author: By MARTIN, Circuit Judge. By SHACKELFORD MILLER, Jr., Circuit Judge.

text:
    AMERICAN ALLIANCE INSURANCE COMPANY et, Appellants, v. KELEKET X-RAY CORPORATION, Appellee. KELEKET X-RAY CORPORATION, Cross-Appellant, v. AMERICAN ALLIANCE INSURANCE COMPANY et, Cross-Appellees.
    United States Court of Appeals.
    Nos. 12981, 12982.
    Decided October 19, 1957.
    William A. McKenzie, Cincinnati, Jacob T. Pincus, Chicago, Ill., Graydon, Head & Ritchey, Cincinnati, Donald N. Clausen, Clausen, Hirsh & Miller, Chicago, Ill., on brief, for American Alliance Ins. Co. et al.

      Joseph A. Segal (of Paxton & Seasongood), Robert P. Goldman, Thomas M. Stanton, Cincinnati, for Keleket X-Ray Corp.
    Before MARTIN, MILLER and STEWART, Circuit Judges.
   OPINION

By MARTIN, Circuit Judge.

The Keleket X-Ray Corporation of Cincinnati, Ohio, plaintiff in the United States District Court and appellee-cross-appellant here was engaged in the manufacture of instruments utilized in the measurement of radioactivity, such as Geiger Muller counters, ionization chambers, pocket dosimeters, and associated equipment.

On July 24, 1951, an incident occurred, occasioning loss to Keleket which has brought about this litigation. Several companies insuring Keleket against two types of loss were the parties defendant in the district court and have appealed from its judgment.

The “stock policies,” so termed, issued by defendants Citizens Insurance Company, Home Insurance Company, Insurance Company of North America, and the World Fire and Marine Insurance Company, insured Keleket against direct loss by explosion to stock, materials and supplies. Under the second type of policies (business interruption policies), Keleket was insured by American Alliance Insurance Company, American Eagle Fire Insurance Company, American & Foreign Insurance Company, California Insurance Company, Mercury Insurance Company, and World Fire & Marine Insurance Company, against loss of gross earnings resulting directly from necessary interruption of business caused by destruction or damage by explosion. After the filing of notices of appeal, the Insurance Company of North America and Keleket entered into a compromise agreement in satisfaction of the judgment against that defendant. Insurance Company of North America is therefore no longer a party to either the appeal or cross-appeal.

In the district court, Keleket alleged that a capsule containing a highly radio-active radium salt had exploded with the direct and proximate result that this material was disseminated throughout the plant. Large quantities of stock and material were contaminated and rendered unsalvageable. The manufacturing operation was necessarily interrupted, at least partially, for about five months because of the serious radiation hazard to personnel in the plant building and for the reason that the nature of the instruments produced required that no radioactive material be present.

It should be observed that, under the extended coverage endorsements of the policies, Keleket was insured against losses due to explosion. There was no insurance protection against radioactive contamination of itself. If the plaintiff were unable to establish the occurrence of an explosion, no liability would arise under any of the policies of insurance. The accident alleged to be the explosion here was not a high order detonation accompanied by severe blast damage, but was of quite small proportions. Therefore, substantial issues were raised in the district court as to whether the accident was an “explosion” contemplated and covered by the several policies of insurance. Secondary issues arose as to whether the damages sustained by Keleket resulted directly from such explosion; and, if so, the extent of the liability of the insurers under the policies.

The case was tried in two stages. By stipulation, the only issue submitted to the jury was whether there had been an explosion of the radium source located in the plaintiff’s plant. It was the verdict of the ,iury that there had been such an explosion. Pursuant to the stipulation and by further agreement of counsel, the remaining issues were submitted to a special master. He found that the damages were the direct result of such explosion and fixed the liabilities of the various insurers.

On July 2, 1956, the district judge entered judgment against the nine insurers in favor of Keleket, in consonance with the verdict of the jury and with the report and the supplemental report of the special master. In Case No. 12981, the insurance companies have appealed generally from the judgment for $103,932.11 entered against them; in No. 12,982, Keleket, on cross-appeal, has raised the sole issue of whether the special master erred in determining the amount of plaintiff’s loss of gross earnings under the “business interruption policies.”

The salient facts in relation to Case No. 12,981, will be stated. An indispensable step in the manufacture of radiation measurement instruments is the calibration of those pieces of equipment. The appellee produces a device known as a “pocket dosimeter,” which, in outward appearance, is not unlike a fountain pen. It consists of a plastic tube with a clip that may be worn in the pocket in the same manner as a pen is worn. The plastic tube contains a small electrometer for measuring the amount of radiation to which it (and hence the wearer of the dosimeter) has been exposed. The calibration procedure determines whether or not the instruments accurately indicate the amount of exposure.

The method of calibration utilized by the appellee required a known source of radiation. A “radium needle” commonly used by the medical profession in radiation therapy was the source employed. The strength of its emission was known, having been measured by the Bureau of Standards. By placing the source for a given period of time at a known distance from the dosimeter to be tested, an accurate mathematical computation can be made of the radiation to which the instrument has been exposed. Comparison of the correct computation with the actual reading of the device would indicate the error, if any.

In order to expedite the calibration operation, the company used a specially constructed calibration stand. Its function was to store the known radium source within a protective lead vault, or “pig,” when not in actual use (thus keeping personnel exposure to a minimum) and to facilitate the proper positioning of the source for calibration operations. The dosimeters to be calibrated were charged and placed in holders in the calibration stand. Compressed air from an ordinary tire pump was then employed to raise the radium source from the lead vault to the “calibrate” position, where it would be retained by a catch until released by an electrical timer after a predetermined period of time. Gravity would then return the source to its storage vault. The dosimeters thus exposed could be read to determine their accuracy.

The known source of radiation used in this calibration stand consisted of an iridium-platinum capsule, approximately 15 millimeters in length and 4 millimeters in diameter, which contained a highly radioactive radium salt (radium barium sulphate) in the form of a finely divided powder. Its actual radium content was approximately 49.1 milligrams. This compound had been sealed within the capsule by a plug-type cap, brazed on with gold solder. The evidence is uncontradicted that this weld was poor, inasmuch as the solder had penetrated the joint only one, or two, thousandths of an inch.

On July 24, 1951, a Keleket physicist was using the stand for routine calibration operations. Upon depressing the plunger of the pump to elevate the capsule to the “calibrate” position, the physicist testified, he heard a “pop” and observed the emission of a white “mist” from the vent holes at the top of the stand. Subsequently, this “mist” was determined to be the finely powdered radium salt previously contained by the capsule. This radioactive powder released from the capsule, along with radon gas (a highly radioactive decay product of radium), permeated the plant and contaminated it throughout.

Appellants contend that the verdict of the jury that an explosion had occurred was not supported by substantial evidence. They urge further that the district court erred in overruling objections to the hypothetical question submitted to appellees’ expert witnesses and that prejudicial error was committed by the trial judge also in charging the jury, for the stated reason that the definition of “explosion” employed in the charge was not that delineated by the Supreme Court of Ohio in United Life, Fire & Marine Insurance Co. v. Foote, 1872, 22 Oh St 340.

In our judgment, sufficient substantial evidence was adduced at the trial to support the verdict of the jury. The extended coverage clauses of the policies in question protected the insured plaintiffs against losses resulting from explosions of both large and small magnitude, the latter being nonetheless explosions despite their relatively small release of energy. The evidence viewed in a light most favorable to the appellee (plaintiff in the district court) demonstrates that the capsule was intact immediately prior to the accident. Highly qualified scientists calculate that the gas pressures within the capsule (resulting from the gaseous decay products of the radium and the dissociation of water absorbed by the radium barium sulphate) would range from 98 to 440 pounds per square inch. While these pressures appear to be small when translated into pounds of actual force acting upon the cap of the capsule, we think the jury was justified in inferring that the pressures were sufficient to. and did, cause an explosion. The popping noise and simultaneous appearance of a cloud of white powder or mist at the vent holes of the stand also substantiate the verdict. After the accident, it was determined that the cap of the capsule had been caught above the calibration stand’s catch, while the capsule itself had returned to the vault, thus presenting strong circumstantial evidence that the two had been parted by some force from within the capsule.

We have carefully considered the appellants’ objections to the hypothetical question posed by appellee to its expert witnesses and conclude that there is no basis for their contention that the question was improperly submitted because it excluded material evidence and included immaterial evidence. The premises upon which these experts were asked to state an opinion were sufficiently comprehensive in scope, not having excluded from consideration the facts in evidence which were essential to the formation of an intelligent opinion by each expert witness. See Squire v. Industrial Commission, Oh Ap 1946, 70 N. E. (2d), 95, 46 Abs 392. Appellants were not prejudiced by the inclusion of immaterial assumed facts in the question. There was substantial evidence to support those assumptions upon which the question was based. The question was analyzed by court and counsel; and appellee was required to make certain amendments. We think that District Judge Druffel’s rulings on objections to the question were correct in every respect, indicating a comprehensive understanding of the highly technical testimony of the scientists. The responses of these experts — all top men in their field — were therefore competent evidence to be considered by the jury. Dr. J. W. Irvine, Jr., who participated extensively in the scientific investigation of the accident, said, in response to the question: “In my opinion the cause of the accident was the forceful expulsion of the cap from the capsule resulting from the gradual build-up and the sudden release of pressure in the radium capsule.” Dr. Otto Glasser thus responded to the hypothetical question: “I think the cap of the capsule was blown out by the release of — suddenly blown out by the release of pressure inside the capsule and this gas, pressure of the gas that had accumulated over a long period of time * * Dr. Leon Curtis answered: “I believe the accident was caused by a gradual accumulation of pressure inside the-capsule to the point where the cap was forcibly and violently expelled from the capsule by the accumulation of gas pressure within the capsule.” On the strength of this expert testimony and the other evidence heretofore mentioned, we consider the verdict of the jury to have been supported by substantial evidence.

Appellants contend that the trial court erroneously instructed the jury with respect to the Ohio definition of “explosion.” Appellee takes the position that this court may not consider this issue, as appellants did not take exception to the charge when delivered by the court. We recognize that the most important purpose of Rule 51, Federal Rules of Civil Procedure, 28 U. S. C. A. is to prevent litigants from challenging on appeal the correctness of the court’s charge to the jury where no objections were raised before the trial judge, thus failing to afford him opportunity to correct inherent errors. We think, however, that in the instant case the objections raised by appellants in the discussion of the charge with the district judge properly preserved the right to assign alleged errors in the court’s instructions.

There was incorporated in the charge the following definition of “explosion” found in Old Seeds Company v. Commercial Union Assurance Co. Ltd., 7 Cir., 1950, 179 F. (2d), 472, 474: “It may be defined as a sudden accidental, violent bursting, breaking, or expansion caused by an internal force or pressure which may be and usually is accompanied by some noise.” Appellants’ principal objection to this definition is that it does not require noise as an essential element of an explosion. They urge that the express definition by the Supreme Court of Ohio in United Life, Fire & Marine Insurance Co. v. Foote, 1872, 22 Oh St 340, 348, should have been given in the charge: “An explosion may be described generally, as a sudden and rapid combustion, causing violent expansion of the air, and accompanied by a report. But the rapidity of the combustion, the violence of the expansion, and the vehemence of the report, vary in intensity as often as the occurrences multiply. Hence, an explosion is an idea of degrees, and the true meaning of the word, in each particular case, must be settled, not by any fixed standard, or accurate measurement, but by the common experience and notions of men in matters of that sort.”

In our judgment, appellants’ objection to the definition used by the court is not well taken. We think the Supreme Court of Ohio did not intend to establish — and indeed recognized that it would be impossible to establish a hard and fast definition that would satisfy all factual situations. The opinion states: “The word ‘explosion’ is variously used in ordinary speech, and is not one that admits of exact definition. Its general characteristics may be described, but the exact facts which constitute what we call by that name, are not susceptible of such statement as will always distinguish the occurrences.” United Life, Fire & Marine Insurance Co. v. Foote, 22 Oh St 340, 347. The so-called “Ohio definition” which followed the quoted words did not purport to be a universaJ definition, but rather a description relevant to the facts of the Foote case. Its inadequacies are apparent with respect to the instant situation, for here there was no “sudden and rapid combustion,” no .‘.‘violent expansion of the air” (on a large scale), and no “report” as that word is commonly used. These circumstances impel the belief that the district judge employed the most appropriate definition under the circumstances.

The district court adopted the “Report of Special Master” filed August 24, 1955, as modified by his supplemental report filed March 5, 1956. The court found that all losses due to the contamination of physical property and all business interruption losses were “the direct, immediate and proximate result of the explosion of the radium source” located at Keleket’s plant. Appellants challenge this finding as being unsupported by substantial evidence, The findings of fact by the court are entitled to great weight and may not be set aside unless clearly erroneous. Rule 52, Federal Rules of Civil Procedure; Watterson v. New York Central R. R. Co., 6 Cir., 1956, 235 F. (2d), 114. There is testimony that the rapid expansion of the compressed gases occupying the interstices of this finely divided powder would have ejected a portion of the radium salt from the capsule at the time of the explosion. These salt particles were so small (a few microns in diameter) that they could be picked up easily by air currents and carried considerable distances. Highly radioactive radon gas also escaped from the capsule at the time of the explosion and was disseminated about the plant by natural air currents. Radon is unstable and, in a comparatively short period of time, will decay into a solid substance which is also highly radioactive. Fans in operation at the time of the explosion doubtless assisted the transportation of these air-borne contaminants throughout the plant. The findings of the special master, as confirmed by the district judge, on this issue are not clearly erroneous and are supported by substantial evidence.

We come now to more difficult questions presented by the cross-appeal (No. 12,982). The issue here is whether the special master properly determined the amount of the plaintiff’s reduction in gross earnings under the “business interruption policies,” the “stock policies” not being involved in the cross-appeal.' This may be further narrowed to a determination of whether or not the special master properly computed “the cost of all ‘raw stock’ from which such production is derived,” a sine qua non for determining the losses under the business interruption policies, the material portions of which are as follows:

“The measure of recovery in the event of loss hereunder shall be the reduction in ‘gross earnings’ directly resulting from such interruption of business less charges and expenses which do not necessarily continue during the interruption of business, for only such length of time as would be required with the exercise of due diligence and dispatch to rebuild, repair or replace such part of the property herein described as has been damaged or destroyed, commencing with the date of such damage or destruction and not limited by the date of expiration of this policy, but not exceeding the ACTUAL LOSS SUSTAINED by the insured resulting from such interruption of business. Due consideration shall be given to the continuation of normal charges and expenses, including payroll, to the extent necessary to resume operations of the Insured with the same quality of service which existed immediately preceding the loss.
“Definition of ‘Gross Eearnings’: For the purposes of this insurance ‘gross earnings’ are defined as the total net sales value of production through use of the property herein described, less the cost of all ‘raw stock’ from which such production is derived, plus other earnings derived from the operation of the business. In determining ‘gross earnings’ due consideration shall be given to the experience of the business before the loss and the probable experience thereafter had no such loss occurred.”

In preparation for the hearings before the special master, both plaintiff and defendants employed certified public accountants to calculate the business interruption loss under the policies. The special master appointed by the district court, James R. Favret, was also a certified public accountant. Fred Dennis, witness for the insured, determined the loss in gross earnings during the period of interruption to be $102,006.70, while the special master, basing his computations on the figures of Iver Johnson, accountant for the insurers, found the loss to be $7,735.80. The master adopted Johnson’s calculations, considering them to be more realistic. The insured now takes the position that, as a result of the master’s decision, it has been deprived of the insurance protection purchased.

An examination of the basis of disagreement among these accountants is appropriate here. A reading of the quoted pertinent provisions of the several policies demonstrates that “the cost of ‘raw stock’ from which such production is derived” is indispensable datum for the calculation of the losses insured under the policies. All the accountants agreed that the only proper way to compute this cost was to determine the ratio of the cost of raw materials to the net sales value of production for a representative period of time. The years 1951 and 1952 were agreed to be representative of Keleket’s operations, excepting the five-month interruption. The aforesaid ratio, expressed as a percentage, was then to be applied to the projected reduction in the net sales value of production resulting from interruption of business. The result is the cost of the raw stock from which the production would have been derived had the interruption not occurred. The wording of the policy obviously does not place any premium on an exact meaning of the word “cost.” The “cost of ‘raw stock,”’ of course, is not an exactly ascertainable amount, but must be approximated by projections and calculations based upon the “experience of the business before the loss and the probable experience thereafter had no such loss occurred” as specified by the policies in respect to determining gross earnings. This is the procedure which the accountants have followed in arriving at their material costs.

Although the accountants arrived at different material cost percentages, they used the same method for calculating them. In determining the cost of raw materials used during the representative years 1951 and 1952 they added the purchases for those two years to the opening inventory as of December 31, 1950. From this total they deducted the closing inventory taken as of December 31, 1952. The accountants disagreed as to the figure which should have been used as the closing inventory, thus the resultant difference between their material cost percentages. See calculations in the margin.

Cross-appellant insists that the policies require the closing inventory used in computing the material cost percentage to be stated at cost. The master, following the recommendations of accountant Johnson, adopted the value of closing inventory as shown on Keleket’s books. The latter figure reflects a so-called “write-down” of material inventories “to provide principally for extraordinary obsolescence.” Cross-appellant insists that the “write-down” is an “entirely irrelevant circumstance” which should not be considered in computing the losses according to the terms of the business interruption policies.

The reasons stated by the special master for accepting the written down inventory are stated in the Report of Special Master, as follows: In “computing material costs, write down of inventory must be taken into consideration, particularly where the inventory at the beginning of the year was shown to have been verified by competent independent accountants as being composed of normal usable inventory stock at that time.” The special master elaborated in his supplemental report: “The parties are all in agreement that early in 1951 an inventory of and limited to usable inventory stock was taken and verified by competent independent accountants. The plaintiff, in Exhibit 32, at page 15, established that ‘the company did not maintain a cost system showing material costs of production.’ The Master therefore concluded and still concludes, not that any arbitrary accounting conception should be adopted, but simply that as a matter of fact the plaintiff’s own general accounting records and suporting data, coupled with physical inventory, provide the best record of material cost.” This finding was made on the assumption that the insured plaintiff had the burden of proof. In the event that he was in error in placing the burden of proof, the master made an alternate finding stating that “it is the Master’s finding of fact, based on the evidence, that the items represented by the write-down were ‘raw stock from which such production is derived.’ ”

Cross-appelant urges: “There is involved only a question of law as to the correct interpretation of the policies, and the cross-appeal is limited to that question.” Under familiar rules of construction, when its meaning is doubtful, an insurance policy must be construed strictly against the insurer and liberally in favor of the insured. American Policyholders’ Ins. Co. v. Michota, 1952, 156 Oh St 578, 46 O. O. 476, 103 N. E. (2d), 817, 35 A. L. R. (2d), 448. In our judgment, however, these policies do not have such attributes of ambiguity as would necessitate the application of the aforestated rule of construction.

The loss must be determined strictly in accordance with the terms of the insurance policies and not solely in conformity with the accounting practices followed by the insured. Puget Sound Lumber Co. v. Mechanics’ & Traders’ Ins. Co., 1932, 168 Wash., 46, 10 P.(2d), 568; Fidelity-Phenix Fire Ins. Co. v. Benedict Coal Corp., 4 Cir., 1933, 64 F. (2d), 347, certiorari denied 289 U. S., 762, 53 S. Ct., 795, 77 L. Ed., 1505. These authorities do not hold the accounts of an insured to be irrelevant under all circumstances for purposes of computing losses under insurance contracts. The cases do stand for the proposition that the finder of fact is not finally bound by the accounting records of the insured when making a determination of loss under a policy. “It is undoubtedly true that, in an action upon such a policy, the trier of fácts is entitled to consider the methods of accounting maintained by the insured prior to the loss, but we cannot agree with appellants that any particular system of accounting is controlling in determining questions of liability under the policies.” Pudget Sound Lumber Co. v. Mechanics’ & Traders’ Ins. Co., 168 Wash., 46, at page 51, 10 P. (2d) at page 571, supra.

The “practical way” test evolved in the Fidelity-Phenix case, supra [64 F. (2d), 352] also clearly indicates this principle: “We think it clear that such losses are to be determined in a practical way, having regard to the experience of the business before the fire and its probable experience thereafter, without being confined to the basis upon which books are kept for income tax purposes or for dealings with stockholders. Hutchings v. Caledonian Ins. Co., D. C., 52 F. (2d), 744.” [The Puget Sound case, supra, is also cited.] The purpose of a business interruption policy is to “do for the insured in event of a business interruption * * *, just what the business itself would have done if no interruption had occurred.” National Union Fire Ins. Co. v. Anderson Pritchard Oil Corp., 10 Cir., 1944, 141 F. (2d), 443, 445. See Miller v. Hocking Glass Co., 6 Cir., 1935, 80 F. (2d), 436.

Inasmuch as the chief end of' any accounting system is the proper allocation of costs and expenses to revenues for a given period of time, so that the financial success of the operation may be determined, information derived from the accounts may materially assist in determining the losses in a “practical way” and in giving effect to the “purpose” of the business interruption policy. The accounts may not be followed blindly, but should be accorded such weight as practical judgment dictates, all relevant matters having been duly considered. The district judge recognized that practical accounting problems were involved when he appointed a certified public accountant as special master to resolve the question of the amount of liability under the several insurance contracts.

The reports of the master do not indicate that he has based his conclusions solely on the accounting records of the insured, or on any other arbitrary accounting predilections. He considered not only Keleket’s accounts, but also supporting data and physical inventory. Based upon the evidence adduced, he found that the inventory data contained in the accounts of the insured were the best evidence of the cost of raw materials from which production was derived in 1951 and 1952.

The burden of proof was on the plaintiff and it is, therefore, unnecessary to consider whether substantial evidence supported the master’s alternative finding (that the items represented by the inventory write-down actually were “raw stock from which such production is derived”). Suffice it to say, there was evidence from which to deduce practical reasons for including as part of the raw material cost those items representing write-down of inventory, even though such items actually remain in stock at the time the inventory is taken. There was testimony that this procedure is typical where a manufacturer produces “made to order” goods under individual contract. Most of Keleket’s instruments were produced for the United States Government on a per contract basis. There are practical reasons why excess materials are commonly found in inventory upon completion of such contracts. In estimating requirements, there is a justifiable tendency to overbuy, in order to allow for spoiled materials, shop errors and the like. This is especially true where “tooled” goods are purchased, for the cost of a few extras at the outset will be insignificant when compared with the cost of procuring a few items at a later date to compensate for an underpurchase. Similar reasoning would apply to volume discount purchases. The extra costs of material resulting from these and similar overpurchases are logically charged as a cost of raw materials from which production was derived, even though all items purchased are not physically incorporated in the finished product after completion of the contract. Excess raw materials remaining in inventory after termination of a contract, and having no utility in future production, should logically be charged as a cost of materials attributable to the contract for which they were purchased. Over-purchases are recurring items of material cost arising as often as contracts reach their final disposition. They are not items which would distort gross earnings if applied as a cost of raw materials. Apparently this was the reasoning of the master when, in effect, he found the evidence to show that the depreciation or obsolescence which led to the write-down occurred within the representative two-year period and should therefore be taken into account.

Late in 1952, Keleket decided to discontinue production of its electronic detection devices which were in competition with products of Tracerlab, a corporation holding controlling stock in Keleket. It is contended that the write-down was exceedingly large and was of an unusual nature, having been necessitated by curtailment of production, and that therefore the adjustment of accounts should be made in such manner as not to affect the gross earnings. There would seem to be no difference between the completion of a typical government contract and the discontinuance of a particular line of instruments. Materials left over from either are recurring material costs properly allocable to the contract for which purchased. The proportionally small write-down [approximately $137,000] represented about 11% of the usable inventory on hand as of January 1, 1951, plus raw materials purchased to fill contracts in 1951 and 1952.

Consistency would seem to compel the decision we have reached on this issue. The formula employed by the accountants to determine material costs for the representative years 1951 and 1952 required opening and closing inventory figures. The opening inventory here (taken December 31, 1950) “was composed of normal usuable inventory stock.” Certain unusuable items were excluded therefrom. The witness, Walsh, testified that these items had been omitted from that inventory, inasmuch as the company considered them to have no substantial value “in view of the fact that there had been no purchases of those items during the preceding six-month period * * *.” It follows that the closing inventory (taken December 31, 1952) must also consist of normal usable inventory stock and not a mixture of usable and unusable items. The special master properly adopted the closing inventory from which unusable items had been separated. Therefore, both the opening and the closing inventories consisted of usable inventory items at cost. The result was a reliable calculation of the cost of materials used in the representative two-year period.

The master exercised sound and practical judgment in determining the amount of loss under the several contracts of business interruption insurance. His calculations are in accord with the provisions of the policies, they are based upon findings which are supported by substantial evidence, and are not clearly erroneous. The cross-appeal is, therefore, dismissed.

The final issue in the appeal [No. 12,981] relates to certain decontamination expenses allowed by the master and the district court under the following clause of the business interruption policies: “Expense to Reduce Loss: This policy insures such expenses’ as are necessarily incurred for the purpose of reducing any loss under this policy (except expense incurred to extinguish a fire) not exceeding, however, the amount by which the loss under this policy is thereby reduced, and such expenses shall not be subject to the application of the Contribution Clause.” [Emphasis added.] Here, again, we think that the words of the policy are not sufficiently ambiguous to necessitate the application of rules of construction.

The above-quoted clause refers twice to “loss under this policy.” The terms of these business interruption policies have been discussed in detail in our consideration of the cross-appeal. It is apparent that the matter involved is not compensation for destruction of physical property, but for the loss of gross earnings due to the interruption of business resulting from an explosion, a hazard insured against under these policies. Certainly the plant building itself is not the interest insured under these contracts of business interruption insurance. The insured was required by the “due diligence” clause of its policies to “exercise due diligence and dispatch to rebuild, repair or replace” this building and the payment for reduction of gross earnings was to continue for “only such length of time as would be required to effect” these repairs.

Keleket argues that decontamination of the building did not require any rebuilding, repairing or replacing and that, therefore, nothing was required of it in this respect. The evidence is to the contrary. The methods employed to remove the radium from this building were similar to typical restoration activity following a fire. Several procedures were necessary in the decontamination process. Where possible, the building was repeatedly washed with a complexing agent, versene solution, to remove the contaminant. Washing proved ineffective where the radium salt had been taken up by porous material such as wood or concrete. The only effective procedure under these circumstances was to remove the contaminated porous materials. The concrete floors and woodwork had to be replaced in some portions of the building.

The insurers do not contend that Keleket failed to use due diligence and dispatch in decontaminating the plant building, nor has the insured introduced any evidence of expenses necessarily incurred to reduce the business interruption losses. Had the plaintiff shown that the period of interruption had been shortened by use of overtime labor at premium wages, for example, then the premium wages would be allowable up to the amount by which the liabilities of the insurers under the business interruption policies had been reduced. The record is devoid of evidence to this effect. In the absence of evidence showing that the expenditures had actually reduced the business interruption losses, the district court was in error in allowing any decontamination expenses incurred to reduce the loss under the business interruption policies.

As heretofore stated, the cross-appeal in No. 12,982 is dismissed. Case No. 12,981 is remanded to the district court with instruction to recompute the liabilities of appellants, under the business interruption policies only, disallowing decontamination expenses. In making the recomputation, the liabilities of the several insurers should be reduced ratably according to the face amounts of the policies so as to disallow $19,862.69 [plus accrued interest thereon], the net decontamination expense allowed by the special master. The master’s finding of fact that, the employees to whom $28,739.13 had been paid “would have been retained in any or all event by the plaintiff” proscribes further consideration of that item with respect to computation of liability, inasmuch as that expense necessarily continued during the period of interruption. The total liability of the several insurers under the business interruption policies is $7,735.80, plus interest. Liability under the “stock policies” remains unmodified. The withdrawal of the Insurance Company of North America as a party to the appeal, pursuant to settlement, should in no way affect the liabilities of the remaining appellants.

Except as modified, the judgment of the district court is affirmed.

DISSENTING OPINION

By SHACKELFORD MILLER, Jr., Circuit Judge.

The Special Master found that the appellee had suffered a stock loss in the amount of $55,724.56. He also found that the appellee had suffered loss due to business interruption in the amount of $7,735.80. He also allowed the sum of $19,862.69 as having been necessarily incurred to reduce the loss, referred to as decontamination expense. The District Judge overruled objections to these findings and entered judgment for these amounts, together with 6% interest from May 20, 1952, totaling $103,932.11, dividing the liability between the different appellants in accordance with the amounts of their respective policies.

The majority opinion approves the finding of loss in the amount of $7,735.80 due to business interruption. Appellee contends that this item of damage should have been approximately $38,212.00 more.

Under the policy the measure of recovery for this item was “the reduction in ‘gross earnings’ directly resulting from such interruption of business less charges and expenses which do not necessarily continue during the interruption of business, * * *.” Gross earnings was defined as “the total net sales value of production through use of the property herein described, less the cost of all ‘raw stock’ from which such production is derived, plus other earnings derived from the operation of the business.’’ The method used by the accountants for the parties for determining the cost of raw materials was to determine the ratio of cost of raw materials to net sales for a representative period and then to apply this ratio, expressed as a percentage, to the net sales value of production lost during the period of interruption. This was done by starting with the value of material inventory at cost as of December 31, 1950, adding to it purchases made in 1951 and 1952, and subtracting from the total the value of material inventory as of December 31, 1952, and the value of materials contaminated. The resulting figure was the value of materials used in production’ during 1951 and 1952. The percentage which this bore to sales during 1951 and 1952 was the ratio used, which, when applied to the total net sales, which were lost during the period the plant was out of production, determined the cost of the raw stock which would have been used in such production. The cost of the raw stock was then subtracted from the lost sales in order to determine the loss of gross earnings insured against. The use of this formula meant that as the value of material inventory as of December 31, 1952, became lower there was a corresponding increase in the value of materials used in production during 1951 and 1952 with a resulting higher percentage of materials to sales, which, when applied to and deducted from the lost sales, reduced the amount of lost gross earnings. The company’s accountant computed this percentage at 59.727%. The insurer’s accountant computed this percentage at 68.732%. The use of the higher percentage resulted in an increase of approximately $38,212.00 in the cost of raw material for the period insured against with a corresponding less amount in the amount of gross earnings for that period. The judgment limiting the loss to $7,735.80 on this item was the result of the use of the higher percentage, which the company contends was error. I think the contention is well taken.

The difference in the two percentages resulted from the different valuations placed by the respective accountants on the material inventory as of December 31, 1952. The company valued this inventory at its cost of $229,327.04. The insurer valued it at $91,639.02, the difference of $137,668.02 being the amount by which the value of the inventory had been written down on the company’s books at the end of 1952. There was testimony that the write down had been made in order to provide for extraordinary obsolescence in certain materials resulting from (1) a discontinuance by the company of the production of certain electronic instruments and (2) the cancellation of a Government contract, leaving on hand a quantity of unused material previously purchased in the expectation of continuing with such production.

I am of the opinion that the value of the material inventory as of December 31, 1952, should have been computed at its cost instead of at its cost less depreciation as shown by the company’s books. The depreciated value on the books may have been the correct value for the purpose of determining the net asset value of the company as of December 31, 1952, or for reflecting on an accrual basis the net income of the company for 1952 income tax purposes, but such a valuation does not seem to be correct for determining the “cost” of the raw stock which would have gone into production. Fidelity-Phenix Fire Ins. Co. v. Benedict Coal Corp., 4 Cir., 64 F. (2d), 347, 352, certiorari denied, 289 U. S., 762, 53 S. Ct., 795, 77 L. Ed., 1505; Puget Sound Lumber Co. v. Mechanics’ & Traders’ Ins. Co., 168 Wash., 46, 51-52, 10 P. (2d), 568. The materials whose value was written down were not used in production. If they had been used in production they would not have been on hand on December 31, 1952, to have been included in the closing inventory. The depreciated value was merely a bookkeeping entry reflecting the company’s opinion as to their value at the end of 1952 by reason of extraordinary obsolescence.

The policy provides for deducting the “cost” of the raw stock from which production is derived. I construe this to mean the actual “cost,” which would be the. actual cost of the materials on hand at the start of the period plus the cost of purchases during the period less the actual cost (not depreciated value) of the materials on hand at the end of the period. There is to me an unacceptable inconsistency in using actual cost figures for the opening inventory and for purchases during the period and using a depreciated bookkeeping value at the end of the period. Cost and value are of course not synonymous.

The majority opinion also eliminates from the judgment the decontamination expense of $19,862.69. I am of the view that this item should be retained in the judgment. I recognize that none of the policies involved covered the building against damage due to explosion and that it would be the obligation of the insured to repair any such damage to the building in order that business might be resumed. But I do not construe the decontamination expense incurred in the removal of the radium from the building as repairing damage to the building. It is clear that production could not be resumed after the explosion until the building had been decontaminated by removal of the radium. In my opinion, such an expense was included in the policy provision covering “such expenses as are necessarily incurred for the purpose of reducing any loss under the policy (except expense incurred to extinguish a fire), * * This provision is very broad, including only one exception. Other exceptions should not be read into the policy. Home Indemnity Co. v. Village of Plymouth, 146 Oh St 96, 101, 32 O. O. 30, 64 N. E. (2d), 248.

I am of the opinion that the judgment should be reversed for the foregoing reasons.

      . Plaintiff’s Accountant Dennis Defendants’ Accountant Johnson
      Material inventory, 12/31/50, at cost (stipulated) .................................................... $ 268,742.11 $ 268,742.11
      Purchases 1953 (stipulated) .............................. 695,240.43 695,240.43
      Purchases 1951 (stipulated) .............................. 215,375.06 215,375.06
      $1,179,357.60 $1,179,357.60
      Material inventory 12/31/52 229,327.04 91,639.02
      950,030.56 1,087,718.58
      Deduct materials contaminated 36,743.91 36,743.91
      Materials used in production 1951 and 1952 .... 913,286.65 1,050,974.67
      Sales, calendar years 1951-1952 $1,529,092.39 $1,529,092.39
      Materials used in 1951-52, expressed as a percentage of sales ................................ 59.727% 68.732%
      Projected net sales value of production lost during interruption (not in issue) .......... 424,342.62 $ 424,342.62
      Material cost percentage ...................................... X .59727 X .68732
      Cost of raw stock that would have been used during period of interruption .................. $ 253,447.12 $ 291,659.16

      (adopted by master)

      The adoption by the special master of the higher raw stock cost figure calculated by Accountant Johnson results in a difference in gross earnings of about $38,000.00.


source: Caselaw Access Project

author: By GARY, J.

license: Public Domain

text:
    WILLIAMS, Estate of, In re.
    Probate Court, Muskingum County.
    No. 6331.
    Decided October 27, 1958.
    D. H. Crossland, for administratrix.
    Ross Johnston, for applicant.
   OPINION

By GARY, J.

This matter is heard upon the application of Chester Williams, a brother of deceased, to set aside the appointment of Faye Williams as administratrix of the estate of Warren Sylvester Williams, her estranged spouse.

The facts presented indicate that Warren Williams and Faye Williams signed a separation agreement on August 8, 1958. This agreement included, among the other customary provisions, the following sentence:

“Each party waives any right which he or she may have to administer the estate of the other party upon the death of such other party.”

Warren Williams died on August 31, 1958 without having made any reconciliation with his wife. He was also survived by two sons, aged 9 and 5. On September 23, 1958, Letters of Administration were issued to Faye Williams, who applied as “widow-parent and prochain ami of next of kin and guarantor of funeral bill.” On October 2, 1958 the application to set aside this appointment was made.

The application was made on two grounds. First, that since the spouse had given up her priority by signing the separation agreement, and the children of deceased are not qualified to serve because of age, the brother, as nearest of kin after these disqualifications, should have the right to administer, and second, that the spouse was complétely barred from serving by reason of the separation agreement.

The first contention can be quickly determined. This point was considered in Shannon v. Hendrixson, 20 Abs 316, in which the Court of Appeals held:

“Where the priority as a matter of right is exhausted for lack of eligible persons, the Probate Court, in committing administration ‘to some suitable person resident of the county’ is not compelled to appoint the nearest relative in the direct line of inheritance.”

Applying this rule to the instant case, it can be seen that the applicant, brother of decedent, has no priority under the statute (§2113.06 R. C.).

The second question is more difficult of answer. Insofar as we can ascertain, this point has never been directly decided in Ohio. The case of Garretson v. Garretson, 4 O. C. C. 336, has been cited by the ad^ministratrix in support of her right to administer. It is true that in that case the court held that a separation agreement in itself was not sufficient to prevent the surviving spouse from being appointed administratrix. However, in the Garretson case, the separation agreement had been executed some ten years before the death of the husband, there was no evidence to show that the agreement was carried out, and there was no clause in the agreement which specifically waived the right to administer. This would distinguish it from the instant case.

This question has been passed upon in other states, however. The case of In re Nicoll’s Estate, 79 Cal. App. 2nd. 48, 179 P. 2nd 95, concerned a factual situation practically identical with the instant case. In that case the California Court of Appeals for the second district held:

“Under the provisions of the property settlement agreement Mary Nicoll individually waived her right to act as administratrix. Such waiver, however, is not to be construed as a waiver by her in her representative capacity, as guardian of the minor, if any, to have letters of administration granted to her as his guardian.”

See also In re Forrest, 43 Cal. App. 2nd. 347, 110 P 2nd. 1023; In re Hadsell, 120 Cal. App. 2nd. 270, 260 P. 2nd. 1021; In re Quinn, 243 Iowa 1266, 34 ALR 2nd. 871, with annotation at page 876.

Since the administratrix filed her application in behalf of the minor children, who are admittedly the next of kin of decedent, and since she was appointed as a “suitable person resident of the county,” and not under her priority as surviving spouse, it is the finding of the court that her waiver of her “right to administer” was merely a waiver of her priority and is not a complete bar' to her being appointed as. administrator.

It should be further noted that the appointment was not made until more than three weeks after decedent’s death. Had the brother or some other suitable person made application during that period, the court might have considered such an appointment as within its discretion. However, having exercised its discretion by appointment of the present administratrix, the Court will not set aside such appointment in the absence of a showing that she is not a proper person to administer the estate. No such evidence having been submitted, and the court having already determined that she was not barred from serving as administratrix, the application to set aside the appointment is hereby overruled.


author: By PETREE, PJ. By PETREE, PJ.

text:
    HILL, Plaintiff-Appellee, v. MELVIN LOVE CONSTRUCTION COMPANY, Defendant-Appellant.
    Ohio Appeals, Tenth District, Franklin County.
    No. 5703.
    Decided December 18, 1957.
    Herbert, Tuttle, Applegate & Britt, Thomas W. Applegate, c. Richard O’Neil, of Counsel, Columbus, for plaintiff-appellee.
    W. Robinson Watters, Columbus, for defendant-appellant.
   OPINION

By PETREE, PJ.

This is an appeal on questions of law from a judgment of the Common Pleas Court in which defendant, appellant herein, makes the following assignments of error:

1. The Court of Common Pleas committed error in refusing to interpret the contract so as to allow the owner-corporation the right to sell its property to anyone with whom the broker had not negotiated without liability to the broker for a commission.

2. The Court of Common Pleas committed error in failing to apply the fundamental rule of construction that where the provisions of a contract may be reasonably interpreted more than one way, the provisions, as a matter ol law, must be strictly construed against the party who drew it or had it prepared, and in favor of the party who took no part in its preparation or in the selection of its language.

Decided February 25, 1958.

The Common Pleas Court gave judgment for plaintiff, appellee herein, in the amount of $975.00. Appellant did not file a bill of exceptions in this court and, therefore, the errors, if any, would be limited to those exhibited by the transcript of the docket, journal entries, and judgment entry. The judgment entry contained a copy of the contract in question together with the findings of facts upon which the judgment was rendered.

The lower court filed a written opinion in the case which sets out at some length the questions involved and the facts and law upon which its judgment was based.

The contention of the appellant in its second assignment of error is not sustained by the facts. There was no bill of exceptions, and neither the findings of facts nor the lower court’s opinion shows who prepared the contract. Without proof we cannot assume who prepared the same; so the appellant has failed utterly to substantiate the second assignment of error. This is true regardless of the soundness of the law cited in support thereof.

We have reviewed the briefs of the parties herein; and upon a consideration of the same, the arguments of counsel, and the written findings of facts and opinion of the trial court, we find that the assignments of error of the appellant herein are not well taken. The judgment of the trial court will, therefore, be affirmed.

Judgment affirmed.

BRYANT and MILLER, JJ. concur.

HILL, Plaintiff-Appellee, v. MELVIN LOVE CONSTRUCTION COMPANY, Defendant-Appellant.

No. 5703.

OPINION

By PETREE, PJ.

Application for rehearing was filed herein on January 30, 1958. This case was decided on its merits on December 18, 1957, on questions of law from the judgment of the Common Pleas Court of Franklin County.

Inasmuch as the Common Pleas Court stated sufficient reasons, in our opinion, upon which to base its judgment, the application for rehearing will be overruled. The judgment allowed a five per cent commission based upon a sale price of $19,500.00, which sale was made within ten days after the contract giving plaintiff, Mildred J. Hill, the exclusive right, during a period of ninety days from March 8, 1954, to sell the property in question. The court found that said property was sold on March 18, 1954. No question arises in this case as to a sale within three months after the expiration of the date of the contract.

We feel that the trial court was justified in its judgment, which followed the holding of the Supreme Court of Ohio in Bell v. Dimmerling, 149 Oh St 165.

Motion for rehearing will be denied.

BRYANT and MILLER, JJ, concur.


author: By PHILLIPS, J.

text:
    DYCE, Plaintiff-Appellant, v. KOCH, Extrx. et, Defendants-Appellees.
    Ohio Appeals, Seventh District, Columbiana County.
    No. 756.
    Decided January 2, 1958.
    S. C. Copperman, Willoughby, for plaintiff-appellant.
    Moore & Moore, Lisbon, for defendants-appellees.
   OPINION

By PHILLIPS, J.

The trial judge withdrew plaintiff’s evidence from the consideration of the jury at the close of plaintiff’s case in her action filed September 22, 1955, against defendant, Executrix of the Estate of Charles M. Koch, and others, to contest a paper writing dated April 18, 1945, purporting to be the last will and testament of Charles M. Koch, deceased, which will was admitted to Probate on June 30, 1955, and directed the jury to return a verdict for defendants finding such instrument to be decedent’s last will and testament and entered judgment accordingly.

Plaintiff appealed from the judgment of that court to this court on questions of law.

Plaintiff contends that the trial judge erred to her prejudice and abused his discretion in directing the jury to return a verdict for the defendant.

Plaintiff is the only child, and defendant, Sue M. Koch, is the widow of decedent, being his third wife.

There is evidence that decedent made several wills, in one of which wills executed in 1954 he had divided his estate equally between his widow and his daughter, which he had discussed freely with and shown to plaintiff’s witnesses.

By brief plaintiff propounds the following questions, which we proceed to dispose of now:—

“1. In order to effect a revocation of a former will, must it be established that the subsequently executed will was such as could be probated?
“2. Is the rule that a document regular on its face is presumed to have been properly executed applicable to a subsequently executed will?
“3. Did the evidence establish that the probated will of 1945 was revoked by the alleged will of 1954?”

Answering the question propounded first by plaintiff, we quote what counsel for defendant stated by brief:—

“We agree with the plaintiff that the answer to this question must be in the negative. There are many circumstances under which a properly executed subsequent will might be effective to revoke a prior will and still not be entitled to probate. There might be a third will in existence or the second will might have been altered or defaced by the testator with the intention of revoking it, to cite two examples.
“The answer to this question has no bearing upon the correctness of the judgment appealed from.”

The thinking of this court is similar to that of the defendant.

Answering plaintiff’s second question defendant • executrix says in her brief:—

“For purposes of argument, we will concede that the doctrine cited is applicable to a subsequently executed will which is regular on its face We have no such document to consider in the instant case. The doctrine is applicable only to an instrument which is physically in existence and capable of being examined for regularity.”.

We are impressed by the reasoning of the trial judge as expressed in his opinion, a portion of which we quote, and in which we concur:—

“In argument, counsel for plaintiff admitted that there was a failure of evidence of execution but he argued that there was a presumption that the instrument purporting to be the 1954 will was properly executed. The court recognizes the rule that documents regular on their face are presumed to have been properly executed but the court does not believe that such a rule is applicable in the situation we have here. In the first place a will contest case is a statutory proceeding and §2741.05 R. C., provides that the order of probate is prima facie evidence of the attestation, execution, and the validity of the will. So, we have a situation where the will in contest is presumed by statute to have been properly executed. Now the claimed will of 1954 was never produced in evidence. There was some evidence that the words ‘Last Will and Testament’ appeared at the top; one witness testified that Mr. Koch told him there was a revocation clause in the will and that he had given everything in equal shares to Mrs. Dyce and Mrs. Koch. There were other witnesses who testified that they saw the signatures of Mr. Koch on the will and the signatures of two witnesses, John Hood and John Johnson. There was no evidence that Mr. Koch signed the will in the presence of the witnesses and acknowledged his signature to them. Under these circumstances, is this a situation that calls for the invocation of a presumption that this ethereal will was regular on its face and therefore entitled to a presumption that it was properly executed. I think not. I don’t think that under all these facts and circumstances you can safely presume the validity of the execution when there is no document or instrument before you regular on its face. I therefore feel that the claim of presumption of proper execution of the subsequent will of 1954 can not be used to save the plaintiff and to make a will where none exists according to the facts.”

Sec. 2107.03 R. C., provides:—

“Except oral wills, every last will and testament shall be in writing, but may be handwritten or typewritten. Such will shall be signed at the end by the party making it, or by some other person in such party’s presence and at his express direction, and be attested and subscribed in the presence of such party, by two or more competent witnesses, who saw the testator subscribe, or heard him acknowledge his signature.

Sec. 2107.33 R. C., provides:—

“A will shall be revoked by the testator * * * by some other written will or codicil, executed as prescribed by §§2107.01 to 2107.62, inclusive, R. C., or by some other writing which is signed, attested, and subscribed in the manner provided by such sections. * * * ”

There is no evidence of any witness identifying the signatures of the alleged subscribing witnesses nor of any witness who saw decedent sign the purported will of 1954 and saw subscribing witnesses sign it. Phrasing it otherwise, as the trial judge did, “there was no evidence that Mr. Koch signed the will in the presence of the witnesses and acknowledged his signature to .them.”

There being no evidence of the execution of the purported revocatory instrument, except that decedent had said he had executed such an instrument, the answer to plaintiff’s third question is in the negative.

Obviously there was no fact in dispute to submit to the jury and the trial judge did not err to plaintiff’s prejudice nor abuse his discretion in directing the jury to return a verdict for defendants and entering judgment in conformity with the verdict.

The judgment of the court of common pleas is affirmed.

NICHOLS, PJ, GRIFFITH, J, concur.


author: By BACON, J.

text:
    MILLER, Plaintiff, v. MILLER, Defendant.
    Common Pleas Court, Meigs County.
    No. 12318.
    Decided October 6, 1958.
   OPINION

By BACON, J.

Plaintiff husband and defendant wife were divorced by decree of this court filed November 1955. One child was born to the union, Judy, then 10 years of age. In addition to granting defendant a divorce and custody of the child, the decree approved a contract between the parties and ordered that each party perform the obligations imposed upon them in said agreement.

Under this contract defendant wife got all of the real estate of the parties, their household furnishings and equipment, a Pontiac automobile, % of the husband’s holdings in a bowling alley (face value of her acquisition, $250.00), all their life insurance which plaintiff was to keep in force, defendant to become beneficiary, consisting of 5 policies, plaintiff was required to pay an $800.00 note to defendant and $300.00 note to the child, the defendant’s attorney fees, and, most pertinent to this opinion, Item 7 provided as follows:

“The Husband agrees to and shall pay to the wife, as reasonable alimony and as support for said minor child, the sum of Thirty-five Dollars ($35.00) per week.”

There was only one provision for the benefit of plaintiff, Item 2, under which defendant renounced all claim to any of the assets of plaintiff’s radio and television business, and a Buick automobile. The indebtedness against these assets is not known to the court at this time. Assets of his business listed for personal tax purposes were $5,269.00 in 1954, and $5,400.00 in 1958. Plaintiff has not paid the 1957 tax and is delinquent.

The divorce decree does not reiterate any of the provisions of the contract save as to custody provisions reaffirming that plaintiff visit his child only at the home of defendant, and save as to that obligation of the contract which imposes alimony and support upon plaintiff, reading as follows as to such alimony and support:

“It is further ordered, adjudged and decreed by the court that the plaintiff, Harry A. Miller, pay to the defendant, Edna Mae Miller, as and for reasonable alimony and for the support of said minor child, the sum of Thirty-five Dollars, ($35.00), per week, payable on Saturday of each and every week hereafter. Said sum to be paid by the plaintiff to the Clerk of Courts of this County, who is hereby appointed as trustee to receive and expend the same.”

In August 1958 plaintiff filed a motion for modification of the decree, averring his financial status has deteriorated and he can no longer pay the sum of $35.00 weekly as alimony and support. Defendant moves his motion be dismissed, relying on the case of Tullis v. Tullis, 138 Oh St 187, 20 O. O. 237, 34 N. E. 2d 212.

In that case the estranged parties contracted, one of the provisions fixing the monthly sums the husband was to pay as support for a child, which contract was incorporated in the decree of divorce. There likewise the wife moved to dismiss the husband’s motion for modification on the ground that the decree was based upon the contract of the parties. Her motion was granted. The court of appeals reversed, but were in turn reversed by the Ohio Supreme Court and the oommon pleas court affirmed. The sums ordered in the Tullis case and the sum ordered in the instant case are similar. Tullis was to pay under his contract and the decree $100.00 monthly until his child was 12, then $125.00 monthly until his child was 15, then $150.00 monthly until his child was of age. The husband, Miller, in the instant case, under his contract and decree must pay $35.00 weekly, which averages a little better than $140.00 per month. His child is now 13 years of age.

The syllabus of Tullis v. Tullis, supra, is as follows:

“A decree in a divorce action, unconditionally fixing the amount and method of payment by the husband for the support of a minor child pursuant to and in accordance with a previous contract of separation between the husband and wife providing for complete property settlement and support to their minor child, which contract is specifically approved by the court and made a part of the decree, may not, in the absence of fraud or mistake be subsequently modified by the court so as to lessen the amount of support for such minor child.”

The opinion was concurred by a bare majority of the court, Judge Zimmerman dissenting, and two others not participating. The decision appears unpopular. In virtually every decision in this field since, Ohio courts have attempted to distinguish their cases on the facts from those of the Tullis case that they may arrive at a different result. As Judge Zimmerman pointed out in his dissent, the weight of authority is otherwise, on the reasoning that the contractual character of the agreement disappears through absorbtion in the decree. Judge Taft of the Ohio Supreme Court in Lowman v. Lowman, 166 Oh St 1, 1 O. O. 2d 152, 139 N. E. 2d 1, said, “. . . it is not now apparent whether this court would follow the decision in Tullis v. Tullis,” and in concurring in Seitz v. Seitz, 156 Oh St 516, 46 O. O. 423, 103 N. E. 2d 741, said, “I believe, therefore, that the decision being rendered in the instant case does overrule Tullis v. Tullis.” Nevertheless, in the Seitz case the supreme court was content merely to distinguish it, so that the rule of Tullis v. Tullis still prevails in Ohio.

It will be noted that there is this important difference between the Tullis case and the instant case: Tullis contracted that his monthly payments were solely for the support of his child. Miller contracted for weekly payments in a fixed sum which was for both alimony and support. The parties failed and the decree failed to define what portion of the $35.00 weekly was for alimony and what portion was for child support. Understanding, therefore, that the rule of the Tullis case, though unpopular, is still the law of Ohio in regard to child support upon its facts, this court examined the Ohio authorities concerning alimony. The Ohio Supreme Court has also spoken on alimony contracted for and incorporated as an unconditional order in a divorce decree, very firmly. The syllabus of Law v. Law, 64 Oh St 369, 60 N. E. 560, 45 Wkly Law Bull. 364, reads as follows:

“A divorce being decreed for the aggression of the husband, and alimony being adjudged to the wife in accordance with an agreement of the parties, the terms of the decree as to alimony are not, if unaffected by fraud or mistake, subject to modification upon a petition filed by the former husband after the term at which the original decree was made.”

The facts of the Law case are significant. The supreme court in its syllabus refers to “alimony,” but the decree of divorce entered by the common pleas court includes the following:

“It is further ordered and decreed that the said defendant pay as alimony to said plaintiff, annually, the sum of $3,000, payable in monthly installments of $250 each, the first installment to be paid on the first day of August, 1889, and out of which said sum the said plaintiff is to support said Edith, maintain and educate her.
“It is further ordered and decreed that in case the said plaintiff shall marry, the alimony herein provided and ordered to be paid to her, shall cease from and after said marriage, but the said defendant shall continue to pay to said plaintiff, for the maintenance, support and education of said child, Edith B. Law, the sum of $1,500 annually, payable in monthly installments of $125 each, and the same shall continue so long as the said Edith B. Law shall remain unmarried.”

Invoking an equitable maxim, as was done by Judge Alexander in the case of Wolfe v. Wolfe, 70 Abs 22, 55 O. O. 465, 124 N. E. 2d 485, wherein he said:

“Since we are by statute restored to our full equity powers and jurisdiction, this case seems to present a peculiarly appropriate occasion for the application of another equitable principle, ‘Equity looks to the substance, not to the form’ — perhaps for a new style in equitable conversation: ‘alimony’ into child-support!”

it is obvious that although the monthly payments of $250 are called “alimony” in the contract between the Laws, it was intended that one-half was for alimony and one-half was for child support.

The facts of the Law case and the instant case are so similar the rule laid down in the Law case controls the result in the instant case. Mrs. Law was decreed $250 monthly out of which she was required to support one minor child. Mrs. Miller was decreed $35 weekly, to support herself and one minor child. The Law decree referred to it as “alimony.” The Miller decree correctly defines it as alimony and support of a minor child. The rule of Law v. Law has been reaffirmed on two occasions by the Ohio Supreme Court. Newman v. Newman, 161 Oh St 247, 53 O. O. 135, 118 N. E. 2d 649, Mozden v. Mozden, 162 Oh St 169, 55 O. O. 4, 122 N. E. 2d 295.

The motion of the plaintiff, Harry A. Miller, is dismissed upon the rule of Tullis v. Tullis and the rule of Law v. Law.

It is recognized that the rule of Tullis v. Tullis, supra, and the rule of Law v. Law, supra, are considered harsh, but they are settled rules of law. The remedy lies either in the realm of the Ohio General Assembly, or by reversal in the Ohio Supreme Court of those rules. In view of the expressions of members of the Supreme Court concerning the Tullis case, it is hoped that the parties in this case will seek review of the within opinion in the higher courts.


author: By SKEEL, PJ.

text:
    NELSON, Plaintiff-Appellant, v. NELSON, Incompetent, etc., Defendant-Appellee.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 24550.
    Decided November 7, 1958.

      Taber, Manlove & Duncan, for plaintiff-appellant.
    John Milton Costello, for defendant-appellee.
   OPINION

By SKEEL, PJ.

This appeal comes to this court on questions of law from a judgment and decree entered for the defendant on plaintiff’s petition and from an order for the defendant on defendant’s cross-petition. The action is one in which the plaintiff’s husband is seeking a divorce, the cross-petition of the wife is one seeking an order of support.

The petition filed by the husband alleges the marriage of the parties on September 4,1948, the birth of two children, the last child being three years old when the petition was filed, the children, now being in his custody, that his wife was committed to Hawthornden State Hospital as mentally incompetent on April 2, 1956, and that the defendant has been guilty of gross neglect of duty, which aggressions of her marital duty occurred prior to her incompetency. The prayer is for a decree of divorce and permanent custody of the children.

The defendant’s answer puts in issue the alleged claims of gross neglect of duty and prays, by cross-petition, for support. The answer and cross-petition were filed by a guardian duly appointed who was, as shown by the record, substituted for the trustee for suit, appointed by the court upon plaintiff’s application. A reply was filed to the defendant’s answer and an answer to defendant’s cross-petition by which pleading all controverted issues of fact were put in issue. At the conclusion of the presentation of plaintiff’s evidence, the defendant moved for judgment, which motion was granted and decree and judgment denying plaintiff a divorce and granting defendant’s prayer for support was entered. From that judgment, decree, and support order, this appeal is taken.

The plaintiff-appellant assigns the following errors:

“1. The trial court erred in sustaining the defendant’s motion to dismiss the plaintiff’s petition and in entering judgment on the defendant’s cross-petition after the conclusion of the plaintiff’s evidence.
“2. The judgment is contrary to the law and the evidence. The trial court failed to recognize the defendant’s plea of insanity as an affirmative defense and to properly place the burden of proof upon the defendant.
“3. The court erred in that certain conclusions of fact are contrary to law and against the manifest weight of evidence.”

• The record shows that the parties were married (as pleaded) on September 4, 1948. In 1950, the parties purchased the home in which the plaintiff now lives, the down payment of $3,000, used to make the purchase, was made out of the wife’s savings. Since the purchase of the home, the plaintiff has paid between two thousand and twenty-five hundred dollars from his income to reduce the balance due on the mortgage. No mention of the property is made in the petition. The record further shows that up and until the birth of the second child, the wife managed the affairs of the household in normal fashion. The husband on being questioned by the court at the conclusion of his testimony testified as follows:

“THE COURT. You made the statement in that report, when you filed this application, did you not, that you observed there was something wrong with your wife from the time the last child was born. Did you make that statement, that you saw some change in your wife after that child was born? That was in 1953.
“THE WITNESS. I may have.
“THE COURT. After Janet was bom, did you observe some change in your wife?
“The WITNESS. I noticed she wasn’t doing what she should properly do.
“THE COURT. But there was a change in her mannerisms and her conduct around the house; you observed that, did you?
“THE WITNESS. Yes.
“THE COURT. And you made that observation to the doctor in Probate Court, when you filed the request for examination?
“THE WITNESS. Yes, sir.”

The application referred to by the court was that filed by the plaintiff in the Probate Court of Cuyahoga County seeking to have his wife probated as incompetent. It is also disclosed by the record that between October, 1953 and the date of her commitment, April 2,1956, the defendant was subjected to the services of the out-patient department of City Hospital for psychiatric treatment and was at least twice confined in the Cleveland Receiving Hospital for observation.

The claims of gross neglect of duty charged against the defendant by the plaintiff are very well summed up in plaintiff’s answer to interrogatories attached to defendant’s answer and cross-petition. The questions were:

“1. In what specific occasions was the defendant, Marie B. Nelson ‘guilty of gross neglect of duty’ before being committed to the State Hospital?
“2. Give the date and location of each item of gross neglect of duty specified in answer to question No. 1.”

The plaintiff answered these questions as follows:

“1. The defendant, Marie B. Nelson, is guilty of gross neglect of duty in that she neglected care of the child four and one-half years old who was forced to get herself up, dress herself and feed herself in the mornings.
“She is further guilty of gross neglect of duty in that she failed to get proper meals for the children and the husband, failed to keep the home clean and tidy, failed to do the dishes and the laundry, necessitating the husband to do these things.
“The defendant is further guilty of gross neglect of duty in that she failed and refused to give proper care to the small child about one year old in that she prepared only one meal a day for said small child, refused to bathe said small child or change the bedclothes or diapers of said small child, although requested to do so repeatedly by the plaintiff, failed and refused to cook supper for the family and the children, insisting that the plaintiff take her to dinner every night, failed and refused to bathe herself and, of course, during the period immediately preceding her hospitalization, she remained in bed all day and did absolutely nothing.
“The defendant, Marie B. Nelson, was further guilty of gross neglect of duty in that she grossly neglected the care of her home, the care and responsibility for her children and the care for her husband in all of the acts and duties which the law imposes upon a wife and a mother of small minor children.
“2. The location of all of the items of gross neglect of duty referred to in question No. 1, took place at the family home at 10025 Ackley Road, Parma, Ohio. These acts were continuous repetitions for the past three to four years.”

Although it must be remembered in giving consideration to the question of whether or not the conduct of the defendant, admittedly not up to the standard (for at least a part of the period of time set out in plaintiff’s petition) that the plaintiff had the right to expect from his wife under normal circumstances, was the result of disease of mind,” that there is no presumption of insanity prior to the date of an adjudication of incompetence,” and that insanity, where pleaded as a defense, is affirmative in character and the burden of proof is with the party making such claim, it must also be remembered that the action in which the plaintiff seeks in the trial of the issues to rely on “presumptions of sanity” is a divorce action and subject to equitable considerations favorable toward sustaining the marital status of the parties. The last part of §3105.20 R. C., provides: “In any matter concerning domestic relations, the court shall not be deemed to be deprived of its full equity powers and jurisdiction.”

This important amendment to the divorce code (which code provides for an action which has heretofore always been considered and still is controlled procedurally as an action at law), together with the amendment permitting an order for alimony for the continued support of one guilty of aggressions of such a character as to warrant a dissolution of the marital agreement, authorizes the court to act with the powers of a chancellor in preserving the rights and obligations created by a contract of marriage. The hard and fact rules of law are, therefore, not fully applicable where unjust hardship would result. As was said in a case of Lewis v. Lewis, 103 Oh Ap 129, 144 N. E. 2d 887, in the exercise of its full equity powers and jurisdiction, a common pleas court may invoke the “clean hands” doctrine (of equity) and refuse to grant a divorce in an uncontested action where the plaintiff is guilty of misconduct which would constitute grounds for divorce. See also Gage v. Gage, 101 Oh Ap 483, 129 N. E. 2d 486 (affirmed 165 Oh St 462). There can be no question but that entering into the marital relation completely changes the status of the parties. A return to status quo ante is impossible. So it is that a divorce can be sustained only when based on grounds set out in the statute passed to provide relief where one party to the marital relationship has committed aggressions of such an inexcusable character as to warrant the court to act and even then, the offending party cannot be deprived of all rights bestowed by the marital relationship if to do so would shock the countenance of the court.

A court will not exercise its jurisdiction in a case seeking a divorce where the acts of the party charged are due to lack of mental capacity even if such acts, if committed by a person of sound mind, would justify a decree. The extent of the lack of mental capacity is one for the determination of the chancellor or trier of the facts in the exercise of his sound judicial discretion. The rule in criminal cases (where insanity is claimed as a defense), that to be relieved of legal responsibility for criminal acts, the defendant must not have been able to distinguish between right and wrong would have no application where one party to the marital relation becomes mentally ill by reason of which his conduct becomes abnormal. An adjudication of incompetence is not a prerequisite to presenting the question of whether the conduct of a defendant charged with gross neglect of duty in a divorce case was the result of a sick mind. It is also true, as claimed by the plaintiff, that an adjudication of incompetency can have no retrospective force nor can there be a presumption of incompetence retrospectively considered because of the judgment finding the defendant incompetent. The rights of the parties, including the state of mind of the defendant, when that question is presented, must be determined from the evidence presented in trying the issues of fact in the case.

Here the plaintiff presented evidehce which, when considered in the light of the surrounding circumstances and from the facts not in dispute, would justify the conclusion reached by the trial judge that the conduct of the defendant in neglecting her household duties was due to mental illness and not-from purposeful or wilful disregard of family obligations. ; -j ¡! --h-'j-íijlf

For the foregoing reasons, the judgment is affirmed.

HURD and KOVACHY, JJ, concur.


author: By MILLER, J.

text:
    BUDD & CO., an Ohio Corp., Plaintiff-Appellant, v. CAPITAL FINANCE CORP., d. b. a. SERVICE FINANCE COMPANY, Defendant-Appellee.
    Ohio Appeals, Tenth District, Franklin County.
    No. 5517.
    Decided October 14, 1958
    Dresbach, Crabbe, Newlon, Collopy & Bilger, Charles B. Brown, of Counsel, Columbus, for plaintiff-appellant.
    J. Craig R. Wright, Columbus, for defendant-appellee.
   OPINION

By MILLER, J.

This is a law appeal from a judgment of the Municipal Court of Columbus, Ohio, rendered upon the sustaining of the defendant’s motion for a directed verdict at the close of the plaintiff’s case. The action was one of conversion alleging that the defendant wrongfully and unlawfully appropriated and converted to its own use one Crosley electric range bearing Serial No. 50011. The answer was a general denial and cross petition which the defendant dismissed at the close of plaintiff’s case.

The record reveals that the plaintiff-appellant, Budd & Company, sold to one Carlyle Welding the said electric range and. took back a chattel mortgage for the balance of the unpaid purchase price; that prior to the date of the sale, the defendant-appellee, Service Finance Company, held a chattel mortgage on all of the household goods of Mr. Welding, including an old range which was traded in as part of the purchase price on the new one. That both mortgages were properly recorded is conceded by both of the parties. Welding later became a bankrupt and the furniture was placed for storage with the Trowbridge Storage Company. The defendant threatened to seize and sell all of the furniture, whereupon the wife of Welding signed the following letter, which was drawn up by the defendant and presented to her.

“Columbus, Ohio
December 30, 1954
I, hereby authorize the Trowbridge Storage Co. to release my Household Goods to the Columbus Auction Company. Subject Household Goods to be sold at Public Auction and the proceeds of said sale less commissions to be applied to my account with the Service Finance Company.
/s/ By Ernetta Welding”

The errors assigned are:

1. The court erred in directing a verdict in favor of the defendant on the petition of the plaintiff.

2. The judgment of the court was contrary to law and manifestly against the weight of the evidence.

We are of the opinion that the first assignment of errors is well taken, for in passing on such a motion the court must resolve all inferences which may be derived from the evidence in favor of the party and against whom the motion is made. If, after giving the evidence such favorable construction, reasonable minds could come to but one conclusion which is adverse to such party, then and then only should a verdict be directed against him. Hamden Lodge v. Ohio Fuel Gas Company, 127 Oh St 469.

It will be noted that the purported letter of authorization to sell the furniture and apply the proceeds to the account of the defendant merely grants permission for the acution company to sell, but is silent as to who employed the auction company to conduct the sale.

-' The inference is reasonable, we think, from the plaintiff’s evidence, that the defendant was the employer of the auction company. If so, it became the principal and is responsible for the sale of the range.

The judgment will be reversed and the cause remanded for further proceedings according to law.

PETREE, PJ, BRYANT, J, concur.


author: VICKERY, PJ.

text:
    SCHULTZ et v SOUSA
    Ohio Appeals, 8th Dist, Cuyahoga Co
    No. 10320.
    Decided November 18, 1929
    Messrs. Schwan, ..Schwan, Thobaben & Reed, Cleveland, for Schultz et.
    Mr. Francis J. Cook, Cleveland, for Sousa. '
   VICKERY, PJ.

It is claimed that inasmuch as there was so-called error in not finding the value of the car in the replevin suit, but only finding a judgment in favor of the plaintiff below for five cents, that that having been paid, thére is no redress. We do not so construe the law.

This redelivery bond obligated the defendant in the replevin suit to either return the car or pay its value and if she failed to do so, judgment being rendered against her, the redelivery bond became absolute by having the conditions broken; and the bondsmen, the plaintiffs in error here, would be responsible on their bond, not for the value of the car, that might have been found in the replevin suit, because they were not parties to that action, for if the value of the car had been fixed too high, they would not be bound by such judgment but could have contested, when they werg^sued the amount that they were liable for. This observation is important because it seems to obviate the necessity of having the value fixed in the replevin suit, because as against the bondsmen it would not be conclusive. They then, if upon failure to redeliver the car, had been sued for the value, could undoubtedly have introduced evidence to minimize the damages and to show that the value of the car was too high, and it would not be res adjudicata because they were not parties to that suit.

Now the conditions of this bond were, in effect, that if judgment was rendered against the defendant in the replevin suit, she would either deliver the car or pay its value and judgment was rendered against her; and it shows that the plaintiff in replevin was entitled to receive the car and the mere fact that there was an error in the proceedings in which the value of the car was not found, does not destroy the remedy the party might have.

It is argued by counsel for plaintiff in error that they should have made a demand for the car and upon a breach of the conditions the bond became absolute and the. duty devolved upon the party who gave tlie bond to either pay the value of the ear or to deliver the car. She did neither and inasmuch as she had parted with the car in a trade for some other car, it became impossible for the plaintiff in this action to get the car and therefore the only action he could bring was an action for its value, and in this case the value of the car was proven to be more than the judgment, but inasmuch as the bond was limited to $210.00, the judgment necessarily was limited to that amount. We think that the bond had been breached. and the conditions of it had become absolute, and the party plaintiff in this action was entitled to recovery in the absence of the car being delivered to him, as the defendant in the replevin suit, the full value of the car; and as against the sureties, the amount of their bond, if the value of the car equalled or exceeded that amount. In this case it shows that it exceeded that amount and therefore we can see no error in the judgment of the court in finding against the plaintiffs in error, the bondsmen, on this redelivery bond, for the amount of the bond.

There being no error, the judgment of the court will be affirmed.

Levine and Sullivan, JJ., concur.


author: LEMERT, J.

text:
    SUGLYO v STUMP et
    Ohio Appeals, 5th Dist, Perry Co
    No. 178.
    Decided November 1929
    Mr. J. E. Powell, New Lexington, for Suglyo.
    Messrs. E. C. Wagner and T. B. Williams, New Lexington, for Stump et .
   LEMERT, J.

As to when a judgment on the pleadings is justified it must be found that taking all the averments as they stand they present a question of law.

77 OS. 360-372

Section 3836 GC provides:

(Here follows quotation)

The above Section provides that when a petition is signed in the manner indicated by the above section, the entire costs of any improvement of such street or highway, without reference to the value of the lands of those who subscribed such petitión may be assessed and collected as provided by this Section.

The language used in the petition to council in this case wa.s plain, clear and explicit, wherein.. it said—

“And the undersigned and each of them consent and request that said assessments be íeviecf and collected without reference to the value of the property of the subscribers hereto and waive all benefits of the statute limiting assessments to 33 1-3 % of the actual value of the property assessed.”

The petitioners say in effect to council, that if you will improve a street upon which our lots about, we will pay all of the actual costs of improvements except only such as is by law chargeable to the municipality, or in other words they petition council to improve these streets, notwithstanding, the fact that their portion of the costs thereon may in such case exceed the limitations provided for by Section 3836.

By signing such a petition,, which is an inducement to pave the streets and save the village from paying the excess of the value of the lots, the petitioners cannot' now be heard to say that the cost of the improvements exceeds the benefits of the 33 1-3 % of actual value of the lots.

By signing such petition and inducement to pave they also say that they waive their limitations. ■

The plaintiffs in their reply admit that they waive the 331-3 % limitation mentioned in 3836 GC.

Now, from the above facts and by applying the law, it seems to be very clear that plaintiffs in error have waived all and every right to protection they might have had under the constitution and laws of the State.

This, the case at bar is an equity case. Plaintiffs must come into Court with clean hands.

On a question of waiver we cite

103rd OS. 585

110th OS. 82

If the petitioners in this case had filed their petition for improvement without setting forth that they waived statutory righs etc, but simply asked for council to improve the streets, and that they will pay whatever assessments as is authorized by law, then they would not waive any rights or be estopped if the assessment exceeded 331-3% or was more than the benefit. But that is not the case at bar.

Without entering into discussion of the numerous cases cited by counsel on both sides of this case, we find that under numerous Ohio decisions and that of other jurisdictions, that in such a case as the one at bar, that it is plain, and clear by Section 3836. What can be done and how an excess of valuation may be made, and when it is done by petition, it is quite clear as to the application of the law. So, we find and hold on all of the facts pleaded, including admissions of the petition and reply thereto, and applving the law to these facts there can be no question but what the lower Court was.right in sustaining the motion to render judgment on the pleadings.

The finding and judgment of the lower Court will therefore be affirmed. Exceptions may be noted.

Houck, J. and' Sherick, J., concur.


author: RICHARDS, J.

text:
    BARGER-MITCHELL MOTOR CO v LEVY LEVY v BARGER-MITCHELL MOTOR CO
    Ohio Appeals, 6th Dist, Lucas Co
    Nos. 2246, 2252.
    Decided Nov. 12, 1929
    Mr. George A. Bassett, Toledo, for Motor Co.
    Mr. Lionel Levy, Toledo, for Levy.
   RICHARDS, J.

These two cases arise out of the same litigation, were heard together, and will be disposed of in one opinion.

The Barger-Mitchell Motor Company recovered a judgment in the court of common pleas on May 23, 1929. On June 25, 1929, and at the same term of court, the trial judge set aside the judgment of May 23rd, and then re-entered the same under the date of Juné 25th. The BargerMitchell Motor Company contends that the court was without power to do this and assigns that action as error. A bill of exceptions was taken which shows that the court Jook this action because of the inability of the stenographer to prepare & bill of exceptions in the original case within the time limited from the date when the judgment was first rendered. A trial court retains control over its judgments during the term in which they are rendered and has full power to set the same aside for any reasonable cause, and to re-enter the judgment,, and we have repeatedly so held. This contention could have been made ip this court in the other error proceeding and did not require a separate action therefor. It follows, therefore, that the judgment ip cause number 2246 should be affirmed.

The original action was commenced before the municipal court in the City of Toledo by the Barger-Mitchell Motor Company and resulted in a judgment in its favor in that Court for a lesser sum than it claimed. For this reason it undertook to appeal the case to the court of common pleas and gave an appeal bond signed by Lewis E. Barger as surety. The BargerMitchell Motor Company is an Ohio partnership and the action was brought in its name as a partnership, the surety .on the appeal bond being a member of the partnership. The defendant Levy made a motion in the court of common pleas to dismiss the appeal based on this ground. On the final hearing of that motion the court overruled the same and exception was taken. Thereafter the action went to trial in the court of common pleas and resulted in a judgment in favor of the Barger-Mitchell Motor Company materially larger than had been rendered in its favor in the municipal court. The proceeding in error by Gladys M. Levy in this court is based on the claimed error of the common pleas court in overruling her motion to dismiss the appeal.

Section 1579-310 GC provides for an appeal from a judgment rendered in the municipal court and requires that the “party appealing” must enter into an undertaking with at least one good and sufficient surety. It is insisted that a co-partnership is not a separate entity from the individuals composing it and that, therefore, Lewis E. Barger, who signed the undertaking for appeal, was, in effect, a party plaintiff in the municipal court and incompetent to become a surety on the appeal bond. This is an important question and has challenged the careful consideration of the court.

We may concede that as a general rule a co-partnership is not_a separate entity distinct from the individuals who constitute the firm, but it does not necessarily follow that an individual co-partner, who is otherwise fully qualified, might not be competent to sigh as surety on an appeal bond for the firm. We are dealing, here with a case brought in the partnership name under a statute expressly authorizing it, and it is thus, for the purposes of bringing and prosecuting the action through the courts, regarded as an entity and entitled to the rights of any other litigant, including the right of appeal by giving, an undertaking signed by a person having the qualifications prescribed by statute. And whether the partnership may or may not.be regarded as a separate entity, the surety on the anneal bond was not the “party appealing” and he was not, therefore, disqualified as such from becoming a surety. Especially is this true in view of the fact that the statute providing for appeals is remedial and must be liberally construed, as was held by the Supreme Court in Commonwealth Oil Co. vs. Turk, et al., 118 Ohio St., 273.

No one could have appealed except the Barger-Mitchell Motor Company. If it.had been content, the judgment would have to stand and certainly, therefore, it alone is the party appealing, and the statute provides that such party must enter into an undertaking with a good and sufficient surety.

Lewis E. Barger, the surety, was not a party to the action. The most that could be said is that he stood in the relation of a guarantor or surety for the firm and his property could only be reached by an appropriate proceeding, and not then unless it be shown that the partnership property was insufficient to satisfy the i- dgment.

Reliance is placed on Rich vs. Rupert, 12 Ohio App., 159, but in that case the surety was a party to the action and one of the parties appealing, and therefore disqualified as a surety.-

The precise question was determined in the court of common oleas in Hamilton County in the case of Fiske vs. Tennenbaum, 7 Ohio Law Reporter, 76, and we are fully in accord with the reasoning and conclusion of the trial judge, Dickson, in that case, holding that one of the partners is not disqualified to sign as surety in an appeal of a judgment rendered against the partnership in its firm name.

If it be said that the signature of the surety furnishes no additional security to the appellee, yet he is amply responsible financially and therefore the appellee is fully protected, and if he were not financially responsible' as surety, that objection could easily have been made, and if a surety, after approval, is found to be insufficient, ample remedy is provided for requiring additional security. Lewis E. Barger, the surety, not being the “party-appealing” and being otherwise fully qualified as surety, the trial court was right in overruling the motion to dismiss the appeal.

The judgment in each case will be affirmed.

Williams and Lloyd, JJV concur.