author: By WOODS, By JONES, Chief Judge.

text:
    POSTON CONSTRUCTION CORPORATION, In re.
    United States District Court N. D. Ohio, E. D.
    No. 68375.
    Decided September 10, 1953.
   OPINION

By WOODS,

Referee in Bankruptcy.

To the Honorable Judges of the United States District Court, for the Northern District of Ohio, Eastern Division, sitting-in Bankruptcy:

I, William B. Woods, referee in bankruptcy, in charge of the above proceedings, do hereby certify:

That in the course of the proceedings in the above case, Donald F. Kepple was elected trustee of the Poston Construction Corporation, the bankrupt, which was in the pipeline construction business at Barberton, Summit county, Ohio.

Hattendorf-Bliss, Inc., of Euclid, Cuyahoga county, Ohio, filed its claim on account for $7807.21, stating “for rental of trenching machine, rental of Insley Backhoe machine, including operator and freight charges for moving- trencher with invoices attached.”

To this claim, the trustee in bankruptcy filed his objection for the reason that said claimant, while insolvent and within four months of bankruptcy, received from bankrupt certain chattels worth $46,236.56 for payment of an antecedent debt, and that the claimant then knew or had cause to know bankrupt was insolvent, so that said Hattendorf-Bliss, Inc., creditor, received a preference, and under Sections 60, 67 and 70 of the Bankruptcy Act, 11 U. S. C. A. §§96, 107, 110, said chattel equipment, or the reasonable value thereof, belongs to the trustee.

Hattendorf-Bliss, Inc., answered, admitting receiving the chattels within four months, denying the other allegations and stating that the chattel machinery had been taken back by it, and credited on notes of bankrupt secured by chattel mortgages.

After filing its answers, Hattendorf-Bliss, Inc., filed a motion, asking that the trustee’s objection to the Hattendorf-Bliss, Inc., claim be dismissed, for the reason that it is a bona fide adverse party, that the trustee is not in possession and has no right to possession of the machinery, or proceeds received therefrom. The court reserved decision on this motion, and directed that the hearing proceed.

Upon hearing had, an order was entered on December 3, 1952, disallowing the claim of Hattendorf-Bliss, Inc., finding that the value of the chattels taken back on May 11, 1951 and June 22, 1951 was $26,936.92, and was received within four months to apply upon an antecedent debt, being a voidable preference, so that the claim of Hattendorf-Bliss, Inc., for $7807.21 was disallowed, unless Hattendorf-Bliss, Inc., surrendered the chattels in question or paid $26,836.92 to the trustee in bankruptcy.

Thereafter, being aggrieved thereat, the time for filing having been extended by order of the Bankruptcy Court, a petition for review of the referee’s order was filed on December 23, 1952.

The controversy concerns the transfer back to the Hattendorf, Bliss, Inc., of chattels, which it had sold the bankrupt, taking a mortgage thereon, and then learning of the financial difficulties of bankrupt, Hattendorf and Bliss, as the two other directors of the Poston Construction Corporation, resigned, Poston bought their stock, and the corporation returned to Hattendorf-Bliss, Inc., the chattels which had been sold outright. Before such repossession of Hattendorf-Bliss, Inc., within four months of bankruptcy, Hattendorf-Bliss, Inc., as a creditor, opened an account and billed to the Poston Construction Corporation rental and service charges, which are the basis of the claim for $7807.21 filed in the proceeding, and to which the trustee objects and sets up the claim that the creditor has received a voidable preference.

The bankrupt purchased items of equipment totaling $167,-349.68 between April 23, 1949 and January 1, 1950. On December 31, 1949, at the instruction of its Board of Directors, bankrupt gave to Hattendorf-Bliss, Inc., the bill of sale for part of the equipment (Trustee’s Exhibit “5”), executed by Hattendorf, as president, and Bliss, as secretary, and for bankrupt by Poston, as president, and Hattendorf, as secretary, gave to Hattendorf-Bliss, Inc., chattel mortgages on the equipment (Trustee’s Exhibits 6-ab to 12-ab inclusive), and executed notes to Hattendorf-Bliss, Inc., for $25,630. (Exhibits 13-19 inclusive.)

The said chattel mortgages were recorded in Cuyahoga County, Ohio, on January 26, 1950, where none of the equipment was ever used; were never filed in Summit County, the principal place of business of bankrupt; and so far as the record shows, were never filed in any county in which equipment was being used.

The controversy thus arises by reason of a voidable preferential transfer of the trenching machinery after it had been sold by Hattendorf-Bliss, Inc., to the Poston Construction Corporation back to the seller, Hattendorf-Bliss, Inc., notwithstanding the transfer was made within four months of bankruptcy, when the officers of Hattendorf-Bliss, Inc., knew Poston Construction Corporation was insolvent.

By its answer, Hattendorf-Bliss, Inc., admitted that the Bankruptcy Court might try the objection of the claim, but denied the right of the court to try a preference suit, and objected to the jurisdiction to try any preference against Hattendorf-Bliss, Inc., on the ground that the trustee was not in possession of any of the machinery and had no right to the assets, and that Hattendorf-Bliss, Inc., was an adverse party.

Whatever the rule might be as to the right of this court to make a judgment, finding against Hattendorf-Bliss, Inc., for the return of the assets or for a money judgment, the rule seems to be that the finding in this court is res adjudicata, which could be the basis of a plenary suit by the trustee against the Hattendorf-Bliss, Inc., creditor, which had benefited by the fraudulent transfer.

The statutes and the principles of law, to be applied in this proceeding, appear to be about three subjects: (1) Jurisdiction; (2) State laws of Ohio controlling recording of chattel mortgages, and (3) Federal and state laws on preferences and fraudulent transfers; which subjects will be considered in order.

The pertinent sections to be considered here are:

Bankruptcy Act, Section 23, 11 U. S. C. A. §46:

23, sub. a. “The United States district courts shall have jurisdiction of all controversies at law and in equity, as distinguished from proceedings under this Act, between receivers and trustees as such and adverse claimants, concerning the property acquired or claimed by the receivers or trustees, in the same manner and to the same extent as though such proceedings had not been instituted and such controversies had been between the bankrupts and such adverse claimants.

sub. b. “Suits by the receiver and the trustee shall be brought or prosecuted only in the courts where the bankrupt might have brought or prosecuted them if proceedings under this Act had not been instituted, unless by consent of the defendant, except as provided in sections 60, 67 and 70 of this Act.”

Bankruptcy Act, Section 51, 11 U. S. C. A. §93:

57, sub. g. “The claims of creditors who have received or acquired preferences, liens, conveyances, transfers, assignments or encumbrances, void or voidable under this Act, shall not be allowed unless such creditors shall surrender such preferences, liens, conveyances, transfers, assignments, or encumbrances.”

Counsel for Hattendorf-Bliss, Inc., have discussed whether their client is an adverse party, and if so, whether this court has jurisdiction to determine the existence of a preference.

Counsel for the trustee urges that even if Hattendorf-Bliss, Inc., were an adverse party, the Bankruptcy Court is within its jurisdiction in hearing the trustee’s objection to the claim of Hattendorf-Bliss, Inc., and further to determine whether Hattendorf-Bliss, Inc., received a preference and the amount thereof.

This question of the jurisdiction of the Bankruptcy Court, and whether the filing of a claim is to be construed as a consent to the summary jurisdiction of the court, is treated in 3 Collier on Bankruptcy 14 Ed. page 1033, where the author says:

“Section 57-g provides that the claim of creditors who have received preferences shall not be allowed unless the creditor surrenders such preference. Proof of claim certainly permits the use of all valid defenses, of which the claim of preference is thus one. The referee may adjudicate the question of preference as an incident to the determination of allowability.”

The counsel for Hattendorf-Bliss, Inc., placed great reliance on B. F. Avery & Sons Co. v. Davis, 5 Cir., 1951, 192 F. 2d 255 which case the trustee urges is not in point, as a plenary action had previously been filed by the trustee in the District Court. In the case at bar, counsel for the Hattendorf-Bliss, Inc., claimant, and also respondent, because of trustee’s claim of preference in its original objection to the claim, had requested in its answer to the objections “that the objections to the claim be tried fully,” and surely this cannot be done without considering the trustee’s claim of preference by fraudulent transfer, effected by Hattendorf-Bliss, Inc., immediately before the bankrupt’s petition was filed. It is interesting to note that by correspondence about the Avery case with him, Hon. E. P. Johnston, referee in the Middle District of Georgia, before whom the bankruptcy proceeding was pending, advises this referee as late as November 1952, that the plenary suit was pending contemporaneously with the bankruptcy proceeding, and that the Court of Appeals sent the whole matter back for further hearing before the District Court; and as referee Johnston had heard the bankruptcy proceeding, plenary suit had been referred to another attorney in Columbus, Georgia, for determination of the issues.

Whatever the decision may have been in other districts, in the 6th circuit it has been held that the Bankruptcy Court has summary jurisdiction of the adverse claim, which is merely sham or colorful.

In First National Bank of Negaunee v. Fox, 6 Cir., 1940, 111 F. 2d 810, 813 was a case where the bank received a voidable preference and in Bankruptcy Court was ordered to pay this fund to the Trustee in bankruptcy. On review, in affirming the lower court, Judge Hamilton said:

“The determination of jurisdiction to dispose summarily of the question of title to property to which a claim is asserted against that of the bankrupt when such jurisdiction is not consented to will depend upon the nature and validity of such claim.”

On the question of summary jurisdiction, the decision of the 6th Circuit Court of Appeals is accepted and approved in Re Journal-News Corp., D. S. C. D. N. Y. 1951, 104 F. Supp. 843. Decisions to the same effect are reported in Shackleford v. Weinberg, D. C. S. D. N. Y., August 1952, C. C. H. par. 57712 and in Re Bromel-Knapp Corp., D. C. Mich. 1952, 106 F. Supp. 519.

The Ohio General Code provides in §§8560, 8561 GC (§§1319.01, 1319.02 R. C.), that a chattel mortgage shall be absolutely void, unless filed with the recorder of the county where mortgagee resides, or in the county where the chattels are situated at the time of the execution of the mortgage.

Apparently, Hattendorf-Bliss, Inc., and its counsel, recognizing the invalidity of any claim of lien, because of the filing of the chattel mortgage in Cuyahoga county instead of Summit county, for no claim to that effect is made; in fact, the attempt to revoke the sale of equipment by transferring it back to Hattendorf-Bliss, Inc., in May and June, just prior to the bankruptcy, shows no reliance of the Hattendorf-Bliss, Inc., on that chattel mortgage as fixing lien.

The language of the federal and state statutes involved here are:

Bankruptcy Act, Section 60:

60, sub. a. (1) “A preference is a transfer, as defined in this Act, of any of the property of a debtor to or for the benefit of a creditor for or on account of an antecedent debt, made or suffered by such debtor while insolvent and within four months before the filing by or against him of the petition.”

Bankruptcy Act, Section 67, sub. d:

“(2) Every transfer made and every obligation incurred by a debtor within one year prior to filing of a petition in bankruptcy * * * is fraudulent * * *.”
“(d) As to then existing and future creditors, if made or incurred with actual intent as distinguished from intent presumed in law, to hinder, delay, or defraud either existing or future creditors.”

Bankruptcy Act. Section 70, sub. e:

“(1) A transfer made or suffered or obligation incurred by a debtor adjudged a bankrupt under this Act which, under any federal or state law applicable thereto, is fraudulent as against or voidable for any other reason by any creditor of the debtor, having a claim provable under this Act shall be null and void as against the trustee of such debtor.”
“(2) All property of the debtor affected by any such transfer shall be and remain a part of his assets and estate, discharged and released from such transfer and shall pass to, and every such transfer or obligation shall be avoided by, the trustee for the benefit of the estate. The trustee shall reclaim and recover such property or collect its value from and avoid such transfer or obligation against whoever may hold or have received it, except a person as to whom the transfer or obligation specified in paragraph (1) of the subdivision ‘e’ is valid under applicable federal or state laws.”

Sec. 8618 GC (§1335.02 R. C.):

“Every gift, grant, or conveyance of lands, tenements, hereditaments, rents, goods or chattels, and every bond, judgment ' or execution, made or obtained with intent to defraud creditors of their just and lawful debts or damages * * * shall be utterly void and of no effect.”

Sec. 11104 GC (§1313.56 R. C.):

“A sale, conveyance, transfer, mortgage or assignment, made in trust or otherwise, by a debtor * * * in contemplation of insolvency and with a design to prefer one or more creditors to the exclusion in whole or in part of others, and a sale, conveyance, transfer, mortgage or assignment made, or judgment procured * * * in any manner, with intent to hinder, delay or defraud creditors shall be void as to creditors of such debtor, or debtors at the suit of any creditor or creditors

Sec. 11105 GC (§1313.57 R. C.):

“The provisions of the next preceding section shall not apply unless the person or persons to whom such sale, conveyance, transfer, mortgage or assignment is made, knew of such fraudulent intent on the part of such debtor or debtors, nor shall anything in such section contained vitiate or affect any mortgage made in good faith, to secure any debt or liability created simultaneously with such mortgage * *

The arguments of the briefs of counsel for trustee and for the respondent claimant, whose claim is objected to, are long and seem to cover the phases of this controversy.

Summing up the facts presented, the facts seem to establish, as claimed, a preference under the Bankruptcy Act, or a fraudulent transfer under the Ohio Statute, in that: (1) Property of bankrupt was transferred as described in said statutes; (2) for the benefit of a creditor; (3) on account of antecedent debt; (4) while debtor was insolvent; (5) within four months of bankruptcy; (6) with an effort to give such creditor a greater percentage of his debt than other debtors of the same class.

The briefs of parties are voluminous and complete, and no attempt will be made to review all. the points and questions urged by counsel. Suffice to say, the three directors and officers of Poston Construction Corporation, bankrupt, were Messrs. Hattendorf, Bliss and Poston.

The accountant of the claimant, sent to collect or examine the effects of the corporation in February, became so worried after time spent on the bankrupt’s books and with its president, Poston, that he summoned Hattendorf and Bliss, who returned from Florida, and then spent several days with Poston going over the company’s affairs with Poston and his accountant. Shortly thereafter Hattendorf and Bliss sold their stock to Poston, and when matters became worse, they took back the trenching equipment in May and June, shortly before bankruptcy, when they knew, or should have known the bankrupt’s financial condition.

The effort of counsel for respondent claimant to convince the court that Hattendorf-Bliss, Inc., was without knowledge of bankrupt’s insolvent condition is interesting. Against this, it is urged that Hattendorf and Bliss, as officers of Poston knew of its financial condition, and they cannot thereafter “unknow” or be ignorant of its affairs as officers of the Hattendorf-Bliss, Inc. As the Supreme Court of Ohio said in its opinion in First Nat. Bank of New Bremen v. Burns, 88 Oh St 434, 103 N. E. 93, 49 L. R. A., N. S., 764—“the manager’s knowledge as a man is equally his knowledge as manager of the bank. He cannot unknow as manager what he knows as man. To hold otherwise would be to promote fraud rather than prevent it.”

Under §8618 GC (§1335.02 It. C.), it is provided that the transfer to be voided must be made or obtained, with intent to defraud creditors; and knowledge by the grantee of such intent is immaterial. Cited in support of this proposition is Ursak v. Sivanick, 56 Oh Ap 434, 9 O. O. 217, 10 N. E. 2d 1017; City Trust & Savings Bank v. Weaver, 68 Oh Ap 323, 22 O. O. 529, 40 N. E. 2d 953; In re Wright Industries, Inc.. D. C., 93 F. Supp. 58.

Under §11104 and §11105 GC (§§1313.56, 1313.57 R. C.) a transfer “made in trust, or otherwise, * * * in contemplation of insolvency and with a design to prefer one or more creditors to the exclusion in whole or in part of others and * * * with intent to hinder, delay or defraud creditors, shall be void * * To avail oneself of this section proof must be established that the transferee had knowledge of the fraudjfient intent. However, it appears that Section 70 of the Bankruptcy Act has been so interpreted that any transfer avoided under state law will be so held in the bankruptcy court and the rule of the state courts there followed.

Donald F. Kepple, Akron, trustee.

Wm. G. Roderick, Kent W. Woodward, Akron, for trustee.

Wells & Marks, Paynter & Snow, Cleveland, for Hattendorf-Bliss, Inc.

Johnson, Whitmer & Sayre, Cleveland, for bankrupt.

The Supreme Court of the United States held in Stellwagen v. Clum, 245 U. S. 605, 38 S. Ct. 215, 62 L. Ed. 507, 41 Am. Bankr. Rep. 1, that the Bankruptcy Act does not suspend the right of the trustee under the statutes of Ohio to challenge a transaction for the benefit of the bankrupt’s creditors. This has been followed by the Court of Appeals of this Circuit in Irwin v. Maple, 252 F. 10, 41 Am. Bank. Rep. 532, where these two sections of the Ohio statutes as to fraudulent conveyances were construed by the court.

Before clarification of the statute as to preferences, as provided in the Chandler Act Amendment to the Bankruptcy Act of 1938, one of the last cases is Prudential Insurance Co. v. Nelson, Trustee, 6 Cir., 1938, 96 F. 2d 487, 491, 36 Am. Bankr. Rep., N. S., 993, where the opinion is by Judge Simons, and his statement as to the respondent’s knowledge of the bankrupt’s insolvency is pertinent here:

“While it is true that mere suspicion of insolvency or preferential effect is not enough to establish the voidability of a transfer, yet neither are circumstances which carry absolute conviction of insolvency the test of its infirmity. The statute condemns a transfer as preferential when the transferee has reasonable cause to believe that the transferor is insolvent and that it will effect a preference. It sets up a practical test, one with which courts are familiar and which in other transactions is frequently applied. If reasonable cause to believe a transferor insolvent and his transfer preferential in effect must wait upon complete audit and appraisal of a bankrupt’s affairs, preferential transfers would rarely exist and the statutory protection to creditors be unavailing.”

So the conclusion and finding is that the claimant, who has also become a respondent by filing its claim and submitting to the jurisdiction of the Bankruptcy Court, was ordered to surrender the trenching machinery or pay its value in lieu thereof before its claim could be allowed.

OPINION

By JONES, Chief Judge.

This matter is before the court upon the petition of Hattendorf-Bliss, Inc., for review of the referee’s order of December 3, 1952, disallowing its claim.

Hattendorf-Bliss filed its claim in the amount of. $7,807.21 for rental of equipment to the bankrupt during the months of July, August and September, 1950. By separate rental purchase agreement, it had leased other equipment to the bankrupt in April, 1949. This agreement was converted to an outright sale with note and mortgage in December, 1949. The purchase price was $25,630.30 — after allowances for rentals and interest already paid. The bankrupt made no further payments, and in May and June, 1951, seven pieces of the equipment were returned to the petitioner. They were then sold by petitioner for $26,936.92.

The bankrupt filed its voluntary petition on July 2, 1951, and adjudication followed thereafter.

In proceedings before the referee, the trustee objected to the claim of Hattendorf-Bliss on the ground that the claimant had received a voidable preference from the bankrupt, which preference, under Section 57, sub. g, of the Bankruptcy Act, it was required to surrender before its claim might be allowed.

In its answer, Hattendorf-Bliss, admitted receipt of the equipment from the bankrupt, prior to bankruptcy and within four months thereof. It denied, however, that the bankrupt was insolvent when the equipment was returned, or that it knew, or had reasonable cause to believe that the bankrupt was insolvent. It alleged that the machinery was taken back by it in due course, and credited on a mortgage note. While it admitted that the court might try the objection to its claim, it objected to the jurisdiction of the court to try the preference suit. It asserted that the trustee was not in possession of the chattels and that, therefore, it was an adverse party. It moved to dismiss the objection to its claim.

A hearing on the objections was had before the referee. On December 3, 1952, the referee entered his order that the claim of Hattendorf-Bliss be disallowed unless the claimant surrendered to the trustee the chattels received as a preference, or paid their value within thirty days.

The petition for review asks that the order of the referee be set aside and the claim allowed. Numerous errors in the findings and conclusions of the referee are assigned. Three substantial questions are raised: The questions of (1) jurisdiction, (2) reasonable cause to believe, and (3) insolvency.

Although the petitioner by answer did request “that the objection to its claim be tried fully,” and the trustee’3 objection was based solely upon the preference obtained by the petitioner, nevertheless, I think it definitely cannot be found that the petitioner thereby consented to summary jurisdiction respecting the preference, or that the petitioner’s claim to the equipment was merely colorable. However, the exercise of jurisdiction in this instance must be sustained, for reasons to follow.

In determining the validity and allowability of petitioner’s claim, it became the duty of the referee to determine, when the trustee raised the question as a defense, the preferential status of the petitioner; and this would be so whether or not the claimant petitioner requested “that the objections to its claim be tried fully.” It well may be that a plenary suit under Sections 23 and 60 of the act will be required to set aside the alleged preferential transfer and secure the property or its value, but that is something other and different from disallowing the claim on the ground that there has been a preferential transfer and no surrender of the preference. See, however, In re Nathan, D. C. S. D. Cal. 1951, 98 F. Supp. 686, where jurisdiction to summarily render an affirmative judgment on trustee’s counterclaim for a preference was sustained. The counterclaim arose out of the same transaction as did the creditor’s claim. See also, discussion of this problem in Journal of the National Association of Referees in Bankruptcy, Vol. 27, No. 3, pp. 90-92.

As stated earlier, Section 57, sub. g, of the Bankruptcy Act required surrender of the preference as a condition for allowance of the claim. Unless the referee determined upon hearing whether there had been a preference, he would not be in position to fulfill the mandate of the statute.

The referee’s exercise of jurisdiction is in accordance with the well established rule in bankruptcy cases. Giffin v. Vought, 2 Cir., 1949, 175 F. 2d 186; Schwartz v. Levine & Malin, Inc., 2 Cir., 1940, 111 F. 2d 81; Metz v. Knobel, 2 Cir., 1927, 21 F. 2d 317. See, however, B. F. Avery & Sons Co. v. Davis, 5 Cir., 1951, 192 F. 2d 255, contra.

Petitioner concedes that its mortgage covering the equipment returned to it was not properly recorded, and is void under the applicable state statute. Secs. 8560-8561 (§§1319.01, 1319.02 R. C.). It has only the standing of a general creditor and not that of lienholder.

The referee disallowed petitioner’s claim because he found that every element of avoidable preference was present and established. In this review, the rule applies that the referee’s findings may not be disturbed unless found to be clearly erroneous.

The exhibits introduced at the hearing before the referee, the transcript of testimony, and the briefs of the parties have been carefully considered. The evidence disclosed in the record supports the finding and conclusion of voidable preference.

Petitioner’s officers were also officers and directors of the bankrupt corporation. As such, they were in a position to know, ultimately, of the financial condition of the bankrupt, even though it may be conceded that proper books were not kept.

Petitioner, through its officers, had reasonable causé to believe the bankrupt was insolvent when the equipment was returned to it. Circumstances which carry absolute conviction of insolvency need not be present. Prudential Ins. Co. of America v. Nelson, 6 Cir., 1938, 96 F. 2d 487.

Early in 1950 the bankrupt corporation began to sustain loses in its operations. This fact was verified by an auditor’s report on May 27, 1950. Thereafter, the directors of the corporation expressed concern over its financial condition. Unable to secure accurate financial data, petitioner’s officers sent their own auditor to investigate the affairs of the bankrupt in January, 1951, and he conducted an audit for nineteen days. Special meetings of the Board of Directors followed in February, 1951, at which time the financial condition of the corporation was discussed

Petitioner’s officers learned from their own auditor of large withdrawals of corporate funds by the president which allegedly were not accounted for. They also discovered that the corporation was heavily indebted to the Government for taxes and to other creditors. They knew of large expenditures which had been made for equipment. These were signs “which to a careful creditor pointed unerringly to a critical stage having been reached in * * * the (corporation’s) affairs.” Prudential Insurance Co. of America v. Nelson, supra, 96 F. 2d at page 491.

Knowledge or belief must be inferred from all the circumstances. Circumstances have been shown pointing to knowledge or reasonable cause to believe that the bankrupt was insolvent at the time of the transfer. In this connection, the referee had the right to consider the evasiveness of petitioner’s auditor when testifying as to the knowledge gained by him and presumably passed on to petitioner.

The referee’s finding and conclusion of “reasonable cause to believe” is supported by the evidence.

The evidence on the question of actual insolvency at the time of the transfer is conflicting. It was for the referee to judge its weight and sufficiency in support of the contentions of the parties, as well as to judge the credibility of the witnesses and their interest in the case when testifying with respect to the various audits.

The court appointed auditor found insolvency as of December 31, 1950, continuing thereafter month by month up to and including the date of bankruptcy. Also, the auditors of the bankrupt estimated that it was insolvent as of December 31, 1950.

By adjustment of the figures in the court audit as of the date of bankruptcy to a supposed fair valuation of assets, petitioner attempts to show solvency as of that date, and a probability of solvency as of the time of the transfer. The evidence, however, does not support nor furnish justification for these adjustments.

It is true that the personal account of the president of the bankrupt was not in good order. The data at hand indicates a probable balance in favor of the bankrupt as of the date of bankruptcy. Fairly evaluated, however, this account had little in asset value, and its inclusion as an asset could not materially alter the financial picture of the bankrupt nor overcome the deficit shown.

The same is true for the contracts on hand immediately prior to bankruptcy. It is conceded that the corporation was not “liquid.” The resignation of Hattendorf and Bliss as directors of the corporation further impaired its credit. The corporation possessed little in “going-concern” value. Only through the intervention of bankruptcy was it able to retain its contracts and continue its operations.

Widely divergent values are placed upon the inventory of equipment by the court auditor and auditors of petitioner. It was the province of the referee to resolve this conflict in the evidence.

The record discloses every element of voidable preference and supports the referee’s findings and conclusions.

Accordingly, the order of December 3, 1952 will be confirmed, and the petition for review dismissed.


source: Caselaw Access Project

author: By THE COURT:

license: Public Domain

text:
    WASHABAUGH, Plaintiff-Appellant, v. KAISER, Defendant-Appellee.
    Ohio Appeals, Second District, Montgomery County.
    No. 2155.
    Decided November 21, 1951.
    Jacobson & Durst, Dayton, for plaintiff-appellant.
    William A. Swaney, Dayton, for defendant-appellee.
   OPINION

By THE COURT:

This is an appeal on questions of law from the judgment of the Common Pleas Court of Montgomery County reversing the judgment of the Municipal Court of Dayton.

The plaintiff sued for damages growing out of an automobile collision. The defendant filed a cross-petition for damages. The case was tried to the court without the intervention of a jury. The trial court made a general finding in favor of the plaintiff on his petition on which judgment was rendered, but made no finding on defendant’s cross-petition.

On appeal the Common Pleas Court reversed the judgment in favor of the plaintiff on the ground that the judgment was against the manifest weight of the evidence.

The evidence shows that each automobile backed toward the other for a distance of between thirty and forty feet (there is some evidence that the driver of plaintiff’s automobile backed approximately seventy feet) on the improved portion of the street, which consisted of only one lane of travel. The evidence shows that the driver of neither automobile gave warning; and that the driver of defendant’s automobile did not see the plaintiff’s automobile until the moment of the impact; there is no evidence as to whether the driver of plaintiff’s automobile saw the defendant’s automobile at any time before the impact. Both drivers started to back their automobiles at about the same time. The collision occurred in the day time and at a place and in such a manner that if either driver had looked he could have seen the other automobile.

The evidence is undisputed that the driver of plaintiff’s automobile failed to give any warning, as provided in §6307-37 GC. In Buckeye Stages Inc. v. Bowers, 129 Oh St 412, it was held that a violation of former §6310-21 GC, which contained language similar to §6307-37 GC constituted negligence per se. The plaintiff’s own evidence raised a presumption of contributory negligence. Plaintiff offered no proof tending to rebut such presumption. If the driver of plaintiff’s automobile had given “ample warning” as provided in §6307-37 GC, in all probability no collision would have occurred. “Ample warning” as used in this section means a warning fully sufficient to apprise those entitled thereto of the backward movement of an automobile, in order to discharge the duty of reasonable care. City Ice & Fuel Co. v. Center, 54 Oh Ap 116.

The Common Pleas Court held that the judgment was against the manifest weight of the evidence and remanded the cause for new trial. Finding no error in the record prejudicial to the rights of the appellant, the judgment is affirmed.

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


author: By HOY, J.

text:
    THOMAS, In re. LAUREY, In re. SONGER, In re.
    Probate Court, Hamilton County.
    Nos. C-9539, C-9438, C-9545.
    Decided January 6, 1954.

      C. Watson Hover, Pros. Atty., William J. Schmid, Asst. Pros. Atty., Cincinnati, for relators.
    C. William O’Neill, Atty. Genl., Kiehner Johnson, Larry Snyder, Asst. Attys. Genl., Columbus, for Dr. E. A. Baber, superintendent of Longview State Hospital, respondent.
    James L. Magrish, Cincinnati, for chairman of committee on Judiciary Legal Forms of Cincinnati Bar Association, amicus curiae.
    Paul W. Steer, Cincinnati, for Probate Court Committee of Cincinnati Bar Association, amicus curiae.
    Alan R. Vogeler, Cincinnati, for Lawyers Club, amicus curiae.
   OPINION

By HOY, J.

This cause is before the court on an order requiring Dr. E. A. Baber as superintendent of Longview State Hospital for the Insane to show cause as to why he should not be held in contempt.

It appears that on November 17, 1953, this court, pursuant to the provisions of §5123.23 R. C., found that Minnie Thomas, Albert Laurey and George W. Songer, all of the age of more than seventy years, were mentally ill and in need of specialized care and treatment and committed them to Longview State Hospital for the Insane. No consent to accept these persons was given by the hospital as provided by a part of paragraph “F” of said section. Dr. Baber, superintendent of the hospital, has refused to accept these patients, and, upon being required to show cause as to why he should not be held in contempt for such refusal, defends solely upon the ground that under the provisions of paragraph “F” of §5123.23 R. C. the court was without power to commit them without first obtaining the consent of the institution.

Sec. 5123.23 R. C. reads as follows:

“On the day set for hearing the probate judge shall, without the intervention of a jury, proceed to examine the witness in attendance, and further witness.es that such judge desires to call. He shall cause an examination of such person to be made by at least one physician and a report of such examination to be made a part of the court record. Upon the hearing of the testimony, which hearing may be had at any place within the county, as the probate judge designates, and after receiving the report of the physician, if such judge is satisfied that the person charged is mentally ill and in need of specialized care and treatment, he may by order duly entered proceed as follows:
“(A) Commit such person to the proper receiving hospital or state hospital for the mentally ill for treatment;
“(B) Conimit such person to the department of public welfare and deliver him to the facility provided by the department for persons described in §5125.04 R. C.;
“(C) Commit such person to the veterans administration or other agency of the United States government, as provided by §5905.02 R. C.;
“(D) Order that such person be placed in a private hospital, home, or institution, licensed and approved by the division of mental hygiene, at the expense of such person or at county expense, until further order of the probate judge;
“(E) Remand such person to the custody of a relative, friend, or other suitable person until further order of the probate judge;
“(F) Order such person placed in the county home or other place provided by the board of county commissioners until further order of the probate judge;
“If the court finds such person not to be mentally ill and not in need of specialized care and treatment it shall order his discharge forthwith.
“No such person 70 years of age or over shall be committed under division (A) and no such person shall be committed under division (C), placed under divisions (D) or (F), or remanded under division (E) until after consent to accept such person is received from the designated institution, hospital, clinic, or suitable person.
“The medical witnesses provided by this section and §5123.24 R. C. must be registered physicians in Ohio and must have had at least three years’ experience in the practice of medicine.”

Obviously, the court cannot hold Dr. Baber in contempt for refusing to admit these patients unless it also holds that the portion of the statute requiring the consent of the hospital as a condition precedent to the court’s power to commit mentally ill persons of the age of seventy years is unconstitutional and void.

It is contended on behalf of Dr. Baber that the court is without power to determine the constitutionality of the statute in this proceeding because it has no personal interest which would require it to prevent and rule on the question sua sponte. With this contention the court can agree only partially. We recognize the rule that one who is not affected or prejudiced by the enforcement of a legislative enactment may not question its constitutionality, but the court has a clearly recognized right to determine its own jurisdiction in any proceedings. If, therefore, the consent provision of the statute is an encroachment upon the jurisdiction of the court, the question of its constitutionality may be presented and determined by the court sua sponte. On the other hand, if such provision is not an encroachment upon the court’s jurisdiction, the question of whether it is unconstitutional by reason of making an arbitrary classification cannot be raised and decided by the court sua sponte because the court, not being the party discriminated against, has no personal interest in how the question might be determined. It is necessary, therefore, to determine whether the statute in question encroaches upon the jurisdiction of the court.

At the threshhold of our consideration of this question we are confronted with the well established canon of construction that every reasonable presumption must be indulged in favor of the constitutionality of a statute. This presumption is founded upon the doctrine which forbids one branch of the government from encroaching upon the duties and prerogative of another and it has been repeatedly held in Ohio that a clear incompatibility between a law and the constitution must exist before the judiciary is justified in holding the law unconstitutional. (See 8 O. Jur., page 162 and cases cited.)

The Probate Court is established by Section 7, Article IV of the Ohio Constitution and its constitutional jurisdiction is set forth in Section 8 of said Article in the following language:

“The Probate Court shall have jurisdiction in probate and testamentary matters, the appointment of administrators and guardians, the settlement of the accounts of executors, administrators, and guardians, and such jurisdiction in habeas corpus, the issuing of marriage licenses and for the sale of land by executors, administrators, and guardians, and such other jurisdiction, in any county or counties, as may be provided by law.”

Clearly, the Probate Court has no constitutional jurisdiction in mental health matters. Its jurisdiction in such matters depends entirely on legislative enactment and the legislature, therefore, has full power to declare and define such jurisdiction. (Schario v. State, 105 Oh St 535.) It would seem to be within the province of the legislature, if it chose, to withdraw such jurisdiction entirely from the Probate Court. The consent requirement of paragraph “F” of §5123.23 R. C. is merely a limitation upon the jurisdiction of the court in a field over which the legislature has complete control. It provides, in effect, that in certain cases the court shall have no power to commit mentally ill patients. Surely if the legislature is empowered to divest the court of all jurisdiction in mental health matters, it also has the power to limit such jurisdiction.

It is true, of course, that when the legislature invests a court with general jurisdiction over a particular class of case, it also gives the court implied or inherent power to enforce its lawful orders and may not impede the court in enforcing such orders.

A number of cases, including that of State, ex rel. Venn v. Baber, decided by Judge Stanley Struble of the Common Pleas Court of this county and reported in 26 O. O. 446, have been cited in support of the proposition that §5123.23 R. C. is unconstitutional for the reason that it invades the court’s implied or inherent power to enforce its lawful orders or impedes the court in enforcing such orders. However, in the Venn case the court was construing §1890-37 GC (effective January 1, 1938 and since repealed) which gave the court power to commit any person found to be insane but also vested discretion in the hospital superintendent as to whether the patient would be received. The court very properly held that the legislature may not vest judicial power in a court and also abridge that power by permitting the superintendent of a state institution to nullify the court’s exercise thereof. In the statute under consideration, however, the court is not given jurisdiction to make an order which a non-judicial officer may nullify. The court is simply divested of its power to commit under certain circumstances. The reasoning of the court in the Venn case and the other cases cited on this point is, therefore, not applicable and we conclude that the legislation is not unconstitutional by reason of any encroachment upon the constitutional or inherent or implied jurisdiction of the court.

It has been suggested that §5123.23 R. C. is unconstitutional by reason of conflict with the universal rule that the legislature may not confer judicial powers upon non-judicial officers and the case of Denver v. Lynch, 92 Colorado 102, has been cited as authority for this contention. In the Denver case, however, the statute under consideration gave judicial powers to the court and the Board of County Commissioners jointly and was, of course, held to be unconstitutional because of its grant of judicial power to a non-judicial tribunal. The statute under consideration in this case, however, does not permit the hospital to determine any question judicially. It merely makes the consent of the hospital a condition precedent to the power of the court to commit in certain cases and cannot be held unconstitutional upon that basis.

It is contended in support of the contempt charges that in committing the mentally ill patients, the court was, in effect, declaring the consent provision of the statute unconstitutional and that disobedience of a court order, even though it be a clearly erroneous order, is contempt. With this argument we cannot agree. Suppose that a Justice of the Peace should attempt to sentence a person charged with a crime to the Ohio Penitentiary. Could it be said that the court was, in effect, passing upon the constitutionality of the law which limits his jurisdiction in criminal cases and would the warden of the Penitentiary be guilty of contempt for refusal to accept custody of the prisoner? Clearly not. It is quite true that disobedience of an order made by a court within its jurisdiction and power is contempt even though the order be clearly erroneous. It is equally true, however, that the order of a court which exceeds the jurisdiction and power of the court has no validity and the violation of such an order is not contempt.

It is indeed unfortunate that while the legislature has decreed to the state the exclusive care, custody, control and treatment of all mentally ill persons, the end result of the consent provision contained in §5123.23 R. C., as shown by the records of this court, is to afford hospitalization to some and incarceration in the county jail to others purely at the whim of the hospital, and if this were a mandamus action brought against the hospital on behalf of one of the mentally ill persons refused admission, the question of whether the classification made by the statute is reasonable or arbitrary and whether it affords the equal protection and benefit guaranteed by the Constitution might be pertinent. In such case the court would be concerned with the constitutional rights of an individual under the law. This case, however, is an ex parte proceeding in which we are determining the guilt or innocence of Dr. Baber of charges of contempt brought by the court itself and the rights of the mentally ill persons in question are not being decided. It is true that a statute which is unconstitutional for any reason at all is as inoperative as if it had never been passed and affords protection to no one but, unless the statute encroaches upon the court’s jurisdiction, the court, having no legally recognizable personal interest in the question of constitutionality, is not permitted to raise and pass upon it sua sponte.

For these reasons the court finds Dr. Baber not guilty of contempt.


author: By BARTLETT, J.

text:
    CANNON, Jr. et, Estate of, Appellant, v. BOARD OF LIQUOR CONTROL, etc. et, Appellee.
    Common Pleas Court, Franklin County.
    No. 186266.
    Decided April 7, 1953.
    Isadore Topper, Columbus, for appellant.
    C. William O’Neill, Atty. Genl., Ralph N. Mahaffey, Asst. Atty. Genl., Columbus, for appellees.
   OPINION

By BARTLETT, J.

BOARD OF LIQUOR CONTROL ORDER (REJECTING APPLICATION FOR D-5 PERMIT), — REVERSED.

This is an appeal under §154-73 GC, seeking reversal of the order of the Board of Liquor Control, affirming the order of the Director of Liquor Control, rejecting the application for a D-5 permit.

This order is based on arrests for street begging and being common prostitutes, said arrests being at the permit premises, under the Cincinnati ordinance making it the duty of police officers to arrest such characters wherever found. Not a single arrest cited, is based on any misconduct on the permit premises. The permit holder has no responsibility to enforce the ordinance, and no duty under the law, to refuse food or drink to such people, who do not misconduct themselves on the permit premises. In the case of Clouston, etc., et al. v Board of Liquor Control, et al, No. 181,856, this court, through Reynolds, J., ruled Section 3 of Regulation 12 of said Board of Liquor Control was invalid. This part of Regulation 12 provided:

“In determining whether to grant or refuse a permit the Department shall consider environmental factors affecting the maintenance of public decency, sobriety, and good order, * * * ”

The Court finds the order of the Board of Liquor Control is not supported by reliable, probative and substantial evidence, and is not in accordance with law.

The Court, therefore, reverses the order of said Board and sustains the appeal herein; and orders the said D-5 permit be issued.

Entry accordingly reserving the exceptions of counsel for said Board.


text:
    BROWN-BROCKMEYER COMPANY, Plaintiff-Appellee, v. TROWBRIDGE, Defendant-Appellant.
    Ohio Appeals, Second District, Montgomery County.
    No. 2143.
    Decided April 9, 1951.
    A. K. Meck, Dayton, for plaintiff-appellee.
    C. William O’Neill, Atty. Genl., Joseph S. Deutschle, Jr., J. Ralston Werum, Asst. Attys. Genl., Columbus, for defendant-appellant, Board of Review.
   OPINION

By THE COURT:

This is a law appeal from the judgment of the Common Pleas Court denying unemployment compensation to the claimant and appellant herein, Naomi Trowbridge.

The record reveals that the claimant quit her employment with the Brown-Brockmeyer Company, Appellee, in Dayton, Ohio, on July 5, 1945, to visit with her son who was in the armed service in California, and there she obtained employment for approximately one month, starting about September 1, 1945; that she next obtained employment in California about November 1, 1945, and worked until March 5, 1946. At the time of filing her initial claim in California on March 22, 1946, claimant stated that she quit because the work was too hard for her and in later correspondence she stated that her California employer sold out and went out of business.

On May 4, 1946, the appellee wrote to the claimant in California offering her a job in Dayton, Ohio. On May 11th claimant replied stating that she was residing in California and could not return to Dayton at the time because of lack of funds and also because she thought she could find work there.

The court found the issues in this case to be the same as were presented in the case of Brown-Brockmeyer v. Holmes, 152 Oh St 411.

We have carefully examined the Holmes case, supra, and are in accord with the ruling of the trial court. The claimant attempts to distinguish this case from the Holmes case, stating that she had established a residence in California, while in the Holmes case such a fact does not appear. We have examined the record in the Holmes case and find the referee states that Holmes had established his residence in California. Therefore, these cases are not distinguishable on the facts, but even though they differed in this respect it could not change the result. The term “residence” as used in §1345-6-e-(3) GC “has reference to the residence of the claimant at the time he quit his employment.” Brown-Brockmeyer Co. v. Holmes, supra, 415. Therefore, in the instant case the work was not at an unreasonable distance from the claimant's residence, as her residence was at Dayton, Ohio, when she quit her employment.

It is our conclusion that by refusing to accept the offer of re-employment made by the appellee herein the claimant waived her right to unemployment compensation.

The judgment will be affirmed.

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


author: By THE COURT.

text:
    STATE ex DEPARTMENT OF LIQUOR CONTROL, Appellee, v. SASSLER d. b. a. ROSELAWN STEAK HOUSE, Appellant.
    Ohio Appeals, Second District, Franklin County.
    No. 4619.
    Decided October 10, 1951.
    C. William O’Neill, Atty. Genl., Thomas R. Lloyd, Richard L. Canter, Asst. Attys. Genl., Columbus, for appellee.
    Bernard P. Bernard, Columbus, for appellant.
    (NICHOLS, J, of the Seventh District, sitting by designation.)
   OPINION

By THE COURT.

This is an appeal on questions of law from a judgment of the Common Pleas Court sustaining an order of the Board of Liquor Control revoking liquor license permits of appellant. The Board based its action upon the sustaining of each and all of five grounds of charges preferred against the permit holder. The Common Pleas Court sustained the order and supported the finding of the Board on four of the five charges.

Appellant assigns seven grounds of error in this court and argues them at length by brief and orally. We have given consideration to these assignments and find no one of them sustained. We have read the written opinion of Judge Gessaman in the Common Pleas Court and are in full accord with the conclusions therein reached and the reasons therefor. It would serve no good purpose to restate these reasons and we therefore refrain from doing so.

Two of the charges, No. 4, that the permit holder employed one Morris Sassler, a convicted felon, in her place of business, and the 5th, that the permit holder prevented, hindered and obstructed agents of the Ohio Department of Liquor Control from making an inspection of the said permit premises, were established by the record and are both serious charges and clearly support the action of the Board in revoking appellant’s permit.

The judgment will be affirmed.

HORNBECK, PJ, MILLER, J, NICHOLS, J, concur.


author: By McLAIN, J.

text:
    KIGHTLINGER et, Plaintiffs, v. HULVEY, Executor et, Defendants.
    Common Pleas Court, Trumbull County.
    No. 62200.
    Decided May 19, 1953.

      Paul E. Kightlinger, Warren, for plaintiffs.
    George D. Lewis, Warren, for defendants.
   OPINION

By McLAIN, J.

The plaintiffs herein, co-executors of the last will and testament of Lydia H. Wheeler, deceased, filed this action for the purpose of having the will of the decedent construed and asking direction of the court in the matter of distribution of the assets of the estate after provisions for the payment of debts, and the disposition of miscellaneous items.

Item 3 of said will provides as follows:

“All the rest, residue and remainder of my estate whether real, personal or mixed, and wheresoever situate, I give, devise and bequeath in equal portions so far as practicable, share and share alike, among my nieces and nephews, Paul M. Gregory, James B. Huff, Edith Hulvey, Charlotte Sugden, Helen Haverfield, Elythia Mecartney and Sarah Mogg. In the event any of my said nieces and nephews shall have predeceased me or shall die before distribution shall have been made by my executors, then I direct that the share of such deceased beneficiary shall be distributed among the survivors of said named nieces and nephews.”

Item 4 of said will provides as follows:

“I nominate and request the Probate Court to appoint my attorney, Paul E. Kightlinger, of Warren, Ohio, and Mr. J. Owen Mogg, of Indianapolis, Indiana, to be the co-executors of this, my last will and testament. I hereby grant unto my said co-executors full power to sell and convey my real and personal property which has not been otherwise disposed of in kind upon such terms and at such prices as my said co-executors may deem proper and without obtaining any order of court therefor.”

It is stipulated by the parties hereto, that Lydia H. Wheeler died September 18, 1952, in the city of Warren, Ohio; that she was a childless widow and left no brothers or sisters; that the seven nieces and nephews named as legatees in item 3 of her last will were her only heirs at law, none of whom resided within the state of Ohio, and that all seven of said legatees were living at the time of her death.

It is further stipulated that the inventory includes cash and securities at $27,441.56, and a single family residence at 509 Genesee avenue in Warren valued at $29,750.00. The estate indebtedness, exclusive of administration expenses, is reported at $1,560.61.

Edith Hulvey, niece of Lydia H. Wheeler, and one of seven legatees named in item 3 of the Wheeler will, died on or about November 22, 1952, subsequent to the death of Mrs. Wheeler. John Hulvey, of Davenport, Washington, and a minor daughter, Jessie Lee Hulvey, survive the said Edyth Hulvey.

The exact question here presented is whether or not Edyth Hulvey, having died before distribution of the estate of the decedent, Mrs. Wheeler, became vested with any interest in the said estate which could pass, by virtue of her death, to John Hulvey and the minor daughter, Jessie Lee Hulvey, or whether the entire estate should be divided among the six nieces and nephews still living.

The court has reached the following conclusions which will be followed by the reasons therefor, and an examination of the authorities.

1. The real estate owned by the testator vested at death, and Edyth Hulvey became a tenant in common together with the other nieces and nephews and, therefore, became vested with her interest in said real estate which passed, by virtue of her death, to her husband, John Hulvey, and the minor daughter, Jessie Lee Hulvey.

2. Edyth Hulvey having died about two months after the death of the testator and before distribution of the personal estate, and said death having occurred during the normal period of estate administration, was divested by reason of her death of any interest in the personal property of the testator.

Any canon by which provisions of a will should be interpreted must almost of necessity be limited to the particular document and the surrounding circumstances. The court must engage itself primarily in an attempt to determine the intention of the testator. Precedents are helpful insofar as they may be considered in some respects analogous or for the purpose of post-rationalization.

A large number of cases, somewhat in point, may be found in 142 A. L. R. at page 139. The annotation considers the interest of an original beneficiary under a will with the limitation over in event of his death before being paid or receiving a bequest or devise.

Without considering all of these cases separately, the following summary is made by the authority at page 137:

“In the absence of a clear indication that the testator intended that there should be an indefeasible vesting in the original beneficiary only if he should survive to an actual receipt of the bequest, the inclination of the courts, when called upon to construe a will providing for a gift over in the event of the death of the first taker before he receives or is paid a legacy, is to regard the gift over as having reference to death before the legacy is de jure payable. Thus the court is not in the habit of making conjectures in favor of finding in a will an intention on the part of testator that his legatee should not have the legacy or the residue unless they live to receive them in actual money.”

These cases generally hold that a legatee’s rights should not depend upon accident, fraud, delay, inconvenience, caprice, mistake or similar factors. This inclination is likewise shown in most of the American cases, such as Manice v. Manice (1871), 43 New York, 303.

“It is held that a limitation over to take effect in case of the death of the legatee before he has received his share, does not take effect if the legatee lives to become entitled to it, though he die before it has been paid.”

A number of cases further point out that there is much greater reason for the adoption of this rule where the legatees all bear the same relationship to the testator than in a case when one or more might be strangers.

A great body of the law on this subject was developed in England. One of the leading cases is Hutcheon v. Mannington (1791), 1 Ves. Jr., 366, 30 English Reprint, 388. The legatee was in the East Indies, and he did not learn of his inheritance before his death. The court held that he was entitled to have the estate vested in him from the testator’s death, notwithstanding a provision that in the case of his death before he may have received the bequest, it should go to his brothers and sisters.

Likewise, in In re: Samson (1896), 1 Ch. (England) 603, it was pointed out that in such cases, the courts favor early vesting regarding it as undesirable that rights and interests should depend on the degree of diligence with which trustees perform their duties.

As to American authorities, the validity of a gift over, of the kind under consideration here, appears to have been questioned only in a few instances, although at least one holding states that a limitation over in case a legatee should die before he or she shall have received the legacy bequeathed to him or her must be regarded as void for uncertainty.

The rule is again stated in L. R. A. 1918E at page 1100.

“In determining whether a postponed gift is vested or contingent, it is the general inclination of the courts to construe legacies as vested whenever possible, such construction being regarded as more consonant with the probable intention of the testator.”

A similar conclusion was reached by the Supreme Court of Pennsylvania in In re: Wengerd’s Estate (1891), 22 Atlantic Reporter, page 869.

The law of Ohio'is clearly stated by the Supreme Court as follows:

“The law favors the vesting of estates at the earliest possible moment, and a remainder after a life estate vests in the remainderman at the death of the testator, in the absence of a clearly expressed intention to postpone the vesting to some future time.” Ohio National Bank v. Boone, 139 Oh St, 361, 22 O. O. 414.

This presents the question, therefore: Does the language used in the will of Lydia Wheeler, the testator, clearly express an intention to postpone the vesting of (1) the real estate, and (2) the personalty, until the estate was distributed?

While it is true that this will contains a power of sale given to the executors, there is no express direction to sell. It is also true that §10509-227 GC (§2113.39 R. C.) provides that a power of sale should be construed to authorize a sale for any purpose deemed by the executor for the best interest of the estate.

This still does not constitute a direction to sell. It, at best, lodges in the executors a discretionary power of sale. It would be an untenable position to say that the executors in this case could merely, by the exercise of the power of sale, disinherit one of the legatees or allow the real estate to vest by restraining from exercising such power.

It cannot be urged that this testator, in the absence of express language, could have intended to clothe her executors with the power to determine who should or should not inherit.

It is likewise a sound presumption that the testator having employed able counsel to draft her will could have, if such was her intent, given an express direction to the executors to sell her real estate and divide the proceeds. In that event, this case would fall within the rule of Junk v. Jones, Court of Appeals of Ohio, Fayette County, decided June 11, 1942, North Eastern Reporter, 2d Series, Volume 44, page 796.

■ The court did give consideration to the fact that the beneficiaries were non-residents and also that the will contained a statement that furnishings might be left in the home to assist tlie sale of the property, and although these facts might indicate some possible intention on the part of the testator that the executors sell the real estate, they are certainly insufficient to indicate any such clear intention and, for the reason already stated, that in the absence of an expressed intention, the court could not properly resort to conjectures to supply such intention.

For the foregoing reasons, under the authority of Ohio National Bank v. Boone, 139 Oh St 361, 22 O. O. 414, the testator not having clearly expressed an intention to postpone the vesting of the real estate, the same vested upon her death.

While the real estate vested at death and did not come into the hands of the executors, the personal property did, and it was the duty of the executors to collect the same and distribute it.

“Words deliberately used in a will are presumed to have been placed there for a purpose, and cannot arbitrarily be ignored; they must be given a meaning to effect the intention of the testator, if such intention can be ascertained, and no rule of law violated.” 41 O. Jur. Wills, Section 470, 605. “Technical words used in a will should have their strict technical meaning, unless it appears that the testator used them in some other and secondary sense.” 41 O. Jur. Wills, Section 517, 645.

“In legal nomenclature, the term, ‘distribution of estate,’ ordinarily has reference to personalty and not to realty.” Words and Phrases, Volume 13, page 23.

Distribution is ordinarily considered the apportionment, by a court, of the personal property of an intestate or its proceeds among those entitled to it according to the statutes of distribution. See Webster’s Unabridged New International Dictionary. (Law)

Ballentine’s Law Dictionary defines “distributees” as follows:

“Persons who are entitled under the statute of distribution to the personal estate of one who died intestate.”

Also see Henry v. Henry, 31, N. C. (9 Iredell Law) 278-279. Effect must, therefore, be given to the plain language of the will, and since a condition was annexed to the legacy, that the legatee should be alive at the time of distribution, it is the opinion of the court that the legatee, in order to be entitled to a share in the personalty, would have to survive the normal period for the administration of the estate. See In re: Powers Estate, Surrogate’s Court, New York County (May 8, 1950), 98 N. Y. S. 2d, 457.

After a consideration of the issues herein, the court cannot suppress a desire to humbly pay tribute to the profound wisdom of a great jurist of the 17th century.

“Wills and the construction of them do more perplex a man than other learning.” Lord Coke in Roberts v. Rex, 2 Bulst. 123, 130 (1614).

Counsel may prepare a journal entry in accordance with this opinion.


text:
    MIAMI SAVINGS & LOAN COMPANY, Liquidation, In re.
    Ohio Appeals, Second District, Montgomery County.
    No. 2066-C.
    Decided November 21, 1951.
    Cowan & Adams, Harold F. Adams, of Counsel, Columbus, for appellant.
    Mason Douglass, Dayton, for appellee, Miami Savings & Loan Company.
   OPINION

By THE COURT:

This is a law appeal from the judgment of the Common Pleas Court, classifying all of the accounts mentioned herein as “running stock” accounts, which the appellant contends constituted error under the facts presented.

It is urged that the following accounts should have been classified as “trust funds” as described in Section 8 of the Report of the Commissioners, being money paid into the Miami after it became insolvent, to-wit: May 11, 1931, and which were held to be trust accounts, but the following were not so classified:

1. Account No. 2596, Louise Freihofer, $780.77.

The record reveals all the money in this account was paid in on November 10, 1932.

2. Account No. 13020, Ora Kibler, $500.00.

All of this sum was deposited with the company on May 11, 1931.

3. Account No. 14095, Martha G. Kane, $5.00.

This sum was paid in on July 3, 1931. The record reveals that prior to this time there was a balance of $218.24 in this account.

4. Account No. 11142, Hattie G. Hurst, $125.00.

The record reveals that $62.50 was paid in on June 1, 1931, and $62.50 on August 4, 1931.

It is our conclusion that the Court erred in its classification of the above accounts as running stock accounts; that as to them the judgment is reversed and the same are ordered to be classified as trust funds as described in Section 8 of the Commissioners’ Report.

It is further urged by the appellant that account No. 11142, Hattie G. Hurst, for $3750.84 should be classified as a contract deposit account and placed in Schedule A as described in Section 5, subdivision 5 of the Report of the Commissioners, the same being deposits transferred to running stock after May 14, 1929, where no subscription for shares ;was ever signed by the said Hattie G. Hurst; that the transfer of June 30, 1930 to a running stock account was never authorized.

We think that the report supports the appellant’s contention and are of the opinion that the status of the depositor could not be changed to that of a stockholder without authority from the said depositor. Sharts v. Warner, 23 Abs 88; Stomberger v. Miami Savings & Loan Co., 32 Abs 402; Busch v. Wagoner, 34 Abs 586.

The error assigned to the classification of the aforesaid account is well taken and it is therefore ordered that the same be classified as a deposit account.

It is next urged that the Court erred in not classifying the following accounts as creditor accounts as described in Section 11 of the Commissioners’ Report and which classified all new accounts opened after May 14, 1929, as general creditors.

1. Account No. 13948, Marie Lerch, $10.13.

This account was opened March 9, 1931, and therefore comes within the above classification.

2. Account No. 11494, Clarence Hofele, $110.00. This account was opened on March 3, 1931, and also would be entitled to the status of a creditor.

3. Account No. 14095, Martha G. Kane, $213.24.

The record reveals this account was opened on August 5, 1929, and therefore it should also be classified as a creditor account.

As to these three aforesaid accounts the judgment will be reversed and the same ordered reclassified as indicated.

It is admitted by the appellant that the following accounts are properly classified;1

No. 10087, Libbie Klepinger, $3318.17.

No. 1391, Mrs. E. M. or Erie M. Polk, $1431.27.

No. 343, Russel H. Cosier, $1371.64.

No. 20179, Prank S. Rinehart, $657.50.

The judgment will therefore be affirmed as to each of the four above listed appellants.

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


author: By LAMB, J.

text:
    MIDDLETOWN (City), Plaintiff, v. DENNIS, Defendant.
    Municipal Court, Middletown.
    No. 1622.
   OPINION

By LAMB, J.

In the present cause, the defendant, William H. Dennis, is charged with unlawfully operating a motor vehicle, to-wit: an automobile upon Garfield Street, a public street in the City of Middletown, Butler County, Ohio, while under the influence of alcohol, contrary to the ordinance of said city in such case made and provided. The evidence on behalf of the prosecution was presented to the court, the defendant being present and represented by counsel.

As soon as the prosecution had rested its case, the defendant, by his counsel, moved the court for dismissal of the charge upon the ground that there was insufficient evidence before the court as to the operation of said vehicle by the defendant, it appearing clearly from the evidence that the defendant was in a serious state of intoxication at the time of his arrest, but not in a state of mania.

Counsel has so vigorously argued the point before the court that it is incumbent upon the court at this time to make certain observations prior to ruling on the motion.

The sole question seems to be whether or not this court is justified in making a finding of “Guilty” to the charge of operating a motor vehicle while under the influence of alcohol when the principal evidence as to the actual operation of the motor vehicle is the admission of the defendant shortly after the collision with a parked truck, that he was the driver of the automobile involved in said collision. There are, of course, certain extrinsic evidentiary facts which will be discussed at a later portion of this opinion.

It may be well at the outset to differentiate between an admission and a confession. While admissions are sometimes loosely referred to by the courts as confessions, there is a great difference in the character of the evidence educed from each. A confession is an acknowledgment of guilt, while admission is merely a statement by the accused, direct or implied, of facts pertinent to the issue and tending to show his guilt. 2nd Wharton Criminal Evidence 1400; 12 O. Jur. 378 and 379.

As Underhill in his Criminal Negligence has stated; “Any voluntary statement by one accused of or suspected of a crime relating to some particular fact or circumstance, and not the whole charge, which indicates consciousness of guilt, and tends to connect him with the crime charged, and to incriminate him, is admissible as against interest,” citing numerous cases at pages 501 and 502 of Underhill’s Criminal Evidence,’ including Harrison v. State, 112 Oh St 429 and 147 N. E. 650; State v. Mueller, 41 Oh Ap 102; 179 N. E. 503; Hunt v. State, 42 Oh Ap 119 and 181 N. E. 651.

An admission is something less than a confession as it acknowledges only some particular fact or circumstance pertinent to the issues and tending to prove guilt in connection with other circumstances, while a. confession covers the whole transaction admitting guilt. Such admission against interest is admissible on the theory that it is apt to be true, because it is not likely that the defendant would make a false statement which would injure himself. They may be either written or oral and the court has wide latitude as regards admissability of this sort of evidence.

Some of the authorities hold that admissions unlike confessions are admissible though involuntary, but others hold that in order to be admissible, admissions must be voluntary. The different jurisdictions, due to different statutory requirements and different rules laid down by the various appellate courts are found to be in conflict with California at the liberal end of the scale and Louisiana and Alabama at the other. In some jurisdictions, the admissions are presumed to be voluntary, in the absence of evidence that they were obtained by duress or otherwise, or if the defendant made no such contention at his trial, and no preliminary hearing or proof is required of their voluntary character. In others such admissions are prima facie involuntary and therefore inadmissible, it being necessary for the State to show in a preliminary hearing their voluntary character and to lay a proper predicate. Such admissions are substantive, original evidence and may be regarded as a criminal circumstance proper to go to the jury, the rules as to impeachment and its foundation not applying.

The rule in Ohio seems to be somewhere in the middle, in that admissions are presumed to be voluntary, in the absence of evidence that they were obtained by duress or otherwise, or the defendant made no such contention at his trial and no preliminary hearing is required of their voluntary character. However, some preliminary proof must be shown on the actual trial of the case that it was voluntarily made. Kosienski v. State, 24 Oh Ap 225, 157 N. E. 301. In our present case no objection was made to the introduction by the prosecution of the voluntary statement made by the defendant shortly after the arrest that he was the driver of the motor vehicle involved in the present case, and therefore it must be considered a voluntary admission, properly before the court, which this court is justified in considering in determining the particular operative fact involved; the actual operation of the motor vehicle by the defendant.

Now, having determined that the statements made by the defendant to the arresting officers shortly after the said arrest, are admissions against interest and are competent for consideration by the court, it may be well to answer the further argument of defendant’s counsel that the statement imputed to the defendant as to the actual operation of his automobile was heard by only one of the two officers present at the arrest. This particular point may be disposed of by the citation of Moran v. State, 11 O. C. C. 464; 5 O. C. D. 234, affirmed without opinion; 72 Oh St 602, and 76 N. E. 1129, holding that, “The fact that only one person of several present claims to have heard a statement made by the accused, and is willing to testify to it, does not affect the competency of the testimony.” See 12 O. Jur., Page 280.

Is a confession inadmissible merely because made while the accused was under the influence of alcohol? The cases are numerous and definite in answering this question in the negative. See numerous cases cited in Underhill’s Criminal Evidence, 4th Edition, page 538 and 539, holding that a confession is not inadmissible merely because made while the accused was under the influence of alcohol, but that fact may be considered by a jury in determining the weight and credibility of the confession; and this is the rule in many jurisdictions even though the alcohol is furnished by the officer having the accused in custody, a situation far removed and much more aggravated than the present case.

Bell v. U. S. 60 App. D. C. 76 and 47 Fed. 2nd, 438 and 74 A. L. R. 1098 holds that, “The fact that a confession is made while the person making it is under the influence of liquor but not to the extent of mania, does not render it inadmissible, although intoxication might affect its weight and credibility.”

Our whole problem, therefore, seems to resolve itself down to the question of whether or not there is sufficient extrinsic evidence in the record, in addition to the admissions against interest by the defendant as to the actual operation of the motor vehicle, from which the court would be justified in making a finding of “Guilty” to the charge against the defendant, defendant having introduced no rebuttal testimony of any kind. It is the inescapable conclusion of this court that such extrinsic evidence is present in the instant case, and that therefore the motion of the' defendant for the dismissal of the charge at the conclusion of the prosecution’s case must be overruled.

The record will disclose that an automobile of the make and model driven by the defendant was observed by a taxi driver a few minutes before the collision with a parked truck; that said motor vehicle struck a parked Chevrolet and proceeded on, without stopping, at a high rate of speed. The record further discloses that the defendant was found at the scene of the collision with a parked truck, standing beside his 1951 Buick Sedan, badly intoxicated; that the defendant admitted that he was the driver of the said Buick; that the front end of the Buick and the rear end of the truck were interlocked; that there was no other person in attendance at the scene of the collision except the defendant; and that the defendant was in a dazed condition from the force of the impact.

Although this case was tried before the court without the intervention of a jury, there are numerous, applicable cases holding, that, “Where there is evidence in the record from which the jury may be informed that the accused drove an automobile upon a public street or highway while under the influence of intoxicating liquor, a conviction will not be disturbed upon appeal, though there is also evidence in the record to the contrary.” See numerous cases cited in 42 A. L. R. 1507; 68 A. L. R. 1362.

Three other cases seem very persuasive of the point at issue. One of these is Commonwealth v. Lyseth, 250 Mass. 555, 146 N. E. 18, where, in addition to other evidence not set out, the accused was found at the scene of an automobile accident one half hour after the happening thereof, and he was then under the influence of intoxicating liquor. The conviction was sustained, the court merely saying: “We accordingly assume the jury can find that the charge in the complaint had been proved.” How much stronger is the present case, in which the defendant was found at the scene of the accident only ten minutes thereafter with the additional extrinsic evidence that a terrific collision had occurred, that the defendant was the sole person present at the scene of the accident, and that he was in an acute state of intoxication.

How much stronger also is the case of McCullough v. State, 96 Texas Criminal Reports, 455; 257 S. W. 541, in which the evidence disclosed that the accused was found cut and bleeding and too drunk to talk, in a roadster shortly after it had collided with another car parked on the highway and that the windshield of the roadster was broken. It was held that such evidence was sufficient to show that the defendant was guilty of driving an automobile in an intoxicated condition. In addition to the vast amount of damage incurred in the collision in the present case, we have the further evidence by the defendant’s own admission that he was operating his Buick Sedan at the time of the collision, a factor which was not present in the Texas case.

This court has been exceedingly impressed by a New Jersey decision, State v. DeHart, 129 Atlantic 427, in which a conviction of driving an automobile while intoxicated, in violation of the New Jersey Motor Vehicle Act, was sustained by the evidence where a police officer arrived at the scene of collision of two automobiles shortly after the accident occurred, required both drivers to exhibit their license and accused then stated that he was in charge of one of the cars, in which there was no other person, and he clearly manifested intoxication, though there was no evidence that he actually drove the car.

All these decisions make it abundantly clear to the court, and particularly so, since the defendant has offered no rebuttal evidence of any kind to the contrary, that the prosecution has proved a case of driving while under the influence of alcohol beyond a reasonable doubt, and that, as a consequence, defendant’s motion to dismiss must be overruled, and he will be compelled, if he so elects, to proceed with his affirmative case. It seems clear from the cited authorities that the admissions against interest of the defendant (that he was the operator of the motor vehicle involved in said collision) made to the arresting officers, are competent, relevant and material to the cause, even though defendant was in a state of intoxication short of the extent of mania, the fact of intoxication and that such statements were made orally going merely to their weight and credibility and not to their competence.

These statements, taken together with the dazed condition of the defendant, defendant’s extreme state of intoxication, his sole presence at the scene of the collision and the enormous amount of damages done as the result of said collision, are all factors which lead the court to the inescapable conclusion that, without further presentation of evidence, the defendant must be found guilty as charged and therefore the motion of the defendant to dismiss must be overruled.

It may be observed in passing that if admissions of this nature, taken together with extrinsic facts of a compelling nature, are not admissible in evidence and are not competent matters for the consideration of a court or jury, thousands of serious cases of this kind, of manslaughter, of fleeing the scene, and worse, should go unpunished. This court does not wish to be placed in the position of setting the patently dangerous precedent that circumstantial evidence of this kind is incompetent or irrelevant; that a defendant must be actually observed driving before a conviction can be obtained.

The law does not place upon the state the overwhelming burden of proving a case beyond all question, but only of proving it beyond a reasonable doubt.


text:
    ZVONYIK et, Plaintififs-Appellees, v. SWARTZEL, Defendant-Appellant.
    Ohio Appeals, Second District, Montgomery County.
    No. 2178.
    Decided April 10, 1952.
    Hyers, Leyland & Patterson, William F. Hyers, of Counsel, Dayton, for plaintiffs-appellees.
    T. L. Barger, Dayton, for defendant-appellant.
   OPINION

By THE COURT:

This is a law appeal from the judgment of the Common Pleas Court affirming that of the Municipal Court. The judgment was in favor of the plaintiffs for damages arising out of an automobile collision. The same questions are presented here as were raised and properly passed upon in the Common Pleas Court. It is urged that the record does not support the conclusion of fact that the trial judge examined the certificate of title to the damaged automobile. We are in accord with the appellant on this conclusion, but think it was immaterial whether or not he examined the same. The original certificate of title was produced in court by a deputy clerk of court in charge of automobile registrations, who testifled as to the number of the certificate, its date of issue and filing, a description of the car, and the person to whom it was issued. It appears that it was examined by counsel for the defendant who must have found no irregularities or the same would have been called to the attention of the Court.

Although the certificate of title was not introduced in evidence, all of its material contents were which we think meets the requirements necessary to prove the ownership of an automobile as laid down in the case of Mielke v. Leeberson, 150 Oh St 528. Judge Mills’ well-considered opinion cites numerous authorities which we think adequately support the judgment of the trial court.

We find none of the assigned errors well made and the judgment will be affirmed.

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


text:
    PROVIDENCE WASHINGTON INSURANCE COMPANY, Plaintiff, v. GARRETTSVILLE (City) et, Defendants. STEIN et, Plaintiffs, v. GARRETTSVILLE (City) et, Defendants.
    Common Pleas Court, Franklin County.
    Nos. 186658, 186659.
    Decided April 4, 1953.
    Herbert Baker, J. Bruce Blanchard, Columbus, for plaintiff.
    C. William O’Neil, Atty. Genl., Hugh E. Kirkwood, Jr., Asst. Atty. Genl., Columbus, for defendants.
   OPINION

By BARTLETT, J.

THE DEMURRER TO THE PETITION IS SUSTAINED.

In both cases, the action is against the State Highway Director and others for damages resulting from the collapse of a bridge on a state highway. The action is based on the negligence of the defendants in failing to maintain and repair the bridge.

It is fundamental that the state is not subject to suit in its own courts without its express consent. Section 16, Article I of the Ohio Constitution provides:

“Suits may be brought against the state in such courts and in such manner as may be provided by”
“2. The provision of the Ohio Constitution, Article I, Section 16, * * * is not self-executing, and statutory authority is required as a prerequisite to the bringing of suits against the state.” Raudabaugh v. State, 96 Oh St 513; State ex rel. Williams v. Glander, Tax Commr., 148 Oh St 188.
“In accordance with general rule that the state cannot be sued without its consent, suits against officers of the state, as representing the state in action and liability where the state, though not a party to the record, is the real party against which relief is sought and where a judgment for the plaintiff, though nominally against the defendant as an individual, could operate to control the action of the state or subject it to liability, are treated as suits against the state. Thus, in an action against the board of public works to compel it to change the character of public works as established by it and its predecessors in the exercise of its official discretion as necessary and proper for officially accomplishing the objects for which the works were constructed, the state is the real party in interest, and the action cannot be maintained without its consent.” 37 O. Jur., State of Ohio, Sec. 44, p. 268.
Secs. 1187 and 11271 GC, merely establish the venue of certain actions, and in no way undertake to create statutory liability.
“But it seems that, in Ohio, in the absence of express statutory provision, an officer on whom rests the duty of keeping highways in repair is not personally liable for injuries resulting from his failure to perform such duty.” 20 O. Jur., Highways, See. 200, p. 878.
“It is well established that no liability rests upon a. county for injuries resulting from a defective or dangerous condition of the highway, even though such condition is due to the negligence of the county commissioners or other road officials, unless such liability is imposed by statute. * * * The liability of county commissioners for injuries to travellers upon public highways, under provisions of §2408 GC, is based upon the failure on their part to use ordinary care to keep the highway free from defects or obstructions * * *.”
■“The doctrine is well established that the provisions of the statutes hereinbefore referred to, being in derogation of the common law rule governing the liability of boards of county commissioners in such cases, are to be strictly construed and will not be extended beyond the plain meaning of their terms.” 20 O. Jur., Highways, Sec. 254, p. 939.
“Some jurisdictions adhere to the rule that, in the absence of an express statutory provision, a public officer on whom rests the duty of keeping streets or highways in repair is not liable for any injury resulting from his negligence in that respect.” 40 A. L. R. p. 45, note citing several states including Ohio.
“1. A board of County Commissioners is not liable in its official capacity for damages for negligent discharge of its official duties except in so far as such liability is created by statute, and such liability shall not be extended beyond the clear import of the terms of the statutes.” Weiher, etc., v. Phillips, et al., 103 Oh St 249; Commissioners v. Darst, 96 Oh St 163.
“No civil action will lie against a supervisor of roads and highways, at the suit of an individual, to recover damages for an injury which he has sustained, in consequence of the neglect of the supervisor to keep a bridge within his district in repair. The only remedy for such neglect is a prosecution under the statute for the penalty it prescribes.” Dunlap v. Knapp, 14 Oh St 64.
'“The nature of the action against an officer, where a liability is imposed upon him, depends upon the nature of the wrong committed, — that is, whether it is regarded as public or private. If the duty which the official authority imposes upon an officer is a duty to the public, a failure to perform it, or an inadequate or erroneous performance, must be a public, not an individual injury, and must be redressed, if at all, in some form of public prosecution. On the other hand, if the duty is a duty to the individual, then a neglect to perform it or to perform it properly is an individual wrong and may support an individual action for damages.” 32 O. Jur., Public Officers, Sec. 112, p. 969.
“1. A municipality constructs and maintains a work house by virtue of the governmental as distinguished from the corporate power with which it is vested, and is therefore not liable to a prisoner confined therein, who complains that he suffered in health by being placed in a small, damp and unsanitary dungeon.
“2. It is a power inherent in a work house superintendent to prescribe reasonable rules for the government of the prison, and to enforce obedience to them by the infliction of proper punishment, and where the punishment is not cruel or excessive, and is not inflicted with malice or intent to injure, the superintendent is not liable to a prisoner suffering injury therefrom.” Rose v. City of Toledo, et al., 1 C. C. (N. S.) 321.

Hull, J., in delivering the opinion of the Court in the foregoing case at page 329 observes:

“A short case found in 49 Pa. St. Reports, 151 (Burton v. Fulton, et al.), is in point. The syllabus, in part, is as follows:
“ ‘Public officers acting within the scope of their authority are not answerable in damages for the consequences of their acts unless done maliciously and with an intent to injure.'
“The liability of public officers is discussed at some length by Judge Cooley in his work on Torts, in the chapter headed ‘Neglects of Official Duty,’ beginning on page 375 and running through to page 403. In the first paragraph it is said:
“ ‘Although the incumbent of public office has a property right in it, yet the office itself is a public trust, and is conferred, not for his benefit, but for the benefit of the political society. It is therefore from' the standpoint of public interest that any failure in duty is to be regarded, and the remedy for such failure must be indicated by the nature of the duty, and the purpose intended to be accomplished in imposing it.
“ ‘Official duties are supposed to be susceptible of classification under the three heads of legislative, executive and judicial, corresponding to the three departments of government bearing the same designations; but the classification can not be very exact, and there are many officers whose duties can not properly, or at least exclusively, be arranged under either of these heads.’
“And on page 376, the author says:
“ ‘It is, however, as a general thing, only against ministerial officers that an action will lie for neglect of official duty. The reason generally assigned is that in the case of other officers it is inconsistent with the nature of their functions that they should be made to respond in damages for failure in satisfactory performance. In many cases this is a sufficient reason, but in others it is inadequate.’
“And again, on page 379:
“ ‘The rule of official responsibility, then, appears to be this: That if the duty which the official authority imposes upon an officer is a duty to the public, a failure to perform it, or an inadequate or erroneous performance, must be a public, not an individual injury, and must be redressed, if at all, in some form of public prosecution. On the other hand if the duty is a duty to the individual then a neglect to perform it, or to perform it properly, is an individual wrong and may support an individual action for damages.’ ”

The board of freeholders are not liable in an action for negligence, in the performance of a public duty, resulting in a private injury. Freeholders of Sussex County v. Strader, 3 Harr. (N. J.) 108. This New Jersey case was referred to as “very respectable authority” by J. Brinkerhoff in the case of Commrs. Hamilton County v. Michels, 7 Oh St 110, the original Ohio case holding County Commissioners not liable in their official capacity for damages resulting from negligence in the discharge of their official duties, except such liability be created by statute.

The Michels case, supra, is considered as an outstanding case throughout the United States; and it would appear that its chief basis is founded on the fact that the county is purely an agency of the state, as will be observed by the comment of Brinkeroff, J., on p. 119:

“Counties are local subdivisions of a state, created by the sovereign power of the state, of its own sovereign will, without the particular solicitation, consent, or concurrent action of the people who inhabit them. * *

If the paramount reason for holding county officials are not liable in damages, for their negligence, to private persons, lies in the fact that the county is only a subdivision of the state, engaged chiefly in functions of the state, then it would beyond question follow that an officer of the state, itself, engaged solely in the discharge of functions of the sovereign, would not be liable to private persons for damages resulting from negligence in the discharge of their official duties, in the absence of such liability being imposed by statute.

In the case of McKay, Executor, etc. v. Kauer, Director, etc., No. 180,523, on the dockets of this court, a few years ago, the eminent Randell, J., sustained a demurrer to the petition, under facts involving the liability of the State Highway Director in the maintenance of state highways.

The plaintiffs have not been able to furnish the Court with any statute that undertakes to attach such liability to the office of State Highway Director, for damages to a private person, resulting from the negligence of the Director in the performance of his duties in the maintenance and repair of the state highways, under his domain and control.

It follows that the demurrer to the petition on behalf of the State Highway Director, should be and hereby is sustained. Entry to be drawn accordingly reserving exceptions of counsel for the plaintiffs.


author: By THE COURT. By THE COURT.

text:
    STATE, ex BOARD OF LIQUOR CONTROL, Appellee, v. JACKSON, d. b. a. BLACK HAWK RESTAURANT, Appellant.
    Ohio Appeals, Second District, Franklin County.
    No. 4615.
    Decided October 15, 1951.
    C. William O’Neill, Atty. Genl., Richard L. Canter, Asst. Atty. Genl., Columbus, for appellee.
    Ray E. Hughes, Columbus, Harold T. Gassaway, Cleveland, for appellant.
   OPINION

By THE COURT.

This is a law appeal from the judgment of the Common Pleas Court of Franklin County affirming the decision of the Board of Liquor Control which sustained an order of the Department of Liquor Control rejecting an application of Lillian Jackson for a Class D-l and Class D-2 permit.

The Department found, and the evidence is ample to support the finding, that the husband of Lillian Jackson had twice been convicted of a felony; that he was responsible for the management of the business and shared in the profits of said business.

The action of the Board in rejecting the application is supported by the provisions of §6064-17 GC, which in part provides:

Decided December 5, 1951.

“No person heretofore convicted of any felony, shall receive or be permitted to retain any permit under the liquor control act; nor shall any such person have an interest, directly or indirectly, in any permit authorized to be issued under the liquor control act.” (Emphasis ours.)

We find no assignment of error well made.

Finding no error in the record prejudicial to the rights of the appellant the judgment is affirmed.

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

ON MOTION FOR REHEARING

No. 4615.

OPINION

By THE COURT.

Motion for rehearing is hereby overruled.

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