author: Per CURIAM:

text:
    PERKINS, Plaintiff-Appellant, v. BENGUET CONSOLIDATED MINING COMPANY et, Defendants-Appellees.
    Ohio Appeals, First District, Clermont County.
    Nos. 181, 182.
    Decided January 27, 1950.

      Gorman, Silversteen & Davis, Cincinnati, for plaintiff-appellant.
    Ely, White & Davidson, Nichols, Speidel & Nichols, Batavia, Lucien H. Mercier, for defendants-appellees.
   OPINION

Per CURIAM:

Two actions were commenced in the Court of Common Pleas of Clermont County. Service of summons was made in each ease upon the defendant, by delivering to John W. Haussermann a copy of such summons. He was so served as “Parent, President, and General Manager, Controlling Member, and the duly authorized representative in the United States” of the defendant.

Motion i to quash, with proper reservation as to appearance, were filed and sustained by the trial court. From such ruling of the trial court, appeals on questions of law have been taken by the plaintiff and are now herein considered.

Essentially, two main issues are presented to this court.

(a) Is the defendant a foreign corporation within the purview of the law of Ohio?

(b) If so, was the defendant doing business in Clermont County at the time summons was made upon Haussermann?

No difficulty is encountered in returning an affirmative answer to the first query. It appears to be clearly demonstrated by the record that the defendant is a corporation organized and existing under the laws of the Phillipines, and, therefore comes within the provisions of §8625-2 GC, defining the terms “Foreign Corporation” and “State.”

The articles of incorporation and the applicable Phillipine law sustain this conclusion.

The second query is not so easily disposed of and involved consideration of many authorities, which, at least, seem to be conflicting.

The facts upon which plaintiff predicates her claim that the defendant was in this State and doing business in Clermont County are as follows:—

(1) The defendant “opened accounts in The First National Bank of Cincinnati and the New Richmond National Bank of New Richmond, Ohio (Clermont County) in January and April of 1942, respectively, in the name of its President John W. Haussermann.”

(2) “The accounts remained open for five years until April, 1947.” “Considerable activity was revealed throughout the entire period of their existence, but particularly in the last eighteen months.”

(3) “No one but John W. Haussermann ever possessed the authority to draw on these accounts.”

(4) Neither Bank has in its possession any authority, either by way of corporate resolution or otherwise, for the establishment of these accounts.”

(5) “A directors’ meeting of the Benguet Consolidated Mining Company was held at Pond Run Farm, the New Richmond home of Haussermann on January 23, 1946, at which meeting authority was given to the First National Bank to act as transfer agent for the transfer of shares of the Benguet Company stock.”

(6) “The First National Bank so acted as transfer agent from that date on.”

(7) “The Bank is a true transfer agent to the extent that no separate authority nor individual correspondence is required from the principal office of the Company in Manila to effect the transfer of shares of stock.”

(8) An office was maintained in a New Richmond Bank Building — claimed not used for any purpose in connection with the bank.

(9) Two secretaries employed by Haussermann in such, office.

(10) Haussermann seen daily at such office.

(11) Haussermann admits possession of the Perkins’ stock— now in dispute in these actions.

(12) Deposits of defendant’s funds were made from Haussermann’s office in local banks.

(13) Defendant “had applied for and secured a Foreign Funds’ Control Commission license for the expenditure of Twenty-two Thousand ($22,000.00) Dollars for office rent and salaries in the United States.”

(14) Correspondence by Haussermann with local banks— pertaining to “handling and payment of the various funds and credits on deposit * ? * directing of forwarding drafts on New Richmond Bank to various individuals and companies throughout Ohio and the United States.”

(15) Haussermann signed “purchase orders for various supplies and machinery which were to be shipped to the Company’s mines in the Phillipines.”

(16) Haussermann signed checks for obligations of the company thus incurred.

(17) “In the registration statements filed with the Securities Exchange Commission, he styles himself the President, General Manager, and the duly authorized representative of the Benguet Consolidated Mining Co. in the United States.”

(18) At a directors’ meeting held as late as January 28, 1946, at Haussermann’s house, The First National Bank of Cincinnati was designated as transfer agent for Benguet and no separate authority from Manila or elsewhere is necessary to effect a transfer of shares.”

(19) “Haussermann maintains an office in the New Richmond Bank Building.”

(20) “He employs two secretaries in that office.”

(21) “Considerable correspondence about Benguet was carried on from this office concerning Foreign Funds Control Commission license, handling and payments of funds, forwarding drafts and the like.”

(22) “Here in New Richmond, Haussermann admitted he signed purchase orders for supplies and machinery and signed checks for the payment of them.”

(23) “Haussermann received as a salary as President and General Manager of the Company in 1945 the sum of $12,000.00, and $12,000.00 as President and General Manager of Balatoc.”

24) “Albert, Assistant Secretary, Jean M. Gorrdon, Assistant to the President, who was in New Richmond, and Francis O. Haussermann all were paid salaries in 1946.”

(25) “Officer’s salary, office rent, secretarial help and the like were all paid for by the activities Haussermann carried on in New Richmond.”

On the other hands, the defendant points to the following evidence, claimed to sustain the conclusion that the defendant was not in Clermont County — and did not “do business” therein:

(1) The defendant is a corporation created and existing under the laws of the Phillipines and engaged in the business of mining gold and silver in the Phillipine Islands.

(2) The corporation, as such, has never maintained am office in the State of Ohio.

(3) It has never sold any gold or silver in Ohio.

(4) “No production of gold or silver having taken place because of the War since December, 1941 to the date of these suits.”

(5) John Haussermann lived in the Phillipines since 1898.

(6) He is the Company’s president and general manager, and has been such for many years.

(7) He organized the Company in 1903.

(8) “He came to Ohio in May, 1941, to attend to personal family matters with reservations to return to the Phillipines in September, 1941.”

(9) He was prevented from so returning to the Phillipines by War restrictions which cancelled his reservations of September, October, and November, 1941.

(10) He made continuous efforts to secure passage to the Phillipines from December, 1945 to January, 1947, and succeeded in securing a reservation in August, 1947.

(11) During the time when he was thus forced to stay in the United States, he made his home on his farm in Clermont County.

(12) During the period from 1942 to the date of these suits “he lived there less than half of the time.”

(13) Since 1906 he has had “what he calls an office for a loafing place in New Richmond, Ohio, every time he came to the United States on vacation.”

(14) He built a building “to house the First National Bank of New Richmond, of which he was President, and in the lease to the Bank, he reserved an office for himself for his loafing place.”

(15) “In which office no business people pertaining to Benguet ever came.”

(16) “He did some banking business pertaining to the Bank in that office, and the townsfolk of New Richmond visited with him there.”

(17) During his stay in the United States in the war years “when it was impossible to communicate with the Phillipines he did what he could to protect the shipments of machinery, supplies and equipment which were returned to the East and West Coast because he was the only one in the United States who could do so.”

(18) “In 1942 as a war expediency and because of the Foreign Funds Control Law, he transferred the Company’s funds from a California bank to accounts in his name in the First National Bank of Cincinnati, and in the New Richmond Bank.

(19) It is stipulated that these funds in Clermont County were the property of the defendant, hence, under §11,276 GC, the venue of the action is properly laid in Clermont County.

(20) “Benguet’s surface properties at the mines in the Phillipines were all destroyed during the war; and when the war was over, and in 1946, Benguet began rebuilding its properties in the Phillipines, which required the purchase of machinery, supplies and equipment. Benguet-had no funds in the Phillipines, but did have those funds in the two Ohio banks. The Phillipines had no machinery, supplies and equipment, and all of this had to be purchased in the United States. To transfer the funds in the Ohio banks to the Phillipines, and then from the Phillipines to the United States would have entailed an expense for exchange.”

(21) “This machinery, supplies and equipment was all negotiated for and purchased by Benguet’s Purchasing Agent in San Francisco, on the direction of the Company’s Chief of Staff in Manila; and Judge Haussermann never negotiated for or purchased a single piece of machinery, supplies or equipment.”

(22) “None of these items of machinery, supplies and equipment were purchased from any Ohio concern by the Company’s Purchasing Agent.”

(23) “The suppliers mostly always insisted on the formal orders being signed by a Company official, and, accordingly, after Benguet’s Purchasing Agent had negotiated for and purchased the items, she would prepare the formal orders for the same and send them to Judge Haussermann for signature.”

(24) “This began in March, 1946 — and he would then do the purely ’ministerial act of signing the orders wherever he might happen to be, whether in New Richmond, New York, Washington, Chicago, San Francisco, or elsewhere wherever the mail reached him.”

(25) “Checks on the Ohio banks were also signed by him— and all of these checks save those for his salary, and for a while that of an Assistant Secretary of the Company, were drawn in the amount, and to the order, as directed by the Company’s Chief of Staff and by Benguet’s Purchasing agent.”

(26) “Two or three, out of nine, meetings of the Board of Directors were held at Judge Haussermann’s home at New Richmond, Ohio, the others having been held at Washington, New York, San Francisco and otherwise than at New Richmond, Ohio.”

(27) “During the war years, three out of the five Directors of Benguet were interned in the Phillipines by the Japanese.”

(28) “In May, 1945, John W. Haussermann, Jr., son of Judge Hausserman, was elected a Director to replace a Director who had been killed by the Japanese in December, 1944.”

(29) “Benguet’s Secretary returned to .the United States from internment by the Japanese in May, 1945.”

(30) “In 1946, a large shareholder (Allen & Company of New York) wanted to dispose. of over 700,000 shares of Benguet, and Judge Haussermann, on behalf of Benguet and to assist this shareholder, supplied to the Securities and Exchange Commission all of the information pertaining to Benguet which was demanded by the Exchange before authorizing the listing and sale.”

# * * *

Does this evidence show that the defendant, as a foreign corporation, was in Ohio and doing business therein?

It is claimed by plaintiff that the term “doing business” has differing significance according to the subject-matter of the proceeding in which the term is involved. Beach v. Kerr Turbine Co., 243 Fed. 706, is cited in support of this contention. At page 708 of the opinion, after citing a number of authorities, it is stated:

“I have examined all of these cases and many others. In my opinion, they are not controlling; in fact, they do not bear on the exact point under consideration. Several of them involve statutes which forbid a foreign corporation to do business within a state without complying with state laws, and in some instances prohibiting action on the contracts if such compliance has not been had. Others involve state statutes forbidding or regulating the doing of business within their limits, or imposing local taxes upon interstate commerce.”

And, continuing, it is stated:

“The question involved in this action, however, seems to me to be different, and is controlled by other considerations. It does not follow that statutes fixing the conditions under which a foreign corporation may engage in business in a state are to have the same construction as statutes permitting a foreign corporation to be served in a state where it may be found. In the former it is, of course, a more or less continuing course of business which is meant to be regulated, whereas in the latter the object sought is only to give notice to a corporation of a pending action. The tendency is to hold that whatever is reasonably effective for this purpose is a good service.”

In this connection, see: Tauza v. Susquehanna Coal Co., 220 N. Y. 259; International Shoe Co v. Washington, 326 U. S. 310, 316.

In International Harvester Co. v. Kentucky, 234 U. S., 579,— The International Harvester Company was indicted in Kentucky for violation of the Anti-Trust Laws of Kentucky. The question of process upon the defendant was in issue. At page 582 of the opinion it is stated: “This case presents the question of the sufficiency of the service of process on an alleged agent of the International Harvester Company in a criminal proceeding * * *” In the headnotes, it is stated:

“It is essential to the rendition of a personal judgment against a corporation that it be doing business within the State; but each case must depend upon its own facts to show that this essential requirement of jurisdiction exists.

“The presence of a corporation within a State necessary to the service of process is shown when it appears that the corporation is there carrying on business in such sense as to manifest its presence within the State, although the business may be entirely interstate in its character.

“The fact that the business carried on by a corporation is entirely interstate in its character does not render the corporation immune from the ordinary process of the courts of the State.”

At page 267 of the opinion in Tauza v. Susquehanna Coal Co., 220 N. Y. 259, supra, it is stated:

“But the problem .which now , faces us is a different one. It is not a problem of statutory construction. It is one of jurisdiction, of private international law (Dicey Conflict of Laws, pp. 38, 155). We are to say, not whether the business is such that the corporation may be prevented from being here, but whether its business is such that it is here. If in fact it is here, if it is here, not occasionally or casually, but with a fair measure of permanence and continuity, then, whether its business is interstate or local, it is within the jurisdiction of our courts (International Harvester Co. v. Kentucky, supra, at p. 587). To hold that a state cannot burden interstate commerce, or pass laws which regulate it, 'is a long way from holding that the ordinary process of the courts may not reach corporations carrying on business within the state which is wholly of an interstate commerce character’ (234 U. S. at p. 588). The nature and extent of business contemplated by licensing statutes is one thing. The nature and extent of business requisite to satisfy the rules of private international law may be quite another thing. In saying this we concede the binding force of the decision of the Supreme Court in Riverside & Dan River Cotton Mills v. Menefee (237 U. S. 189) and kindred cases (Bagdon v. Philadelphia & Reading C. & I. Co., 217 N. Y. 432, 438; Pomeroy v. Hocking Valley Ry. Co., 218 N. Y. 530). Unless a foreign corporation is engaged in business within the state, it is not brought within the state by the presence of its agents. But there is no precise test of the nature or extent of the business that must be done. All that is requisite is that enough be done to enable us to say that the corporation is here (St. Louis S. W. Ry. Co. of Texas v. Alexander, 227 U. S. 218; Washington-Virginia Ry. Co. v. Real Estate Trust Co. of Philadelphia, 238 U. S., 185; Int. Harvester Co. v. Ky., supra; Pomeroy v. Hocking Valley Ry. Co., supra). If it is here it may be served (Halsbury, L. C., in La Compagnie Generale Transatlantique v. Law, L. R. (1899 A. C.) 431).”

In 20 C. J. S. p. 45, “Corporations” section 1828, it is stated:

“Statutes regulating foreign corporations apply only when they are doing business within the state, and a distinction exists between the doing of business so as to be amenable to service of process and the doing of business so as to be subject to regulatory statutes.”

In section 1920, a. Id., it is stated:

“The nice question as to what constitutes doing business in the state so as to render a foreign corporation suable must be determined largely from the facts of each case rather than by an all embracing rule.

“The determination of the question whether a foreign corporation is doing business within a state so as to be subject to suit therein is often a matter of difficulty and of extreme nicety. In determining the question the courts have enunciated certain general principles hereinafter discussed and have stated generally that the foreign corporation must have entered the domestic state for the purpose of carrying on its business there, and that the transaction of business must be such that the corporation is for the time being within the state in which it is sued. Nevertheless, no all-embracing rule as to what is ‘doing business’ has been laid down. The question is one of fact, and it is to be determined largely according to the facts of each individual case rather than by the application of fixed, definite, and precise rules. (Emphasis ours.)

“The question whether a foreign corporation is doing business in the state in such a sense as to make it amenable to the jurisdiction of the courts thereof is not one of local law or of statutory construction; it is one of jurisdiction, or general law, or private international law, and in the last analysis is one of due process of law under the constitution of the United States. However, to some extent at least, a state has the power to say what will constitute corporate presence within its borders.”

Later on, in the same section, it is stated:

“the corporation may be doing business within the state so as to render it subject to the jurisdiction thereof, even though the business done is interstate rather than local. Indeed, where a state has enacted two statutes relating to suits against foreign corporations, the effect of one of which is to make foreign corporations transacting local business in the state domestic corporations as to such business and subject to the same remedies in the courts of the state, the other statute will be construed to be limited in its application to foreign corporations transacting interstate commerce business in the state.”

In Section 1920, b, it is stated:

“The character and extent of the business done must warrant the inference that the foreign corporation has subjected itself to the jurisdiction of the state. The business must have some continuity but it may be done by an unlicensed corporation or by a withdrawing corporation.”

And later in the same section it is stated:

“The business which a foreign corporation is conducting in the state, in order to give the courts of the state jurisdiction over it by proper service of process, must be a part of the business for which it was organized, or at least a part of the usual and ordinary business in which it is engaged. Nevertheless it is not necessary that the transactions in the state of the foreign corporation shall be the performance of those particular acts which constitute the characteristic feature of the business for which it was organized.” (Emphasis ours.)

On page 168, Id., 2, (9) it is stated:

“It cannot be said to be clear whether or not transactions by a foreign corporation’s agent involving the transfer of its stock in the state constitute a doing of business therein.”

And:

“The mere fact that a foreign corporation doing all of its business outside the state has acted as transfer agent for a sale of securities within the state will not bring it into the state for purposes of jurisdiction of a suit against it.”

To the same effect are statements in Am. Jur., See: Foreign Corporations, Section 490, page 482; Section 495, page 498; Section 369, page 352; Section 370, page 353.

In Section 377, Id., page 371, it is stated:

“As heretofore observed, a foreign corporation may be held to be doing business in the state in such a sense as to bring it within a statute relating to the venue of suits or to render it amenable to the jurisdiction and process of the local courts, * * *”

See, also: Section 361, Id., page 335, as to “What Constitutes” —doing business in a state. Also, Section 363, Id., page 341— “For Purposes of Jurisdiction and Service of Process.” Section 364, Id., page 344, Section 365, Id., page 346, dealing with particular transactions.

See, also: “Words and Phrases” Vol. 13, page 126, “Doing Business.”

In St. Louis Southwestern Ry. Co. v. Alexander, 227 U. S., 218, it is held:

“In order to hold a corporation personally liable in a foreign jurisdiction it must appear that the corporation was within the jurisdiction and that process was duly served upon one of its authorized agents.

“A corporation is not amenable to service of process in a foreign jurisdiction unless it is transacting business therein-to such an extent as to subject itself to the jurisdiction and laws thereof.

“Under the Carmack Amendment the initial carrier is not liable to suit in a foreign district unless it is carrying on business in the sense which would render other foreign corporations amenable to process. No all embracing rule has been laid down as to what constitutes the manner of doing business by a foreign corporation to subject it to process in a given jurisdiction. Each case must be determined by its own facts.

“The business done by a foreign corporation must be such in character and extent as to warrant the inference that it has subjected itself to the jurisdiction.”

It must be apparent that no useful purpose would be served by comparing or considering the host of authorities to be found upon this question. Enough has been noted herein to indicate the general rules applicable and that essentially a factual issue is presented to the trier of facts, which in the cases before the court was the trial judge.

The trial court upon such consideration of the evidence presented found" in favor of' the defendant upon the motion to quash. It cannot be said that his conclusion was contrary to law, or that, as a matter of law, he was in error in finding that the motions to quash should be sustained. His judgment is before this court, predicated upon the evidence before him. The record does not sustain the claim of the plaintiff that he was in error, either upon the law or the facts. In this connection, the conclusion of Bell, J., of the Common Pleas Court of Hamilton County, is before the Court urged as an authority by the plaintiff. The record presented to the trial judge in Clermont County, while it included the record before Bell, J., was more extensive than that presented to the Hamilton County Court. Bell, J., was the trier of the facts presented to him in the action before the Hamilton County Court. This Court is not reviewing either the law or the facts considered by the Hamilton County Court, and nothing said herein is to be considered as a pronouncement upon the judgment of such court. The judgment of that court is not before this Court for review.

Other claims have been advanced by the plaintiff and considered among these is the claim that the defendant is estopped to assert now that it is a foreign corporation. The factual predicate for this claim is not present in the record. There is no basis for this claim requiring this Court to find for the plaintiff.

The record does not justify the claim that there has been a general entry of appearance by the defendant.

The extensive record and elaborate briefs presented to this court have required deliberate consideration of the issues of law and fact involved in the respective contentions of the parties.

The conclusion is that no error, prejudicial to the plaintiff appears affirmatively in the record and that, therefore, the judgments of the trial court on the motions to quash must be and are sustained.

ROSS, PJ, HILDEBRANT & MATTHEWS, JJ, concur.


source: Caselaw Access Project

license: Public Domain

text:
    CINCINNATI MASONIC TEMPLE COMPANY, Application of, In Re.
    Board of Tax Appeals.
    No. 16507.
    Decided January 23, 1950.
    Ernst R. Gwinner, Clarence H. Hallman and Lawrence P. Lake, Cincinnati, for applicant.
    Donald B. Leach, Columbus, for tax commissioner.
   OPINION

This cause and matter came on to be considered by the Board of Tax Appeals upon an application for tax exemption and remission filed herein under date of August 11, 1949, by The Masonic Temple Company, Cincinnati Taxing District, Hamilton County, Ohio.

The property involved is tangible personal property and consists of stoves, steamers, cafeteria counters, coffee urns, refrigerators, roll warmer, tables, chairs and other equipment normally found in a restaurant. The application for tax exemption seeks exemption for the years 1948 and 1949 and the application for remission seeks tax and penalty remission for the tax years 1932 to 1947, inclusive.

The cause was submitted on the application and exhibits, the evidence given before a member of this Board, a record of which hearing is now before us, and the brief of applicant’s counsel.

The application seeks tax exemption under the provisions of §§5353 and 5570-1 GC.

Sec. 5570-1 GC, is a procedural statute and §5353 GC, is a substantive statute. Sec. 5353 GC, in so far as herein pertinent, reads as follows:

“* * *. Real and tangible personal property belonging to institutions used exclusively for charitable purposes, shall be exempt from taxation.”

The purpose clause as contained in the articles of incorporation of The Cincinnati Masonic Temple Company, a corporation for profit, read as follows up until November 19, 1929:

“Said corporation is formed for the purpose of acquiring by gift, devise or purchase, and of holding real estate; and of improving the same, by erecting buildings and other structures thereon, to be used for the purpose of providing meeting places and other accommodations for the Masonic Fraternity, Masonic Bodies, and affiliated organizations, of Cincinnati, Ohio and for other purposes, and of acquiring by gift, bequest or purchase and holding such personal property as may be needed to suitably furnish and equip the said property, buildings and structures for the uses and purposes of said Fraternity Masonic Bodies and affiliated organizations.”

On November 19, 1929, a certificate of amendment to the articles of incorporation of this company was filed with the Ohio Secretary of State. The above quoted purpose clause apparently remained intact and the pertinent portion of said amendment reads as follows:

“BE IT RESOLVED that the Articles of Incorporation of this Company be amended to read as follows:

“That the purpose for which this Corporation is formed is not for profit. No dividends shall at any time be paid’to any stockholder; all the earnings of the Company in excess of the cost of maintenance of the building and its equipment shall be devoted to some charitable purpose to be selected by the Board of Directors at such time as they shall determine,

“PROVIDED, however, that the Board of Directors shall have the right to reduce the maintenance assessment paid by any of the stockholding bodies from time to time as circumstances warrant.”

From the evidence it is apparent that the tangible personal property herein involved has been used during the years in question as equipment in a restaurant operated by the applicant; and that said restaurant is operated primarily for the benefit of the Masonic members and their friends for a noon lunch, which is served from 11:00 A. M. to 2:00 P. M., Monday through Friday. Meals are also served in this restaurant in the evenings to affiliated Masonic Fraternities and to other groups making arrangements therefor. There is nothing in the record to indicate that the spéciñc personal property herein involved was used exclusively for charitable purposes as that term is used in §5353 GC. It appears that a regular charge was collected for all meals served in this restaurant.

The tax commissioner’s motion to dismiss this application for lack of jurisdiction on the part of the Board of Tax Appeals is founded on the cases of Pfeiffer v. Jenkins, 141 Oh St, 66, and McFadden v. Glander, 147 Oh St, 225. A close inspection of said cases discloses that the decisions therein were based on an interpretation of §5616 GO, which reads as follows:

“Any person, board or officer authorized by this act to file complaints with the county board of revision may complain to the tax commission of Ohio (Board of Tax Appeals) at any time prior to the thirty-first day of December in any year, of the determination of a county auditor respecting the liability of any property to taxation in that year, or its exemption therefrom. The commission shall hear such complaint and determination whether the property complained of is subject to taxation and certify its findings to the county auditor, who shall correct the tax list and duplicate accordingly.”

It is apparent that this section refers only to real property for the reason that the Board of Revision has nothing whatever to do with the taxation of personal property; and the county auditor in assessing personal property for taxation acts only as the deputy of the Tax Commission of Ohio. Our view in this matter is strengthened by the language used in the first syllabus of the McFadden case, supra;

“The Board of Tax Appeals is without jurisdiction to consider an application for exemption of real property from taxation unless such application is filed prior to the thirty-first day of December in the year for which exemption is claimed.” (Pfeiffer et al., Trustees of Akron Public Library v. Jenkins et al., Board of Tax Appeals, 141 Oh St, 66, approved and followed.)

It is, therefore, the opinion of the Board of Tax Appeals that an application for the exemption of personal property from taxation and for the remission of taxes and penalties thereon can be considered by this Board at any time and for any years, subject only to the restrictions contained in §5570-1 GC, and although in this case the Board of Tax Appeals has no jurisdiction to pass on the merits of the application as to the years 1948 and 1949 (for the reason that the taxes for said years have been paid by the applicant, jurisdiction remains as to prior years.

And upon a finding that the tangible personal property herein involved was not used for an exempt purpose during the tax years 1932 to 1947, inclusive, the application for the remission of taxes and penalties assessed for those years is hereby denied. And upon a finding that the taxes assessed upon the tangible personal property for the years 1948 and 1949 have been paid, the application in regard thereto is hereby dismissed.


author: By HURD, J:

text:
    McCARTHY, Plaintiff-Appellant, v. CINCINNATI STREET RAILWAY COMPANY, Defendant-Appellee.
    Ohio Appeals, First District, Hamilton County.
    No. 7265.
    Decided July 18, 1950.

      Kunkel & Kunkel, Raymond Kunkel, Cincinnati, for plaintiff.
    Leo J. Brumleve, Cincinnati, for defendant.
    (DOYLE, PJ, of Ninth District: McNAMEE, J, HURD, J, Of Eighth District sitting by designation in First District.)
   OPINION

By HURD, J:

This is an appeal on questions of law from a judgment of the common pleas court of Hamilton County, wherein a verdict and judgment was rendered in favor of the defendant, in an action for personal injuries alleged to have been sustained by plaintiff while alighting from a street car on which she was a passenger.

In her petition, plaintiff alleges, in substance, that on the 26th day of April, 1948, at about 6:15 P. M., she was a passenger in an out-bound Kennedy Heights street car; that said car had come to rest at the corner of Washington Avenue and Montgomery Road for the purpose of loading and unloading passengers; that the door of said car, which was under the exclusive management, control and operation of defendant, was open for the purpose of permitting this plaintiff to leave said car; that plaintiff was in the act of alighting from said street car and was in the process of stepping from the step of said car to the street, when the motorman of the car started said car with a sudden, unexpected jerk and caused the door thereto to be closed prior to the time when plaintiff had fully alighted from said street car, throwing her with great force and violence into the street; that as a proximate cause of the negligence and carelessness of defendant in maintaining and operating said street car and the door thereto, and the causing of said car to jerk suddenly and said door to close before plaintiff left said car, she sustained serious injuries which are described at length in her petition.

The answer of defendant admits that plaintiff was a passenger at the time and place alleged in the petition but denies all liability in respect to her injuries.

The assignments of error are as follows:

1. The court erred in a special charge submitted to the jury at request of defendant;

2. The court erred in the general charge to the jury;

3. The verdict is against the manifest weight of the evidence.

We are principally concerned with the first assignment of error, wherein the court at the request of counsel for defendant, charged the jury in writing before argument, as follows:

“The Court charges you that, before you can return a verdict for the plaintiff, you must find that the plaintiff has proved facts by affirmative evidence tending to show that the conduct of the Cincinnati Street Railway Company fell below the standard represented by the conduct of reasonable men engaged in the operation of street cars, under the same or similar circumstances and that such conduct directly caused injury to the plaintiff. If the plaintiff fails to establish such proof by a preponderance of the evidence, that is, by the greater weight of the evidence, then the plaintiff cannot recover and your verdict must be for the defendant, The Cincinnati Street Railway Company.”

We have carefully considered the arguments of counsel in respect of this charge, and upon due consideration have reached the conclusion that the special charge as given before argument, though skillfully worded, is misleading and prejudicially erroneous as applied to the issues raised by the pleadings and the evidence in this case.

The vice in the charge as given is that it ignores completely the rule of law so well established in Ohio that where the plaintiff is a passenger and defendant a common carrier of passengers for hire, the defendant owes to the passenger the duty of exercising the highest degree of care consistent with the practical operation of the railroad.

See: Pendleton St. Ry. Co. v. Shires, 18 Oh St 255; Cleveland Ry. Co. v. Arrison, 26 Oh Ap 359; Cincinnati St. Ry Co. v. Henkel, 38 Oh Ap 243 (Motion to certify overruled); Olszowy v. Cleveland Ry Co. 47 Oh Ap 529.

See also: 38 O. Jur., Street Railways, Duty of Care Owed to Passengers, Sec. 698, commencing at page 157, which in part reads as follows:

“The general rule applicable in the case of passengers is that a street oj; interurban railroad company owes the duty ■toward them to exercise the highest degree of. care, which an ordinarily careful and prudent company of this type would use under similar circumstances * * (Emphasis ours.)

Citing numerous authorities, including the cases herein-above cited, and in addition the following:

Cleveland City R. R. Co. v. Osborn, 66 Oh St 45, 63 N. E. 604; Brooklyn St. Ry. Co. v. Kelley, 6 O. C. C. 155, 3 O. C. D. 393 affirmed without opinion in 53 Oh St 646, 44 N. E. 114, 33 Bull 330; Ohio Traction Co. v. Miller, 13 O. C. C. (n. s.) 67, 32 O. C. C. 348; Holmes v. Ashtabula Transit Co. 10 O. C. D. 638, reversed on other grounds in 67 Oh St 153, 65 N. E. 877; Altemeier v. Cinn. St. Ry Co. 4 O. N. P. 224; 5 O. D. (N. P.) 655 affirmed by Cir. Ct. without opinion, which judgment is affirmed in 60 Oh St 10, 53 N. E. 300.

See also: 6 O. Jur. (Carriers) Sec. 311 p. 945 as follows:

“In General: It is the duty of a common carrier of passengers under most circumstances, to exercise the highest degree of care for their safety, which an ordinarily careful and prudent person would use under similar circumstances.” And numerous authorities therein cited. (Emphasis ours.)

That the foregoing rule of law is not peculiar to Ohio is indicated by the following quotation from 10 Amer. Juris. “Carriers” Sec. 1245 p. 163 as follows:

“The degree of care required of a common carrier is not capable of a precise formulation, applicable to all situations that may arise. In general, however, carriers of passengers are required to exercise the highest degree of care, vigilance and precaution for the safety of those it undertakes to transport, and are liable for the slightest negligence. It is clear that the rule does not require such a degree of vigilance as will be wholly inconsistent with the carrier’s methods of transportation, or impracticable to such an extent as to interfere with its regular business. Nor does it require the utmost degree of care which the human mind is capable of imagining or which men are capable of exercising. The practical effect of the application of the rule theretofore discussed is merely to require that the carrier exercise the highest degree of practicable care and diligence that is consistent with the mode of transportation and the normal prosecution of its business.” Citing a multitude of authorities from jurisdictions throughout the entire United States. (Emphasis ours.)

It is a peculiar coincidence that the question here presented was raised by the identical defendant in this case, in a somewhat different form in the earlier case of Cincinnati St. Ry. Co. v. Henkel, supra decided Dec. 8, 1930, by the Court of Appeals of Hamilton County where in an able opinion by Ross J., it was held that it was not error on the part of the trial court to refuse a charge requested by the defendant before argument in form as follows:

“The court charges you that the conductor and motorman of the street car were bound to exercise that degree of care which ordinarily prudent persons would exercise as a motorman and conductor under circumstances similar to that present at the time plaintiff sustained his injuries.”

The special charge requested and refused in that case, while in different form and phraseology, is practically the same in content and import as the special charge allowed by the trial court in the instant case.

The Hamilton County Court of Appeals by its judgment in that case disapproved this charge and the Supreme Court overruled the motion to certify. We see no dififerencé in principle between the special charges as requested in these two cases originating in the same judicial district. The defendant appellee in argument and brief, in its attempt to sustain this particular charge, cites and quotes from the cases of Engelhardt v. Phillips, 136 Oh St 73, and Boles v. Montgomery-Ward Co. 153 Oh St 381 (Ohio Bar, Apr. 24, 1950). We have examined these cases carefully and have concluded that they must be distinguished from the instant case on the facts.

Engelhardt v. Phillips, supra, was an action on behalf of a minor, by his next friend, to recover damages for personal injuries sustained through using a diving tower at a swimming pool operated by defendant, the claim being made that the tower was negligently operated.

Boles v. Montgomery-Ward Co. supra, was an action by the plaintiff for injuries sustained when .she slipped and fell after she had proceeded into the store of defendant a few feet. She claimed that her injuries were attributable to the negligence of defendant in permitting the floor of the store to be and remain in a slippery condition due to a combination of water and slush tracked into the store by other patrons and an oily dressing with which the floor had been previously treated by the defendant.

A mere statement of the facts in each case clearly shows the dissimilarity to the facts in the instant case, where plaintiff was a passenger for hire upon a common carrier.

Undoubtedly the requested charge before argument would be applicable in an action against a common carrier by a member of the general public not a passenger claiming damages due to the negligence of defendant. In cases of that character the standard is ordinary care, but in passenger cases of the character of the instant case, the standard fixed is the highest degree of care consistent with the practical operation of the railroad. Any departure from this norm or standard of care required of a common carrier of passengers by the use of words susceptible of misconstruction and misunderstanding, would by a process of disintegrating erosion gradually weaken and ultimately dissipate a sound rule of law heretofore firmly established as part of our system of jurisprudence.

Concluding our consideration of this first assignment of error we are of the opinion that it is well taken and should be sustained and that the charge as given by the trial court in writing before argument, is prejudicial to the rights of plaintiff and that on this ground the judgment of the common pleas court should be reversed.

We do not consider it necessary to dwell at any great length upon the second assignment of error, namely, that the court erred in its general charge to the jury. In the main we consider that the charge as given is correct, although at several points it appears to be unduly repetitious in respect of the burden of proof placed upon the plaintiff.

The plaintiff complains also that the trial court placed an undue burden upon her in the charge when the court combined two propositions, namely, that the car suddenly jerked and started, and secondly, that the door closed before plaintiff had fully alighted from the car.

We are of the opinion that the plaintiff is not in a position to complain of the combining of these two propositions inasmuch as the same were combined in the petition and not pleaded as separate specifications of negligence.

In considering the general charge as a whole, we cannot find that it is prejudically erroneous to the rights of plaintiff. However, we are of the opinion that upon well recognized principles of law the general charge will not operate to correct the error in the charge in writing given before argument.

We think in view of our conclusions here it is unnecessary to discuss the third assignment of error.

For the reasons stated the judgment of the common pleas court will be reversed and the cause remanded for further proceedings according to law. Exceptions noted.

DOYLE, J, McNAMEE, J, concur.


author: By HUNSICKER, PJ.

text:
    BARTELL, Appellant, v. BROOKS, Admr., Appellee.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 21886.
    Decided July 17, 1950.
    Bernsteen & Bernsteen, Jos S. Kreinberg, Cleveland, for appellant.
    Richard E. McMonagle, Cleveland, for appellee.
    (HUNSICKER, PJ, DOYLE, J, of 9th District; FESS, J, of 6th District sitting by designation in 8th District.)
   OPINION

By HUNSICKER, PJ.

' In this appeal on questions of law, the plaintiff (appellant) Florence Bartell, claims that: she loaned one Curtis F. Brooks, now deceased, $2200.00 to be used by said defendant to purchase an automobile; the title to said automobile was to remain in the name of the decedent until a mortgage for the balance of the purchase price was paid, at which time decedent was to deliver the automobile and title thereto to her; Curtis F. Brooks died before the transfer of the title to said automobile to Florence Bartell; she presented her claim for $2200 (or, 'in lieu thereof, the automobile) to the appellee administrator of the estate of Curtis F. Brooks, who rejected said claim. Florence Bartell prayed for a judgment against decedent’s estate for the claimed loan of $2200.00.

The defendant (appellee) administrator of the estate of Curtis F. Brooks, deceased, admitted that: the decedent owned, at the time of his death, an automobile; Florence Bartell filed her claim against said estate for $2200.00, or delivery of said automobile; he rejected the claim. The other allegations of the petition were denied.

In réality, the petition sought only a judgment for a claimed loan of $2200.00 made by Florence Bartell to Curtis F. Brooks, deceased, on or about January 5, 1948.

The case was tried to the court, a jury having been waived by the parties. At the trial in the common pleas court, only one witness, an Arlene Murphy, gave testimony for the purpose of establishing the claim of Florence Bartell; at the conclusion of which, plaintiff rested her case. Thereupon, defendant by oral motion, asked that plaintiff’s petition be dismissed. This motion, the court stated, would be held “under advisement” and the court requested the defendant to “go forward with their testimony.” Testimony was then presented in behalf of defendant. At the conclusion of all the testimony and the arguments of counsel, the court said:

“At this time the case will be marked ‘heard and submitted’ ‘taken under advisement.’ Motion renewed by the defendant for verdict at the end of the plaintiff’s case.”

Thereafter, the following judgment was entered by the court:

“Jury waived. On trial, at close of plaintiff’s evidence, motion for a directed verdict for defendant is granted, and judgment is rendered in favor of defendant and against the plaintiff and for costs, to all of which plaintiff excepts.”

An appeal on questions of law from such judgment is before this court.

It is to be noted that a judgment was given upon the evidence presented at the conclusion of plaintiff’s case, and not upon the entire evidence presented to the court.

The plaintiff’s evidence established the fact that she had given to the decedent $2200 in an envelope and, at the time of such delivery, plaintiff said “Here is my money” to which the defendant replied, as he took it, “all right.” Testimony was also given as to the claimed purpose for which the money was delivered.

We conclude that, at the conclusion of the testimony for the plaintiff, a prima facie case was established in her behalf for money had and received by the decedent.

The purpose, according to the testimony adduced, for which the money was advanced, was not fulfilled, and the defendant then had the burden of going forward with his case to controvert the claims of the plaintiff; and there being no testimony in behalf of the defendant, such evidence of the plaintiff stood uncontradicted. •

The trial court, in directing a verdict at the conclusion of plaintiff’s case, committed error prejudicial to the substantial rights of the plaintiff.

The judgment is reversed and the cause remanded to the trial court for further proceedings.

DOYLE, J, FESS, J, concur.


text:
    SPELLMAN, Admr., Appellant, v. KILBOURNE, Exr., Appellees, BACKENSTOE et, Appellants.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 21883.
    Decided July 17, 1950.
    Hartshorn, Thomas, Abele, Mitchell & Edelman, Howell Leuck, Cleveland, for appellant James R. Spellman, Admr.
    Harrison, Thomas, Spangenberg & Hull, Cleveland, Henry L Scarlett, Columbus, for appellee.
    Benjamin F. Levinson, Nelson Moss, Columbus, for appellants Willard Backenstoe, Julia Meagher and Herman Murnane.
    (HUNSICKER, PJ, and DOYLE, J, of the Ninth District, and FESS, J, of the Sixth District, sitting by designation in the Eighth District.)
   OPINION

By HUNSICKER, PJ.

On May 13, 1949, appellant James R. Spellman, as administrator of the estate of Maurice Patrick Murnan, deceased, filed in the Common Pleas Court of Cuyahoga County, Ohio, a petition to vacate a decree of divorce granted to one Grace Daugherty Backenstoe, now deceased. The petition alleged that: such decree of divorce was entered on November 7, 1912 by the Court of Insolvency, Cuyahoga County, Ohio, wherein Grace Backenstoe was granted a divorce from her then husband, George Backenstoe; Grace Backenstoe claimed, prior to her death in November, 1939, to be the wife of Maurice Patrick Murnan, and, as such wife, claimed (at the time of the filing of the petition), through the executor of her last will and testament, to have an interest in the estate of the said Murnan, who died in May, 1937; that such decree of divorce awarded Grace Backenstoe was invalid and of no legal effect for the following reasons, to wit: “the Court of Insolvency of Cuyahoga County had no jurisdiction to receive and consider the said cause,” said Grace Backenstoe was a resident of Franklin County at the time she sought to invoke the jurisdiction of the Court in Cuyahoga County, and “there was perpetrated on” such Court of Insolvency “fraud of such nature as to cause the record to * * * show a judgment or decree” of divorce “which is invalid.”

The petition afeked that such decree of divorce granted to Grace Backenstoe on November 7, 1912, be vacated, set aside, and rendered null and void.

Raymond W. Kilbourne, the executor under the last will of the estate of Grace Backenstoe Murnan, filed an answer to the petition of James R. Spellman, administrator of the estate of Maurice Patrick Murnan, and alleged that: Grace Daugherty Backenstoe secured a judgment of divorce from the Court of Insolvency of Cuyahoga County, Ohio, from George Backenstoe on November 7, 1912; that said judgment was a final, conclusive, immutable and valid adjudication of the marital status of the said Grace Backenstoe and George Backenstoe; Grace Daugherty (formerly Backenstoe) married Maurice Patrick Murnan, now deceased, on July 15,1915, and that said Murnan died in May, 1937, leaving Grace Daugherty Backenstoe Murnan as his surviving widow.

Many other defenses are set forth in such answer as filed by Raymond W. Kilbourne, executor of the estate of Grace Daugherty Murnan, deceased, which are not necessary to set out in detail.

Thereafter, one Willard Backenstoe, a brother of George Backenstoe; Julia Meagher, a grandniece of Maurice Patrick Murnan; and Herman Murnane, a grandnephew of Maurice Patrick Murnan, were, upon their respective applications, made parties defendant, and each of said parties filed an answer and cross-petition. Bach of said parties attacked the validity of the judgment of divorce obtained by Grace Backenstoe in Cuyahoga County on November 7, 1912.

Appropriate answers and replies were filed by the several parties to bring the matter to an issue. At the beginning of the trial, counsel for the defendant Raymond W. Kilbourne, executor of the estate of Grace Backenstoe Murnan, by motion directed to the court orally, asked for judgment on the pleadings as to the petition and the several cross-petitions. 'These motions were sustained by the trial court, and judgments accordingly were entered, dismissing such petition of the plaintiff and the cross-petitions of Willard Backenstoe, Julia Meagher and Herman Murnane.

It is from the judgments so entered that appeal has been perfected to this court on questions of law.

Bor the purpose of this discussion, one question is determinative of the matter before us, and that is: May a judgment of divorce, granted by a court of competent jurisdiction in November, 1912, be vacated approximately thirty-seven years after the judgment of divorce, on the ground that the party to whom such judgment was awarded was guilty of fraud in securing the jurisdiction of such court, where the parties seeking such vacation are the administrator of one who married the party granted the judgment of divorce, the claimed heirs at law of such latter spouse, and the claimed heir at law of the divorced husband of the deceased party to whom the judgment of divorce was awarded?

It must be noted that this petition to vacate the judgment of divorce was filed many years after such judgment was entered by the Court of Insolvency of Cuyahoga County, admittedly a court vested with jurisdiction to hear and determine petitions for divorce. The instant action is not brought or defended by the parties to the divorce action, nor is it sought by the husband who later married the claimed guilty party to that divorce action. All of such parties are dead.

The instant action must be determined according to the law as it existed at the time the decree was entered.

We do not deem it necessary and hence do not express an opinion as to the present right to maintain an action to vacate a divorce judgment on the ground of fraud.

A full and complete discussion of the policy of the law as it existed prior to the amendment of Section 6 of Article IV of the Ohio Constitution on September 3, 1912 (effective January 1, 1913, as to all cases arising after the effective date of such amendment), is found in the recent case of Jelm v. Jelm, 56 Abs 364, decided by the Eighth District Court of Appeals on February 27, 1950. It was there said (at pp. 368-369):

“Prior to the constitutional amendment of 1912, reviewing courts of this state were without jurisdiction to review a decree of divorce as distinguished from alimony and property matters. This doctrine of absolute finality applied to proceedings in error as well as to other modes of review. Thus up to the time of the constitutional amendments of 1912, divorce decrees, their sanctity and finality under numerous authoritative decisions, could not be reviewed, modified or reversed upon appeal or error and could not be vacated by an original bill in equity or by any statutory proceedings after term, no matter how gross the fraud practiced by the prevailing party.

“The leading case in support of this doctrine is Parish v. Parish (1859) 9 Oh St 534, 75 Amer. Dec. 482, where the court refused to grant relief upon an original petition or bill in equity after term, although the divorce decree had been obtained by fraud. This was followed by other cases.

“See: Solomon v Solomon (1904) 4 O. C. C. (n. s.) 321; Casto v. Casto (1907) 10 O. C. C. (n. s.) 265; Mulligan v. Mulligan (1910) 82 Oh St 426; Epstein v. Epstein (1909) 17 O. C. C. (n. s.) 321.” (Emphasis ours.)

It is the opinion of the members of this court that such statement correctly and authentically states the law applicable to the matters raised by this appeal.

The judgments dismissing the petition and the several cross-petitions are affirmed.

DOYLE, J, and FESS, J, concur.


author: By PHILLIPS, PJ.

text:
    PERSIN, Plaintiff-Appellee, v. YOUNGSTOWN (City), Defendant-Appellant.
    Ohio Appeals, Seventh District, Mahoning County.
    No. 3252.
    Decided April 14, 1949.
    Peter B. Betras, A. T. Kryzan, Youngstown, for plaintiffappellee.
    H. Herschel Hunt, Law Director, I. Freeman and P. Richard Schumann, Asst. Law Directors, Youngstown, for defendant-appellant.
   OPINION

By PHILLIPS, PJ.

Defendant, the City of Youngstown, Ohio, a municipal corporation operating under a Home Rule Charter of its own adoption, appeals on questions of law from a judgment of the court of common pleas “entered on September 23, 1948, overruling the defendant’s motion for judgment notwithstanding the disagreement of the jury.”

In a word plaintiff alleged in his petition that as the result of the construction by defendant city of a 606 acre airport in 1939 on the westerly side of Ohio State Route 90 in Trumbull County, Ohio, his land situated on the easterly side thereof, which he had owned for more than 30 years, was damaged by defendant diverting water from its natural courses; and by accelerating and increasing the flow of surface water from a greater area than previously such water drained toward the east beyond the capacity of the water courses in their natural drainage to dispose of it, causing an overflow of water upon his land and a backing up and flooding thereof thereon where originally there was no overflow; that defendant caused water to flow from the westerly side of route 90 across that highway upon his land, and has failed to control all such flow and overflow of water, and has drained greater “territory into said water courses, ditches and onto the property of plaintiff that never before drained water into said water courses, ditches or flowed upon the property of plaintiff” (sic); and finally that defendant maintains a nuisance.

In its answer defendant admitted the construction, location and maintenance of its airport as alleged; and by second defense demurred to plaintiff’s petition on the ground that “the allegations therein do not state a cause of action against it”; and in its third defense averred “that if the facts so alleged do constitute a cause of action against this defendant, which defendant denies, then said cause of action is not brought within the time stipulated by law arid is barred by the Statute of Limitations.”

By assignments of error defendant claims that the trial “court erred in overruling defendant’s several motions for directed verdict” made at the close of plaintiff’s case and at the conclusion of all the evidence; “in not holding plaintiff’s claim damnum absque injuria because of defendant’s natural easement of drainage as upper proprietor and its inherent and statutory right to the ‘reasonable use’ of its land for airport purposes”; in overruling defendant’s motion for judgment non obstante, as there was no evidence showing any change of conditions with respect to flooding by the construction of the airport, or that the flooding was caused by any unlawful act on the part of the defendant by reason of which “the judgment of the court of common pleas is contrary to law; and contends:—

“(1) That under the evidence adduced no change of conditions with respect to flooding, by the construction of the airport, had been shown; (2) that as upper proprietor the City had a natural easement of drainage with respect to surface water; (3) that the improvement of its land for airport purposes was a ‘reasonable use’ of its property and the exercise of a statutory power conferred by §3939 (22) GC, which specifically enables a municipality to acquire ‘land and air rights necessary for landing fields, either within or without the limits of the municipality, for aircraft and transportation terminal uses associated therewith and incident thereto and to improve and equip the same with structures necessary or appropriate to such purposes’; that the inadequacy and clogged conditions of the lateral ditches along State Highway No. 90, constructed and maintained by the State Highway Department, were no responsibility of the City; (5) no case was established by the evidence to warrant submission of it to the jury.”

As the result of the construction of such airport, the highest point of which is “up here at the north and 1196 feet,” fences, trees and their stumps, orchards, wooded areas, underbrush, sod, vegetation and buildings were removed from 606 acres of farm and pasture land fronting 6500 feet on the west side of Route 90, all of which was graded evenly from the west to the east toward Ohio State Route 90; natural drains were filled, and as much as 50 acres of such lands were hard surfaced, partly sewered and catch basined, and four run ways, as much as 150 feet wide and 3850 feet long, parking lots and various buildings were constructed thereon, and the rest thereof was allowed to remain “in weeds and different grasses.”

Plaintiff testified “my ground is low, everybody, see, low, and when we get a rain we get a little water, maybe a foot deep in the low places, maybe a foot and a half, now we got 3 or 4 feet deep, when that terrible water comes, in torrents” at various places, for at least a half a mile, directly in an eastern direction over the highway toward the Persin farm for at least a thousand feet; “even cattle don’t want to walk in the deep water”; and “you couldn’t farm since water came in.”; it was just “like a big lake and when you see it come down that driveway sometimes it wouldn’t take long to get 5 or 6 inches, and sometimes 7 or 8 inches, deep in the cellar.”

The evidence discloses that plaintiff’s land is situated approximately 1800 feet south of the entrance to defendant’s airport and that his land, which is low and on which there was an ever flowing spring, was flooded to some extent prior to the construction thereof, three times subsequent thereto in 1946 during cloud bursts and flash floods; that there was “one place,” which “was almost at the extreme south section of the airport,” where “water” used to come up on the road during the heavy rains in the spring when there was ice in the ditches; that the ditch on the westerly side of Route 90 was “pretty well filled up, well I saw an ill kept ditch” which “showed lack of having been timed to a grade; that there was dirt sloughed off into it in some places, and indicated it hadn’t recently been laid to an even grade”; that it “would interfere with the free drainage of water down that ditch”; that the ditch on the easterly side thereof “seemed deeper” before the construction of the airport, “and could take care of the water before, but not now”; that prior to the construction of the airport water, which drained toward the highway (easterly), came from cultivated fields, meadows, pastures, orchards, and shaded lands, twenty-five acres less in extent than at the time of which plaintiff complains, and that the natural slope of the land to the east was not changed substantially by the construction of the airport; that since such construction such drained land is sodded, which would reduce and retard the “run off” of surface waters therefrom after heavy rains; that a ditch on the Turowski farm, extending east for three-quarters of a mile from the airport entrance to a creek, is a “natural water course”; that “since the airport was constructed” one witness never saw “at any time water flowing from the airport lands into the west ditch of the highway, over the highway into the east ditch, and onto the Persin farm property ‘because I never happened to go by when there was a storm, I was always at home, but it washed our driveway out three weeks ago’”; that the same witness never saw “water go over onto the Jackson property”; that the east and west ditches were connected by a culvert at the entrance to the airport; that drainage east of the airport entrance was a connected system as the result of which water, by the natural flow of gravity, would drain into the Turowski ditch from' which it was conveyed east to a creek, its natural outlet three-quarters of a mile distant.

Defendant introduced evidence which defines the physical condition in and about the entrance to the airport and the Turowski farm, situated nearly opposite such entrance, too lengthy to state here, which it claims “proves the physical impossibility of the existence of the situation plaintiff complains of,” and showing water from portions of the highway draining toward the west.

Defendant’s engineer testified that there is a fall of 5 feet in the Turowski ditch toward the east in a distance of 500 feet; that in front of the Jackson farm the highway ditch was 6% feet higher than the low point of the Turowski ditch 500 feet from the road; that water would have to be 6% feet deep there before it could flow (and there is no evidence of water to that depth there) down the east ditch, and that if it were that deep there it would totally submerge lands situated on the east side of Route 90 to the southerly line of the airport excluding only the Jackson farm.

There is no dispute but that substantially the natural slope of land eastwardly remained unchanged after the construction of the airport.

It is on such evidence that plaintiff bottomed his case in the court of common pleas that accelerated water from the airport and its driveways and hard surfaced portions was conveyed south one-half mile to his farm by means of the east and west ditches of Route 90; and that defendant contends that “reasonable minds can reach only the following conclusions from these facts and there are inescapable;—

“(1) Construction of the Airport was a reasonable use of the land, and the means employed, were in accordance with best engineering practices.

“(2) Less surface water to the extent of the 25 acre area drained east towards Route 90 after construction of the Airport.

“(3) The smaller amount of surface water now draining east has been retarded in its flow by the grass sod covering, as opposed to the cultivated fields existing prior to the construction.

“(4) The lands of plaintiff were flooded in a similar manner prior to the construction of the Airport.

“(5) The greater degree of flooding, which may have occurred since the Airport has been constructed, is due to the clogged, filled in and generally poor condition of the state highway ditches.

“(6) The only collection or channelling of surface water is at the airport driveway where the same is eonveyed by natural gravity on to the natural water course on the Turowski farm.

“(7) This water so channelled could not, under the physical facts and the record, ever reach the Persin farm by means of the east and west highway ditches.

“(8) There is no evidence in this record which in any way supports a direct causative connection between the construction of the airport and the flooding of plaintiff’s land. Rather, the greater degree of flooding complained of by plaintiff is directly due to the poor condition of the state highway ditches, and/or is equally consistent with one of the several other causes, not giving rise to liability against the City of Youngstown.”

Plaintiff filed his action in the court of common pleas on February 19, 1947, and §§11599 and 11599-1 GC, enacted in June of the same year and effective September 27th, require that a motion for judgment non obstante veredicto be filed prior to the filing of entry of judgment; and since no entry journalizing the judgment of the court was filed prior to the filing of defendant’s motion for judgment non obstante veredicto such motion was properly before the court. McAtee v. Western & Southern Life Insurance Co., 82 Oh Ap 131.

We believe that the jury’s disagreement would not furnish ground for the trial judge not considering defendant’s motion for judgment notwithstanding the verdict rendered against it on questions of law.

In the case of Myers v. Elyria Memorial Hospital Co., 30 Abs 674, in which the supreme court overruled motion to certify, the jury disagreed and was discharged by the trial judge. Upon appeal to the court of appeals of the ninth district that court said:—

“Irrespective of the disagreement of the jury, §11601 GC, empowers the trial court to pass upon a question of law and render judgment in favor of the party entitled thereto, when under the evidence received only a question of law is presented.”

Counsel for defendant contend:—

“The rule-has been followed on motions for directed verdict where the jury has failed to agree. Colwell v. Dwyer, 33 Abs 455; Swaney v. Pennsylvania R. R., 23 Abs 212. It is also an established rule of law in Ohio, followed by our court of appeals, that the overruling of a motion for judgment notwithstanding the verdict is a final judgment from which an appeal may be prosecuted. McClanahan v. Koviak, 62 Oh Ap 307; Cousins v. Huss, 71 Oh Ap 107; Massachusetts Insurance Co. v. Hauk, 72 Oh Ap 131, (1943) Mah. App. 48; Meyers v. Elyria Hospital, 30 Abs 674; Stowe Fuller Co. v. Dominick, 20 C. C. N. S. 556, affirmed in 75 Oh St 593; Raykovich v. Youngstown (1947) Mah. App. 72.

“The motion non obstante as now existent under §11601 GC, is in effect nothing more than an iteration of the motion for judgment or an instructed verdict, filed at the conclusion of the case. Harig Co. v. Cincinnati, 61 Oh Ap 314 at 319. In passing upon such motion the court may now consider the entire record. Arthurs v. Citizens Coal Co., 37 Abs 438.

“Obviously, therefore, the purpose of §11601 GC is to enable the trial court to render such judgment ‘upon the statements in the pleadings or upon the evidence received upon the trial’ as ‘one party is entitled by law,’ independently of any verdict returned by the jury. Logically, too, if the court is given the power to render judgment notwithstanding or adverse to the verdict, it certainly may render the proper judgment where no verdict at all could be reached by the jury.”

Obviously we conclude the trial judge had jurisdiction to rule upon defendant’s motion for judgment in its favor notwithstanding the disagreement of the jury.

Defendant waived its right to rely upon its motion for judgment entered in its favor made at the close of plaintiff’s case when it accepted the ruling of the trial judge and proceeded with its defense and introduced evidence on its own behalf.

“When a motion of a defendant for a directed verdict is made at the conclusion of plaintiff’s evidence and overruled, the defendant has an election either to stand on his exception to the ruling or to proceed with his defense; and if he accepts the ruling, however erroneous it may be, and proceeds with his defense, introducing evidence on his own behalf, he thereby waives his right to rely on the denial of his original motion.” Halkias, Appellee, v. Wilkoff Co., Appellant, 141 Oh St 139.

Under its assignment of error three, that “the court erred in overruling defendant’s several motions for a directed verdict,” defendant’s counsel argue that “from the record, the only conceivable theory upon which plaintiff can attach responsibility against the City is that by acceleration of water in times of heavy rains down the airport driveway, the water was caused to rise up and go to the south through the east and west ditches over the high point in the Jackson farm, and thence one-half mile to plaintiff’s farm. Under the evidence, reasonable minds could not differ on the fact that this is a physical impossibility.” Defendant’s counsel supports its argument by quoting the second syllabus of Willoughby v. Malone, 122 Oh St 815, where it is said:—

“In an action against a village for damages due to the backing up of sewage upon private property, it is reversible error to charge the jury that ‘if you find that plaintiff’s house was properly connected with the sanitary sewer, evidence of failure of the sewer to drain plaintiff’s property is prima facie evidence of defective construction or negligent maintenance.’ ”

Counsel for defendant further argue that to avoid the rule announced in the case of Village of Willoughby v. Malone, supra, the plaintiff would have to sustain the burden of proving:—

“(1) That the state highway ditches were well-kept;

“(2) That the culvert underneath his own driveway was free from obstructions;

“(3) That the east and west ditches and their culverts, as they extend north of his farm, were equally free from obstructions.”

Finally on this assignment of error counsel for defendant claim there is no proof contained in the record on any of the quoted propositions, and that after giving the evidence the most favorable construction in favor of plaintiff of which it is susceptible that the court should have directed a verdict in favor of defendant.

We have read the voluminous record of the testimony taken in the court of common pleas, and studied the evidence and exhibits contained therein, and upon such evidence we can not reach the conclusions at which defendant asks us to arrive that “reasonable minds can reach only” all of the conclusions outlined in their quoted eight points; and conclude that the trial judge did not err, as urged in this assigned ground of error, in overruling defendant city’s motion for a verdict directed in its favor made at the conclusion of all the evidence.

Defendant argues that assuming, but not admitting, 'that plaintiff’s land was flooded occasionally subsequent to the construction of its airport, that his claimed damage resulting therefrom was “damnum absque injuria because of defendant’s natural easement of drainage as upper proprietor and its inherent and statutory right to the reasonable use” of its land for airport purposes, and cites authorities as follows:—

“‘While the rightful use of one’s own land may not infrequently have some effect to diminish the value of an adjoining estate, or to prevent its being used with the comfort which might otherwise have been anticipated, this is damnum absque injuria, as to which the law cannot interfere.’ 1 Am. Jur., p. 505.

“ ‘It is well established as a general rule subject to certain modifications hereafter noted, that the owners of lands through or along the border of which a natural water course flows may accumulate surface water falling upon lands adjacent thereto, and cast the same into said stream, without liability to a lower riparian owner for damages, although the flow of water is thereby accelerated and the volume increased, provided that this is done in reasonable use of his own land.’ 56 Am. Jur., p. 559.

“The above general rule obtains in Ohio. See Mason v. Comm., 80 Oh St 151, at 159; Strohm v. Molter, 30 Abs 330; Nagy v. Akron, 27 Oh Ap 250, McCoy v. Rankin, 35 Abs 621; Blue v. Wentz, 54 Oh St 247. In the latter case the Supreme Court said:—

“ ‘Syllabus 2. A lower tenement is under a natural servitude to a higher one to receive from it all the surface water, accumulating from falling rains and melting snows, or from natural springs, that naturally flow from it to and upon the lower one. This advantage of the higher tenement is a part of the property of the owner in it, and he is not indebted to the lower tenement therefor.’

“The law governing surface water in Ohio, following the Civil Laws, is stated in 41 O. Jur., p. 48, Sec. 46:

“ ‘Surface water is that which is diffused over the surface of the ground, derived from falling rains and melting snows, and continues to be such until it reaches some well-defined channel in which it is accustomed to, and does, flow with other waters, whether derived from the surface or springs; it then becomes the running water of a stream and ceases to be surface water. Where two parcels of land, belonging to different owners, lie adjacent to each other, and one parcel lies lower than the other, the lower one owes a servitude to the upper, to receive the water which naturally runs from it. The owner of the upper piece of land has a natural easement in the lower piece, to the extent of the natural flow of water from the upper piece, to and upon the lower one.’

“In Hamilton v. Ashbrook, 62 Oh St 511, it was held:

“ ‘A municipal corporation is not liable for damages caused by such increased flow in a natural watercourse as results from the improvement of lots and streets within the territory whose waters naturally drain into such water course.’”

Defendant further argues that in the case of Florence Turowski, Plaintiff-Appellee, v. The City of Youngstown, Defendant-Appellant, Mahoning Appeals No. 3126, in which the supreme court overruled motion to certify, this court “considered the lateral ditch along the west side of the highway to be a natural drainage channel and attached liability against the city because under the state of facts this water was diverted from this ditch,” and quotes this court’s opinion as follows:—

“The lateral ditch along the west side of the highway in the present case seems to me to be a ‘natural drainage channel’ so far as the parties here are concerned and if all the defendant did was to accelerate the flow of water into that ditch, the ‘Mason case’ would be conclusively adverse to plaintiff’s claim. But the entrance driveway, as constructed, did more. It was built across the highway ditch and there is substantial evidence that water ran down the entrance driveway over the lateral ditch, across the highway and thence on to plaintiff’s farm.

“* * * The law, as deduced from these authorities, seems to me fairly clear. While mere acceleration of natural flow is not actionable, acceleration plus diversion is actionable.

“There is substantial evidence in this case that the flow of surface water was not only accelerated along the concrete entranceway to the airport, but that such water was diverted thereby from flowing into the west highway ditch and was sent across the top of the highway into the east lateral ditch and thence overflowed plaintiff’s lands.”

Defendant’s counsel then argues:—

“It is clear from the record in this case that the west highway ditch was not a ‘natural drainage channel’ but on the contrary, only served to bring the water from the north and south down to the airport entrance, through the culvert and in and upon the natural water course upon the Turowski farm where it was carried by natural gravity three-fourths of a mile to a creek.

“If this court, therefore, had the instant record before it in the Turowski case, no liability would have attached as against the City of Youngstown.

“And contrariwise and paradoxical, if we accept here that the west ditch is a natural drainage channel, which it is not, then the city had a perfect right to accelerate water and increase its flow, and run it down the road to flood the Persin farm, as plaintiff claims the situation to be.”

Defendant concludes its argument on this assigned ground of error with this statement:—

“Thus, under the rule above stated, and followed, in Ohio, the city had a right to accelerate and even increase the flow of the water into the Turowski ditch.”

In the case we review, as in the case of Turowski v. City of Youngstown, supra, “there is substantial evidence that the flow of surface water was not only accelerated along the concrete entrance way to the airport,” as well as elsewhere along the 6500 feet the airport fronted on Ohio State Route 90, “but that such water was diverted thereby from flowing into the west highway ditch, and was sent across the top of the highway into the east lateral ditch, and thence overflowed plaintiff’s lands.”

While in the exercise of the reasonable use of its land, plaintiff, a lower tenant, is under a natural servitude to defendant city, a higher one, to receive from it all surface water, accumulating from falling rains and melting snows, or from natural springs, that naturally flow from it to and upon plaintiff’s land; yet under the facts in the case we review a question was presented for the determination of the jury whether defendant was indebted to plaintiff.

In our opinion the construction of the airport by defendant city under such conditions amounted to rightful and reasonable use of its land; but we cannot conclude that “the court erred in not holding plaintiff’s claim was damnum absque injuria because of defendant’s natural easement as upper proprietor and its inherent and statutory right to the reasonable use of its land for airport purposes.”

Having reached the conclusions announced, it is obvious that we do not believe that the trial judge erred to defendant’s prejudice in overruling its motion for judgment in its favor notwithstanding the disagreement of the jury on the urged ground that “there was no evidence showing any change of conditions with respect to flooding by the construction of the airport”; nor that the flooding was caused by any unlawful act on the part of the defendant; nor in any of the other respects urged by defendant city, all of which have been considered.

The judgment of the court of common pleas is affirmed.

NICHOLS, J, BUCKLEY, J, concur in judgment.


author: By PAULINO, J.

text:
    MARRISON, Plaintiff, v. HOGUE et, Defendants.
    Municipal Court, Ashtabula, Ohio.
    No. 14515.
    Decided July 7, 1950.
    Richard C. Rose, Ashtabula, for plaintiff.
    Walter L. Barsky, Ashtabula, for defendants.
    Nelson Hague, Ashtabula, for Garnishee.
   OPINION

By PAULINO, J.

This cause came on to be heard by the court on Proceedings in Aid of Execution. On April 5, 1950 a judgment for $511.58 and court costs was recovered by Curtis Marrison, plaintiff, against Farnum F. Hogue and Marleo E. Hogue, also known as Marleah E. Hogue, defendants. Thereafter, on May 19, 1950, a motion and an affidavit for an order in aid of execution was filed and on the same day an order was served on The Farmers National Bank & Trust Company of Ashtabula, Ohio, to appear before the court on May 29, 1950 to answer respecting any liability on the part of the bank to the defendant, Farnum F. Hogue. By agreement of the parties the hearing on the order was continued to June 7, 1950.

The Farmers National Bank and Trust Company, as garnishee, sent two letters to the court which were filed in the office of the Clerk of Court. The first letter dated May 20, 1950 and filed on May 23, 1950 stated as follows:

“Referring to Case No. 14515 Curtis Marrison v. Farnum F. Hogue and wife, we wish to advise that the balance on the checking account of said Hogue at our bank is the sum of $334.57.”

The second letter dated May 25, 1950 and filed on May 26, 1950 stated as follows:

“A few days ago we advised you that there was a balance of $334.57 in a checking account in our bank standing in the name of Farnum F. Hogue.

“Inasmuch as Mr. Hogue is indebted to our bank we are claiming this as an offset and applied it on his loan thus balancing out the account.”

At the hearing held on June 7, 1950, Mr. F. B. Russell, President of The Farmers National Bank and Trust Company, substantiated the statements set forth in the two letters and testified further that the defendant, Farnum F. Hogue, owed the bank the sum of $2067.50 on a demand note dated January 10, 1950; that after the bank had been served with the order in aid of execution the credit balance in the sum of $334.57 in the checking account of the defendant was credited to the note owing the bank and was charged off. On cross examination Mr. Russell testified that no formal demand had been made on Mr. Hogue for payment of the note at the time of the offset nor at any other time.

In the brief filed on behalf of the plaintiff it is contended that the bank had no right to appropriate an account of a depositor after an order in aid of execution had been served upon the bank to subject the funds of the defendant toward the payment of the judgment of the plaintiff. In support of this contention plaintiff cites §11837 GC which reads as follows:

When property and garnishee bound. — An order of attachment shall bind the property attached from the time of service. A garnishee shall be liable to the plaintiff in attachment for all property of the defendant in his hands and money and credits due from him to the defendant from the time he is served with the written notice hereinbefore mentioned.* * *

Plaintiff further contended that at the time of the service of the order on the bank there was a balance of $334.57 in the cheeking account of the defendant, Farnum F. Hogue, and that the bank had no right to summarily appropriate these funds, that the bank at the time of being served with the order in aid of execution was honoring checks written by said defendant, that it had made no claim to the funds, that it had made no demand for payment of the note on the defendant, that it had made no attempt to collect the note from the defendant, that the bank failed to sustain its position by having failed to introduce the note in evidence or to exhibit it to the court, and that there had , been no legal determination that defendant was indebted to the bank, and that by summarily appropriating the funds of said defendant, the bank failed to give the defendant, Farnum F. Hogue, the opportunity to set up any defenses he might have had against the claim of the bank.

The defendant, Farnum F. Hogue, filed a brief upholding the position which the bank had taken. His contention was that the bank had a perfect right to summarily appropriate the funds in the checking account to apply on the note owing the bank. He argued that no demand upon him for payment of the note was necessary and that the bank had a prior right to any attaching creditor to set off funds on deposit in his checking account against the note owing by the defendant.

The Courts of the State of Ohio have generally held that a bank has the right to set-off against a deposit the matured debt of a depositor to the bank. This right is given to the bank even after it has been served with a garnishee notice. Cleveland Trust Co. v. Crothers, 15 Abs 445.

Syl 2. The right of set-off given by §11321 GC between persons between whom cross demands have existed gives to a bank the right to apply the account of a depositor to a past due mortgage after an order in aid of execution is served on it to reach the depositor’s account.

On page 447 of the above decision the court held as follows:

Finally, it is our opinion that the right of set-off where cross demands exist is given by statute in any case in which suit is brought by the one party in which suit the other party may legally counter-claim. The Bank has the right of set-off at all times up to the amount of the indebtedness past due, indebtedness of the depositor to the bank or vice versa. Service of process in garnishment does not defeat or take away the right, although the right is not asserted and the bookkeeping act of set-off not performed until after service of garnishment process. The provisions of §11772 GC reach only such sum as may remain after the balance is struck.

The leading Ohio cases supporting this proposition of law are as follows:

Bank v. Brewing Company, 50 Oh St 151.

Railroad Co. v. Bank, 54 Oh St 60.

The plaintiff in his brief contended that the note of the bank being a demand note had not become due by reason of the fact that the bank had made no demand upon the defendant for payment and by reason of the fact that the bank had not shown to the Court that it had a valid and mature claim against the defendant. In support of his contention plaintiff cites 3 R. C. L., page 592, Sec. 220, as follows:

As a general rule, in order that a bank may apply a deposit to an indebtedness of a depositor to it, the indebtedness must be due and payable. A debtor in one sum has no lien upon it in his hands, for the payment of a debt owned by him, which has not yet matured; nor has a bank, more than any other debtor. Both hold, as debtors, the moneys of their creditors, and may set up no claim to them not given by the law of set-off, counterclaim, recoupment or kindred rules. And as a bank holding a note of a depositor has no right of set-off, and no valid lien, before the note matures, it has 3en held that if, in the interval before the maturity, the depositor makes an assignment of his funds without the knowledge of the bank, but otherwise legal, the amount of his balance will pass to the assignee.

On the question of a demand for payment being made before a demand note becomes due, plaintiff cites §8176 GC which provides as follows:

When the instrument is not payable on demand presentment must be made on the day it falls due. When it is payable on demand, presentment must be made within a reasonable time after its issue.

On the other hand defendant in support of his contention that a demand note is due upon execution cites the following cases:

Rigley v. Watts, 15 C. C. 645; 8 C. D. 229.

1. A promissory note payable ‘on demand after date,’ is not an instrument to pay money on time; it is a promise to pay which becomes mature at its execution and due at its date.

2. When a promissory note payable ‘on demand after date’ is delivered, the payee may at once put it in action; the commencement of the suit is sufficient demand.

The Union Central Life Insurance Company v. Curtis, 35 Oh St 357.

In the condition of a mortgage given to secure the payment of a promissory note, payable on demand, it was provided that, if the mortgagor should pay said note, or cause the same to be paid, the mortgage deed should be void; Held, that demand of payment of the note before suit was not a necessary condition to a right of action on the mortgage. Hill v. Henry, 17 Ohio 9.

A promissory note for money, payable on demand, is due upon delivery.

The Court has examined a number of authorities on the proposition of whether or not demand must first be made before a note due on demand matures. Gordon v. Preston, Wright 341, decided in 1833, holds that ‘Where a note is payable on demand, it is not due until demanded.’ This authority, however, is not the prevailing view. The case of Darling v. Wooster, 9 Oh St 517, decided in 1859 holds that no demand is necessary to sustain an action on a demand note. In this particular case ‘the petition contained no averment ■of a demand previous to the commencement of suit, and no evidence of such previous demand was offered upon the trial.’ The Supreme Court of Ohio affirmed the decision of the lower court.

A more recent authority, decided July 28, 1943, holding that a demand note is due upon delivery thereof is the case of Union Properties, Inc. v. McHenry, 142 Oh St 136, 26 O. O. 339, on page 342 which holds as follows:

It is well settled that a promissory note payable on demand is due upon delivery thereof, and therefore the filing of an action is in itself sufficient demand against the maker of a note to sustain the action and no demand for payment is required prior thereto.

Plaintiff in his brief cited §8176 GC which provides for presentment of an instrument for payment when it is payable on demand. This rule applies only to endorsers but not to the payor of the instrument. No presentment for payment of the instrument to the maker thereof is necessary. Sec. 8175 GC provides as follows:

Presentment for payment is not necessary in order to charge the person primarily liable on the instrument.

Plaintiff further contended that the bank did not introduce the note into evidence and neither did it exhibit the note to the court in order to sustain the position which it took.

It is an elementary principle of law that the burden of proof is upon the one who asserts. The evidence presented by the bank was that it had a demand note and that it applied the funds in the checking account of the defendant, Farnum F. Hogue, as a set-off against the indebtedness owing the bank by the defendant. If the plaintiff is asserting that the bank did not have such a note or that the facts with reference to the note were different from the testimony which was presented, the burden was upon the plaintiff to so show such facts. The plaintiff had ample opportunity to cross examine the witness for the bank and to require him to present the note in evidence.

Knight v. Boren 39 Abs 96.

A party who seeks relief by legal process must make proof of the basic facts essential to establish the right to such relief.

The plaintiff in this case filed a Motion and Affidavit for an Order in Aid of Execution. This order was served upon The Farmers National Bank and Trust Company. The bank first answered stating that the defendant, Farnum F. Hogue, had on deposit with it in a checking account the sum of $334.57. Later the bank answered stating that the defendant, Farnum F. Hogue, was indebted to it and that this sum of $334.57 was applied as a set-off against his indebtedness to the bank. The testimony of the bank at the hearing disclosed that the bank was the holder of a demand note executed by the defendant, Farnum F. Hogue, which note was dated January 10, 1950 and was in the sum of $2067.50.

On the basis of the evidence presented in this hearing and of the authorities herein cited the court finds that the bank has no funds in its possession belonging to the defendant, Farnum F. Hogue, subject to be applied on the judgment of the plaintiff, and the court is therefore vacating the Order in Aid of Execution and is dismissing the garnishment proceedings filed against The Farmers National Bank and Trust Company. Exceptions of the plaintiff noted.


text:
    CHISHOLM, Plaintiff-Appellant, v. CHISHOLM, etc., Defendant-Appellee.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 21799.
    Decided July 24, 1950.
    Horwitz, Kiefer & Harmel, Cleveland, for plaintiff-appellant.
    Hauxhurst, Inglis, Sharp & Cull, Douglas, Stark, Jett & Biechele, Cleveland, for defendant-appellee.
   OPINION

Per CURIAM:

In seeking the relief demanded, plaintiff is in the unique position of attacking the validity of an agreement fully understood and freely executed by her more than twenty-seven years before the institution of this suit. She makes no claim of fraud, mistake imposition or undue influence. She asserts no ground for a reformation of the trust agreement of May 9, 1921, although such in essence is the nature of the relief sought. With the advice of counsel and with full knowledge of the facts she elected unequivocally to receive her annuity out of the income of the trust fund. By her conduct she is now estopped from making a different choice.

There was no testamentary trust in favor of plaintiff created by the will of Henry Chisholm. No duties were imposed upon. Andre T. Chisholm as trustee that were enforceable by plaintiff. Under the terms of the will, plaintiff’s annuity was an equitable charge upon the estate of the residuary legatee.

See: Restatement of Trusts, Vol. 1, Sec. 10 page 32. The following language under sub-section (f) of Sec. 10 of the Restatement is pertinent:

“Ordinarily where property is transferred to another ‘subject to the payment of’ a certain sum of money to a third person, or ‘paying’ such sum, an equitable charge and not a trust is created, since the transferor does not thereby manifest an intention to impose a duty upon the transferee to deal with the property for the benefit of a third person. On the other hand, where property is transferred to another with a direction to pay to a third person a certain sum out of the property or its proceeds, or ‘subject to the payment from the property or its proceeds’ or ‘paying from the property or its proceeds’ such sums, a trust and not an equitable charge is created, since the transferor thereby manifests an intention to impose a duty upon the transferee to deal with the property in part at least for the benefit of the third person.”

The foregoing quoted language delineates the distinction between Chisholm v. Shields, 67 Oh St 374 and the case under review.

All the beneficiaries under a will may by agreement between and amongst themselves, make a disposition of property otherwise than as directed by the testator. 57 Amer. Juris. 653, Sec. 1005-1009.

See also:

Annotation in 97 A. L. R. 468.

“The beneficiaries under a will cannot, however, agree to modify or destroy a trust provision thereof.”

Farwell v. Carpenter, 161 Iowa 257; Davenport v. Sandman, 204 Iowa 927; Parker v. Broadus, 128 Miss. 699, 91 So. 394; Madden v. Shallenberger, 121 Oh St 401.

The last citations and quoted language are from 97 A. L. R. at page 471.

The case of Madden v. Shallenberger, supra, relied on by plaintiff, is not authority for the proposition that the beneficiaries under a will may not alter the distribution directed by the testator where such agreement does not effect the provisions of an active and express trust.

The judgment of the Probate Court is affirmed. Exc. Order See Journal.

SKEEL, PJ, McNAMEE, J, HURD, J, concur.