the first to adopt a Corrupt Practices Act in the United States in 1890 and was followed. by Connecticut, Michigan, Colorado, Massachusetts and other states enacting similar acts. Ohio passed its first act in 1908. It used much of the language found in the New York Act of 1906. The clause “for any political purpose whatever” was taken verbatim from the New York Statute. New York, however, recognized the all inclusiveness of this language by incorporating in its election laws Chapter 239, page 470, which reads as follows:

“The term ‘political committee,’ under the provisions of this article, shall apply to every committee or combination of three or more persons cooperating to aid or to promote the success or defeat of a political party or principle, or of any proposition submitted to vote at a (public election or to aid or take part in the election or defeat of a candidate for public office, but nothing in this article contained shall apply to or in respect of any committee or organization for the discussion or advancement of political questions or principles without connection with any election.” (Emphasis ours.)

Since Ohio, in its original enactment, in no way restricted this broad statement prohibiting corporations from aiding “any politicial purpose whatever,” the 1929 amendment, which changed the clause to “or use such money or property for any other partisan political purpose,” assumes added significance. Did the legislature have in mind the New York Act, which it originally copied, and intend to clarify the broad expression “any political purpose whatever,” not by restricting its meaning by definition, as New York did, but by substituting the words “or use such money or property for any other partisan political purpose?” That seems to have been its manifest object.

Sec. 3599.03 R. C., prohibits the use of money or property of a corporation for or in aid of:

1) A political party

2) A political committee

31 A political organization

4) A candidate tor political office

51 A nomination oí a candidate to a political office

61 Any other partisan political purpose.

Respondent contends, inter alia, that this section of the Election Law of Ohio was enacted to prevent “corruption of our American party system, where * * * as was so universally known as to make particularization stuffy * * * candidates for office are supported and nourished by political parties, political committees, and political organizations;” that in the use of the expression “other partisan political purposes,” the legislature described wnat went on before, namely, a political party, committee or organization, as partisan; that partisan, therefore, refers to political parties and similar organizations; that the law intends to prohioit corporations from aiding elections having to do with poiitical parties ana party candidates and nothing else; and that propositions and issues are not elected but are submitted to voters upon a ballot marked “For” or “Against.”

In advancing this contention, respondents lose sight of the fact that many candidates for office under Ohio Law get on the ballot by means of nonunatmg petitions with no party label whatever, and that all candidates for election to judicial office, whether or not nominated at a party primary election, are placed on a nonpartisan ballot for election.

The word “other” means remaining or additional. Partisan is an adverb qualifying the phrase “political purpose.” It expresses the manner or quality of the political purpose, and as employed in this statute, plainly nas a broader meaning than referring to party elections alone since the legislature in adding the word “other” clearly intended that it embrace the concept of taking sides in an eiection whether along party lines or not. All elections are partisan in the sense that the voters are either for or against something and whether the election involves candidates, or questions and issues, partisan zeal and spirit develops between those who are for or against the candidate, the proposition or the issue on the ballot, as the case may be.

Corporations do not vote. They exist for the purpose of furthering the particular business in which they are engaged. Corrupt Practices Acts were enacted with respect to them because practices indulged in by certain corporations in making contributions for campaign purposes had become objectionable and subversive to good government and the public welfare. Even if such contributions were made from proper motives, they might afterwards be made the basis for demands which might not be for the public interest to grant.

The Supreme Court stated in the syllabus of Cochrel v. Robinson, 113 Oh St 526, 149 N. E. 871:

“4. In the construction of a statute the primary duty of the court is to give effect to the intention of the Legislature enacting it. Such intention is to be sought in the language employed and the apparent purpose to be subserved, and such a construction adopted which permits the statute and its various parts to be construed as a whole and give effect to the paramount object to be attained.”

It, accordingly, seems obvious that the ^legislature amended §4785-192 GC (now §3599.03 R. C.), in order to make clear its intent to prohibit corporations from contributing to political purposes that are of a partisan nature only and such classification includes all elections, whether for candidates or on questions, propositions or issues.