author: By DEEDS, J.

text:
    DOMBEY, Plaintiff-Appellee, v. RINDSFOOS et, Defendants-Appellees, and SAXBE, Attorney General, Defendant-Appellant.
    Ohio Appeals, Tenth District, Franklin County.
    Nos. 5753, 5754 & 5764.
    Decided March 11, 1958.

      Robert C. Tyler, C. Richard Grieser, Columbus, for plaintiff-appellee.
    Clarence D. Laylin, Edward H. Laylin, Rodney B. Baldwin, Columbus, for defendants-appellees.
    William Saxbe, Atty. Geni., Robert E. Boyd, Neva H. Wertz, Asst. Attys. Geni., Columbus, for defendant-appellant.
    (DEEDS and FESS, JJ, of the Sixth District; HORNBECK, J, of the Second District, sitting by assignment in the Tenth District.)
   OPINION

By DEEDS, J.

There are three appeals for a review of the judgment of the Probate Court of Franklin County involving the Will and Trust Estate of William Rindsfoos, deceased.

William Rindsfoos, deceased, • died January 15, 1956, owning certain shares of the capital stock of The Brunson Bank & Trust Company and The Brunson Savings & Loan Company, of Columbus, Ohio.

On February 6, 1956, in accord with the provisions of the Will of the decedent, the Probate Court appointed the defendants-appellees, Virginia M. Rindsfoos, Winifred M. Poly, Walter P. Reiter and Frederick E. Jones as the executors of the estate of the testator.

The defendants-appellees are also designated by decedent's Will to act as co-trustees of the decedent’s trust estate.

By the terms of his Will, the decedent- created the “William and Virginia Rindsfoos Foundation” and directed that, after payments to certain life beneficiaries, including Virginia M. Rindsfoos, his surviving spouse, during her life, the entire remainder of income from his trust estate should be used for certan designated charitable purposes.

The defendant-appellant, William Saxbe, Attorney General of the State of Ohio, is a party by virtue of official responsibility in actions involving charitable trusts, as provided in the Charitable Trust Act, §109.23 et seq, §2307.131 R. C.

Appeals number 5753 and number 5764 were taken by defendant-appellant, William Saxbe; appeal number 5754 was taken by plaintiff as an appeal on law and fact from orders entered July 2, 1957, and July 22, 1957; on October 4, 1957, appeal number 5754 was reduced as on law and fact and retained on law only.

Although not formally consolidated, the appeals have been considered together, by consent and without objection, except as will appear later in this opinion. The plaintiff, Alex S. Dombey, has also filed assignments of error as appellee in appeal number 5753. Motion by defendant executors has been filed to dismiss plaintiff-appellee’s assignments of error.

William Saxbe, Attorney General, defendant-appellant, has filed the following assignments of error:

“1. The Probate Court erred in holding that by his Last Will and Testament, William Rindsfoos, deceased, intended to vest in his executors the fullest, widest, and most complete power of discretion that could be conferred upon fiduciaries.

“2. The Probate Court erred in granting the motion of the Executors for approval of their report of June 11, 1957, and in approving the sale of the shares of stock of The Brunson Bank & Trust Company and of The Brunson Savings & Loan Company to William C. Cook and Associates for the aggregate price of $988,731.90.

“3. The Probate Court erred in holding that the said Executors, in recommending to that Court the approval of the bid of William C. Cook and Associates, exercises in good faith the discretion vested in them by the said Will.

“4. The order of the Probate Court is contrary to the manifest weight of the evidence.”

Plaintiff-appellee, Alex S. Dombey, has filed assignments of error as follows:

“1. The Probate Court of Franklin County, Ohio, erred in its order of July 2, 1957, in approving the report, dated June 11, 1957, of the defendant executors and the proposed sale of the shares of stock of The Brunson Bank and Trust Company and of The Brunson Savings and Loan Company to William C. Cook and' Associates for the aggregate price of $988,731.90, in that said approval and proposed sale were and are in violation of the agreement made in the course of proceedings in said Probate Court between Plaintiff-Appellee and the Defendant-Appellees, fiduciaries in the Estate of William Rindsfoos, deceased.

“2. The said Probate Court in said order erred in failing or refusing to disapprove said report of the defendant fiduciaries and in failing or refusing to direct said fiduciaries to perform under said agreement with Plaintiff-Appellee by accepting the latter’s highest offer for the said shares of stock in the. aggregate amount of $1,250,500.00.”

The action was for a declaratory judgment in the Probate Court and was commenced October 30, 1956, by the plaintiff, Alex S. Dombey, as the owner of 457.39 shares of the capital stock of The Brunson Bank & Trust Company of Columbus, Ohio.

In plaintiff’s petition in the Probate Court, the plaintiff alleged in substance that the defendants are co-executors and trustees of the Estate of William Rindsfoos, being appointed by the Probate Court on February 6, 1956; that defendant, Virginia M. Rindsfoos, is a legatee under the Will; that Virginia M. Rindsfoos is a member of the Board of Directors of The Brunson Bank & Trust Company and that defendant-executor, Walter Reiter, is an Executive Vice-President of the City National Bank & Trust Company of Columbus, Ohio.

Plaintiff alleged further that of the 2,500 outstanding shares of the Brunson Bank, 1,313.09 shares are in said estate and 681.52 shares in the Rindsfoos Holding Company, all of which shares are under the control and in possession of the defendants in said estate and trust and that plaintiff is the owner of 475.39 shares.

Plaintiff alleges that by the terms of the Will of William Rindsfoos the defendants as executors were required to make a sale of the shares of the said Brunson Bank within twelve months after their appointment for not less than the book value thereof per share; that plaintiff made an offer on September 21, 1956, for all of the stock of The Brunson Bank & Trust Company, held in said estate, for a price of two dollars per share above the book value thereof; that at least one other bid was made at a price in excess of the book value of said shares; and that no action was taken on any of the said bids by the defendants.

Plaintiff alleged further that at the time of his death the testator was the President and Cashier of the Brunson Bank; that since the death of the decedent those offices had not been filled; and that the management of the bank was under the management of a Board of Directors representing only 30 shares of the 2,500 shares outstanding; that unless a sale of the bank stock is made in conformity with the Will, defendant, Walter Reiter, as the Executive Vice-President of a competing bank, has the power to vote the liquidation or merger of the Brunson Bank.

Plaintiff alleges that the defendants authorized and directed the Board of Directors of the bank to enter into a renewal of the lease on the premises occupied by the bank for a period of five years at a rental of $20,000 per annum, in violation of the terms of the Will of the decedent, William Rindsfoos.

Plaintiff alleges that the control and management of said bank by the defendants is detrimental to the bank and plaintiff and is contrary to the Will of the testator; that unless directed by an order of the Court, defendants will continue to refuse to oonsider bids for the purchase of said stock, notwithstanding said bids are advantageous to the best interest of both the bank and trust estate; and that finally defendants will liquidate or merge said bank to the irreparable damage and loss to plaintiff.

The prayer of plaintiff’s petition prayed for:

“(a) a construction of the Will of William Rindsfoos, deceased, with particular reference to Item V, paragraph (k) of that Will, and the determination, direction and judgment of the Court upon the duties of defendants under said provision and in the lawful and proper administration of the estate and trust (1) to make an advantageous sale of the stock of the Brunson Bank & Trust Company and The Brunson Savings & Loan Company by accepting an advantageous offer when made or prior to expiration thereof; (2) to divest themselves of ownership of said stock and to remove themselves from the operation, control, direction or management of said institutions; and (3) to dispose of said stock at best available offer and to avoid any diminution of assets or liquidation or merger of said institutions;

“(b) the direction and judgment of the Court with reference to the rights of Plaintiff to prevent diminution of assets and net worth and liquidation or merger of said institutions by the acts of or inaction of Defendants;

“(c) the direction and judgment of the Court as to the rights and protection of unknown beneficiaries under the Will of said William Rindsfoos, deceased;

“(d) and for such other relief, in law or equity, as may be just and which this Court in the exercise of its plenary powers and jurisdiction may grant.”

On November 13, 1956, plaintiff filed application for mandatory injunction requiring executors to make sale of the shares to plaintiff. Plaintiff’s application was dismissed January 31, 1957. Plaintiff filed notice of appeal to the Court of Appeals.

Demurrer by the defendants to plaintiff’s petition was overruled by the trial court on January 25, 1957.

Defendants, as executors, filed answer and cross-petition on February 15, 1957.

By the cross-petition of the defendants, William Saxbe, Attorney General, was made a defendant, and Virginia M. Rindsfoos was also named as a defendant individually.

The answer of the defendants, as co-executors of the estate of William Rindsfoos, deceased, admitted that said defendants were appointed as co-executors of said estate by the Probate Court of Franklin County, Ohio, on February 6, 1956; denied that they are acting as trustees of said estate; denied that Virginia M. Rindsfoos is a legatee under said Will and say that she is one of several beneficiaries of the trust created by said Will.

The answer admitted that Virginia M. Rindsfoos is a member of the Board of Directors of The Brunson Bank & Trust Company and was first elected January 18, 1956.

Defendants deny that the powers and duties of the executors and trustees expressed in said Will with reference to the disposition of said stock are identical; admit that plaintiff made a bid to defendants as executors for the 1,313.09 shares of the stock of said Brunson Bank directly held in their estate on February 29, 1956, and that no action was taken thereon for the reason that they were without authority to consider an offer to purchase said shares only; admitted that other offers had been received for the purchase of part or all of the shares of the stock of the said two institutions, directly or indirectly held by them, and that one or more of the executors deemed the offers to be not advantageous.

Defendants admit that plaintiff had notified these answering defendants that plaintiff was unalterably opposed to any possible liquidation or merger of The Brunson Bank & Trust Company; deny that the executors authorized and directed the Board of Directors of said bank to renew the said lease; deny that their ownership of said stock or the position of Virginia M. Rindsfoos as a Director of said bank is in violation of the terms of the Will or principles of law and deny that the executors are actually engaged in the management of said bank.

Defendants admit that sale of the stock of said institutions must be agreed to unanimously, by the terms of decedent’s Will. There are other denials, admissions and allegations in the answer of the defendants as executors not considered pertinent or necessary to be recited here.

The pertinent allegations of the cross-petition of the defendants as executors are that:

“The contentions of the plaintiff in this action have raised doubt as to the powers and duties of these defendants and cross-petitioners with respect to the exercise of the power of sale vested in them by ITEMS V (k) and IX of said Will, and therefore they cannot safely proceed in that regard, as they desire to do, without,the direction of the Court. Said questions are:

“1. Do the Defendants and cross-petitioners, as executors, still possess said power of sale? They are of opinion that said power remains vested in them. The defendants and cross-petitioners are informed that the plaintiff contends otherwise, and claims to be entitled to the shares of stock to which said power relates, because of having made a bid therefor, at a price per share in excess of the book value thereof, which bid was not accepted or rejected on or prior to February 6, 1957.

“2. Do the powers and duties vested in and imposed upon the executors and the trustees, respectively, by ITEMS V (k) and IX of said Will relate and pertain to the shares of stock of The Brunson Bank & Trust Company and of The Brunson Savings & Loan Company, belonging to the Rindsfoos Holding Company, as well as to the shares of stock of said respective companies held directly by the executors, and, if so, must the shares of stock of each of said companies, including both those directly held and those belonging to the Rindsfoos Holding Company, be sold, if at all, as a unit and not piecemeal or separately? The defendants are of opinion that the testator conceived of the stocks belonging to The Rindsfoos Holding Company as comprised within his ‘holdings’ of the stocks of said Bank, and said Savings & Loan Company, respectively, and that his expressed intention was that each of said holdings of such stocks shall be dealt with by his executors or the trustees as a unit. These defendants and cross-petitioners are informed that the plaintiff does not question their power to sell the stocks belonging to the Rindsfoos Holding Company, but does contend that the stocks directly held by them may be separately sold.

“3. If it be determined that the stocks belonging to The Rindsfoos Holding Company are comprised within the power of sale vested in the executors, are the executors empowered to vote the stock of The Rinds-Coos Holding Company in such manner as to effectuate said power, by either a sale of the assets of said Holding Company, or its liquidation, and have they discretion as to their course in the premises? They cannot safely proceed without the direction of the Court in that particular.

“It appears from said Will and codicil, ‘Exhibit A’ the following are legatees or beneficiaries thereunder:

“Jean Caldwell is a pecuniary legatee under ITEM III of said Will. This legacy has been fully paid to her.

“Jean Caldwell, Winifred Poly and Adelaide Laver are contingent beneficiaries of the trust created by said will and their several interests in the subject of this cross-petition are not such as to make them necessary parties hereto.

“Virginia M. Rindsfoos, who is sued in the petition as a legatee, is the life beneficiary of the income of the trust created by said Will, with the right to a guaranteed income of $15,000 annually, payable to the extent necessary out of the principal, and is a necessary party hereto.

“The First Presbyterian Church of Bremen, Ohio, the First Presbyterian Church of Circleville, Ohio, and the Broad Street Presbyterian Church of Columbus, Ohio, are sub-trustees of charitable trusts under the said trust; the public charitable interests in said sub-trusts, as well as the public charitable residual and remainder interest in the said principal trust, are directly concerned with the questions hereinabove stated, and should be represented herein by the Attorney General of Ohio.”

The prayer of said cross-petition is as follows:

“Wherefore, these defendants and cross-petitioners pray that William B. Saxbe, as Attorney General of Ohio, be made a party hereto, and for a declaratory judgment determining:

“1. That the Executors of the estate of William Rindsfoos now have, and during their administration of said estate will have power to sell the holdings of said estate in the stocks of The Brunson Bank & Trust Company and The Brunson Savings & Loan Company.

“2. That the plaintiff is not now entitled to said shares, subject to the payment of the amount bid by him for their purchase.

“3. That said power of sale extends to the stocks of said respective companies, owned by the Rindsfoos Holding Company.

“4. That said power may be exercised only by selling in one unit all the shares of stock of The Brunson Bank & Trust Company, owned and controlled by the executors, including those belonging to said holding-company, and by selling in one unit all the shares of The Brunson Savings & Loan Company owned or controlled by the executors, including those belonging to said holding company, or by selling both such units to the same purchaser.

“5. That the executors have power to vote the stock of the Rindsfoos Holding Company for the sale of substantially all the assets thereof or for the liquidation thereof, as they may deem advisable in order to effectuate the intention of the testator as expressed in said Will.

“And defendant cross-petitioners further pray for all other and proper relief to which they may be entitled on their cross-petition.”

On March 1, 1957, Virginia M. Rindsfoos, as an individual, filed her answer to petition and to the cross-petition of the executors.

Plaintiff filed answer to the cross-petition of the defendants as executors, in which plaintiff denied the authority of the executors to sell the shares held by the Rindsfoos Holding Company.

The defendant, William Saxbe, filed an answer to said cross-petition as Attorney General on February 28, 1957. The Attorney General admitted the allegations of fact contained in the said cross-petition and joined in the prayer of the cross-petition, and further asked the Court for a “judgment and decree determining the questions presented to the Court by the defendants, and for such other and further relief as may be just and equitable in the premises.”

It is disclosed by the record before us that on March 12, 1957, plaintiff, Alex S. Dombey, and counsel for the executors entered into an agreement in the presence of the judge of the Probate Court, with the purpose and object of terminating the controversy between the parties, in order that an advantageous sale of the shares of the Brunson Bank and the Savings and Loan Company could be made by the executors with the approval of the Probate Court of Franklin County.

In accord with and as a result of the agreement between plaintiff and counsel for the executors, plaintiff dismissed his petition in the Probate Court; also answer to the cross-petition of the executors; withdrew appeal to the Court of Appeals from the order of the Court dismissing plaintiff’s application for a mandatory injunction; and in accord with that agreement plaintiff also dismissed an action pending in the Court of Common Pleas for the specific performance of agreement to sell the shares of the financial institutions to plaintiff.

On March 15, 1957, the Probate Court of Franklin County made the following finding and determination on the cross-petition of the executors :

“This day came the parties, by their respective counsel, and the plaintiff, in open court, dismissed his petition, with prejudice, withdrew his answer to the cross-petition of the defendants, Virginia M. Rindsfoos, Winifred M. Poly, Walter P. Reiter, and Frederick E. Jones, as executors of the Will of William Rindsfoos, deceased, and waived his right to answer further herein.

“And thereupon this cause came on to be heard and was submitted to the Court on the cross-petition of the defendants, Virginia M. Rindsfoos, Winifred M. Poly, Walter P. Reiter and Frederick E. Jones, as executors of the estate of William Rindsfoos, deceased, the will of William Rindsfoos, attached thereto as an exhibit, and the answer to said cross-petition of Virginia M. Rindsfoos, as an individual, and of William Saxbe, Attorney General of Ohio.

“The Court, upon consideration, finds that the allegations of said cross-petition are admitted to be true, and that all persons who have or claim any interest which would be affected by the declaration prayed for in said cross-petition have been made parties hereto and are before the Court.

“The Court finds and adjudges as to certain questions presented in said cross-petition and the pleadings that the true intention and construction of the said Will as to said questions is as follows:

“1. That the executors of the estate of William Rindsfoos now have and during their administration of said estate will have, power to sell the holdings of said estate in the stocks of The Brunson Bank 8a Trust Company and The Brunson Savings & Loan Company.

“2. That the plaintiff is not now entitled to said shares, subject to the payment of the amount heretofore bid by him for their purchase.

“3. That said power of sale extends to the stocks of said respective companies, owned by the Rindsfoos Holding Company.

“4. That said power may be exercised only by selling in one unit all the shares of stock of The Brunson Bank 8a Trust Company, owned or controlled by the executors, including those belonging to said Holding Company, and by selling in one unit all the shares of The Brunson Savings 8a Loan Company owned or controlled by the executors, including those belonging to said Holding Company, or by selling both such' units to the same purchaser.

“5. That the executors have power to vote the stock of the Rindsfoos Holding Company for the sale of substantially all the assets thereof or for the liquidation thereof, as they may deem advisable, in order to effectuate the intention of the testator as expressed in said Will.

‘•And the Court further finds from said cross-petition that the executors desire to sell said shares of stock, and have prayed for all proper relief, on consideration of which it is hereby ordered that said executors proceed, in such manner as they may deem for the best interests of their estate, to procure and receive offers for the purchase of the shares of stock of said The Brunson Bank & Trust Company and of said The Brunson Savings <fc Loan Company; that said executors report to the Court on or before May 1, 1957, their proceedings in that behalf, and any offer or offers by them received, and their reasons for any immediate action or inaction proposed by them in the premises, and in the event proposed inaction, their reasons for requesting further time; and jurisdiction is hereby retained for the purpose of considering and acting upon such report.”

On May 1, 1957, the executors reported pursuant to the above order of the Court of March 15, 1957, that the Rindsfoos Holding Company had been dissolved and that the shares of The Brunson Bank & Trust Company and The Brunson Savings & Loan Company that had been held by that company were distributed to the executors; that they had received two oflers for the purchase of all the shares of The Brunson Bank & Trust Company and three offers to purchase all the shares of The Brunson Savings & Loan Company but that the offers had not been considered fully by the executors; that the executors had received requests from other interested parties which would require additional time.

Counsel for the executors requested the Court to extend the time for receiving further offers for a period of ninety days.

On May 3, 1957, the Court extended the time within which the executors might receive and make a report of further offers to May 18, 1957.

On June 4, 1957, the executors reported that “on the basis of their study and investigation, the Executors, acting unanimously, as required by the Will of William Rindsfoos, deceased, have determined to sell all the shares of the stock * * *” of the two companies “to William C. Cook and Associates of Columbus, Ohio, for the aggregate price of $988,731.90, which the Executors have found to be in excess of the probable book value per share * * * and respectfully represent that a sale at said price is not only in the best interest of their estate, and in conformity with the directions contained in the will of William Rindsfoos, deceased, but is the best price which has been proposed after their diligent efforts to procure and receive offers.”

The executors prayed for an order approving the acceptance of the Cook offer.

It is clear from the record that the report of the executors on May 18, 1957, was not a compliance with the order of the Probate Court entered on March 15, 1957, and as a result further hearings were ordered by the Court and hearings were held on various dates, including an extensive hearing on June 4th and 5th, which culminated in a finding by the Court with respect to the agreement which had been entered into between plaintiff and counsel for the executors and is in part:

“Heretofore in this same matter said Alex S. Dombey filed a petition for declaratory judgment, involving a construction of the Will and the rights of certain parties thereunder, and an application for a mandatory injunction, requiring executors to sell the stock of the Bank and of the Building and Loan Company. Appeal was taken from the judgment of the Probate Court to the Court of Appeals. An action for specific performance of contract was also filed in the Court of Common Pleas.

“During the pendency of these matters Dombey and the executors expressed a desire to arrive at some suitable procedure under which the stock could be sold to the best advantage, eliminating prolonged and unnecessary delay and the unfavorable effect of pending litigation on prospective purchasers, all of which might tend in their opinions to make it impossible to attract the highest and best bidders and unreasonably delay the setting up of the trust and the closing of the estate.

“Negotiations were begun, as a result of which the Court feels that an agreement was reached with reference to the pending litigation and the sale.

“The evidence in the case occupied two days of trial. There are differences of recollection, as to some matters and some divergence in inferences to be drawn from events and conversation. There is dispute as to a deadline for the receiving of bids. There is conflict as to whether continuances of hearings were obtained in the regular manner and whether bids were received out of time, and similar matters. But the Court is of opinion that the decisive preponderance of the evidence indicates that an agreement was reached, the salient points of which were:

“That Dombey would dismiss his actions in the Probate Court and Common Pleas Courts and the Court of Appeals;

“That the executors would proceed to sell the stock of the financial companies if possible by May 1st, 1957;

“That a report of their negotiations and their recommendations as to the sale would be made by the executors on May 1st, 1957, unless the Court, for good cause shown, extended the period;

“That, his bid having reserved the right, Dombey should be permitted to make a further offer for the stock when all other bids were in;

“That, if he exercised such right, all other prospective purchasers whose bids had been submitted on the day of the executors report should have a like privilege;

“That Dombey, who concededly was not acting in his own behalf, should disclose his principal on the day that the names of the bidders and amounts bid were disclosed;

“That such bids were not to be submitted as at a . public auction, but to be submitted to the executors at that time, who would then be given a reasonable time for consideration and report;

“It is undisputed that Dombey has dismissed his actions, as agreed, and has disclosed his principal, and we feel that the executors must now proceed in conformity with their agreement.”

As of June 6, 1957, the trial Court entered an order in part as follows:

“That the executors be directed to appear in open Court on Friday, June 7th, 1957, at eleven o’clock A. M. to receive the additional bid in writing of Alex S. Dombey, if he chooses to exercise his right to submit same, and in the event such right is exercised, to permit the same privilege to any other of the bidders above properly before them, and a report thereon, with their recommendations on Tuesday, June 11th, 1957, at ten thirty o’clock A. M.

“This order is entered ñunc pro tunc, effective as of June 6, 1957.”

Further hearings were held following the order of the Court as of June 6, 1957.

We have read and carefully appraised all the testimony and evidence contained in the transcript of more than 500 pages.

We proceed directly to a consideration of the order of the Probate Court entered July 2, 1957, which is the judgment authorizing and approving the sale of the shares to William C. Cook and Associates.

The order and judgment of the Probate Court entered July 2, 1957, from which appeal number 5753 was taken, determined in part that on June 4, 1957, the executors made their report disclosing the names of all bidders whose bids had been submitted prior to May 18, 1957, the amounts, terms and conditions of each bid and that said executors recommend the sale of said stock to Wiliam C. Cook and Associates; that Alex S. Dombey disclosed his principal for the first time on May 18, 1957; that the .Court directed the executors to appear in open court on Friday, June 7, 1957, to receive the additional bid in writing of Alex S. Dombey and to permit the same privilege to any other bidders properly before the executors; that the executors appeared on June 7, 1957; that Alex S. Dombey did submit an additional bid; that T. Bernard Burke, Trustee, submitted an additional bid; that the executors received the additional bids for consideration with the bid of William C. Cook and Associates; that the hearing was continued to June 11, 1957.

The Court found further that pursuant to the order of the Court, the executors filed their report on June 11, 1957, stating that neither of said additional bids of Dombey and Burke as trustee was acceptable to them and that the only bid to which said executors were in unanimous agreement was the bid of William C. Cook and Associates; that thereupon a hearing was had; that at said hearing the executors reported that the said three bids for the stock were as follows:

“1. That of Alex S. Dombey, acting as agent for Approved Finance, Inc., for the stock of both financial institutions held by the fiduciaries in the total amount of $1,250,500.00, which bid contained the statement that the shares, if sold to him, would be assigned to Approved Finance, Inc., Nationwide Mutual Insurance Company, and Nationwide Mutual Fire Insurance Company;

“2. That of T. Bernard Burke, Trustee, offering to pay for the Savings and Loan Company stock $3,708.86 per share, or the book value per share at the time of sale, which time should be deemed to be the time of the acceptance determined by the Superintendent of Building and Loan Associations of Ohio, plus $7.20 per share, and for the Bank stock $362.50 per share, or the book value determined by the Superintendent of Banks of Ohio, plus $33.74, or according to the Executors’ figures, a total of $1,044,786.02; and

“3. That of William C. Cook and Associates as originally submitted in the amount of $988,731.90.”

The Court stated further in the order that the executors reported in open court that they had investigated all bidders; and testified they had been for many years intimate friends, associates and .confidants of the testator; that the executors had “repeatedly” talked to the decedent concerning the disposition of the stock and the terms of his Will; that the decedent had frequently indicated that he did not wish such stock to come into the possession of Alex S. Dombey or anyone connected or associated with him, and that the executors were in unanimous agreement that the bid of William C. Cook should be accepted.

The Probate Court determined further that the Court has heretofore held and it is by all parties conceded that the executors have the right to sell the stock here in question; that the executors have fully complied with all the terms and conditions of the oral agreement with Alex S. Dombey; and “that upon careful consideration of the Will and all its parts, the Court finds that the testator intended to confer upon his Executors the fullest, widest and most complete powers of discretion that could be conferred upon fiduciaries; that the Court may not substitute its judgment or opinion for that of the Executors.”

The Probate Court determined finally that:

“And the Court finds from the facts and as a conclusion of law, that the Executors of the Estate of William Rindsfoos, deceased, have exercised the discretion vested in them by the Will of their Testator in the premises in good faith and that their recommendations should be approved; it is therefore

“ORDERED, that the motion of the Executors for the approval of their report filed herein on June 11, 1957, be and the same hereby is granted and that the sale of the stock of The Brunson Bank & Trust Company held by said Executors, to-wit 1994.61 shares, and all the shares of stock of The Brunson Savings and Loan Company, held by them, to-wit 86.749 shares, to William C. Cook and Associates for the aggregate price of $988,731.90 be and the same is hereby approved, and upon payment in cash of the said aggregate purchase price the Executors are authorized to transfer and deliver said shares of stock to William C. Cook and Associates.”

We consider it pertinent to note here that the offer of William C. Cook and Associates contained the following condition:

“3. Title to said shares will be conveyed free and clear from all liens, encumbrances and restrictions and you will accompany the acceptance of this offer with an order of the Probate Court of Franklin County, Ohio, authorizing and directing the sale of said shares to the undersigned upon the payment of the purchase price.”

It is clear from statements made by counsel for the executors, vhich appear in the record, and also from the course pursued, that the ixecutors sought and would not consummate a sale of the shares to William C. Cook and Associates without the approval of the Probate lourt. It is significant, in our view, that the executors did not intend ;o exercise their discretion and consummate a sale unless the sale was mthorized and approved by the Probate Court.

It is clear that the judgment of the Probate Court authorizing the ixecutors to consummate a sale of the shares cannot be sustained unless he sale is in accordance with the decedent’s Will and the principles >f law applicable to the sale.

We are required to consider the pertinent provisions of the Will of he decedent, William Rindsfoos.

Paragraph (k) Item V, of the testator’s Will directs the trustees of lis trust estate to dispose of the shares of the Brunson Bank and The 3runson Savings & Loan Company within a specified time, which paragraph is as follows:

“(k) Among my present holdings are substantially all of the stock if The Brunson Savings & Loan Company and a majority of the stock >f The Brunson Bank & Trust Company, both of 10 East Broad Street, lolumbus, Ohio. If these assets or either of them shall remain in ny estate and come into the hands of the Trustees, it is my will, and : direct, that the Trustees shall sell and dispose of such assets at such ;ime as an advantageous sale of them can be made, but not later than ,welve (12) months after they shall have been received by the Trustees md for not less than the book value thereof per share, at the time )f sale, to be determined by the Division of Banks, Department of Comnerce of Ohio or the Superintendent of Building and Loan Associations if Ohio, or their respective successors in function, as the case may reluire. If not so sold within the time so limited, I direct the Trustees ;o proceed immediately to cause the liquidation of said institutions (or nstitution, if only one is involved). Provided, however, that the Trustees, in their discretion, may, within said period of time, in lieu of telling such assets or either of them for cash, participate in a merger of :ither or both of said institutions, on the above specified basis per share md receive in exchange for the shares of stock of said Bank or Building md Loan Company, or both, shares of stock in such other financial institution or institutions, anything in paragraph (c) of this ITEM V to ;he contrary notwithstanding, in which event the Trustee shall sell and lispose of the shares so received in exchange from time to time, at such times and in such amounts, and over such period as, in their discretion shall be for the best interest of the Trust, to the end that the investnents of the Trust shall finally comply fully with the limitations and lualifications expressed in said paragraph (c).”

By paragraph 9 of Item IX of his Will, the decedent also authorized the executors to make a sale of the shares of the Brunson Bank and The 3runson Savings & Loan Company. The pertinent part of paragraph 9 s that:

“My Executors and their successors, in addition to the rights and powers which they may have by force of law, shall have power to sell both or either of the assets mentioned in paragraph (k) of ITEM V of this my Last Will and Testament and to sell the property mentioned in paragraph (i) of ITEM V hereof under the same circumstances and with the same degree of discretion, with a view to the accomplishment of the purposes therein mentioned, as is conferred upon the Trustees hereby, and, in the case of the sale of the assets mentioned in said paragraph (k) to invest the proceeds thereof in the same manner as the Trustees are authorized to invest trust funds.”

Paragraph (h) of Item V in the decedent’s Will provides:

“(h) Subject only to the restrictions mentioned in this Item V, the Trustees may do all such acts, take all such proceedings and exercise all such rights and privileges and enter into all such contracts, covenants and agreements binding the Trust Estate with respect thereto, whether the power is specifically mentioned and described herein or not, as if the said Trustees were the sole and absolute owners of said Trust Estate. It is my Will that my said Trustees shall have and exercise all the powers, privileges and discretions which I might have and exercise if present and acting personally in the premises.”

There can be no dispute but that paragraph (k) of the decedent’s Will directs the executors or trustees to relinquish and dispose of all interest which the estate of the decedent has in the Brunson Bank and The Brunson Savings & Loan Company, either by sale, merger or liquidation within a specified time.

The testator has directed his fiduciaries by explicit and unambiguous language to dispose of all interest in the Brunson institutions in one of three designated ways, within a specified period of time.

It is the contention of the executors in effect that by paragraph (h) Item V, quoted above, the testator intended that his trustees. should manage the trust as if the trustees were the sole and absolute owners and that they were to “exercise all of the powers, privileges and discretions which I might have and exercise if present and acting personally in the premises.”

We are required to determine the intention of the testator as expressed in paragraph (h) and whether he intended that the discretion and authority of his executors should be unlimited.

It should be noted that paragraph (h) of Item V contains the specific limitation: “(h) subject only to the restrictions mentioned in this Item V.”

Paragraphs (k) and (c) are contained in Item V; consequently in order to determine the “restrictions” intended by the testator it is necessary to consider the contents of paragraphs (k) and (c).

In paragraph (k) of his Will the testator has directed his trustees (or executors) to sell the shares of both the Brunson Bank and The Brunson Savings & Loan Company, or in the event of a merger "the Trustees shall sell and dispose of the shares so received. in exchange from time to time, at such times and in such amounts, and over such period as, in their discretion shall be for the best interest of the Trust to the end that the investments of the Trust shall finally comply fully with the limitations and qualifications expressed in said paragraph tc).”

In paragraph (c), the testator has given his trustees explicit directions with respect to the character of the investments which the trustees may make with the money realized by a sale of the shares in their management of the trust estate.

It is provided in said paragraph (c) Item V of the decedent’s Will in part: “That no investment shall be made in real estate,” \etc., “* * * the Trustees shall not invest more than ten thousand dollars ($10,000.00 in any one mortgage or like investment,” etc.

Thereafter paragraph (c) directs the trustees specifically with respect to the character of the securities in which they may invest the funds of the trust estate.

The testator directs and specifically limits the authority of the trustees with regard to the investments which they shall make in part:

“ (2) Investments of the following classes must meet the qualifications herein expressed:

“(i) Corporate Securities, other than those of companies in which I am interested at the time of my death, must be seasoned securities listed on the New York Stock Exchange or the American Stock Exchange, or, in case of the discontinuance of both, on the then leading stock exchange in the United States, and

“In the case of stock, must have paid some dividends (either in cash or in stock) continuously each year for at least twenty (20) years prior to the date of purchase;

“In the case of bonds, must be those of corporations which have not defaulted in the payment of interest or principal of any issue for at least twenty (20) years prior to the date of purchase.

“(ii) State, County or City bonds must be voted unlimited tax bonds (but not revenue bonds), and the issuer must not have defaulted in the payment of interest on or principal of any issue for at least twenty (201 years prior to the date of purchase, and, if a city, must have existed as a city for at least twenty (20) years prior to such date;

“Should any qualified securities, after having been purchased, fail to measure up to the qualifications expressed in this paragraph, the Trustees need not dispose of them for that reason alone, but are authorized to sell or retain them, in their discretion, using their best judgment, for the interest of the trust.”

It should be reiterated, therefore, that paragraph (c) concerning the investments which the trustees may make and also paragraph (k) which directs the trustees to dispose of the shares either by sale, merger or liquidation, are parts of Item V and that the seeming almost unlimited authority contended for by the executors in paragraph (h) as quoted above is qualified and limited by the statement found in paragraph (h) “subject only to the restrictions mentioned in this Item V,” which are the restrictions that direct the trustees specifically in reference to both a sale of the shares and the investments which they may make in managing the trust estate.

Paragraph (k) of the decedent’s Will, as set out above, provides with respect to price, that a sale of the shares shall not be made for “less thai the book value thereof per share, at the time of sale, to be determin; by the Division of Banks, Department of Commerce of Ohio or th Superintendent of Building and Loan Associations of Ohio, or thei respective successors in function, as the case may require.”

We are in accord with the view that the decedent intended to pro vide a method for determining the “minimum price” at which the share could be sold and certainly did not intend to suggest or imply that tlr executors should not attempt to make a sale for the highest pric obtainable.

It necessarily may be implied, although the Will is silent on th> subject, that the bidder would be required to meet the test of financia ability, otherwise the offer could not be considered as being an offe made by a responsible bidder.

In the report of the executors of offers to purchase the shares, file* June 4, 1957, which report included an offer by plaintiff as agent, th statement is made that “The Executors have no question as to th financial responsibility of any of the persons by or on behalf of whon offers have been made and received. Each and all of the proposals ar on the basis of immediate sale for cash.”

The report filed on that date also contains the statement that th executors had made “diligent efforts to procure and receive offers.”

Three of the executors testified in the Probate Court, as shown b; the record, to the effect that from the standpoint of financial respon sibility the Nationwide companies, consisting of Approved Finance, Inc Nationwide Mutual Insurance Company, and Nationwide Mutual Fir Insurance Company, were entirely satisfactory.

In reference to offer of William C. Cook and Associates the recori discloses in substance that William C. Cook was endeavoring and in tended to form a corporation which would eventually become the owne of the Brunson shares; that subscriptions had been secured for share in the corporation in the aggregate amount of $300,000.00; that a con siderable number of persons were prospective subscribers for share in the corporation and that it was uncertain as to who the remainin subscribers for stock would be.

The testimony in the record discloses, in substance, that the execu tors had faith in William C. Cook as the principal; that they were rely ing on Cook to organize and promote a corporation by securing sub scribers for shares, and that eventually-the corporation would own an control the shares of the Brunson bank and the Brunson Savings ¿ Loan Company.

Mr. Walter F. Reiter, a defendant executor, who is also Executiv Vice-President of The City National Bank & Trust Company of Colum bus, Ohio, testified, in substance, that he had secured information con cerning the financial ability of Cook and Associates from the record of his bank where William C. Cook and Associates had made an applies tion for a loan, presumably for the purpose of consummating the pur chase of the Brunson shares held by the executors. The inference i reasonable that the loan would probably be in the amount of aboi $700,000.00.

The Probate Court allowed the executors to testify, over objection, as set out in the order of the Court of July 2, 1957, in part, “that the executors had ‘repeatedly’ talked to the decedent concerning the disposition of the stock and the terms of his Will; that the decedent had frequently indicated that he did not wish such stock to come into the possession of Alex S. Dombey or anyone connected or associated with him.” There was additional testimony of a similar character received for the purpose of showing the desire and intention of the testator with respect to the future welfare of the Brunson Bank and The Brunson Savings & Loan Company. The competency of this testimony will be considered later in this opinion.

Sec. 2113.39 R. C., authorizes qualified executors or testamentary trustees to sell any class of personal property, deemed by them to be for the best interest of the estate, if the power “is not expressly limited by such Will” without the authority of the Probate Court.

It is clear in the case before us that the executors were not making a sale of the shares to William C. Cook and Associates, pursuant to §2113.39 R. C., but, instead, sought the approval and were authorized by the Probate Court to consummate the sale to William C. Cook and Associates.

Therefore, it is not necessary for this Court to consider or determine what the responsibility of the executors would be if they had elected to make a sale of the shares pursuant to §2113.39 R. C., without being authorized by the Probate Court.

Sec. 2109.45 R. C., provides:

“Before the probate court confirms a sale by an executor, administrator, guardian, assignee, or trustee made under an order allowing such officer to make a private sale, such court shall require such officer to file an affdavit that such private sale was made after diligent endeavor to obtain the best price for the property and that the sale reported is the highest price he could get for such property.”

It is our opinion that §2109.45 R. C., was intended to govern the action of the Probate Court in all sales of estate property, made by executors and trustees pursuant to and under an order of the Court “allowing” such officer to make a private sale.

Sec. 2113.40 R. C. (omitting exceptions not relevant here), provides:

“At any time after the appointment of an executor or administrator, the Probate Court, when satisfied that it would be for the best interests of the estate, may authorize such executor or administrator to sell at public or private sale, at a fixed price or for the best price obtainable, and for cash or on such terms as the Court may determine, any part or all of the personal property belonging to the estate.”

We recognize that the order of the Probate Court under review here, was not. when considered strictly, the confirmation of a sale: nevertheless, it is our view that the clear legislative purpose and intent expressed by the enactment of the foregoing sections of the Revised Code must have a persuasive, if not a controlling, influence in a consideration of the sale involved in the appeal now before this Court.

The issue for determination is whether by the terms of the decedent’s Will and the applicable principles of law the Probate Court should have authorized a sale of the shares to William C. Cook and Associates in preference to a sale of the shares for the highest price bid, at a loss to the trust estate of more, than $260,000.00.

In the declaratory judgment construing the Will of the decedent the Probate Court required the executors to proceed and procure offers to purchase the shares and make reports of the offers received for consideration by the Court.

The Probate Court did not determine that the executors should consummate a sale without being authorized by the Court, but the Court retained jurisdiction for the purpose of considering reports of offers to purchase.

In their final report of offers to purchase, the executors presented three offers (as listed above) and sought an order of the Court authorizing and approving a sale of the shares to William C. Cook and Associates in preference to the highest responsible dollar bid.

It is our conclusion that the Probate Court was required to exercise its discretion as a matter of law, when it authorized the executors to consummate a sale of the shares to William C. Cook and Associates in preference to the highest price obtainable.

It is the opinion of this Court that the terms and provisions of the decedent’s. Will are clear and unambiguous with respect to a sale of the shares by the executors or trustees and that extrinsic evidence was not competent for the purpose of determining the intention of the testator.

In the situation presented by the record the Probate Court was required to determine the intention of the testator by a consideration of the terms and provisions of the decedent’s Will and extrinsic statements were not competent to make additions or show that the decedent had an intention different than as shown by his Will.

The rule of law has been settled by decisions of the Supreme Court of the State that extrinsic evidence is not admissible for the purpose of adding to a will or to show an intention different than the intention as expressed by the Will.

The principle of law applicable to the extrinsic statements which the Probate Court received as evidence in the case now before this Court is stated in the opinion in Sommers v. Doersam, et al, 115 Oh St 139, 152 N. E. 387, pp. 149-150 and 151:

“In the language of Shauck, J., in Smith v. Hunter, Trustee, 86 Oh St 106, 115:

“ ‘If the Court should supply them (words limiting succession to the daughter’s heirs at law, who should be of her blood), it would be amending his will rather than construing it. However confidently we might follow counsel in the conjecture that the .testator would have used such terms if he had foreseen all that has occurred, we should still be admonished that in ascertaining the meaning of the testator it is of first importance to assume that he meant what he said.’

“Courts cannot ‘devise a new scheme for the purpose of spelling out a new theory by which it can be said that the testator intended something which his language shows that he did not intend. Wright v. Wright, 118 N. Y. S., 994, affirmed 140 App. Div., 634, 125 N. Y. S. 875.

“Adams, Adm’r., v. Jones, 176 Mass., 185, 57 N. E., 362: ‘When words have an ascertained meaning, and admit of a rational interpretation, and there is nothing in other portions of the will indicating that they were not used in their ordinary sense, a court cannot depart from that ordinary sense for the purpose of giving effect to what it may be guessed was the intention of the testator, because it would result in a fair distribution of the estate. If, in such a casé, the testator did. in fact intend to make an equal distribution, he has failed to express that intention in using the words he did use, and the power of the Court goes no further than to ascertain the true meaning of the words used by him as he used them.’

“ ‘Whatever method may be resorted to for the interpretation of a will, it must be applied solely with a view to arrive at the intention of the testator, as his intention may be gathered from the language found in the instrument itself. However clearly an intention now expressed in the will may be proved by intrinsic evidence, the rule of law requiring wills to be in writing stands as an insuperable barrier against carrying the intention thus proved into execution.’ Daugherty, Adm’r., v. Rogers, 119 Ind., 254, 20 N. E. 779, 3 L. R. A., 847.”

The settled principle has been applied in a very considerable number of decisions by the Supreme Court of the State. We consider those following to be controlling in the case before us:

Steinbrenner, et al., Appellants, v. Dreher, et al., Appellees, 140 Oh St 305, 43 N. E. 2d 283; Kurtz, et al., v. Kurtz, et al., and Cadwell, et al., v. Kurtz, et al., 123 Oh St 425, 175 N. E. 694; Foster, et al., v. Clifford, et al. 87 Oh St 294, 101 N. E. 269; McNeal, Exr., v. Pierce, Admr., 73 Oh St 7, 75 N. E. 938; Robbins, et al., v. Smith, Jr., Admr., et al., 72 Oh St 1, 73 N. E. 1051; Townsend’s Exrs. v. Townsend, 25 Oh St 477; Lessee of Worman v. Teagarden, 2 Oh St 380, 382; Page on Wills (Lifetime Ed.) 642, Section 1621-674. Section 1627; See also 57 American Jurisprudence, Section 1040, Wills, pp. 674, 675.

The Will of the decedent in the case now before us for review contained no language which could be construed to mean that the testator intended that his executors or trustees should exercise any control over the shares after a sale of the shares has been consummated. • There is no language in the Will which can be construed as meaning that the testator intended that his fiduciaries should participate in any way in the future welfare or management of any corporation which might become the purchaser of the shares of the Brunson Bank or The Brunson Savings 8s Loan Company.

It is clear, in our opinion, from the evidence in the record concerning the offer of William C. Cook and Associates to purchase the shares, that it would be necessary for the executors to participate in the promotion of the corporation which is to be the ultimate purchaser of the shares, if they are to have any knowledge concerning the future management or control of the Brunson institutions.

There is no language in the decedent’s Will which indicates that the testator intended that the duties of his fiduciaries should be divided with respect to the best interests of the trust estate and the future welfare or control of the Brunson institutions.

The name of Alex S. Dombey does not appear in the Will of the testator and the Will expresses no intention or desire that the Brunson shares should not be sold to any company with which Dombey might have some affiliation or connection.

The evidence in the record does not indicate that Alex S. Dombey has any connection with the Nationwide companies (to which companies the shares are to be transferred) as owner, stockholder, attorney or otherwise, except merely as the agent who presented the offer to purchase on behalf of these companies.

The Will of the decedent provides that such sale by the executors should be “with a view to the accomplishment of the purposes * * * as is conferred upon the trustees hereby, and, in case of the sale of the assets mentioned in said paragraph (k) to invest the proceeds thereof in the same manner as the trustees are authorized to invest trust funds.”

The offer of Alex S. Dombey, acting as agent, contains the stipulation that in the event of a sale of the shares to him as agent, the shares are to be assigned to Approved Finance, Inc., Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company.

There is no competent evidence in the record before us tending to show that the three Nationwide companies, which it is intended should be the ultimate purchasers of the shares, are not competent and capable to manage the business and affairs of the Brunson Bank and The Brunson Savings & Loan Company.

It is the conclusion of this Court that the action of the fiduciaries in accepting the offer of William C. Cook and Associates in preference to the highest price obtainable was contrary to the terms of the decedent’s Will and clearly was not for the best interest of the trust estate.

The Will directed that the executors should act in the same manner as the trustees were required to act in making a sale.

The responsibility of the executors in making a sale would not be less than the responsibility of trustees of the trust estate.

Raymond v. Evatt, 145 Oh St 234, 61 N. E. 2d 194; Holmes v. Hrobon, 61 Abs 113, 93 Oh Ap 1.

The rule governing fiduciaries of a trust estate is stated in the opinion In Re Estate of Binder, etc., 137 Oh St 26, 27 N. E. 2d 939, at p. 47:

“At this point, the words of Justice Cardozo, when Chief Judge of the Court of Appeals of New York, in rendering the opinion of the Court in the case of Meinhard v. Salmon, supra, at 464, are appropriate. He said:

“ ‘Many forms of conduct permissible in a workaday world for those acting at arm’s length, are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior. As to this there has developed a tradition that is unbending and inveterate. Uncompromising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty by the “disintegrating erosion” of particular exceptions. * * * Only thus has the level of conduct for fiduciaries been kept at a level higher than that troddened by the crowd. It will not consciously be lowered by any judgment of this court.’ See also Piatt v. Longworth’s Devisees, 27 Oh St 159, 195 and 196; Cox, Admr., v. John, 32 Oh St 532, 539 and 540; Caldwell v. Caldwell, 45 Oh St 512, 522 and 523, 15 N. E., 297.”

The fiduciaries could not deviate from their duties with respect to the best interest of the trust estate, contrary to the intention of the testator, as indicated clearly by his Will. Mills v. Connor, et al., Trustees, 104 Oh St 409, 135 N. E. 616. In re Trusteeship of Trust Created by Will of Sedgwick, 74 Oh Ap 444, 59 N. E. 2d 616.

It is our view that the circumstances and conditions shown to exist in reference to the offer that was accepted would require actions and decisions by the fiduciaries not intended by the Will and not for the best interest of the trust estate.

The statement in the opinion In re Trusteeship of Stone, 138 Oh St 293, 34 N. E. 2d 755, is appropriate here, 302-303:

“Since a trustee is a fiduciary of the highest order and is charged with the utmost fidelity to his trust, he must refrain from creating situations where his own interests are brought into conflict with those of the trust, and from doing those things which would tend to interfere with the exercise of a wholly disinterested and independent judgment. In accepting a trust, the trustee is presumed to know the obligations and limitations connected with his high office and, if he transgresses, must abide the consequences.”

See, also, 2 Restatement of the Law of Trusts, 432, Section 170, comments c and d; 4 Pomeroy’s Equity Jurisprudence (5 Ed.), 222, Section 1077. 62 A. L. R. 1. In re Lewisohn, 294 N. Y., 596, 63 N. E. (2nd.) 589; 2 Scott on Trusts 856, Section 170.

The actions of fiduciaries of a trust estate will not be upheld in a course palpably arbitrary and unreasonable, “It is not sufficient that he be honest, and from a strictly moral standpoint act in good faith; he is bound in law to exercise diligence and to act reasonably.” Moeller v. Poland, et al., Exrs., 80 Oh St 418, 89 N. E. 100; Morris v. Mull, et al., 110 Oh St 623, 634, 635, 144 N. E. 436, 39 A. L. R., 323. Restatement of Trusts, 431, Section 170.

It is our view that the seemingly unlimited discretion contended for by the language authorizing the trustees to act as if they were the “absolute owners of the Trust Estate” and to exercise “privileges and discretions” which the testator would exercise if present, cannot mean more than that the decedent intended that the fiduciaries would act reasonably, as required by law, and for the best interest of the trust estate.

Fiduciaries will not be excused on the ground that the instrument creating the trust and making them trustees has given them broad authority and unlimited discretion in the administration of the trust.

The trustee cannot take advantage of liberal provisions of a trust instrument to relieve him from the legal responsibility of a fiduciary, under the law. Roberts v. Michigan Trust Co., 273 Mich. 91, 262 N. W. 744; In re Will of Sibert, 216 Iowa 336, 249 N. W. 196. In re Estate of Binder, 137 Oh St supra, 43. Willis, Admr., v. Braucher, Gdn., 79 Oh St 290, 87 N. E. 185.

We reach the conclusion that the sale of the shares to William C. Cook and Associates, as authorized by the Probate Court,' is not in accordance with the terms of the decedent’s Will and is contrary to established principles of law.

We, therefore, find the assignments of error of the defendant-appellant, William Saxbe, Attorney General of Ohio, well taken and those assignments are sustained.

Appeal in number 5764 was taken by the Attorney General from order overruling motion for rehearing entered July 22, 1957. Appeal number 5764 is dismissed for the reason that the order of July 22, 1957, is not a final order.

We determine that plaintiff, Alex s. Dombey, dismissed his petition for a declaratory judgment and answer to cross-petition of the defendants as executors and was thereafter not a party in the proceedings; that plaintiff failed to sustain alleged agreement with counsel for the executors; and that as agent for an unsuccessful bidder for the shares of the Brunson Bank and The Brunson Savings & Loan Company, the plaintiff is not a party aggrieved in this cause. Apple v. Ganson, 49 Abs 547 at p. 550, 76 N. E. 2d 736. Siegfried v. Railroad Co., 50 Oh St 294, 297.

Appeal number 5754 by plaintiff-appellant and the assignments of error filed by plaintiff-appellee in appeal number 5753 are dismissed.

Bill of Exceptions, Volume II, is not properly filed herein and, therefore, the transcript of the evidence so designated is stricken.

The judgment of the Probate Court is reversed, cause remanded with instructions to that court to enter an order requiring defendants as executors of the estate of William Rindsfoos, deceased, to consummate a sale of the' shares of The Brunson Bank & Trust Company and The Brunson Savings & Loan Company, held by said executors in said estate to Approved Finance, Inc., Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company for the price of $1,250,500.00.

The costs on this appeal shall be assessed and divided equally between the plaintiff, Alex S. Dombey, the defendants as executors of said estate and the State of Ohio.

Journal entry shall be prepared accordingly for approval by counsel and this Court.

Judgment reversed, cause remanded with instructions.

FESS and HORNBECK, JJ, concur.


source: Caselaw Access Project

author: By HUNSICKER, J.

license: Public Domain

text:
    BARSAN, Extrx. et, Appellees, v. PIONEER SAVINGS & LOAN CO. et, Appellants.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 23102.
    Decided July 28, 1954.
    A. L. Kearns, A. R. Roman, David Perris, for plaintiff-appellees.
    Roth & Pollack, for defendant-appellants.
    (DOYLE, PJ, STEVENS and HUNSICKER, JJ, of the Ninth District, sitting by designation in the Eighth District.)
   OPINION

By HUNSICKER, J.

This is an appeal on questions of law and fact.

The plaintiffs in the trial court, appellees here, whom we will sometimes call, for the purposes of this opinion, Virginia Barsan, filed an action in the Common Pleas Court of Cuyahoga County, seeking an injunction to prevent The Pioneer Savings & Loan Co., its officers, and some of its directors, from holding a meeting to authorize stock subscriptions, and to compel the Savings & Loan Co. to set aside a cancellation of stock. In this opinion the defendants in the trial court, appellants here, will sometimes be referred to as Savings & Loan Co.

The Pioneer Savings & Loan Co. filed an answer and cross-petition, and the defendant officers and directors filed general denials, to the petition of Virginia Barsan. A reply to the answer and an answer to the cross-petition was filed by Virginia Barsan.

The claims of the parties are founded on the following facts:

On, April 14, 1948, at a regular meeting of the board of directors of The Pioneer Savings & Loan Co. (then known as Romanian Savings & Loan Co.), a resolution was duly adopted to issue corporate stock at the price of $105 per share. This resolution reads as follows:

“T. Andrica seconded by D. Radu made a motion to issue new stock at the price of $105.00 and the sale to be concluded not later than June 30, 1948. The new stock may be bought on Running Stock and the subscribers should make monthly payments of not less than 1.00 for each share, with an initial payment of minimum 10.00 from which sum $5.00 wili be attributed to the Reserve Fund. The motion was approved with unanimous roll call vote.”

On May 5, 1948, the board of directors of the Savings & Loan Co. approved the minutes of the meeting at which the above resolution to issue stock had been adopted.

At the annual stockholders’ meeting held on January 17, 1949, a stockholder-director asked about the new issue of stock. These minutes indicate a lengthy discussion and that the stockholders “were satisfied with the explanation given to them.”

At the time this resolution of April 14, 1948, was adopted, there was issued and outstanding 536 shares of permanent, nonwithdrawable stock. There was also outstanding, running stock and paid-up stock. Sections 15, 16 and 17 of the bylaws of the Savings & Loan Co. provided for this stock classification. All of the stock, except the permanent, nonwithdrawable stock, could be repurchased by the Savings & Loan Co. if not fully paid for, or it could be withdrawn or forfeited. In the event of withdrawal or forfeiture, such stock could be reissued.

The constitution of the Savings & Loan Co. in Section 2 of Article III provides that: “Stock may be issued to members in whole or fractional shares, upon such terms and conditions as the bylaws may provide.”

Section 21 of the bylaws of the Savings & Loan Co. says:

“The board of directors may require any member, except holders of Permanent Stock, to surrender his passbook or certificate and receive the amount standing to his credit, together with all dividends, declared and remaining unpaid thereon. All cancellations of stock shall be made only in the reverse order from that in which it was issued and all rights as members shall cease with the notice to surrender.”

After the resolution of April 14, 1948, wherein stock was authorized, subscriptions for 511 shares were made. The appellees were among those who subscribed and paid for this new stock. Certificates for permanent stock pursuant to such subscriptions were issued and given to the various appellees, including Virginia Barsan. These stock certificates were dated December 12, 1952, except as to one stockholder, whose certificate was dated December 1, 1952.

It may be noted that, at the annual meeting on January 19, 1953, inquiry relative to the increase in permanent stock was made by a stockholder, who was informed that those who had subscribed for stock pursuant to the resolution of April 14, 1948, were required by the directors at the meeting of December 11, 1952, to pay for such stock during the month of December, 1952, or lose their right to purchase the stock. The minutes of this stockholders’ meeting indicate a lengthy discussion of the right of the corporation to issue new stock, and the failure to give stockholders their pre-emptive rights. It was also pointed out in the minutes by the statements of shareholders that the stockholders had approved the new stock issue at the stockholders’ meeting held January 17, 1949, and no further question or inquiry relative to the problem had been raised at other stockholder meetings until at this meeting of January 19, 1953.

At the directors’ meeting held on February 18, 1953, a letter from the superintendent of Building and Loan Associations of the State of Ohio was read and made a part of the minutes. In this letter, inquiry relative to the new issue of permanent stock was made, because certain shareholders had made such inquiry of the superintendent of Building and Loan Associations. The minutes also show that Mr. Benson M. Smith, the superintendent of Building and Loan Associations, was present at this meeting. It should be stated here that, as early as the joint report of examination of the Savings & Loan Co., made January 5, 1949, by the Division of Building and Loan Associations and the Home Loan Bank Board, this report noted that certain running stock credits were actually subscriptions for permanent stock.

At the directors’ meeting held May 6, 1953, the following resolution was adopted (those plaintiffs who were directors voted against such resolution):

“Because of the insufficiency of the information given those who were members of the board relative to the rights of the shareholders of this institution; and because of the improper manner in which the proponents of the resolution to increase the number of shares of the capital stock of this institution have acted during the shareholders’ meeting in the year of 1949 and also during the general meetings held during (he year 1948, it is necessary that we protect the rights of all of the stockholders of this institution; and now in conformity with the laws of Ohio, and particularly §8623-35 GC, relative to the pre-emptive rights of shareholders of a corporation, and in accordance with such Act passed by the General Assembly of Ohio, we hereby realize that such acts of the board of directors at that time were occasioned through misinformation to the disadvantage of all of the shareholders of this institution, and it is thererfore necessary that we rescind the action of the board of directors held in 1949 at the shareholders’ meeting and at the regular meetings to increase the stock of this institution by five hundred and eleven (511) shares.

It is therefore proposed that the actions of the board of directors resulting in increase of the capital stock of this institution by 511 shares be now rescinded, and all of such shares issued be cancelled and dividend action upon such shares so issued shall be foregone and no dividends to be paid upon such shares; and that all monies paid for such shares shall be refunded to the persons in whose name such stock is now issued. Such monies shall be immediately segregated and placed in a special account or fund for disbursement to such persons holders of such stock without any interest excepting upon such person’s request such monies may be deposited as a savings account, properly identified by pass-books, to receive the benefits as depositors under the rules of this institution.”

The president of the Savings & Loan Co. thereafter called a special stockholders’ meeting for October 3, 1953, for the declared purpose of giving pre-emptive rights to purchase additional stock in the proportion owned by the stockholders on April 14, 1948.

The instant action was then filed in the Court of Common Pleas, asking the court: to remove the cloud on the title to the stock, purchased by plaintiffs as a result of the issue authorized on April 14, 1948; to compel the Savings & Loan Co., and its officers and directors, to set aside the order of cancellation of such stock; and to permanently enjoin the meeting called for October 3, 1953. The appellees here, except T. Andrica, were not directors on April 14, 1948. Elie Barsan, now deceased, the founder, president and director of the corporation, did subscribe for stock, and his estate is represented as a plaintiff through his wife as executrix.

The cross-petition of the appellant Pioneer Savings & Loan Co. asks that the stock issued as a result of the April 14, 1948, meeting be cancelled and the certificates be ordered returned to the Savings & Loan Co.; that the appellees be denied any rights in such stock; and that the appellees be restrained from interfering with the Savings & Loan Co. and its officers in holding the meeting previously called for October 3, 1953.

The very complicated and lengthy fact situation in this case may be stated briefly in the question to be decided by this court, which is: Did The Pioneer Savings & Loan Co., through its present directors, have the right to order a cancellation of the shares of stock issued as a result of the subscriptions made pursuant to the resolution of April 14, 1948?

It is clear, as shown by the evidence in this case, that, although the payments for the stock ordered sold by the resolution of April 14, 1948, were to be paid for in installments as “on Running Stock,” nevertheless, all directors, officers, savings and loan examiners, and stockholders present at the meeting on January 17, 1949, knew that the subscriptions were for new, permanent capital shares, and not for any other classification of stock. The form of subscription which each person signed was for “capital stock of The Romanian Savings & Loan Co.”

There is some evidence that, by personal contact and oral conversation on the part of the then president and other officers, stockholders other than those who subscribed for the new issue of 511 shares were given an opportunity to buy this stock.

Sec. 8623-35 GC (now §1701.40 R. C.), provides for the pre-emptive rights of shareholders. The written records of the corporation in evidence do not show that such rights were granted to the shareholders. Does that fact justify the action taken by the board of directors in ordering the stock cancelled? No stockholder, so far as the evidence before us is concerned, has sought to enforce his rights by way of a legal action. We do not express any opinion in such a matter, for that is not the problem before this court; however, it may be noted that a stockholder may waive or relinquish his right to subscribe to an issue of new stock. See 52 A. L. R. 226, et seq.; 138 A. L. R. 529, et seq.

There is no complaint made in this case that the Savings & Loan Co. had no right to sell additional stock; and, from the action of the present objecting officers and objecting directors, it is evident that the complaint which brought about the present action is that certain shareholders were not immediately, after April 14, 1948, given a right to subscribe to their respective proportionate shares.

The fact that 511 shares of stock were subscribed for and sold, did not cause the Savings & Loan Co. to lose money or decrease its earning power, and it did not in any other way cause the Savings & Loan Co. injury. It must be presumed that, by an increase in capital, when put to productive use, an increase in earning power resulted.

What harm, then, has been done the Savings & Loan Co. as a corporate entity? It committed no act beyond its powers in authorizing the issue of additional permanent capital shares. The wrong, if so it now is, was in the method of distribution and sale of those shares. Does the corporation, after all that transpired, and after the several stockholders’ meetings where the subject of such new shares was discussed, have the power to cancel those shares and order a resale to all shareholders? We do not think the corporation can now lawfully exercise such power.

Let us assume that, after the subscriptions for new stock had been executed, the Savings & Loan Co. became insolvent. Would the subscribers to new stock, in a suit to collect unpaid stock subscriptions, be permitted to set up the failure to grant pre-emptive rights? We think not, for even an irregularity in the proceedings authorizing the increase would not prevent a receiver from collecting the amounts subscribed for such stock.

“3. Irregularities in the proceedings to increase the stock, or unauthorized provisions as to such stock, ex gra., that no notice of the meeting of stockholders was given, that a part of the stock was declined by the stockholders without actual apportionment of it, or that the agreement contained a stipulation that the original stockholders should have part of the shares without paying for the same in money, will not defeat an action to recover on a subscription for such increased stock for the purpose of paying debts, where such subscriber, having knowledge of the facts, acquiesced until the company became insolvent.”

Clarke v. Thomas, Receiver, 34 Oh St 36.

See also: 10 O. Jur., Corporations, 270, Sec. 182.

It must be remembered that in the instant case the stock subscriptions signed by the plaintiffs, although then executory contracts between the subscribers and the corporation, became fully executed when, upon payment by the subscribers, the stock certificates were issued by the corporation (Savings & Loan Co.) to such subscribers for the new stock. There is no indication that the subscriptions were obtained by fraud, either on the part of the purchasers or the Savings & Loan Co.

When this stock was issued by the Savings & Loan Co., it held no lien on such stock “unless the right of the corporation (Savings & Loan Co.) to such lien or the restriction is stated upon the certificate.” (Sec. 8673-15 GC, now §1705.18 R. C.) There is no evidence to indicate that the Savings & Loan Co. reserved any lien or placed any restriction on this new permanent stock issue.

A stockholder and the corporation in which he owns shares are distinct persons in law. Bates v. Firestone, 20 Oh Ap 51, at p. 65. Generally, a stockholder, who,is not a director, is not charged with notice concerning the conduct of the affairs of the corporation. Greenville Gas Co. v. Reis, et al, 54 Oh St 549, at p. 558.

Pre-emptive rights to subscribe to stock, it must again be pointed out, are, according to the statute, rights given to existing stockholders of such corporation; and, as pointed out above, the stockholder deprived of such right may have a remedy in equity. See 52 A. L. R. 241. The injury, if one has occurred, sought to be redressed in such an action, is one belonging to those who were shareholders at the time the new issue of stock was offered for sale.

We have searched the authorities in Ohio, and find no case where the facts are similar to the facts in the instant case.

11 Fletcher, Cyclopedia Corporations (Perm. Ed.), Sec. 5135, et seq., discusses the pre-emptive rights of stockholders, and, in Sec. 5160, this text with citation of authorities says (at pp. 317-320)’:

“Thus, in disposing of it (increased stock issue), the directors or majority of the stockholders cannot discriminate between the stockholders, nor issue it to themselves, or to their nominees, either for the purpose of making a profit for themselves out of the transaction, or for the purpose of obtaining or retaining control of the corporation. * * *. If they attempt to do so, they commit a fraud upon the other stockholders, against which a court of equity will grant relief, unless the right to relief is barred by laches or acquiescence. And stock so issued' will be cancelled where the person to whom it is issued is a party to the fraud, although not where it has come into the hands of a bona fide purchaser for value.” (Portion in parenthesis' added.)

The same text in Sec. 5166 (at pp. 348-349), when speaking of the right of a corporation to cancel invalid stock certificates, says:

“The right to procure a cancellation of stock illegally issued may be barred by the statute of limitations, or lost by laches. * * *. Relief by cancellation of certificates may also be barred by the estoppel of the corporation or the stockholders to deny the validity of their issuance or that of the stock they represent.”

In the instant case we have detailed the salient facts, setting out that no fraud was perpetrated on the corporation when the new permanent capital stock was issued. The stockholders had notice at the next succeeding regular stockholders’ meeting of January 17, 1949, that subscriptions for such new stock would be received, and that in due time new permanent capital shares would be issued to the subscribers. Under these and all the attending facts and circumstances of this case, the corporation cannot now cancel and hold for naught this increase in capital shares.

It is therefore, the judgment of this court that the relief sought by the appellees be granted. Appellant shall pay the costs. Exceptions granted to appellants.

DOYLE, PJ, STEVENS, J, concur.


author: By MILLER, J.

text:
    RAPPICH et, Plaintiffs-Appellants, v. ALTERMATT et, Defendants-Appellees.
    Ohio Appeals, Tenth District, Franklin County.
    No. 5794.
    Decided December 31, 1957.
    B. N. Murray, Columbus, for plaintiffs-appellants.
    Charles E. Connor, Columbus, for defendants-appellees.
   OPINION

By MILLER, J.

This is a law appeal from a judgment dismissing the plaintiffs’ cause of action after sustaining the demurrer to the amended petition. Since the question presented involves the sufficiency of the allegations contained therein, we quote it in its entirety:

“Plaintiffs say that on July 22, 1949, they purchased from the defendants parts of Lots Nos. 139 and 140 of Berwick Addition to the City of Columbus, on which the defendants, on or about said date, had completed a single family dwelling, the said defendant, Albert B. Altermatt being the general contractor and builder of said structure.

“Plaintiffs say that on or about April 22, 1955, they discovered that twelve (12) of the windows in said dwelling had been improperly installed according to the manufacturer’s directions, in that they were improperly set into metal surrounds with required caulking necessary for such installation, that several of said windows had to be completely removed, together with the plastering, lathe and the original rough framing made as openings to support said windows and which became rotted and had to be replaced, together with plaster and lathe which became disintegrated through precipitation entering around the window framing.

^“Plaintiffs further say that when- the plastering had been removed and the defective workmanship of the original installation was exposed to view, the same was exhibited to the defendant, Albert B. Altermatt, for his examination. Plaintiffs thereupon demanded of the defendants that an adjustment be allowed them for the cost of repair to the plaster, decorating, caulking and flashing necessary for the proper reinstallation of said windows and to avoid the penetration 'of future precipitation, but said defendants have refused and still refuse to make such adjustment or to reimburse said plaintiffs for the costs of said repairs.

“Plaintiffs say they have expended the sum of $548.50 for the carpenter work, metal work, plastering, lathing, paintirig and decorating necessary to replace said improper installation; all to their full damage in the sum of $548.50.

“WHEREFORE, plaintiffs pray judgment against the defendants in the sum of $548.50, and for costs of suit.”

Counsel for the appellants cites several cases which he claims sustain his position. The first four of these are: Chapman v. Orrachio, et al, 8 Abs 250; Fiebig v. Brofford, 58 Abs 494; Galvin v. Keen, 100 Oh Ap 100; and Gleason v. Bell, 91 Oh St 268. We shall treat these together since all are distinguishable on the same grounds. Each of these cases was based on fraud which occurred by reason of the affirmative false representations made by the vendor regarding the quality or condition of the premises involved. They are not applicable to the instant situation because there is no charge of any kind made in the amended petition that there was any fraud practiced upon the purchasers of this home, nor is there any allegation that there were any representations made by the sellers, false or otherwise, at the time of its purchase.

The case of Vanderschrier, et al v. Aaron, 103 Oh Ap 340, differs from our case as it involved work to be done upon the property after the sale had been completed. This work was to be done in a good and workmanlike manner. The action was brought for breach of this agreement by the purchasers who claimed that certain of the additional work which had been agreed to had either not been completed or if completed had not been performed in an efficient and workmanlike manner as agreed upon. The house in our case was entirely completed and it was purchased without any representations being made. In the cited case, supra, the court says at page 341:

“In this opinion we will not go into a discussion of the duty of the seller, of a completed house to the buyer, with the ever-varying circumstances surrounding such sales. Nor will we discuss the legal questions of caveat emptor and express warranty, except to say only that the vendor of a completed house, in respect of which there is no work going on and no work to be done, does not generally, in the absence of some express bargain or warranty, undertake any obligation with regard to the condition of the house.” (Emphasis ours.)

With respect to the condition of the premises conveyed it is said in 55 Amer. Jur. 795, Section 368:

“Sec. 368. Responsibility for Condition of Premises. While the law implies an obligation on the part of the vendor to convey a marketable title, with respect to the physical condition of the premises the rule of caveat emptor generally applies. The vendor does not impliedly warrant the condition of the premises, and when out of possession he is not liable in damages to the vendee or members of his family for injuries caused by defects in the premises.”

In the case of Shinkle, et al v. Birney, et al, 68 Oh St 328, a statement of the law applicable to our case is found in the syllabus, which reads as follows:

“The relation of lessor and lessee arises out of contract, and, where there is neither express warranty nor deceit, the latter cannot maintain an action against the former on account of the condition of the premises hired.”

In our case the relation of vendor and vendee also arises out of contract and the amended petition alleges neither an express warranty nor any deceit on the part of the defendant; hence, no recovery may be had. The only theory upon which it might be said that a good cause of action was stated would be under that of an implied warranty. Sec. 1315 et seq, R. C., relates solely to the sale of goods and chattels and can be given no application to the sale of real property.

Counsel for the appellants also urges that the amended petition states a cause of action based on constructive fraud or deceit. An examination of the same reveals that it contains no allegation of the concealment of any facts relating to the present condition of the house nor that the defendant knew of any such defects. These allegations are essential in order to sustain an action for fraud or deceit. It is therefore our conclusion that the amended petition fails to state a good cause of action, either upon the theory of fraud or upon that of an implied contract. Therefore, the court properly sustained the demurrer to the petition and the judgment will be affirmed.

PETREE, PJ, BRYANT, J, concur.