author: By McBRIDE, J.:

text:
    LATHREM, Plaintiff, v. FOREMAN, Defendant.
    Common Pleas Court, Montgomery County.
    No. 95891.
    Decided February 14, 1957.

      Rowan A. Greer, Jr., of Landis, Ferguson, Bieser & Greer, and Louis T. Shulman of Shaman, Winer, Shulman & Ziegler, Dayton, for plaintiff.
    William G. Piekrel, Maurice J. Leen, Jr., of Pickrel, Schaeffer & Ebeling, Dayton, for defendant.
   OPINION

By McBRIDE, J.:

On a petition to vacate a judgment taken by confession it was undisputed that the original note and warrant of attorney was lost and was not produced at the time the judgment was rendered or at any other time during the subsequent proceedings. This presents the question of the authority of an attorney to confess judgment and of the jurisdiction of the court over the person of the defendant when the original warrant of attorney is not available. A second problem arises as to the validity of an attempt to restore the instrument and to obtain judgment without notice to the defendant.

The initial pleadings, filed November 2, 1945, were in the customary printed form used in cognovit cases and included a verification by an attorney that the instrument was in his possession. In 1952 a conditional order of revivor of the dormant judgment was filed and notice was served on the defendant for the first time. The judgment was revived and this decision was affirmed in Case No. 2281 by the Court of Appeals of Montgomery County.

At the hearing on the merits of the petition to vacate the judgment both parties were present and represented by counsel. The defendant, and petitioner in the instant proceedings, Carl M. Foreman, denied signing the note dated November 8, 1929 for $1,245.00 and he denied signing any other note to Samuel F. Lathrem. On cross-examination he was shown notes for $150.00 to Lathrem, each dated in 1929 and apparently paid. Thereafter he merely indicated that he had no personal recollection of signing the note on which the judgment was taken; that he had no knowledge of the note until he received the notice of the proceedings to revive the judgment. A penned notation above the caption of the original pleadings that “judgment (was) rendered on (a) lost instrument” and endorsed by the trial judge was introduced.

A stipulation of fact, filed in this case in the revivor proceedings, was offered in evidence and decision reserved, however said stipulation is admitted. The attorney for the judgment creditor, called on direct examination, admitted the facts contained in the stipulation.

The court finds that the evidence is undisputed that the judgment of November 2, 1945 was rendered by confession when the original note and warrant was lost and that the instrument and warrant of attorney was not presented to the court. The testimony reveals that prior to the rendition of the judgment an ex parte hearing was had before the trial judge and evidence was introduced that such a note existed, had been signed by the defendant, contained a warrant of attorney, and was unpaid. On the basis of such hearing and without notice to the defendant the court proceeded as if the note were produced and granted judgment by confession. There is no pleading, notice, or order of the court as to the lost instrument. There is no record or any finding that the instrument or the warrant of attorney be restored.

8}C * * Sfr

The court acknowledges the assistance of scholarly briefs. They discuss the problems involved and decisions in the instant case through several hearings and one appeal. In every instance the validity of the judgment was sustained

In sustaining the revival of the within judgment the Court of Appeals applied the general rule that attaches to every judgment; that a presumption exists as to the validity and regularity of any judgment, citing McCullough v. Luteman, 15 Oh Ap 207. The Court of Appeals indicated that the lost instrument may be restored and a recovery had upon each instrument.

“Under the presumption of regularity in obtaining the judgment, since the record reveals the note was lost and record taken, the presumption must also prevail that sufficient evidence was presented to establish the instrument as being lost and the copy attached to the petition as being authentic. Under the power of attorney in said copy, Attorney Smith was authorized to enter an appearance and waive the issuing and serving of summons. Upon appearance being entered jurisdiction was acquired, and if the court was not authorized to enter a judgment under §2323.13 R. C., and having done so, the same would be erroneous and irregular but not void . . . .”

We have emphasized the presumptions expressly mentioned. We may add a presumption of jurisdiction over the defendant for the purpose of restoring the note before Attorney Smith was authorized to enter an appearance or to waive the issuing of summons. This court is now concerned with the facts and not with presumptions, as is the situation on a motion to revive. The authority of the court in an action to revive a judgment is limited. 23 O. Jur., 1103. When the Court of Appeals sustained the revival of the within judgment in Case No. 2281 it also stated:

“. . . . Matters of defense may not be set up in proceedings to revive a dormant judgment which existed anterior to the rendering thereof where it appears by the record that the court which rendered it acquired jurisdiction. An error in the rendition of a judgment may not be corrected in a proceeding of revivor. Bates Pleading and Practice, 4th Ed., 532; 138 A. L. R. 863.
“It is our conclusion that this collateral attack upen the original judgment is not well taken; that if sufficient grounds of irregularity in obtaining the judgment can be established entitling the appellant to a vacation of the same, this relief must be obtained by a direct attack upon said judgment.”

This court is now confronted with the undisputed testimony that the defendant received no notice that judicial process was in motion to determine whether such instrument existed and whether or not the attorney had authority to act on his behalf. The plaintiff represented to the court in his petition that the instrument and warrant was in his possession, yet at the ex parte hearing he admitted that it was not and informally requested the court to exercise its power to restore the instrument so that the attorney would thereafter have authority to confess judgment. Whether or not the attorney had such authority must be resolved by the facts: It cannot rest on a presumption.

It is also argued that this court should follow a decision in this case overruling a motion by Carl M. Foreman for a judgment on the pleadings in the proceedings to vacate. The court examined the record at the time of the trial, and again recently, and failed to find an answer to the petition to vacate. Since the parties and counsel proceeded to trial on the merits this failure is now waived however the absence of an answer justified a refusal to grant judgment on pleadings. Any additional reason heretofore advanced for a decision thereon fails for want of an admission of fact.

Another factor which distinguishes the problem presently before the court from the prior rulings is the “entirely new law” included in the defendant’s brief which was not previously considered. This undoubtedly refers to an old, but significant amendment to the form of what is now §2323.13 R. C. This “entirely new” historical study of the statute requires a thorough examination of the procedure in Ohio on judgments by confession.

* * * * *

Sec. 2323.13 R. C. (§11597 GC; §5324 R. S.) provides:

“An attorney who confesses judgment in a case, at the time of making such confession, must produce the warrant of attorney for making it to the court before which he makes the confession; and the original or a copy of the warrant shall be filed with the clerk.”

This statute has existed in substantially the same form for over a century without determination of the question of the necessity of producing the original instrument. A former provision, which was deleted in 1852, provided that the attorney produce his warrant “if required so to do.” Statutes, 1841; 29 Ohio Laws, 69; 51 Ohio Laws, 120.

Prior to the amendment production of the power of attorney was not mandatory. Whether it was produced or not was expressly left to the discretion of the court. We have been unable to discover what prompted the legislature to eliminate the optional provision. However the intent is apparent to eliminate any discretion on the part of the court in requiring the performance of the condition expressed. The only optional provision relates to filing the original or a copy with the clerk after the judgment has been rendered. This additional special provision for making up the record excludes any construction that such option exists at the time the judgment is confessed. It will be observed that the words “must” and “shall” are separately used in this statute.

The condition of the law of other states is not helpful, but it does indicate how litigious this situation can become when the production of the original warrant is left to the discretion of the individual judges. Various conditions have been imposed by other states where cognovit instruments are allowed. The most common and cumbersome are those which require a sworn verification of the warrant and a statement containing various facts as to the existence, purpose, and consideration of the note. Of the statutes examined the simple Ohio regulation stands alone as the most conducive to the use of commercial credit, strictly in accord with the agreement of the parties, and adequate to protect the public in the otherwise unrestricted use of cognovit instruments.

In the absence of a reported case in Ohio the judgment creditor relies upon the case of Mahoney v. Coliman (1928) 293 Pa. 478, 143 A. 186 which affirmed a judgment by confession by an attorney pursuant to a copy of the instrument where the original was shown to have been lost. At the time in question a judgment could be entered in “amicable actions” by a prothonotary only if the warrant in writing were produced. If the confession was made by an attorney the judgment was “entered independently of the statute” and “according to ancient and established practice” which did not require the authority of the attorney to be in writing. In the absence of legislation the county courts in Pennsylvania, at the suggestion of the supreme court, adopted local rules regarding confession of judgments by attorneys. In Wilson v. Richard, 298 Pa., 17 (1929) the court rule prohibited an attorney from confessing judgment unless he had the original instrument in his possession at the time of entering judgment. The court followed the view that “it was not to be assumed a member of its bar would undertake to enter a judgment under the rule without having in his possession the warrant to do so. . . . As stated in Mahoney v. Coliman, 293 Pa. 478, 482, in some counties the rules of court require the original note to be filed; but in Clarion County there is no such requirement, and its rule does not run counter to any of our decisions.”

A court is obligated to follow a general statute, but not its own rule. The confusion inherent in the absence of legislation is apparent in other Pennsylvania decisions.

In Peerless Soda Fountain Service Co., v. Hummer, 19 D Ss C (Pa.) 302 (1932), a judgment was stricken from the record where the warrant was not attached to the confession of judgment nor subsequently produced and exhibited to the court for the purpose of saving the judgment. In Bittner v. Ellick, 14 D & C (Pa.) 621 (1930), the court followed the Mahoney case in applying a local rule as to confession of judgment by an attorney. An affidavit as to loss was filed when judgment was taken as suggested by the supreme court. The rule that a judgment may be entered on a copy of the note in the absence of a statute requiring the original to be produced was followed in Crane v. Harris, 56 D & C (Pa.) 481 (1946). But in Longacre, et al v. Breish, 22 D & C (Pa.) 271 (1934), it was held that judgment should not be entered upon a mere copy of a paper containing a warrant for the confession of judgment, even in the absence of an applicable rule of court, but where the original is produced at the hearing of a rule to strike the judgment so entered the court may order the original instrument filed in order to cure the irregularity.

As indicated in the Mahoney case, at page 187, “In some counties the rules of court require the original note to be filed with the amicable action and confession. These rules, carrying out the suggestion of the court in an earlier case, apply where the note is in existence; and where it is not, the next best evidence is the copy on which judgment may be entered as here indicated.”

What is the purpose of the Ohio statute which requires that the instrument must be produced by the attorney at the time of making the confession? May the court, without notice to the debtor, substitute its personal discretion as to the nature of the evidence of the existence of the warrant, and enter judgment on something other than “the warrant” or such other reconstruction of its contents as the creditor may recollect? If the court may disregard the language of the statute and render judgments by confession on the “next best” or worse evidence this amended statute is meaningless and the door is open to careless, improper and fraudulent practices from which Ohio has been spared.

The terminology used in §2323.13 R. C., defies any construction other than that the original instrument itself must be produced. The language, “at the time of making such confession, must produce the warrant of attorney for making it to the court,” is a simple and clear expression of a mandatory condition precedent to the establishment of the authority of the attorney to confess and of the jurisdiction of the court over the person of the defendant. This construction is consistent with the legislative policy of Ohio to regulate rather than prohibit the use of cognovit notes.

Every amendment of a statute is presumed to effect a change in the purpose or the policy of the legislature. The purpose of an amendment must be determined by the extent of the change in the language. Lytle v. Baldinger, 84 Oh St 1, 95 N. E. 389; Board of Education v. Boehm, 102 Oh St 292, 131 N. E. 812. The early amendment to the present §2323.13 R. C., was of a substantial nature and the presumption arises that the legislature intended a substantial change in the handling of judgments by confession by the courts. 37 O. Jur., Statutes, Sections 436, 438, 439. This section has a special purpose applicable to special proceedings in which fundamental rights are waived by a stranger to the party in interest. It is proper that the legislature establish conditions to be performed by counsel and the court in handling such matters. Conditions established by the legislature for the protection of the public must be literally construed and strictly executed to effect that purpose. Any construction of §2323.13 R. C. which perpetuates the discretion denied to the court or qualifies the language of the statute ignores the amendment of 1852 and is as contrary to the expressed intent of the legislature as if words of prohibition had been used.

While it is generally true that common law rules have been greatly relaxed, it is equally true that in certain instances the legislature has seen fit to adopt additional requirements. The common law rule of profert in curia, requiring production in court of an instrument in order that the judge and the defendant might read and inspect it, did not apply to promissory notes or unsealed instruments. 25 O. Jur., f. n. 10, page 789; 10 C. J. S., 1189; 72 C. J. S., 1215. By statute Ohio has extended the common law rule of profert of certain instruments. Where the action is founded on an account or written instrument as evidence of indebtedness a copy must be attached and filed or the reason for its omission must be stated in the pleading. Sec. 2309.31 R. C. (§11333 GC). Where the attorney verifies such a pleading he must state under oath that the instrument is in his possession. Sec. 2309.53(C) R. C. And where the written instrument contains a warrant of attorney it must be produced to the court for inspection before judgment is confessed and the original or a copy thereafter filed with the clerk. Sec. 2323.13 R. C. (§11597 GC; §5324 R. S.). These requirements are distinctly different and must be construed to give effect to their respective purposes.

The legislative purpose in eliminating discretion as to the production of the instrument is similar in nature and purpose to that of the certificate of title law which prohibits a court from recognizing the title of any person to a motor vehicle without the production of a certificate of title. Mielke v. Leeberson, 150 Oh St 528; 38 O. O. 352. A few situations involving conditions imposed by statute include In Re Estate of Golembrewski, 146 Oh St 551, 38 O. O. 41; Cleveland Ry. Co. v. Halliday. Admr., 127 Oh St 278; State, ex rel. Dworken, v. Common Pleas Court, 131 Oh St 23, 5 O. O. 291; State, ex rel. v. Basher, 46 Oh Ap 148; Case v. Smith, 142 Oh St 95, 26 O. O. 282; Crandall v. Irwin, 139 Oh St 253, 22 O. O. 273; Gravier v. Gluth, 163 Oh St 232, 56 O. O. 228.

For many years Rule XX of this court has provided: “before a judgment entry is filed in case of confession of judgment by warrant of an attorney on promissory notes the original note shall be presented to the clerk of this court who shall endorse thereon by rubber stamp or writing the fact that the note is in judgment. The entry of judgment shall not be filed until the same is done.” Since the court waived its own regulation, Rule XX is not decisive in this case. The requirement that the original be presented to the clerk for endorsement is indicative of the construction of §2323.13 R. C. accepted by this court for many years.

It is the conclusion of the court that §2323.13 R. C. establishes a legislative policy in Ohio as to confession of judgments on cognovit notes and requires, as a condition precedent, that the attorney who confesses judgment shall produce the original warrant of his authority for making it to the court at the time he waives service of process and consents to judgment. This requirement is not satisfied by the production of a carbon or other copy, nor by oral evidence of the existence of a warrant when in fact the instrument itself is lost or cannot be produced. Where the attorney fails to produce the warrant of his authority to confess judgment or it is otherwise shown for any reason that the warrant itself is not or cannot be produced the attorney is without authority and the court acquires no jurisdiction over the defendant. A judgment taken under such circumstances is void ab initio.

The loss or destruction of a written instrument does not, as a general rule, change or impair the obligation of the parties, however such loss may and usually does impair the owner’s ability to establish his rights under the general rules governing notice and procedure.

The judgment in this case was rendered without the production of the warrant of authority from the defendant to confess, and without jurisdiction over the person of the defendant and was void ab initio. Where the judgment is void, the procedure outlined by §2325.01 et seq, R. c., does not control and the court has inherent authority to set aside such void judgment whenever it is properly attacked. Snyder v. Clough, 71 Oh Ap 440, 26 O. O. 367; Donovan v. Decker, 98 Oh Ap 183, 57 O. O. 230; Shaman v. Roberts, 87 Oh Ap 328, 43 O. O. 50; Hayes v. Kentucky Land Bank, 125 Oh St 359; 14 O. Jur. 2nd, 509 et seq.

As to the second question, what is the effect of the ex parte hearing at which the court apparently found that the note existed and contained a warrant of attorney signed by the defendant?

A determination by the court after hearing testimony that an instrument, represented to be lost, exists and contains a power of attorney to confess judgment is an exercise of judicial power affecting substantial rights of the parties. The exercise of such power without process and without a journal entry of the action of the court thereon is a sham, unconstitutional, and void and must be disregarded as a nullity even though the formality of a hearing did take place. Because of the lack of process a journal entry could not breathe life into such a procedure.

The language of a warrant of attorney may not be enlarged to include actions or proceedings not expressly contained in the instrument. For example, a power of attorney to confess judgment for possession in event of any breach of covenant authorizes a confession upon a condition and this condition must be proved after issue, summons, and trial and cannot be confessed for no appearance is authorized on this issue. Fitzgerald v. Wiggins, 6 Dec. Rep. 1201, 9 Dec. Rep. 125, 11 W. L. B. 51. The customary power stated in a warrant contained in a cognovit note is not broad enough to authorize the attorney to perform any act with respect to different facts or causes of action. Cushman v. Welsh, 19 Oh St 536; Spence v. Emerine, 46 Oh St 433.

The restoration and establishment of an alleged lost power of attorney, which cannot be produced for any reason, is a justiciable issue on which the other party is entitled to regular process of law. 54 C. J. S., Section 10, page 810. Where the authority of the attorney to confess and the jurisdiction of the court over the person of the defendant is dependent .upon the exercise of judicial power to restore to the plaintiff that which he cannot produce, as required by §2323.13 R. C., service of process is indispensible.

Judgments of courts should and must have a large degree of sanctity attached to them, and before they can be disturbed, the right to do so should be clear, the injury palpable, and the evidence convincing. McCullough v. Luteman, 15 Oh Ap (210) 207. Individual rights are equally, if not more sacred. They cannot, and must not, be disturbed by an unwarranted extension of judicial authority based on a technicality that a plaintiff need not ordinarily allege an issue — such as that he lost the instrument on which his action is founded — which determines the jurisdiction of the court over the person of the defendant. If the court may, in an ex parte hearing, find that a defendant has waived service as claimed by an interested creditor, constitutional and statutory guarantees are worthless. Such an argument sanctifies a judicial order founded upon either a action or a falsehood which recognizes a waiver where none existed initially. Thus jurisdiction of the defendant is not acquired but created by the court, by its own order, and not by the consent of, or service upon the defendant. The argument that an instrument may be restored and jurisdiction thereby obtained without notice to the opposing party is based upon a premise that is false and, if accepted, will promote fraud and produce devastating results in any similar situation in which this technique is exploited.

It is not necessary in the instant case to consider the appropriate procedure where a cognovit note is lost or destroyed however the owner may bring an action on the instrument. Every case of this character in Ohio has heretofore been initiated with the service of process. Sargent v. Railroad, 32 Oh St 449; 25 O. Jur. 778, 780. The owner might seek restoration of the note and warrant in an equitable action however existence of the legal remedy may prevent equitable relief. In either event service of process is unavoidable.

An entry may be prepared vacating the judgment for $2550.48 taken November 2, 1945.


source: Caselaw Access Project

author: By HURD, J:

license: Public Domain

text:
    STATE, Plaintiff-Appellee, v. BROADWELL et, Defendants-Appellants.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 23837.
    Decided July 11, 1956.
    Frank T. Cullitan, Pros. Atty., Dennis J. McGuire, Frederick W. Frey, Asst. Pros. Attys., for plaintiff-appellee.
    Edward C. Stanton, Joseph R. Slemmons, for Robert Broadwell, Walter I. Krewson, for E. M. B. Ownen, for defendants-appellants.
   OPINION

By HURD, J:

This action originated in the Court of Common Pleas of Cuyahoga County where the defendants-appellants were indicted under §4731.47 R. C., which reads as follows:

“No person shall make, issue, or publish, for the purpose of sale, barter, or gift, a certificate, diploma, or other writing or document falsely representing the holder or receiver thereof to be a graduate of a medical school, college, or educational institution of medicine and entitled to the powers, privileges, or degrees thereby pretended to be conferred, or sell or dispose of, or offer, to sell or dispose of such diploma, certificate, writing, or document containing such false representation or use his name, or permit it to be used, as a subscriber to such false and fictitious diploma, certificate, writing, or document or engage in the practice of medicine and surgery under and by virtue of such fraudulent diploma, certificate, writing, or document.” (Emphasis added.)

The indictment contained two counts. The pertinent parts of the first count are as follows:

“1. ... Do Find and Present, That Robert Broadwell and E. M. B. Ownen on or about the 22nd day of September 1953, at the County aforesaid, unlawfully and fraudulently published and offered to sell one Joseph M. Centanni a Diploma in Homeopathic Medicine for the sum of $1500 without examination, attendance or study, and that said Diploma would represent the said Joseph M. Centanni to be a graduate of a Medical School and entitled to the powers and privileges thereby pretended to be conferred and did further falsely represent that said Diploma would admit the Holder to the practice of Medicine, the said Robert Broadwell and E. M. B. Ownen well knew said representations to be false and were made with intent to defraud.” (Emphasis added.)

The second count of the indictment is similar to the foregoing except as to the date of the offense.

The jury returned a verdict finding both defendants guilty as charged on two counts and they were then sentenced to the Ohio Penitentiary, the sentences on each count as to each defendant to run concurrently. Motions for new trial were filed and overruled and the case is here appealed on questions of law.

A brief condensation of the evidence presented by the State, as appears in the record, is as follows: On September 22, 1953, Robert J. Broadwell, who had come to Cleveland a few months previously, and E. M. B. Ownen, of Arcadia, Missouri, conducted a meeting at the Hollenden Hotel, in Cleveland, attended by seven local chiropractors, whose presence was the result of certain solicitations and representations theretofore made by Broadwell. Broadwell and Ownen both outlined a plan whereby by paying $1500, local chiropractors could obtain degrees in homeopathic medicine and licenses to practice in Ohio as doctors of medicine. Broadwell was to handle this “deal” in the Cleveland area, and the same program was being duplicated in other States.

Dr. Ownen stated that he had recently acquired a new charter for the American Non-Allopathic University, Incorporated of Arcadia, Missouri, as the result of which his school was then in a position to issue diplomas in homeopathic medicine; that those chiropractors accepting his introductory offer were to pay $500 down and $1,000 not later than December 1, 1953, and furnish photostatic copies of their degrees and licenses in chiropractic or mechanotherapy and individual college credits; that if such applicants did not have college credits, he, Ownen, would supply the deficiencies through a certain McKinley-Roosevelt School in Chicago, where for an additional $1,000, a four-year college degree would be supplied without any attendance being required; that when their money and credits had been received, the applicants would be placed on Ownen’s “preferred list,” thus reserving one of thirty-six “select” places. They would immediately receive diplomas in homeopathic medicine from the American Non-Allopathic University of Arcadia, Missouri, without attendance or study, after which they would automatically receive licenses, issued in either Massachusetts, Connecticut, or Rhode Island, according to the applicant’s choice, to practice as doctors in homeopathic medicine. Following this and after the applicant had taken a “fixed” total examination in four simple subjects: namely, public health, hygiene, prescription writing and homeopathic medicine, a license to practice homeopathic medicine would be issued by the Ohio State Medical Board.

Following this Hotel Hollenden meeting; namely, on October 30, 1953, Broadwall visited Dr. Centanni at his office and again went over the details of the “deal” in the presence of Robert Drake, a Cleveland Plain Dealer reporter, who was represented as being a chiropractor and interested in getting in on the deal. Broadwell instructed Dr. Centanni to draw a check for $500 payable to the American Non-Allopathic University and to submit therewith a list of his college credits. Dr. Centanni gave Broadwell a check for $500 as instructed, in an envelope on the outside of which were listed Dr. Centanni’s college credits. Broadwell put the check and envelope in his pocket and left the office. By prearrangement with the police, he was arrested immediately, and when searched, the $500 check and the envelope were found on his person.

The police then questioned Broadwell, who admitted that he had visited Dr. Centanni at his office; that he was representing a school for the purpose of helping chiropractors obtain medical degrees; that he was from Missouri and was presently working at the Forest Hill Clinic in Cleveland; that he did not have a medical degree; that he was not licensed by the State of Ohio to practice as a Doctor; that he had the title of “Doctor” by reason of having attended a school in Missouri for a couple of weeks; that he was a representative of a certain Dr. Ownen, of Missouri “from the American Non-Allopathic University” and was here to recruit students and offer a course to help them obtain medical degrees; that the papers and credentials of such students were to be sent through the State of New Jersey, following which Néw Jersey would return the papers to Ohio for processing through the Ohio Medical Board so that the students could obtain doctors’ medical licenses.”

Defendant Broadwell testified in his own defense, but defendant Ownen did not testify.

While there are fifteen assignments of error attacking inter alia the sufficiency of the indictment, the rulings of the trial judge on motions, the admission or rejection of evidence, the charge of the court, the claims of error, both by way of brief and oral argument, principally involve the proposition urged by counsel for defendants throughout the trial, namely, that since there was no actual diploma published by the defendants, they could not be guilty of offering to sell something which was not theretofore in existence.

It is conceded by the State that there was no actual diploma delivered to any of the State’s witnesses nor was any diploma actually exhibited to them. However, the gist of the crime charged by the State is that defendant “offered to sell false medical diplomats)” in violation of §4731.47 JR. C. Thus the question arises as to whether this is a crime within the prohibition of that section. The defendants contend that it is not; that the words “such diploma” immediately following the phrase “offer to sell” refer back to the first words of the statute, that is, to “make, issue or publish a diploma.” This contention, we think, is highly technical and a strained construction of the statute which cannot be sustained in view of the precise wording of the statute. The statute, with reference to the words “offered to sell,” reads as follows:

“No person shall * * * offer to sell • * * a diploma falsely representing the holder or receiver thereof to be a graduate of a medical school * * * etc.”

To argue that the legislature contemplated the existence of an actual diploma before a person would be guilty of the offense of “offering to sell * * a diploma falsely representing the holder thereof * * *, etc.” is contrary to the purpose for which the statute was enacted. This is the very thing which the legislature was attempting to prevent. The offense of “offering to sell” in this case was just as serious and it was just as important to prevent the fraud at this stage of development as it would be at a later time when an actual diploma would have been issued. We cannot conceive of the legislature intending this additional element, namely, the issuance or publication of a false diploma, to be present before it could be said that a crime had been committed. The offense complained of was still present. The “offer to sell” had been made and the money had passed to the defendants on the basis of their “offer to sell.” The following comments of the Supreme Court in the case of State v. Healy, 156 Oh St 228, 240, are equally applicable here:

“Sec. 12447-1 GC, was clearly designed and enacted for the purpose of protecting the innocent from ingenuous fraudulent schemes, and that purpose should not be thwarted by an interpretation which would in effect nullify its very salutary provisions.

“Courts will not by the strict construction of penal statutes defeat the intention of the lawmaker ... A penal statute should receive a reasonable and common sense construction, and ‘its force should not be frittered away by niceties and refinements at war with the practical administration of justice.’ 2 Sutherland on Statutory Construction (2 Ed.), Section 528.

“The following statement in 37 O. Jur., 750, Section 422, is supported by decisions of this court there cited:

. . . while criminal statutes are to be strictly construed in favor of the defendant, the courts are not authorized so to interpret them as to defeat the obvious purpose and intent of the legislature.

The defendants-appellants’ claim that the offense set forth in the indictment, that is, “publish and offer to sell, etc.” was not proved since there was no evidence that a diploma was even published, and, therefore, it should have been quashed, is without merit. If it is an offense to “offer to sell a diploma, etc.” then the indictment is sufficient even though it has included the words, “and publish.” The offense, “offer to sell, etc.” is marked in the statute by the disjunctive “or” but the indictment may substitute the conjunctive “and.” State v. Conner, 30 Oh St 405; State v. Bauer 1 N. P. 103, 1 O. D. 199.

The alleged imperfection in the indictment may be excused by the following parts of §3941.08 R. C., which reads:

“An indictment or information is not made invalid, and the trial, judgment, or other proceedings stayed, arrested, or affected:

“(D) For stating imperfectly the means.by which the offense was committed except insofar as means is an element of the offense;

“(I) For surplusage or repugnant allegations when there is sufficient matter alleged to indicate the crime and person charged;

“(K) For other defects or imperfections which do not tend to prejudice the substantial rights of the defendants upon the merits.”

Sec. 3945.83 R. C., also applicable, provides:

“No motion for a new trial shall be granted or verdict set aside, nor shall any judgment of conviction be reversed in any court because of:

“(A) An inaccuracy or imperfection in the indictment, information, or warrant, provided that the charge is sufficient to fairly and reasonably inform the accused of the nature and cause of the accusation against him:

“(B) A variance between the allegations and the proof thereof unless the accused is misled or prejudiced thereby;

“(C) The admission or rejection of any evidence offered against or for the accused unless it affirmatively appears on the record that the accused was or may have been prejudiced thereby;

“(D) A misdirection of the jury unless the accused was or may have been prejudiced thereby;

“ (E) Any other cause unless it appears affirmatively from the record that the accused was prejudiced thereby or was prevented from having a fair trial.”

Next, it is argued that the hypothetical question propounded to Dr. Moritz was error prejudicial to the rights of the defendant. The error complained of by defendants is the assumption in the question propounded that there was a diploma in existence and that there was a diploma issued. Of course, that was not the fact but clearly it was the end result of the defendants’ scheme if it had been consummated and that was the gist of the complaint contended in the indictment, namely, that what they were offering to sell was, in fact, a false diploma. Only by determining that what they were offering to sell was a diploma which was not genuine would the jury be able to determine their guilt or innocence. Under these circumstances, for the purpose of the hypothetical question alone, the assumption of an actual diploma and its issuance was proper.

Complaint is made as to the court’s charge. We have examined the charge and find no error prejudicial to the defendants. To repeat, the gravamen of the offense charged, that of “offering to sell,” which by statute is made a crime and the indictment so charges.

The defendants object to the court’s use of the word “diploma” in its charge since there was no showing that actually a diploma was issued to any of the state’s witnesses. This is the same argument that is used throughout by the defendants. It is difficult to see how the court could possibly avoid the use of the word “diploma” when the gravamen of the offense charged and the gist of the evidence was that the defendants were “offering to sell a false medical diploma” and that is what the State’s evidence shows that they attempted to do.

Upon a review of the entire record, we find no error prejudicial to the rights of the defendants and conclude that the judgment must be and is affirmed.

Exceptions. Order see journal.

KOVACHY, PJ, SKEEL, J, concur.


author: By THE COURT:

text:
    McGRATH, Sr. et, Plaintiffs-Appellants, v. KNEISLEY, Defendant-Appellee.
    Ohio Appeals, Second District, Clark County.
    No. 526.
    Decided April 23, 1956.

      Herman O. Abele, Springfield, for plaintiffs-appellants.
    Gardner & Acton, Abe Gardner, of Counsel, Springfield, for defendant-appellee.
    (FESS, J, of the Sixth District, sitting by designation in the Second District.)
   OPINION

By THE COURT:

This is an appeal from a judgment of the Common Pleas Court finding in favor of the defendant with certain modifications immaterial to our question, and refusing to grant a restraining order as prayed in plaintiff’s petition.

There is no dispute between the parties on material facts in this case. Plaintiffs and defendant were owners of adjoining lots in Meadow Lanes Estates, a sub-division, addition to Clark County, Ohio, the conveyance to which lots were subject, according to general plan, to uniform restrictions. The covenant and restriction involved in this case provides:

“No building shall be located on any residential building lot nearer than 40 feet to the front lot line nor nearer than 10 feet to any side lot line.”

Plaintiffs charged that the defendant was erecting a residential building in violation of the restriction, in that the building at the northerly end thereof was but 2.42 feet from the east sideline of Lot No. 71 owned by plaintiffs-appellants and a like distance from the west sideline of Lot No. 70, owned by defendant-appellee. That the southerly portion of said building was being erected by defendant-appellee at a distance of 3.45 feet from the east sideline of said Lot No. 71. Plaintiffs allege that during the first part of April 1955, they discovered that the building was being erected in violation of the restriction and that immediately they notified the defendant of his violation and requested compliance with the restriction. That on or about the 9th day of April and later on the 21st day of April 1955, they again notified the defendant in writing of his violation of the restriction and requested compliance therewith. They charge that contrary to the notices defendant is proceeding in violation of the covenant and restrictions to the irreparable injury of the property of plaintiff and other owners of lots in the division.

The answer of the defendant is short and after admitting the restrictions that the respective owners of the lots are the parties to the suit, says:

“Defendant further answering states that he erred in placing the house in the position that it now is and that his attention was not called to the said fact until after the foundation, plumbing, electrical work, plastering and practically the entire house was completed except finishing hardware on the inside, installation of cabinets in the kitchen, the siding on the exterior of the house, rough grading of the lot and putting in the driveway.”
“Defendant further alleges that plaintiffs have a remedy at law for damages.”

Plaintiffs in reply deny that they have any adequate remedy at law and say that they admit the foundation was in and that part of the building was done before plaintiffs discovered the violation of building restrictions as set forth by the petition and deny, * * * that all the work as claimed by defendant in his answer was done before notice of violation was given to him. Plaintiffs further state that the lots owned by them in the sub-division described in the petition were vacant; that they did not live in the sub-division and that when they first saw the building being erected and discovered the violation of building restrictions, they immediately notified the defendant of his violation.

The case was submitted on the pleadings and affidavits of the parties which do not materially differ from the facts averred and admitted by the pleadings.

It will be noted that the defendant does not deny the averment of the petition, that plaintiff did not discover the erection of the building on defendants lot until April 1955, or, that at the time stated in the petition plaintiffs orally and in writing notified defendant of the violation of the restriction. Nor is there any averment of laches against the plaintiff.

The trial judge in a written opinion found the facts as to notices as stated and admitted in the pleadings and assumes “that the facts as sworn to by the plaintiffs herein with respect to progress made in the construction of said house are correct.” “Those facts indicate that at least the house was under roof, and that the heating system was in the slab floor construction and imbedded in the concrete flooring at the time plaintiff notified defendant of his violation.” “That at least the rough plumbing was inside the unplastered walls, the heating ducts and pipes were in the slab floor and the lead-in wires and some rough electrical work was completed.”

Then follows the subject matter upon which the trial judge relied for his order denying any relief to the plaintiffs as to the violation of the restriction. He continues:

“Prom the observation of this Court, it would be a great expense to the defendant herein if the Court would require the enforcement of this restrictive covenant. The plaintiff himself admits a delay but simply excuses his delay by reason of his absence from his lot.”
“There is no showing in this case that the defendant deliberately and wilfully violated restrictive covenants in his deed.”

We may observe there is no averment of wilful violation of the covenant but it is obvious that the defendant was put on notice both by the general plan and by the notice of the restriction in the deed by which he took title to the lot on which the building was erected. The court cites several cases all of which are directed to the defense of laches and say:

“If there had been some indication in this case that the defendant herein wilfully violated the restrictive covenant or fraudulently kept the plaintiffs in ignorance of defendant’s violation, the laches of plaintiff herein would not be a defensive matter available to the defendant.”
“The Court in this case is of the opinion that it would be inequitable and would impose an unnecessary loss and hardship upon the Defendant in the instant case to enforce the restrictive covenant inasmuch as the Defendant did not wilfully violate the covenant, and the Plaintiff, himself, slept on his right by being absent from his lot until after Defendant’s work had progressed to such an extent that enforcement of the covenant under the circumstances of this case would work a great loss and hardship upon the Defendant.”

From what we have heretofore set out it is manifest that but for the finding of the trial judge that the plaintiffs were chargeable with laches, the order would not have been made.

Laches, unless the facts appearing clearly require a plaintiff to explain delay in failing to assert a right is an affirmative defense which must be set up by way of answer. There is no such defense pleaded, and therefore, was not an issue in the case. Lockwood et al, v. Wildman et al, 13 Ohio 430.

Prior to the holding of the Supreme Court in Andrews, Jr. etc. v. Board of Liquor Control, 164 Oh St 275, it was the practice of reviewing courts to assume the validity of an order under review and that, if there was any substantial reason to support it, even for a reason different than that asserted by the trial court, the order should be affirmed. However, the Andrews ease holds that a reviewing court may examine an opinion of the trial court to determine if the reasons assigned for the judgment are sound. So, in this case, we examine the law to determine if the defense of laches was in this case it was supported by the evidence.

It is clear that the defendant must be charged with notice of the restriction which he admits he violated. The lack of willfulness on his part, which the trial judge found, must be based not upon lack of knowledge of the restriction but upon the evidence that by mistake he placed the residence too close to the sideline of his lot. This would not relieve him of his contractual obligation to abide the terms of the restrictive covenant.

“Reasonable restrictions, which are a part of a scheme or plan of restrictions published and adhered to by the owner of a tract, of which purchasers of lots therein, by reason of publication of a scheme or plan, have constructive notice, are enforceable notwithstanding an offer of the original owner to sell an entire line of lots on the defendant’s side of the street without the restrictions.”

West Hill Land Co. v. Ritchie, 18 O. C. C. N. S. 183 aff'd., 80 Oh St 733.

“Actual notice is that which consists in express information of a fact and constructive notice is that which is implied in law.”

Prouty v. Devin, 50 Pacific 380.

The reported cases in Ohio treating of the subject of laches disclose to what extent the element of time weighs in determining the validity of such a defense.

In the early case of Clark v. Potter, 32 Oh St 49, 21 years had elapsed between the time when plaintiffs’ cause of action arose and the time they asserted it.

In Bridenbaugh v. King, 42 Oh St 410, the period of time involved was 43 years during which, without excuse, plaintiff failed to press his claim.

In Harris et al, v. The Wallace Mfg. Co., 84 Oh St 104, the court refused to grant specific performance to the Wallace Company which for four years, with knowledge of Harris’ failure to observe his contract and with knowledge that he had expended considerable sums of money to perfect the device, the subject of the suit, failed to assert their rights. In Russell, Admr. v. The Fourth National Bank, 102 Oh St 248, the plaintiff-administrator, his decedent and heirs had failed from 1866 to 1895 to assert the claim upon which the action was predicated. It was in this connection that the court pronounced the fourth syllabus, which, in part, is:

“Equity demands that rights should be asserted before lapse of time has made a judicial inquiry difficult and uncertain by reason of the death of parties, the loss of papers and books, the death of witnesses, and the intervention of equities; * *

The foregoing case cited by the trial judge in his opinion affords no support whatever for a finding of laches in the instant case.

In Copen v. Flecher (C. C.), 3 O. F. D. laches is defined, as “such neglect or omission to assert a right as, taken in connection with lapse of time and other circumstances, causes prejudice to the adverse party, and therefore operates as a bar in a court of equity.”

These cases and others support the general statement in 16 O. Jur. 266:

“As has been intimated, however, several elements may enter into the determination of laches.”
“Lapse of time is the essential one, in the sense that where there has been no delay, there is no laches;”

30 C. J. S. 548 is cited as the basis for the holding that plaintiffs slept on their rights in failing to act sooner than they did.

It reads:

“Voluntary absence or non-residence, if it presents no legal obstacle to a suit, is ordinarily insufficient to excuse delay.”

Supporting the text Brody v. Maril (Ala.) 84 So. 764, 767 is cited. This case was an action to compel an accounting, initiated 12 years after dissolution of the partnership and more than 6 years after the last transaction of the partnership, and, in the view of the court, the only excuse for the delay in bringing the suit was absence of the plaintiff from the state. There was no question but that the plaintiff at all times should have been cognizant of his rights and was under the obligation to assert them promptly. The court held against the plaintiff’s right to an accounting.

Here, we are unable to conclude that the plaintiff, George N. Mc-Grath, Sr., who did not live on the lot which he owned adjacent to defendant’s lot was under any legal obligation to visit his lot to determine if defendant was erecting a building in violation of the setback restrictions in his deed. Instead of being charged with laches, it is apparent upon the record that said plaintiff was diligent, as soon as he had knowledge of the violation of the restriction, in asserting his rights and in attempting to maintain them. Of course, had he been under any obligation to discover the erecting of the building when first begun in December, his failure to act until April would present another and different question. It was in the improper assumption that he was so obligated that the court erred.

The order upon the basis upon which the trial judge granted his action is against the manifest weight of the evidence.

We are passing only on the error assigned in the case, viz., the finding of laches on the part of the plaintiffs.

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

MILLER, PJ, HORNBECK and FESS, JJ, concur. '


author: By SKEEL, J:

text:
    STATE, Plaintiff-Appellee, v. HIRSCH, Defendant-Appellant.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 23557.
    Decided January 10, 1956.

      Frank T. Cullitan, Pros. Atty., Frederick W. Frey, Asst. Pros. Atty., for plaintiff-appellee.
    Greene & Greene, Lockwood Thompson, for defendant-appellant.
   OPINION

By SKEEL, J:

This appeal comes to this court on questions of law from a judgment and sentence of the defendant, Samuel Hirsch, on the verdict of guilty returned by the jury. The appellant’s wife, a co-defendant in the same trial, was found not guilty by the verdict of the jury and discharged.

The defendant, Samuel Hirsch, and his wife, Bess, were indicted for alleged violations of the Blue Sky Law. Mrs. Bess Hirsch was the owner of an eight-suite apartment house located at 1031 Linn Drive, Cleveland, Ohio. Mr. Samuel Hirsch is a licensed real estate broker. Through the procurement of Mr. Hirsch, two separate land contracts were entered into between Mrs. Hirsch and two purchasers entitling such purchasers to a fixed percentage undivided interest in the apartment property, the purchase of such interest giving the purchaser the right to occupy a designated suite in the building for residence purposes, including the use of a garage space. The other suites in the building were disposed of in like manner but due to the statute of limitations provisions of the Blue Sky Law, the sales of such suites were not subject to the criminal provisions of the Securities Act, and in the trial of this case the sales of these suites were injected into the trial, the state claiming that such evidence was admissible as similar offenses (similar acts) under the provisions of §2945.59 R. C.

The facts upon which the State seeks to sustain the conviction of the defendant on the four counts of the indictment are not in great dispute.

Bess Hirsch, as owner; sold to Wilma Long and Bunyon Long, mother and son, through the efforts of this defendant-appellant, a four-thirty-eights interest in the apartment house (which contained eight suites) located on Linn Drive as described by metes and bounds in the land contract for $6300, payable $1200 down and the balance payable at the rate of $51.00 per month, which includes six per cent interest on the balance, beginning October 1st, 1953, plus $16.50, as the purchaser’s portion of taxes, insurance and building maintenance. The contract was dated September 5, 1953 and provided that the purchaser of such interest had the right to occupy Suite No. 5 with the further provision that:

“It is understood and agreed that four shares of stock will be delivered to the party of the second part when the principal sum will be reduced to two thousand five hundred dollars ($2500). At the time of the delivery of said stock, the party of the second part will execute a note or notes in the sum of twenty-five hundred dollars ($2500) payable in monthly installments of fifty-one dollars ($51.00) each plus sixteen dollars and fifty cents ($16.50) per month for taxes and assessments, maintenance and any other expenses which will be incurred in connection with the maintenance of said building.”

The other land contract (procured by the efforts of this appellant), the execution of which by the defendant, Bess Hirsch, is the subject of this indictment, was with Walter and Hazel Venable, husband and wife. This contract is the same in every respect as that entered into with the Longs except that the total consideration was $7,000, the down payment $1500, the interest in the apartment property to be transferred to the purchasers (by warranty deed) was five-thirty-eights, the monthly payments of $55.00, plus $16.50 for taxes and maintenance, the number of shares of stock to be received upon reduction of purchase price to $2800, five, and the suite which the Venables were privileged to occupy was No. 1.

At the time of the indictment neither the Venables nor the Longs had become entitled to the delivery of stock under the terms of the contract. There is no provision in the land contracts defining or in any fashion describing the corporation, the stock of which was to be delivered under their terms. That is to say there is not a word in either contract as to the capital structure of such corporation, its purposes or any other essential fact about it necessary to make use of provisions of the contract requiring delivery of shares of stock.

The first count of the indictment charges that Bess Hirsch and Samuel Hirsch on or about the fifth day of September, 1953, at the county aforesaid:

“did knowingly, unlawfully and intentionally sell, cause to be sold, offer for sale and cause to be offered for sale to Wilma S. Long and Bunyon Long a security, to-wit, a written instrument and agreement of a promissory nature bearing the title of a ‘land contract,’ which said instrument provides, in substance and in material part, that the said Bess Hirsch promises and agrees to deliver to said Wilma S. Long and Bunyon Long four shares of stock when the principal sum due and payable from said Wilma S. and Bunyon Long to the said Bess Hirsch according to the terms of said written instrument bearing the title of ‘land contract’ will be reduced to the sum of two thousand five hundred dollars, which said security, to-wit, said so-called land contract, was not then and there registered by description, nor qualified, nor exempted, nor the subject matter of a transaction then and there registered by description, nor the subject matter of an exempted transaction in accordance with the provisions of the Ohio Securities Act, to-wit, §§1707.01 to 1707.99, inclusive, R. C., and §§8624-1 to 8624-45, inclusive, GC.”

The second count describes the same transaction as described in the first count, the charge being that the defendants made a sale of securities coming within the Securities Act without being jointly or severally licensed to sell securities under the Blue Sky law of Ohio (§§1707.01 to 1707.99 R. C.).

The third and fourth counts describe a like transaction entered into the ninth day of February, 1953, between the defendants and Walter Venable and Hazel Venable, husband and wife, and charges like offenses in that a sale of securities, not licensed or exempt under the Ohio Securities Act, was made by the defendants and that the defendants were not licensed to sell securities under the Act.

The evidence shows, and these facts are not controverted by any evidence introduced by the State, that the Longs (mother and son) and the Venables (husband and wife) were not in the security market at the time these transactions were consummated. What they wanted and did purchase was an undivided interest in an apartment building with the absolute right to occupy one of the suites as a home. These two contracts required the seller to give the purchasers warranty deeds when the contracts were fully performed. The only mention of stock in the contracts here, the basis of these indictments, was as above quoted except that at the end of the Venable contract are the words “shares of stock according to contract.” There is some evidence of verbal discussions with some of the purchasers of the suites, other than those which are the subject of these indictments, with regard to organizing a corporation whereby the suite owners would have their interest in the building represented by shares of stock in a corporation to which the title of the apartment building would be deeded. This idea has some support from the evidence which is to the effect that the building had eight suites with a total of thirty-eight rooms and the number of shares mentioned in the eight contracts introduced in evidence equalled the total number of rooms in the suites purchased, that is thirty-eight in number. The evidence of the State shows that those who dealt with the defendants were buying a percentage interest in an apartment building with the right to occupy a particular suite therein as a home and if stock of a corporation was in fact to be involved in the transaction, it was for the sole purpose of working out the cooperative features of the joint ownership of the real estate. It must be observed, as above noted, that the evidence about any existing or proposed corporation whose stock was disposed of or to be disposed of to the purchasers of percentage interests of the apartment building was of such an indefinite nature as to be unenforceable either at law or in equity and if some form of corporate organization was necessary to make the cooperative features of joint ownership of the property more workable, it could only come about by a new agreement between the several owners.

The defendant has presented thirty-seven assignments of error, many of them covering the same or closely related questions. The defendant has grouped these claims of error under twelve headings in his brief and confined his consideration of them under such groupings. He also states that all of the claims of error fall into two categories. First, was the defendant, Samuel Hirsch, entitled to be discharged because the State failed to establish him guilty of a violation of the Blue Sky Law, or entitled to be discharged because Bess Hirsch, the principal, having been found not guilty by the jury, the defendant, Samuel Hirsch, tried as an aider and abettor before the same jury, should have likewise been discharged? Second, defendant, Samuel Hirsch, if not legally entitled to be discharged, is at least entitled to a new trial free of the “errors, passion and prejudice, abounding in the proceedings.”

These categories are concerned first with the sufficiency of the indictments, and error in overruling defendant’s motion for discharge at the end of the plaintiff’s case and also at the conclusion of the taking of evidence, and in the second category the errors may be grouped under the following heads:

First: Error in the admitting of evidence offered by the State, including so-called similar offense (act) evidence, and rejecting competent evidence offered by the defendant and limiting the scope of cross-examination.

Second: Errors in the charge of the Court and related subjects.

Third: Misconduct of the court and prosecutor in the trial of the case to the prejudice of the defendant.

Fourth: Overruling motion for new trial.

The first two claims of error must be overruled. They charge that the allegations of the indictment are not sufficient to charge a violation of the provisions of the Security Act. The allegations of the first and third counts, charging the sale of an unlicensed security, is clearly suffieient under the statute as is equally true as to counts two and four charging the defendants with selling securities, not being licensed so to do as required by law. If greater clarity in the allegations of the indictment was needed, the defendant should have requested a bill of particulars.

Under the evidence, the defendant, Bess Hirsch, was the owner of the property who executed the land contracts claimed by the State to be securities and the defendant, Samuel Hirsch, conducted all the negotiations, acting as the selling agent in such transactions. There is no claim in this case that Mrs. Hirsch acted under the domination of her husband, at least so far as the State’s case is concerned. Such claim must of necessity be presented as a defense which was not done in this case, nor is there a claim by the State that she held title to the apartment in trust for her husband. Therefore, the defendant, Samuel Hirsch, had nothing to sell, the property being his wife’s and his wife (defendant Bess Hirsch) according to the evidence, put all negotiations for the sale of the property in the hands of her husband. There is absolutely no evidence to support the assertion in the State’s brief that the property was that of Samuel Hirsch. The jury verdict found the defendant, Bess Hirsch not guilty and the defendant, Samuel Hirsch, guilty under all four counts of the indictment. If the defendant who was charged with aiding and abetting the sale of the claimed unregistered or unlicensed security was found guilty and the seller (the admitted owner of the property sold) was found not guilty in the same trial by the same jury, such a verdict must be inconsistent. It is difficult to see how an aider and abettor could be guilty if the principal was not where there is but one issue of fact to be determined, that is that the act of selling was unlawful. This must be equally true where the agent is charged as aider and abettor of a co-defendant as principal for the alleged unlawful acts of selling securities without a license. Under such circumstances, where ownership of the property is admitted by the seller and the terms of the sale and the sale is also admitted so that the only issue is as to whether the property sold comes within and is prohibited by the provision of the Securities Act (now known as §§1707.01 to 1707.99 R. C., inclusive), a verdict of not guilty as to the owner and seller could be only on the ground that the sale of the property was not in violation of the Securities Act. We must conclude, therefore, that in any event when the jury found defendant, Bess Hirsch, not guilty in the same trial and on the same evidence upon which they found the defendant, Samuel Hirsch, guilty on all four counts, such a verdict was inconsistent and the defendant, Samuel Hirsch should have been granted a new trial.

We are quite aware that in separate trials of co-defendants charged with participation in the same crime, verdicts need not be consistent. It is likewise true that where issues of identity or participation in a criminal act are presented in the same trial of two or more defendants, a verdict of guilty of one defendant and not guilty as to a co-defendant will not support a claim of inconsistent verdicts. But where there is but one issue to be decided by the jury, that is whether the security sold (the sale of which is admitted by the defendant) was one coming within the provisions of the Blue Sky Law, the finding of one defendant not guilty and the other defendant guilty on the same evidence where the defendant found not guilty was the owner of the property and the one held guilty, charged as an aider and abettor, such a verdict is inconsistent and must be set aside.

This identical question was presented in the case of State v. Nowak, 16 C. C. N. S. 596, where the defendant was convicted as an aider and abettor of a special constable on a charge of extortion, and the special constable found not guilty in the same trial. The court held that an aider and abettor cannot be convicted in the same proceeding and by the same jury which acquits his principal.

The other claims of error are numerous covering almost every aspect of the trial. Those dealing with the similar acts section of the Code of Criminal Procedure (§2945.59 R. C.) must for the most part be sustained. The provisions of this section are as follows:

“In any criminal case in which the defendant’s motive or intent, the absence of mistake or accident on his part, or the defendant’s scheme, plan, or system in doing an act is material, any acts of the defendant which tend to show his motive or intent, the absence of mistake or accident on hie part, or the defendant’s scheme, plan, or system in doing the act in question may be proved, whether they are contemporaneous with or prior or subsequent thereto, notwithstanding that such proof may show or tend to show the commission of another crime by the defendant.”

The court and the prosecutor referred to this statute as a similar offense statute. To do so was prejudicial to the defendant’s rights. These statements, in effect, told the jury that such evidence was to demonstrate that the defendant was guilty of similar offenses. The only purpose of this section is to make available to the State evidence of similar acts when issues of the defendant’s motive or intent, the absence of mistake or accident on his part or the defendant’s scheme, plan or system in doing an act is material. No issue of that character is here presented. The defendant admits negotiating the land contracts. He admits that he dictated the terms of such land contracts. The only issue is whether or not the contracts as drawn and sold constitute a violation of the Blue S'ky Law as in force at the time the contracts were made, that is, were they a security required to be registered or licensed under the Blue Sky Law or did such contract constitute a sale of an interest in land. The evidence of claimed similar acts was, therefore, clearly inadmissible and the admission of such evidence constituted prejudicial error.

The errors in the rejection and admission of evidence are numerous but because of the principal question to be decided as to whether or not, taking the record in its entirety, the State made out a case as charged in the four counts of the indictment, we do not find it necessary to say more than that for the most part such claims are well taken. This is likewise true of the errors claimed as to the charge to the jury, excluding however, the claim that the court attempted to explain the provisions of the general charge after it had been reduced to writing under the provisions of §2945.10 R. C.

We come now to the sufficiency of the State’s case. In the first place, the overwhelming evidence as to the purpose of the Longs and the Venables in entering into the contracts designated as State’s Exhibits 1 and 7 respectively, was to purchase a place to live. They were not seeking investments in the security market nor was it the purpose of the defendants to sell securities for investment purposes. The Longs and Venables bought the right to occupy separate suites in an apartment building, together with the right to have transferred to them by warranty deed an undivided percentage interest in the property. The land contracts here considered constituted the purchase of an interest in land. Such transactions are excluded from the provisions of the Securities Act (§1707.01 to §1707.99 R. C.). The term “security” in that Act is clearly and carefully defined by §1707.01-B R. C., the last sentence of which reads:

“Such sections (§1707.45 R. C.) do not apply to bond investment companies or to the sale of real estate.”

The reference to stock in these contracts, if it could be said to have any binding effect at all, which we hold it could not, was for the purpose of managing the cooperative feature of the joint ownership of the property.

There are other provisions of the Act which support the substance of the quoted part of the foregoing section, that the Act was not intended to include real estate transactions within the State of Ohio.

For the foregoing reason, we must conclude that the State failed completely (that is that there is no evidence) to show a violation of the Blue Sky Law as charged in the indictments.

This identical question was presented to this Court in two cases, styled State v. Silberberg, Nos. 23445 and 23446, 72 Abs 481, CP 70 Abs 449, where the facts were far more favorable to the State in that the land contracts spelled out the necessity of forming a corporation at the vendor’s expense to take title to the property, the corporate stock of which was to be issued to the purchasers of suites to the extent of the percentage interest purchased. This Court, in that case, held that the land contracts there involved constituted a sale of an interest in real estate and not the sale of á security as defined under the Blue Sky Law. The opinion was written by Middleton, J., of the Third District and the judgment concurred in by Judges Doyle and Hunsicker of the Ninth District.

The judgment of guilty and sentence of this appellant is, therefore, reversed and the defendant discharged. Exceptions noted. Order see journal.

KOVACHY, PJ, HURD, J, concur.


author: By GRIFFITH, J. By PHILLIPS, PJ.

text:
    VODREY, Admr., Plaintiff-Appellee, v. QUIGLEY, Defendant-Appellant.
    Ohio Appeals, Seventh District, Columbiana county.
    No. 748.
    Decided November 30, 1956.
    Vodrey, Buzzard & Shay, East Liverpool, for plaintiff-appellee.
    Guy J. Mauro, Charles McCorkhill, Salem, for defendant-appellant.
   OPINION

By GRIFFITH, J.

Action was filed in the Probate Court of Columbiana County to determine the heirs of Pauline Ann Vodrey who died on the 6th day of March, 1954, at the age of 19. She died unmarried intestate and survived by no brothers or sisters, parents, or grandparents.

She was adopted on the 15th day of May, 1951, by Sarah Vodrey Gardner. Helene Campbell Quigley, a sister of Pauline Ann’s blood mother, claims to be the natural and legitimate heir notwithstanding the adoption.

J. Norman Vodrey, who admittedly is the next of kin of Sarah Vodrey Gardner, deceased, the adopting mother, claims that the provisions of §3107.13 R. C., which became effective on August 28, 1951, controls Helene Campbell Quigley’s right to inherit and that, as a result thereof, she is not an heir of her natural niece; that the statute cut off her rights and that he, a collateral heir of her adoptive parent, is the one entitled to inherit from Pauline Ann Vodrey’s estate.

The pertinent provisions of §3107.13 R. C., as applied to our case, are:

“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. ... For the purpose of inheritance to, through, and from a legally adopted child, such child shall be treated the same as if he were the natural child of his adopting parents, and shall cease to be treated as the child of his natural parents for the purposes of intestate succession.”

Vodrey, Buzzard & Shay, East Liverpool, for plaintiff-appellee.

Metzger, McCorkhill & Metzger and Guy J. Mauro, Salem, for defendant-appellant, Helene C. Quigley.

Clark & Clark, East Liverpool, Hunston, Atkinson & Lower, Salem, for defendants-appellants.

While this statute was not effective at the time of the order of adoption, it was in effect at the time of the death of Pauline Ann Vodrey and governs the question before us as to who is entitled to inherit. Staley v. Honeyman, 157 Oh St 61 (1952).

The Probate Court held that the natural blood relative. Helene C. Quigley, is legally no longer an heir of Pauline Ann Vodrey; that Pauline Ann Vodrey’s adoptive mother, Sarah Vodrey Gardner, had died without leaving any lineal descendants, and that J. Norman Vodrey is the next of kin of Sarah Vodrey Gardner and that, by virtue of Sec. H. of §2105.06 R. C., he is the sole legal heir of Pauline Ann Vodrey.

With this conclusion, we are in accord. Under the amendment of 1951 to the adoption law, an adopted child may no longer inherit property from its natural parents or other natural kin who die intestate. Since August 28, 1951, a legally adopted child in Ohio has the same rights and status as if born in lawful wedlock to the adopting parents with the two exceptions (A) and (B) set out in §3107.13 R. C.

The legislature at that time made a drastic change in the Ohio law with the question of inheritance arising out of adoptions. It is presumed that the amended §3107.13 R. C. is made to affect the purpose expressed. We think the plain language of the statute is decisive of the legal questions raised in this case.

Therefore, the judgment of the Probate Court to the effect that J. Norman Vodrey is the sole legal heir of Pauline Ann Vodrey should be, and hereby is, affirmed.

Judgment affirmed.

CONCURRING OPINION

No. 748.

By PHILLIPS, PJ.

On May 15, 1951, Sarah Vodrey Gardner legally adopted Pauline Ann Vodrey, called decedent, who died intestate, unmarried, on March 6, 1954, at age nineteen, survived by no brothers, sisters, parents nor grandparents.

Helene Campbell Quigley, a sister of Pauline Campbell Vodrey, natural mother of Pauline Ann Vodrey, was appointed administratrix of decedent’s estate.

Acting under the provisions of §3107.13 R. C., the judge of the court of probate removed Pauline Campbell Vodrey as such administratrix on the ground that she was not next of kin of decedent; and on the action of J. Norman Vodrey to determine heirship held that J. Norman Vodrey was the sole heir of decedent, and appointed him administrator of decedent’s estate.

The question presented by the appeal of Helene Campbell Quigley to this court on questions of law from the judgment of the Probate Court is whether Helene Campbell Quigley, sole blood heir of decedent, or J. Norman Vodrey, the sole heir of her adopted parent, inherit from her.

As applicable §3107.13 R. C. (§8004.13 GC), the controlling statute, effective August 28, 1951, provides:—

“* * * 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; provided: * * *.
“For the purpose of inheritance to, through, and from a legally adopted child, such child shall be treated the same as if he were the natural child of his adopting parents, and shall cease to be treated as the child of his natural parents for the purposes of intestate succession.”

Sec. 3107.13 R. C., was not in effect when decedent was adopted on May 15, 1951, but was in effect when she died on March 6, 1954.

In Staley, Admr., v. Honeyman et al, 157 Oh St 61, it is said:—

“* * * an adopted child’s rights to inherit are governed by the laws in force at the time of the death of the decedent and not the laws in force at the time of the adoption, and that an adopted child is entitled to inherit collaterally through as well as from its adopting parent.”

I believe that §3107.13 R. C., which I hold is constitutional and controls in this appeal, severs all rights of Helene C. Quigley, decedent’s nearest blood relative; and that J. Norman Vodrey, the nearest blood relative of her adopted mother, inherits from her, as held by the trial judge.

In my opinion the trial judge did not err to the prejudice of Helene C. Quigley, as charged by her, “in construing the adoption statute, §3107.13 R. C.,” nor in failing to follow the construction adopted by the Ohio Courts; nor “in failing to find that in so far as inheritance is concerned a different rule applies where an adoption is had after the death of the natural parents, than obtains where the natural parents are living”; nor in failing to find that the relationship created by adoption is personal between the adopting parents and the adopted child, that such relationship is in the nature of a contract binding upon the parties to the adoption and no one else”; nor “in failing to find that insofar as inheritance is concerned a different rule applies where a child is adopted by his natural kin than where the adoption is by persons unrelated to such child”; nor “in failing to find that a fraud had been committed against the court and the alleged adoption was a nullity at law and in equity insofar as the laws of descent and distribution are concerned, since the adopting parent, although fully able, failed to carry out the obligations imposed by §3107.13 R. C. in respect to education and maintenance,” which if established to be true “is not enough to invalidate an otherwise legal adoption or to change the plan provided under the laws of descent and distribution.”

The judgment of the court of Probate is affirmed.


author: By STEVENS, PJ.:

text:
    PLATER, Plaintiff-Appellant, v. JEFFERSON, a. k. a. ERNSTINE PLATER, Defendant-Appellee.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 23722.
    Decided July 18, 1956.
    Woodle & Wachtel, for plaintiff-appellant.
    Harry Jaflfe, H. P. Fetterman, for defendant-appellee.
    (STEVENS, PJ, HUNSICKER and DOYLE, JJ., of the Ninth District, sitting by designation in the Eighth District.)
   OPINION

By STEVENS, PJ.:

The amended petition filed below alleged:

That, while this defendant was a party to a meretricious relationship with plaintiff, and while she was pregnant with a child conceived as the result of said relationship, she caused to be filed against Albert Hunt a petition for divorce; that thereafter, a divorce was granted to her from Albert Hunt; that the procuring of the divorce from Hunt was a part of a scheme whereby she later claimed to be the common law wife of this plaintiff, sued this plaintiff for divorce and alimony, and procured a substantial alimony award; that the procuring of a divorce from Hunt was a condition precedent to asserting a common law marriage to this plaintiff; and that, in the obtaining of the divorce from Hunt, a fraud was perpetrated upon the court and upon this plaintiff, who was not a party to said action.

Plaintiff prayed that the divorce decree from Hunt be vacated, and that defendant be restrained from enforcing the order obtained against this plaintiff in the divorce and alimony case of Plater v. Plater, No. 644,050.

A motion to strike the amended petition was filed by defendant, which the court treated as a demurrer and sustained. An order of dismissal of the action was then entered.

Appeal on questions of law ensued.

It must be conceded that the judgments attacked in this proceeding are regular on their face, and each appears to have been entered by a court having jurisdiction of the subject matter of the action and of the parties; and said judgments are, upon their face, valid and subsisting judgments, wholly unmodified and unreversed.

In 49 C. J. S„ Judgments, Sec. 401, the rule concerning collateral' attack upon judgments is stated, as follows:

“A judgment rendered by a court having jurisdiction of the parties and the subject matter, unless reversed or annulled in some proper proceeding, is not open to contradiction or impeachment, in respect of its validity, verity, or binding effect, by parties or privies, in any collateral action or proceeding * * *. Even if the judgment is voidable, that is, so irregular or defective that it would be set aside or annulled on a proper direct application for that purpose, it is well settled as a general rule that it is not subject to collateral impeachment as long as it stands unreversed and in force.”
“Collateral Attack” on a judgment is defined in 49 C. J. S., Ibid., Sec. 408 thus:
“A collateral attack is an attempt to avoid, defeat, or evade a judgment, or to deny its force and effect, in some incidental proceeding not provided by law for the express purpose of attacking it.”

The attack made upon the judgments here under consideration is a collateral attack within the purview of the above definition. The attack made by plaintiff upon the judgment in the case of Hunt v. Hunt, No. 604,029, to which case plaintiff was not a party or a privy, is an attack by a stranger to the judgment.

What strangers may impeach a judgment in a collateral proceeding? Freeman on Judgment (Fifth Ed.), Sec. 319, answers that question in the following manner.

“* * * It is only those strangers who, if the judgment were given full credit and effect, would be prejudiced in regard to some pre-existing right, that are permitted to impeach the judgment. Being neither parties to the action, nor entitled to manage the cause nor appeal from the judgment, they are by law allowed to impeach it whenever it is attempted to be enforced against them so as to effect rights or interests acquired prior to its rendition. * * *” (Emphasis ours.)

See also, 49 C. J. S., Judgments, Sec. 414.

There are no allegations contained in the petition in the instant case which aver that rights acquired by plaintiff, prior to the rendition of the judgment in the Hunt case, will be prejudiced by the enforcement of that judgment.

Inasmuch as the vacation of the judgment in the Hunt case is the foundation for all of the relief sought herein by plaintiff, and inasmuch as plaintiff has not, by his pleading, brought himself within that class of strangers who may properly collaterally attack a judgment, the trial court did not err when it sustained a demurrer to plaintiff’s amended petition and dismissed plaintiff’s action.

The judgment will be affirmed.

HUNSICKER and DOYLE, JJ, concur.


author: By THE COURT.

text:
    HURLESS, d. b. a. RAY'S PLAYHOUSE, Appellant, v. STATE, DEPARTMENT OF LIQUOR CONTROL, Appellee.
    Ohio Appeals, Second District, Franklin County.
    No. 5275.
    Decided April 23, 1956.
    Reed M. Winegardner, Washington C. H., McFadyen & Swisher, Columbus, for appellant.
    C. William O’Neill, Atty. Geni., S. Noel Melvin, Asst. Atty. Geni., Columbus, for appellee.
   OPINION

By THE COURT.

Our rules now make no provision for applications for rehearing, but where appropriate and it is probable that we have erred we do consider them. In this case, however, final judgment has been entered in this Court, so recognized by appellant in his motion to certify in the Supreme Court. We recognize that the action of the Supreme Court in overruling a motion to certify is not tantamount to an affirmance of the judgment and not conclusive that there was no error in the review in this Court. But such action by the Supreme Court is persuasive that the record was free from prejudicial error. Especially is this so in this case because of the recent action of this Court in the case of Andrews, Jr., d. b. a. Buffalo Grill & Hotel v. Board of Liquor Control, 164 Oh St 275. The Court must have felt that the situation presented on this record was different from that found in the Andrews case. Our jurisdiction to entertain this application is, to say the least, doubtful. We find no sufficient reason to grant a rehearing.

Application denied.

MILLER, PJ, HORNBECK, J, concur.

WISEMAN, J, not participating.