author: By HOWARD, Secretary.

text:
    AMERICAN OAK LEATHER CO., Appellant, v. PECK, Tax Commr., Appellee.
    Board of Tax Appeals.
    No. 19498.
    Decided December 18, 1951.
    Joseph H. Head, Robert L. Black, Jr., Cincinnati, for appellant.
    Hon. C. William O’Neill, Atty. Geni., by Paul Tague, Jr., of Columbus.
   OPINION

By HOWARD, Secretary.

On January 25, 1951, the Tax Commissioner denied appellant’s application for review and redetermination of an increased personal property tax assessment for the year 1950 theretofore made. Appellant appeals from the denial order. So far as we know the questions made are without precedent in Ohio.

The matter now comes on for further and final consideration upon the Commissioner’s transcript, the notice of appeal, an agreed stipulation of facts and briefs of counsel. The stipulated facts are set forth in toto:

“1. The American Oak Leather Company was incorporated in 1880 and organized under the laws of Ohio as a corporation for profit. Its principal place of business and only location in Ohio was at Kenner and Dalton Avenues, Cincinnati, Hamilton county. Prior to July 1, 1949, the only business of the Company was the tanning of sole leather by two processes: vegetable tanning and chrome retan.
“2. At a Special Meeting of Shareholders of the Company duly convened and held on July 1, 1949, more than two-thirds of the shareholders entitled to vote voted in favor of dissolution and liquidation of the Company. Pursuant thereto the Company’s Certificate of Dissolution was duly filed with the Secretary of State of Ohio on October 3, 1949. By December 31, 1949, the Company had made liquidating distributions to its shareholders totalling $3,399,700, and representing more than half of the total such distributions.
“3. Beginning in November, 1948, the Company ceased to soak (process) any more hides in the vegetable tan department and thereafter its activities in this operation consisted of completing the work in process and realizing upon it. In August, 1949, the Company ceased to put hides in process in the chrome retan department; thereafter its activities in this operation consisted of completing the work in process and realizing upon it. The finished products of both departments were sold in regular channels up to October, 1949. when most of the remaining balance was sold in a lump sum sale. The materials still on hand December 31, 1949, were disposed of principally by redelivery to the Company’s suppliers and the balance by lump sum sale. The entire Ohio inventory of the Company at all times pertinent had been manufactured by it, and was stored, in the county of manufacture.
“4. The inventories on hand at the ends of the various months during 1949 were:
“The average of month-end inventories on hand was $583,-288.
“5. Beginning in July, 1949, the Company sold its manufacturing machinery, all of which was located in its plant at Cincinnati. On September 1, 1949, the Company sold all of the machinery and equipment used for chrome retan to Howes Leather Company and also leased to Howes the entire part of the Company’s plant theretofore used in this process. The balance of the machinery, being that used in vegetable tanning, was sold to various buyers so that on December 31, 1949, there remained only miscellaneous machinery and equipment having a true value of $5,186.24 and supplies, fuel, and fixtures at a true value of $4,518. The vegetable tanning plant was incapable of operation as a complete plant after July 31, 1949. The Company ceased all processing after September 1, 1949, and after that date it was physically impossible to re-enter the business of tanning leather.
“6. On December 30, 1949, the Company sold and conveyed to The Hotel Burnet Company all of the Cincinnati real estate except that part which had previously been leased to Howes Leather Company. The latter part remained under said lease until sold and conveyed in February, 1950.
“7. The Company did not pay and was not assessed a franchise tax for the year 1950.
“8. On or before May 31, 1950, the Company filed a corporation return of taxable property with the Auditor of Hamilton County, as shown in the record certified by the Tax Commissioner, and in due time paid the tax of $833.75 disclosed thereby. On September 1, 1950, the Company paid under protest an increase of tax in the amount of $12,353.06, pursuant to an amended preliminary assessment certificate issued by the Tax Commissioner of Ohio, based on changes to said corporation return made by a tax examiner.”

On page 16 of the Commissioner’s transcript appear certain comments by the departmental examiner, which likewise appear to have been carried into the Tax Commissioner’s final order complained of. Inasmuch as these comments disclose the reason and cause for the increased assessment made on appellant’s tangible personal property after dissolution for the tax year 1950, they are now set forth in full.

“Schedule 2.

“Machinery & Equipment was assessed as idle equipment at the rate of 10% of its cost value of $51,862.38 equals $5186.-24. This amount we listed at 70% instead of 50%.

“Our reasoning was as follows: the corporation had ceased to manufacture for the purpose of dissolving. The common and preferred stockholders were paid for the holdings at par value as of 12-31-1949. The Board of Directors are then acting as Trustees for the sale of the remaining assets of the corporation. At this time they cease to be manufacturers and become merchants. For this reason we have used the 70% list instead of 50% as the equipment was considered as having been withdrawn from the production line.

“Schedule 3.

“Inventory was assessed on the physical monthly average at 70% list for the same reason as above.

“Schedule 4.

“Furniture and Fixtures was assessed at 20% of its remaining cost value at 70% list. Fuel and non-productive supplies inventories were assessed at year end values and taxed at 70% list.

“Schedules 8 and 10.

“We disallowed the method of allocation as to within and without the State based upon a percentage of stock holdings, since these deposits and receivables arose out of business within the State of Ohio and were still under the control of the Board of Directors.”

The questions made by appellant are as set forth in its brief:

“(1) Is a dissolved corporation a taxpayer within the meaning of §5366 GC?
“(2) Is the tangible property of a dissolved corporation taxable for the year 1950, if during the calendar year 1949 its shareholders voted to dissolve, its Certificate of Dissolution was filed, its machinery and inventory substantially sold or disposed of, its operations terminated except for tag-end sales, its plant no longer capable of its designed operation and more than half of the proceeds of liquidation distributed to its shareholders?
“(3) If such tangible property is taxable, is the inventory of such a dissolved corporation, which prior to liquidation was a manufacturer, taxable at 70% of average month-end values during the year 1949, or at 50% of such values, or at 70% of the year-end value of the inventory?
“Appellant submits that the first two questions must be answered in the negative, but that if both are affirmatively answered, the inventory is taxable at not more than 70% of the year-end value thereof.”

Appellant further reasons that by its dissolution its whole purpose and character was converted and transformed in contemplation of law from a corporation for profit into a liquidating trust. It maintains that it was no longer doing business in this State, and that its. undisposed of tangible property was not used in business, and that it was no longer in business for profit or engaging in any commercial enterprise. It is urged that it is no longer a manufacturer and is not now a merchant. Appellant’s liquidating officers do not question but concede the dissolved corporation’s liability for personal taxes assessed subsequent to dissolution upon its intangible property to the extent the beneficial owners thereof are taxpayer residents of the State of Ohio.

It is the policy and statutory rule of this State not to tax tangible personal property (with certain exceptions of no importance here) unless the same is “used in business,” which §5335-1 GC has defined in this manner:

“Within the meaning of the term ‘used in business,’ occurring in this title, personal property shall be considered to be ‘used’ when employed or utilized in connection with ordinary or special operations, when acquired or held as means or instruments for carrying on the business, when kept and maintained as a part of a plant capable of operation, whether actually in operation or not, or when stored or kept on hand as material, parts, products or merchandise; * * *.”

Since appellant contends that it is not a taxpayer under the terms of §5366 GC, we quote its applicable portion:

“ ‘Taxpayer’ means any owner of taxable property and includes first, every person residing in, or incorporated or organized by or under the laws of this state, or doing business in this state, or owning or having a beneficial interest in taxable personal property in this state, * *

This section further enumerates certain kinds and classes of taxpayers, among whom are included:

“(b) Partnerships, corporations, associations and joint stock companies, under whatever laws organized or existing, doing business or having taxable property in this state; and corporations incorporated by or organized under the laws of this state, wherever their actual business be conducted.”

In order to correctly determine the status of appellant on tax lien day, January 1, 1950, it becomes necessary to examine another section of the code; that is §8623-80 GC. Before examining its present provisions it is necessary that its history be reviewed. On February 16, 1927, the legislature enacted a “General Corporation Act” (112 O. L. 41). Sec. 8623-80 GC thereof supplanted and broadened older §8741 GC and §§8742 and 8743 GC. This act and section materially changed previous concepts; in fact, a corporation voluntarily dissolved is given life after legal death until final liquidation. Sec. 8623-80 GC, as originally written reads:

“Sec. 80. Upon the filing of any such certificate together with receipts showing the payment of all franchise and other taxes to the date of such filing or the giving of security therefor satisfactory to the tax commission, the corporation shall be dissolved and shall cease to carry on its business, but it shall continue for the purpose of paying, satisfying and discharging any existing liabilities or obligations, collecting and distributing its assets and doing all other acts required to adjust, settle and wind up its business and affairs, and it may do all such acts and may sue and be sued in its corporate name.” (Emphasis ours.)

On April 4, 1929, the next legislature revised the act (113 O. L. 413 [451]) and made the section read:

“Upon the filing of any such certificate, together with:
“(a) Receipts, certificates or other evidence showing the payment of all franchise and personal property taxes accrued up to the date of such filing: or,
“(b) An affidavit of one of the officers of said corporation containing a statement of (1) the counties in this state in which the corporation has personal property, and (2) a statement of the assets and liabilities of such corporation and the estimated value thereof, or, in lieu thereof, a statement that the net assets of such corporation are sufficient to pay such taxes; the corporation shall be dissolved.
“Any corporation which shall be dissolved and any corporation whose articles have been cancelled shall cease to carry on its business and shall be without authority so to do, but it shall continue for the sole purpose of paying, satisfying and discharging any existing liabilities and obligations, collecting and distributing its assets and doing all other acts required to adjust, settle and wind up its business and affairs, and it may do all such acts and may sue and be sued in its corporate name.
“Any person or persons having possession of any such assets shall be personally liable in an amount equal to the fair cash value of such assets available at the time of dissolution for the payment of such franchise and personal property taxes, if he or they shall make any distribution thereof without paying or adequately providing for the payment of such taxes.” (Emphasis ours.)

On May 28, 1945, the General Assembly again amended §8623-80 GC (121 O. L. 167). The section as reenacted bears the following title:

“An Act to amend §8623-80 GC, relative to winding up and dissolution of corporations and the payment of personal property taxes in connection therewith.
“Winding up and dissolution; payment of taxes.” (Emphasis ours.)

This last amendment makes but two changes in the first paragraph of the then existing law, and drops therefrom that part designated as (b) 2. We set it forth as it now stands:

“Upon the filing of any such certificate, together with receipts, certificates or other evidence showing the payment of all current and delinquent franchise and personal property taxes accrued up to the date of such filing, and an affidavit of one of the officers of said corporation containing a statement of the counties in -this state in which the corporation has personal property, the corporation shall be dissolved.”

Ohio’s conception of corporate life is threefold. (1) It has a prenatal status that exists up to the point of its coming in being. Its incorporators enjoy certain privileges, and it is subject to certain obligations and direction. (2) The actual business life of a corporation for which it was created. (3) Its continuance for certain purposes, enumerated in §8623-80 GC, until its complete liquidation. The act of dissolution does not deprive it of all life. That which ceases is the enjoyment of its greater and lesser franchises, its special privilege and immunities, and the right to further pursue the business or purposes for which incorporation was procured. The legislature recognized that the act of dissolution did not end all corporate business, but, like an individual after death, its activities must be settled; its claims collected, its debts paid, its sums due the State be satisfied, its property (real and personal), its manufactured product, its raw materials, its machinery and equipment, its office supplies, and its securities be sold and converted into cash, and its stockholders proportionately be placed in possession of the balance of the corporation’s assets. The selling of its assets for the best price obtainable is a highly important and particular business that requires special business acumen. Can it be said that the liquidators are not engaged in business, and the property with which they deal is not “used in business”? It must be noted that the legislature, in §§5325-1, 5328 and 5388 GC, did not say “used in business of manufacturing,” but employed the much broader term of “used in business”; that is, in any kind of business or “special operation” as §5325-1 GC states. Although taxation statutes are strictly construed, it must be remembered that statutes, like §8623-80 GC, granting corporate liquidating powers, are remedial and are universally construed liberally.

The Board’s independent search has revealed but one adjudicated case bearing directly upon the question at issue. In Stoner v. Higginson, 12 P. S. 296, 316 Pa. 481. 175 Atl. 527, the question was whether or not service upon a partnership previously had voluntarily announced its withdrawal from the business for which it was created. It placed a liquidating agent in charge to wind up its affairs. Pennsylvania law made the effectiveness of the service dependent upon whether or not the liquidating agent was engaged in business. It was held that he was so engaged; and that the property with which he dealt was of necessity used in business.

It is noted that §8623-80 GC as originally enacted in 1927, and both of its subsequent amendments, provide that the corporation “shall cease to carry on its business,” “but shall continue” for the purposes enumerated. The word “shall,” to our notion, used in such close proximity, is mandatory and not permissive. It is also noticed that the original section speaks of “all franchise and other taxes.” The amendments interject the word “personal” before the word “taxes.” The 1945 amendment reads “all current and delinquent franchise and personal property taxes.” The title to the 1945 amendment and present statute is expressive of legislative intent in the use of the words “and the payment of personal property taxes” in connection with dissolution. Retention of the statute’s affidavit feature, as to “the counties in this State in which the corporation has personal property,” can have but one purpose, which is, since the corporation proper will make no further personal property tax return, the guide by which the Department of Taxation makes allocation of all further tax collections between the several counties wherein personal property of 'the liquidating corporation is situated.

The Board of Tax Appeals finds that the dissolved corporation is a taxpayer within the meaning of §5366 GC; and that its tangible personal property used in business is taxable for the year 1950.

As previously indicated, appellant insists that if it is neither a manufacturer nor a merchant its inventory is taxable at 70% of its true value at the year’s end. This Board had that question under consideration in Workingmen’s Overall Supply Co. v. Glander, Case Nos. 15600 and 15601, 58 Abs 385, 42 O. 0.181, under date of January 4, 1950, wherein it was held that where one was engaged in business, and its tangible personal property was used in business, that it was taxable at 70% of its year-end value. We see no need for another exposition of the reasons upon which this conclusion was reached.

And now reverting to Nos. 4 and 5 of the stipulation of facts, we find it therein agreed that the true value of appellant’s tangible personal property on January 1, 1950, was:

The Boárd of Tax Appeals finds that the Tax Commissioner was right in his order in taxing appellant’s tangible personal property for the tax year 1950, but that he is in error in his manner of its computation. The order complained of is affirmed in part and reversed in part as herein indicated, and the cause is remanded to the Tax Commissioner for correction in accordance with the findings herein made.

Dissenting Opinion by Chairman Kirwin.

I agree with the majority of the Board that if 'the property here involved is subject to taxation it is taxable at 70% of year-end value. However, I believe that the final order of the Tax Commissioner complained of should be entirely reversed and said property found not to be subject to taxation. Tangible personal property (with exceptions herein unimportant) is subject to Ohio taxation only if “used in business” in Ohio; and this is true regardless of the character of the owner of said tangible personal property — corporation —individual—partnership, etc.

I am of the opinion that the tangible personal property here involved was not “used in business” on or after January 1, 1950, for the reason that the activities of the appellant, on and after that date, were not of such a character as to bring them within the definition of “business” as set out in §5325-1 GC.

Said activities, in my opinion, did not constitute an enterprise conducted for gain, profit or income — but merely were the activities of a dissolved corporation in disposing of its property regardless of gain or profit.

It appears to me that the appellant, prior to January 1, 1950, had done everything required by the provisions of §8623-80 GC, to attain the status of a dissolved corporation — and its right to engage in business was thus terminated.


source: Caselaw Access Project

author: By THE COURT. By THE COURT.

license: Public Domain

text:
    WORPEL, Appellant, v. BOARD OF LIQUOR CONTROL, Appellee.
    Ohio Appeals, Second District, Franklin County.
    No. 4495.
    Decided May 9, 1951.
    Siegel & Siegel, Cleveland, for appellant.
    Hon. C. William O’Neill, Atty. Geni., Thomas R. Lloyd, Asst. Atty. Geni., Columbus, for appellee.
   OPINION

By THE COURT.

Submitted on motion of the appellee seeking an order dismissing the appeal for failure to comply with Rule' VII of this Court.

Decided July 11, 1951.

The record'discloses that the notice of appeal on questions of law only was filed on the 29th day of July, 1950; that the appellant’s assignment of errors and brief were filed on January 2, 1951. It will be noted that there was a failure of compliance, but which the appellant seeks to justify by the filing of an affidavit showing that he has been in bad health and was therefore not able to comply with the rule. The affidavit sets forth that the affiant, Samuel O. Siegel, was confined to a hospital in the early part of October for observation after continuous ill health prior thereto; that he tried the case in the Court below and was familiar with the entire matter. The record discloses that affiant had associate counsel, so the matter of the illness of one of same cannot constitute good cause for the failure to comply. The proper procedure would have been, under such circumstances, for one of counsel to have made an application for an extension of time, which this Court has always been liberal in granting. A computation of time for the filing discloses that the same expired on September 17, 1950, while the affiant did not go to the hospital until the early part of October. Therefore the appellant was in default prior to the affiant’s entry to the hospital. The fact that prior thereto the affiant had been in bad health certainly is not definite and certain as to his physical and mental capacity. Since January, 1935, this Court has adhered to a strict compliance with the rule. See Maher v. Thomas, 23 Abs 146; Keating v. Keating, 49 Abs 575, affirmed in 148 Oh St 671; Costlo v. Strum, 54 Abs 284.

The appeal will not be dismissed, but the judgment will be affirmed, as we deem this to be the proper procedure.

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

ON APPLICATION FOR REHEARING

No. 4495.

OPINION

By THE COURT.

This is an application for a rehearing in which we find nothing that has not been previously considered. The application. will be denied for the reasons set forth in our opinion under date of May 5, 1951.

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


author: By KING, J.

text:
    BEEBE, Plaintiff, v. BROWNLEE, Defendant.
    Common Pleas Court, Franklin County.
    No. 179655.
    Decided October 9, 1951.
   ORAL OPINION

By KING, J.

THE COURT: Gentleman, I have listened as carefully as I could to the analysis of the authorities which each of you have presented to the court, both pro and con, the ultimate issue for determination by the court, as well as the record evidence which has been adduced here in evidence.

This is an action, in substance, instituted by the plaintiff wherein he seeks by proper order of the court to have conveyed to him real property, the subject of the action, located here within the County of Franklin formerly jointly or commonly owned by himself and his former wife, Mrs. Beebe. The action of the plaintiff is based upon a finding of the court of Florida wherein the plaintiff by a bill of complaint instituted an action of divorce from his wife, answer was filed, the cause proceeded to be determined by the court on the factual situation presented to that court.

The record before me discloses that the plaintiff obtained the divorce based upon the aggression — upon the grounds of the aggression of the wife. It was stated here to the court, and it is in evidence before me, that the parties had been married for a period of nineteen years, that the former wife, the defendant herein, informed the plaintiff, in substance, that she no longer cared to live with him as his wife, that she had found another with whom she desired to be married. There was born as the issue of this marriage a child which at the time was past fourteen years of age. The record further discloses that there was property both real and personal located in the State of Florida and also real property located here in Franklin County jointly owned or owned in common, whichever way the facts might finally determine, by the parties.

The plaintiff was granted the divorce. A contract was entered into by and between the parties, as it appears from the evidence, in which, in substance, it was agreed that the plaintiff should have the care, custody and control of the minor child, fourteen years and past of age, subject to the right of visitation by the other; that monies in the bank amounting to approximately $2200.00 was to be given to the wife; that the property in Florida was to go to the husband. The contract further provided that the defendant would convey to the plaintiff all of the property jointly owned by them, whether real, personal or mixed. The provisions of the contract were observed and carried out with the exception of the real property in Ohio, in which the wife, former wife, refused to make a conveyance. The record further discloses that in the meantime Mrs. Beebe has remarried.

Now, it is the contention of the plaintiff, as I understand it, that due to this contract and to this decree he is entitled to an order of the court providing for the conveyance of the property in question. It is, if I understand correctly, the contention of the defendant that the court of Florida had no jurisdiction over the res, that is the property here in Ohio, that that court had jurisdiction- only of property located within its jurisdiction, and that its decree could not be operative upon property beyond the boundaries of Florida. The plaintiff, among other things, has asked for specific performance, specific performance of the contractual agreement entered into, the contractual relationship created by' the stipulation before the court.

Now, first, it seems to me that the question is, what was the intention of the parties, what did they intend to do? Did the husband, the then husband and the wife before the divorce was granted and in making their arrangements with reference to the properties jointly owned — was it the intention, the mutual agreement of each, that the property in Ohio should be conveyed to the plaintiff?

Now, the stipulation provides all of the property. Now, all means in whole, the entirety, in the aggregate. It seems to me that there is no ambiguity about the contract, there is no ambiguity about the decree. It is as clear as language can make it, namely, that all of the property of the wife shall be conveyed to the husband. She also therein as a consideration received $2200.00 in cash, and the language of the decree is as clear as the wording of the stipulation, the contract.

I appreciate that that decree in and of itself does not work as a transfer of the real property, as that court had no jurisdiction over the res, its jurisdiction was in persona, but that court was a court of equity, having jurisdiction over the person, and in weighing the equities could make any order requiring the defendant or the parties to comply with such order as was in keeping with the equities of the situation, of the facts and circumstances presented to that court, and the court did that. I repeat it. It had jurisdiction of the person but not over the property in Ohio. I feel that that court could make such a decree as the equities of the case justified, and that that order while not in and of itself acting as a transfer of the property would be binding upon the conscience of the parties and could become, as it became here, the predicate or the basis of an action by the plaintiff in a court of competent jurisdiction where the property is situated. That is what has occurred. Now, it would be binding, I say, upon these parties, that decree, unless fraud had been shown, and there is nothing like that presented here, no fraud, not even a suggestion of fraud. Now, you are persuaded that the decree is, as the language states, all properties wherever situated, but that was the intention of the parties, and it was the meaning of the court order, that all real property wherever situated was to be conveyed by the wife to the husband, that is her interest.

It would be strange, indeed, that all other matters like the custody, care and control of the child, the right of visitation, the monies in the bank in Florida, and all of the property in Florida was provided for and disposed of, that they would leave just one parcel here in Ohio unthought of and undisposed of. I use that because of the probabilities of the agreement, the intention of the parties, the mutuality, or the lack of it.

I feel that there was a complete hearing. I feel that they all understood what they were doing, that is, the parties to it. I feel for the aggression of the wife that was really the logical thing to do. Here in our own court, if husband and wife come into court seeking a divorce, property owned by the husband, and the husband is the aggressor, guilty of wrongdoing, the court can make such disposition of that property as the facts and the circumstances before him warrant or justify. He could do it in the absence of an agreement, but of what greater force is the action of the parties when they enter into an agreement disposing of their property, later approved and made a part of the decree, or at least approved by the court.

I repeat this. The decree of the Florida court does not act as a conveyance. It can’t do that, but it is binding upon the parties and can be, and here is, the subject of an action to compel not only compliance with the contract but an observance of the determination of the rights of the litigants by a court in a sister state.

My analysis of the facts and the law brings me to this conclusion: That the plaintiff is entitled to have an order of the court requiring the defendant within ten days to execute a deed of conveyance of the property in question or upon her failure so to do, that the order of the court stands of record as a conveyance of the property in question, and that her present husband be barred of all dower right or interest in the property. You may draw an entry accordingly. Exception may be taken to the ruling of the court.


author: By THE COURT.

text:
    BEEBE, Plaintiff-Appellee, v. BROWNLEE (Formerly BEEBE), Defendant-Appellant, and BROWNLEE, Defendant-Appellee.
    Ohio Appeals, Second District, Franklin County.
    No. 4714.
    Decided January 14, 1952.

      Howard Morgan Jones, Columbus, for Walter Stewart Beebe, plaintiff-appellee, and for the motion.
    Carl H. Valentine, Columbus, for Dorothy M. Brownlee, defendant-appellant, contra the motion, and Frederick Brownlee, defendant-appellee.
   OPINION

By THE COURT.

Submitted on motion of appellee to dismiss the appeal for the reason that the defendant-appellant has given no appeal bond as required under §12223-6 GC, or any substitute for an appeal bond as required by §12223-11 GC. The motion must be sustained. Secs. 12223-12; 12223-11 GC; Parker, et al. v. Ingle, et al., 9 O. O. 229; and Teegarden, a minor, v. Teegarden, et al., 35 O. O. 445. The requirements of the statutes are mandatory, subject only to the exceptions therein stated. It does not appear that the defendant-appellant comes within any of the exceptions of §12223-6 GC. As required by §11564 GC, the appeal will be retained for determination on questions of law only and the appellant granted leave to perfect said appeal in accordance with Supplement to Rule VII of this Court.

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


author: By HORNBECK, PJ.

text:
    BEEBE, Plaintiff-Appellee, v. BROWNLEE et, Defendants-Appellants.
    Ohio Appeals, Second District, Franklin County.
    No. 4714.
    Decided May 23, 1952.

      Howard M. Jones, Columbus, for plaintiff-appellee.
    Carl H. Valentine, Columbus, for defendants-appellants.
   OPINION

By HORNBECK, PJ.

This is an appeal on questions of law from a judgment of the Common Pleas Court in favor of the plaintiff directing the defendant, Dorothy M. Brownlee, to make and execute a deed to certain premises described in the second amended petition.

Counsel have provided the Court with extended, comprehensive and helpful briefs which we have considered.

As a part of the Bill of Exceptions there appears the opinion of Judge King on the issues drawn between the parties. We are in accord with his conclusion and the reasons therefor and it would serve no good purpose to add to the files in this case an extended opinion of this Court.

The decree of the Florida Court in divorce entered in behalf of plaintiff incorporated a stipulation of the parties, in part, as follows:

“It is hereby stipulated by and between the parties * * * that in the event a final decree is granted to the plaintiff herein, the following stipulation is to be incorporated and become a part of the final decree:
* * *
<¿2 * * *
“3. That the plaintiff herein be given title to all other property now jointly owned by the parties hereto whether such property be real, personal or mixed in nature.
“4. That the defendant will execute a conveyance of all real property now jointly owned by the plaintiff and the defendant herein granting all her interest in and to such property to the plaintiff herein.
“5. * * (Signed by the parties and witnessed by their attorneys.)

Appellant relies particularly upon two propositions: First, that the Florida Court which entered the decree and judgment upon which plaintiff’s first and second causes of action are predicated was without jurisdiction to enter a judgment respecting the real estate in Franklin County; and, second, that if the Court had such jurisdiction the judgment entry evinces no purpose to affect Ohio real estate but was confined solely to Florida real estate.

The decree was granted for the aggression of the defendant, Dorothy M. Brownlee.

The language of the stipulation carried into the entry clearly was broad enough to include all real estate which, ex vi termini, would incorporate the Ohio real property. As a matter of fact, at the time the decree was entered the only real estate to which it could refer was the Ohio realty because the defendant had deeded the Florida property to plaintiff before the divorce was decreed.

Considerable attention is. devoted to the lack of equity in the apportionment of the property of the parties, but, as Judge King held, there is no proof of fraud practiced by plaintiff on the defendant in the Florida Court.

The principal contention of appellants is that the judgment purporting to treat of the rights of the parties to the Ohio real estate was without effect because the Court had no jurisdiction to make an order affecting such real estate. This contention is twofold: First, that jurisdiction of the subject matter, i. e., the real estate, could not be given to the Court because it was not capable of receiving it; and, second, the pleadings in the divorce case made no issue of title to the real estate. It is true that the pleadings made no issue as to the real estate but the parties, by the stipulation, requested the Court to assume jurisdiction and to determine their respective rights in the real estate in accordance with the stipulation which both parties signed. We are in agreement with Judge King’s position respecting the full faith and credit which must be given to the judgment of the Florida Court. It may be that the judgment entry wherein it recites that the Court had jurisdiction of the subject matter, if including che real estate in Ohio, is too broad. However, clearly, the Court did have jurisdiction of the person of the parties and upon the stipulation to make the order as to their respective rights in realty which they jointly owned, although, of course, the decree itself could not operate to transfer title to the Ohio real estate.

An examination of the judgment entry indicates that it responds only to the issue drawn between the parties on the first cause of action of the second amended petition and the answer thereto and does not adjudicate the issue drawn on the third cause of action.

It is our opinion that the plaintiff’s right to the relief sought most clearly appears upon the claim that there was a contract between the parties, as evidenced by the stipulation, which concluded their rights and accorded to the plaintiff the right to compel the defendant, Dorothy Brownlee, to transfer to him any interest that she might have in the Ohio real estate.

There is support for a judgment for the plaintiff in the case of Burnley, et al. v. Stevenson, 24 Oh St 474.

Upon the whole record, it clearly appears that the plaintiff had the right to invoke the jurisdiction of the equity side of the Common Pleas Court to secure the relief accorded to him.

The judgment entry will be modified to carry a further finding on behalf of the plaintiff .on the issue joined by the third cause of action of the second amended petition and the answer thereto, and the judgment will be affirmed.

WISEMAN and MILLER, JJ, concur.


author: By THE COURT:

text:
    NEVIUS, In re.
    Ohio Appeals, Second District, Clark County.
    No. 489.
    Decided August 16, 1950.
    Orel J. Myers, E. H. & W. B. Turner, Dayton, for appellant.
    George S. Raup, William Malcolm Elder, Kenneth L. Rush, Springfield, committee for appellee.
   OPINION

By THE COURT:

Submitted on application of appellant for an order of this court for diminution of the record and amendment of the same.

The subject matter of which a record of the trial court shall consist is peculiarly for the Judge of that court.

The record and files will be remanded to’ the Common Pleas Court for determination of the application.

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


author: By WATTERS, J.

text:
    BELL v. ROGERS et.
    Common Pleas Court, Summit County.
    No. 184846.
    Decided June 7, 1952.

      Bruce W. Bierce, Edward N. Heiser, Akron, for plaintiff.
    Louis S. Belkin, Akron, for defendants.
   OPINION

By WATTERS, J.

Conclusions of Fact and Law.

Plaintiff, Peter J. Bell, has been in the beauty shop supply business for a number of years.

Early this year his truck driver and four of his salesmen who called on the beauty operators of Summit, Lorain, Wayne, Medina and Stark Counties, signed up with and joined the defendant Union, of which James Rogers is the business agent. A competitor of Bell known as the K. and J. Beauty Supply had already unionized some time before that.

The' four salesmen who signed up were Reese, Cox, Weeks and Jackson, and the truck driver or delivery boy Urich.

In addition, the employees were salesmen Humbert and Kile, a stockroom and handy man Richert, and I believe two office girls, a Mrs. Woofter and Mrs. Sullivan.

Bell was requested to negotiate a contract, but nothing came of it, and the five members named above voted to strike, and picketing started March 14 or 15, 1952. Four of the members became active as pickets and otherwise for the union, along with Rogers, while Jackson continued to work for Bell along with the employees loyal to Bell. This caused considerable bitterness naturally between the two groups or factions. '

The plaintiff’s business is conducted in a one story building at 93 N. Main Street, about sixty feet wide and one hundred twenty feet in depth. The rear is upon Maiden Lane Alley (public) about twenty feet wide.

The picketing continued through the day and night, twenty-four hours, at the place of business. The reason for this does not clearly appear, except it appears that the Bell group have in some instances worked late at night getting orders ready. It would have been more sensible if they had by agreement worked a reasonable day and the pickets likewise.

During the day there were usually two pickets of the four mentioned on at one time in front, with Rogers actively looking in on the situation from time to time.

Bell has delivered most of his orders since picketing started through the mail. However many customers came to the store to purchase supplies during day-time working hours. With such persons the pickets, who knew most of the customers, discussed the dispute, but there were no threats of violence or intimidation and no violence.

Many customers were told that if they continued to purchase from Bell, their places of business (beauty shops) would be picketed.

Many customers were called upon by Rogers and others of the four and told that if they purchased from Bell, or did not return purchases made of him, their beauty shops would be picketed.

In only one instance did such picketing actually occur at a beauty shop for several hours only, when it was discontinued.

Some customers were followed to their place of business where they were told to stop buying of Bell, or to return their purchase, or their place would be picketed. This phase of the case is discussed under the law findings later.

On one occasion there was some .-jostling of one Don Houlton, son of one of the lady employees, by two of the pickets in front, near the door, after words and some name calling was exchanged by him and them. The two pickets have been charged with assault and battery in Municipal Court and are awaiting trial. Therefore I will not discuss it in any degree, or the merits thereof. Civilly it was of course not permissible under any right of peaceful picketing, but was an isolated flare-up of no great seriousness.

There was some spotty evidence about pickets parking their cars in the public alley back of the building in the vicinity of Bell’s back door. To clear up that situation no picket car may be parked or operated by a picket or on his behalf in any such manner as to interfere with the loading or unloading, or ingress or egress of any car or truck entering or leaving said alley on business with Bell, or the driver of said car or truck.

The telephone wires come off a pole at a point about three feet over the roof. Said pole being at the rear of the building and almost flush with the rear wall. The wires extended toward Main Street (west) lengthwise of the roof and about three feet above it, and entered the building at the upper front wall just about eight feet üp from the sidewalk at the upper southwest corner of the building. Anyone could easily climb the pole to the roof by means of the metal bar-steps placed alternately on the pole as commonly seen on telephone poles for climbing purposes.

The evidence shows that the two wires about two inches apart were cut, once right at the pole, then next in the center of the roof, and the last time, where they entered the front part of the front wall. There were three different cuttings at different intervals of time apart.

Plaintiff claimed that the defendants cut the wires. The defendants claimed that the plaintiff cut them.

The first cutting was repaired at midnight for Bell by a man procured by one Craig Martin, who he named as a Williard J. Morris, but Morris did not appear here as a witness. Martin told a wierd and mysterious tale which I will not attempt to repeat here.

The next time Bell himself repaired them from the roof, or he may have repaired them the first time — it is immaterial which. The third time the telephone company repaired them after they had been cut some four or five weeks. In the meantime the evidence showed that Bell used the phor.e in the business place next door.

The court cannot determine from the mere fact that the phone wires were cut, who cut them. The union telephone repair men of course refused to cross the picket line, which is their custom, and apparently the telephone company can't do anything about it without the agreement of its union officers.

However the decree shall contain an order of this court binding upon the defendants and the defendant union to withdraw its picket line if phone service is interrupted at Bell’s through cutting of the wires by unknown persons or known persons, or any other cause, for a period of time necessary to repair its service, said time of withdrawal to be fixed by counsel, and in case of inability of counsel to agree on the time, the court will set it, at the convenience of the telephone company.

At one or two times during the picketing Bell posted a sign on the inside of his window in front reading in substance “Open for Business,” the pickets placed a sign or signs over it reading in substance “Closed for Business.” This occurrence or occurrences was or were not permissible under the free speech doctrine, as he was open for business, and the pickets’ signs were false. Although those occurrences were early in the picketing, they were improper and the court enjoins such proceedings.

The evidence shows the following of salesmen’s and other employees’ cars by pickets and Rogers, in their cars, at a hazardous and dangerous distance between cars.

The defendants no doubt have the lawful right to follow salesmen and customers at a safe distance behind so as to ascertain their customers for the purpose of acquainting those persons with the dispute in a lawful manner. But they have no lawful right to harass said salesmen or customers by trailing them in a dangerous and hazardous manner, causing them in some instances to pull over and stop, and thus limiting their freedom of movement. Such conduct is infantile, dangerous, unlawful and by no stretch of the imagination can be considered in the exercise of freedom of speech, and is enjoined.

Mr. Rogers, the defendant union’s business agent, freely admitted that he and the pickets under his instructions, had told practically all the customers, beauty shop proprietors, that if they continued to trade with Bell, or did not return purchases they had made, the union would picket their place of business. Apparently he did this under advice of counsel, who contends that defendant had that right.

This court does not agree. The defendant union would have no authority to picket the beauty shops to compel them to unionize, because the union has no such beauty-parlor employees jurisdiction and coverage. Mr. Rogers admitted that they would not picket for that purpose, but only for the purpose of influencing them not to trade with Bell, or to take back what they had bought.

In the court’s opinion, to picket the beauty shop for such purpose would hot be primary picketing at the situs of the dispute, hence lawful, but would be a secondary boycott and unlawful, although in itself peaceful.

It is true that they only threatened to picket such customers, except in one instance where they did picket for awhile, but they did it believing they had that right, and conveyed the idea to the customers that they would be picketed if they should trade with Bell.

In my opinion such conduct constitutes an unlawful secondary boycott and is enjoined.

See Anderson Sons Co. v. Local Union No. 311, 156 Oh St 541, 104 N. E. 2d 22, 24, cited and discussed further hereinafter. In the second syllabus thereof will be noticed the following words: “but an exercise of economic pressure upon such others to cause them to refrain from business relations with the person against whom the boycott is directed, through fear of loss or damage to themselves if they refuse to do so.”

Applied to our case, the conduct in said respect against the customers as found herein constituted a secondary boycott. The defendants cannot picket such customers. Nor can they threaten to do so if they trade with Bell. Such conduct is enjoined.

Further Conclusions of Law and Fact.

In the court’s opinion the facts in this case show a labor dispute in existence beyond any doubt, and peaceful picketing is permissible under the Freedom of Speech Doctrine. See A. F. or L. v. Swing, 1941, 312 U. S. 321, 61 S. Ct. 568, 85 L. Ed. 855.

Also see this court’s opinion in Iacomini’s Restaurant v. Hotel and Restaurant, etc., Union No. 118, 85 N. E. 2d 534, 54 Abs 33, which latter case was affirmed by our Court of Appeals, 63 Abs 258.

In 1941 the United States Supreme Court held in substance in Milk Drivers Union of Chicago, Local 753 v. Meadowmoor Dairies, 312 U. S. 287, 61 S. Ct. 552, 85 L. Ed. 836, that:

“Where the violence is of such magnitude originally that continuation of peaceful picketing will operate coercively, by exciting fear that the former violence will be resumed, then all picketing (even peaceful) will be enjoined.”

See also Anderson Sons Co. v. Local Union No. 311, etc., 156 Oh St 541, 104 N. E. 2d 22, Syllabus (1)—(Ohio Bar Feb. 18, 1952) as follows:

“Workers may by means of peaceful and lawful picketing or bannering announce their grievances to the public and thus persuade or seek to persuade prospective employees as well as prospective customers of the person against whom the picketing or bannering is directed from dealing with such person.”

The case of Crosby v. Rath, 136 Oh St 352, 25 N. E. 2d 934, cited in the above case is fully discussed in this court’s decision in the Iacomini case cited above. Briefly in the Crosby case the violence was so extreme that the Ohio Supreme Court enjoined all picketing, and the United States Supreme Court refused to admit the case apparently on authority of the principle at that time decided by the United States Supreme Court in Milk Wagon Drivers Union v. Meadowmoor Dairies cited herein above.

However in the instant casé, whatever violence there was, was comparatively of slight magnitude, so the court cannot and does not enjoin, but permits, peaceful picketing with the limitations set forth hereinafter.

Peaceful Picketing.

Peaceful picketing is allowed under the constitutional guaranty of freedom of speech, in order that the union may acquaint the public with the fact that a labor dispute is on, and of its nature.

Pickets have the lawful right to peacefully persuade prospective customers, truckers, employees and the public not to cross the picket line, and not to trade with or work for the employer picketed, and can fully inform everyone of the labor dispute peacefully and truthfully by bannering or otherwise. No picket, however, can use any form of violence, nor engage in any threats or intimidation of any nature whatsoever.

Anyone wishing to enter or leave the place of business can do so freely, whether he be a trucker, an employee who desires to work, a customer, or any one wishing to enter or leave the place.

Often other union employees such as truckers and the like will refuse to cross a picket line. That is their privilege, and nothing can be done about that.

Mass picketing or physical blocking of ingress and egress to the place being struck is not permissible.

The employer picketed may of course likewise orally, in writing, by bannering, through the press, via radio, letters, etc., give his side of the dispute to customers and the public generally.

The peaceful picketing allowed will be confined to the sidewalk in front of Bell’s place and to the alley in the rear, and there will be only one picket in the front at one time, and only one in the rear at one time, and neither shall picket in any way so as to have (2) in the front or rear at any one time.

The other remaining pickets and Rogers will not “join up” either of the pickets actively engaged in picketing on the picket line in any manner so as to increase the number allowed at any one time, except for a reasonable time in which to change shifts.

The Court has already laid down above what is generally understood by lawful or peaceful picketing.

I firmly believe that if counsel and the parties could sit down together with open minds, in a give and take frame of mind, that some satisfactory proposition can be worked out. If I can aid counsel along this line, I shall be pleased to do so.

The entry will be drawn in accordance with the court’s decision, with exceptions.

The costs are taxed against the defendant Union.


author: By MARTIN, CJ.

text:
    GENERAL MOTORS CORP., v. KEENER MOTORS, INC.
    U. S. Court of Appeals, Sixth Circuit.
    No. 11380.
    Decided February 14, 1952.
    Luther Day, Cleveland (Luther Day, George H. Rudolph, Cleveland, on the brief; Jones, Day, Cockley & Reavis and Alexander Ginn, Cleveland, Henry M. Hogan, P. J. B. Crowley, Detroit, Mich., of counsel), for appellant.
    L. M. Cailor, Youngstown (L. M. Cailor, Youngstown, on the brief), for appellee.
    Before MARTIN, McALLISTER and MILLER, Circuit Judges.
   OPINION

By MARTIN, CJ.

In an action ex contractu brought in the United States District Court against General Motors Corporation, the appellee, Keener Motors, Inc., recovered judgment on the verdict of a jury for $28,000 damages.

On appeal, General Motors Corporation insists (1) that there was insufficient evidence of a binding legal obligation entered into by it to warrant submission of the case to the jury; (2) that, assuming only argumentatively that the alleged contract came into existence, there was insufficient evidence that appellant breached it to warrant submission of the case to the jury; and (3) that no properly admissible evidence was offered which established or tended to establish any damages suffered by appellee in consequence of the alleged breach of contract.

The circumstances from which the justiciable controversy arose are somewhat involved and require detailed statement.

In 1938, Evan J. Keener obtained charter for Keener Motors, Inc., in which he owned ninety-nine percent and his wife owned the other one percent of -the corporate stock. Keener was an experienced automobile dealer, having handled numerous makes of automobiles. On Jtine 20, 1940, Keener Motors, Inc., entered into a signed contract with General Motors Corporation for the nonexclusive dealership in Pontiac motor vehicles for the metropolitan area of Youngstown, Ohio. A new contract, or direct dealer’s Pontiac selling agreement, was executed between the parties on October 1, 1941, covering nonexclusive rights in the same territory. This second agreement continued in effect until terminated by mutual consent of the parties a year later, on October 2, 1942, after the United States entéred into World War II, which had properly required the suspension of its manufacture of passenger automobiles. At the close of the submission of its proof, appellee amended its complaint to aver that the alleged contract was “terminated,” not “suspended.” During the period in which the contract was in effect, 228 motor vehicles were delivered to appellee by the Pontiac Division of General Motors.

On October 2, 1942, Keener, being subject to draft, proffered his services for United States Army work and went to Detroit to take care of parts replacement for tanks needed in North Africa. When he inquired how much time he would have to close out his business, he was told, “You start yesterday.” So, he immediately returned to Youngstown and, with the help of General Motors, disposed of his stock on hand and terminated his agency under conditions which his attorney described as “mutually agreeable.”

On March 2, 1942, prior to the termination of the Keener contract, Alfred P. Sloan, Chairman of General Motors Corporation, issued a message to General Motors dealers, in which he discussed the company’s policy with respect to car distribution after the war should end. His message stated that it was intended that, for dealers who should accept the responsibility of maintenance of active service facilities for the duration (involving at best a reduction of profits, or perhaps the acceptance of losses), there would be provided the opportunity of regaining their positions “as compared with other dealers who might at that time be newly appointed.” It was stated further that, for a period of two years after resumption of production, from the cars available for domestic distribution General Motors would extend priority in car shipments on a stated basis to dealers whose active service had been continuous during the period of suspended production before any cars would be made available to new dealers. The Sloan message asserted that certain dealers might decide to liquidate under conditions mutually agreeable as between themselves and General Motors; and, under caption “Consideration for Reappointment,” stated: “It will be the policy to accord first consideration in dealer replacements to those dealers who terminated under conditions which were mutually agreeable to the dealer and the division, provided they meet the current qualifications at that time.”

On March 12, 1943, Murray, Acting General Sales Manager of Pontiac Motor Division, General Motors Corporation, addressed a letter to Keener Motors, Inc., in which he referred to Chairman Sloan’s message of March 2, 1942, sent to General Motors dealers, wherein the intention was expressed to accord first consideration in dealer replacement to those dealers “who terminated under conditions mutually agreeable to the dealer” and to the division under which he operated, provided he should meet that division’s current dealer qualifications. The Murray letter stated: “We are pleased to advise you that since you terminated your Pontiac Selling Agreement under such conditions, we will give your application for a Pontiac franchise preferential consideration after production of Pontiac automobiles has been resumed, provided you meet our current dealer qualifications at that time,” with a further proviso that a written application for such franchise be filed by Keener with General Motors within three months from the date on which resumption of production of Pontiac automobiles is announced. The letter continued: “If your former location is available at that time you will, of course, be given first consideration for that point if you so desire, otherwise we will endeavor to place you at some open point which is available and mutually agreeable to you and ourselves.”

Shortly after receipt by Keener of this letter from Murray, Keener received a second message to General Motors dealers from Chairman Sloan, supplementing his message of March 2, 1942. This message was quite long, was addressed to General Motors dealers and captioned, “Dealer Problems in the Present Emergency.” The general situation was discussed and, under the heading “Some Specific Policies,” it was asserted that the present message was intended to clarify and modify certain policies outlined in the previous message, it being “impracticable to lay down definite and complete administrative technique within the confines of a message of this kind.” The letter went on to say: “This is within the jurisdiction of the sales departments of the Corporation’s various operating divisions. The principles, however, can be stated in broad terms.”

This Sloan “message,” in substantially this same manner as did the Murray letter, made reference to the specific “policy” of General Motors in considering reappointments of dealers who had terminated their contracts and emphasized the fact that “during the two-year period following the resumption of production, cars cannot be made available to new or reappointed dealers until the basic allotment and bonus have been provided for all dealers of record on the date production is resumed.” The second Sloan message concluded: “The above comments on the general situation merely express one point of view. The surest way to be right is to say nothing. And it is the easiest way. Perhaps I should add that all I have said is ‘subject to change without notice.’ But i have tried to pass on to General Motors dealers my beliefs for what they may be worth to them in their thinking and particularly their planning for today and tomorrow.”

Some thirteen months after receipt by him of Murray’s letter, Evan Keener, on April 11, 1944, purchased from a Mrs. Gough and her husband the Chevrolet building in Youngstown, Ohio, next door to his former location. Almost immediately after acquiring ownership of the Chevrolet building, Keener leased it to Gough for a term “until six months following cessation of hostilities in the European Theater of the World War.” On October 9, 1944, Keener Motors, Inc., notified Murray by letter that it had acquired this property and asked for any information which General Motors cared to give relative to resumption of production or postwar dealer plans.

This letter was answered under date of October 12, 1944, by Davison, Assistant General Sales Manager of the Pontiac Motor Division of appellant. He expressed his pleasure that Keener desired to take on again Pontiac representation in Youngstown and said he would see whether it would be possible to work out the arrangement desired by Keener. He said, however, that inasmuch as a number of new policies regarding dealer locations had developed during the war period, it would be necessary “to do some checking” before a definite answer could be given Keener. The letter concluded that the company would get in touch with Keener just as soon as there was something specific to report.

Two weeks later, on October 26, 1944, Davison kept his promise to report specifically. He wrote a letter to Keener, stating in the first paragraph that, after checking the possibility of signing a new agreement with Keener Motors, Inc., as a Youngstown dealer, the Pontiac Motor Division did not feel justified in offering him a franchise at the time, inasmuch as it already had representation in Youngstown and only a limited number of cars would be available for new dealers after the production of new cars should be resumed. Attention was directed to the statements in the two Sloan messages to the effect that dealers who had carried on continuously active service during the time of suspended production would be given priority. The letter concluded: “If, at a later date, sufficient new cars become 'available to sign a second dealer in Youngstown, or if another point becomes available in which we feel you might be interested, we will be very glad to give you preferred consideration.”

On October 4, 1945, Bathrick, General Sales Manager of Pontiac Motor Division, wrote the following letter to Keener Motors, Inc: “You are hereby advised that production of Pontiac passenger cars for domestic distribution was resumed on this day. If, therefore, you wish to be given preferential consideration for a Pontiac Franchise, you must file a written application for such franchise with the undersigned within three (3) months from the aforesaid date on which resumption of production occurred, that is, not later than January 4, 1946, and, further, you must meet Pontiac’s current dealer qualifications at the time such application is made.” Then follows a paragraph relating to the filing of an application by one in the Armed Forces who had not been demobilized. An acknowledgment form was enclosed.

On October 26, 1945, Keener Motors, Inc., submitted for the attention of Bathrick an application by letter with the information that Keener owned a building on Market Street in Youngstown, Ohio, large enough for the display of six cars, also a stock room and a service department in which eight men could work at the bench, in addition to a grease and wash rack department and a paint and body department. The letter said that he had service and shop equipment in storage, salesroom and office equipment in good condition and ready for use on February 1, 1946; and that he had an adjoining used car lot with space for thirty cars. He enclosed a picture of the building and offered to furnish any additional information desired.

The reply to this letter was dated November 7, 1945, and was signed by Thompson, Assistant General Sales Manager. It made the assertion that, due to commitments to Pontiac dealers who had operated throughout the war period and to the uncertain factors existing, the company did not contemplate — at least for the present — a second Pontiac dealership in Youngstown, Ohio. Regret was expressed that Keener’s application could not be considered at the time and he was assured that, when it was believed that circumstances warranted the appointment of a second dealer at Youngstown, Keener’s application would be given preferential consideration if he should meet the then current qualifications. Appreciation of Keener’s continued interest in the Pontiac franchise was expressed.

An issue of fact arose from the conflicting testimony of Keener and that of Thompson concerning conversations between them. Keener testified that in a talk with Thompson in Cleveland shortly after he mailed his letter of October 26 to Pontiac, Thompson had assured him that Keener had done everything he could do, that it was just a question of a little time until he would have his Pontiac franchise, and that the application, all in order, was in Thompson’s office. Keener testified further that, in a second conversation with Thompson in January of 1946, a short while before the latter quit his job as Cleveland Zone Manager to become a dealer at Cuyahoga Falls, Ohio, he told Keener that he thought from the way it looked that Keener would get his Youngstown dealership about August or September of the current year. Thompson denied Keener’s version of the conversation, and swore that he told Keener that his application was in order, and that when a point became available to put in another dealership, Keener would be given first consideration for that point. He said that he had made no reference to any “time element.” He said further that he told Keener that as Zone Manager he had no authority to designate whether the point would be available, or not, that being something which “had to be cleared in the central office.” Thompson explained that, while there was no restriction on his authority to sign a selling agreement, he did not have authority to place a dealer in the territory, and that he definitely had disclosed this fact to Keener. Questions of fact as between Keener and Thompson concerning the conversations would, of course, be for the jury; but the agent’s representations of his authority would not, as a matter of law, bind his principal.

We find no evidence in the record to support the argument of appellee that Thompson had authority as Zone Manager to make final selection of a dealer or dealer location, or to make an oral selling agreement. We think the evidence establishes the contrary. Ward, who was head of the sales department of the Pontiac Division at the time of the trial, testified as to the authority of zone managers. He said that they made recommendations, pertaining to selection of dealers for their zones, through proper channels; that is, through the Regional Manager’s office and, in turn, through the Assistant General Sales Manager’s Office, and then to Ward. He stated that, when the information, recommendations and reports came to his desk, he made the final decision after careful analysis as to whether or not the prospective dealer would be acceptable. If a dealer was so approved, the Zone Manager was given authority to conclude arrangements with him.

In 1940, Ward had been Zone Manager of the Cleveland area and, in such capacity, had dealt with Keener Motors, Inc., with respect to the obtaining of its original Pontiac dealership. He testified that, at that time, he had discussed with Hopper, who had the major investment in the Buckeye Pontiac Company operating in Youngstown, the fact that it appeared to him as if the automobile business were “coming out of the doldrums,” and that increased business might be expected in the Youngstown area; but that he advised Hopper that it would be unwise for Buckeye to expand its business in order to get the additional volume anticipated. He added that he thought it would be wise to put a second Pontiac dealer in the city of Youngstown, proper, rather than for Buckeye to increase its activity and expenses to get the additional business. Hopper agreed, with the result that Keener Motors, Inc., received its first nonexclusive dealership contract of June 20, 1940.

The same territory covered by the direct dealer’s agreement with appellee was embraced in an associate dealer’s selling agreement between Buckeye and Struthers Auto Sales, approved by Pontiac on January 2, 1940, and in effect when Keener Motors, Inc., first became a direct dealer in the Youngstown metropolitan area. Struthers Motor Auto Sales had represented Raybuck at Struthers, Ohio, from 1936 until October 1, 1941, when it sold out to Raybuck Motor Sales, an unincorporated business operated by Raybuck individually. It thus appears that, prior to World War II, there were three Pontiac dealer locations in Youngstown, Ohio, namely; the earliest direct dealer, Buckeye Pontiac Company; its associaté dealer, Raybuck, individually; and the appellee company. It would appear that the three possessed an identical nonexclusive right to sell Pontiac motor vehicles in the Youngstown metropolitan area.

We regard it as immaterial to go into a discussion of the status of the Wilson Agency, successor to Heck, in North Lima, Ohio. The appellee complains of the fact that, while it was denied a renewal of its Pontiac dealer’s agency in Youngstown, Raybuck (a returned soldier) was, on September 21, 1945, granted an associate dealer’s selling agreement covering Struthers, Ohio, an adjoining city, as well as nonexclusive selling rights within the metropolitan area of Youngstown; and that, on December 4, 1945, Wilson was given an associate dealer’s exclusive selling-rights agreement within the corporate limits of North Lima, Ohio, and “nonexclusive selling rights in all other communities in which no authorized Pontiac dealer is located or which are not within protected territory of an authorized Pontiac dealer or dealers.”

Shipments to North Lima totaled only 32 cars in 1946; 49 in 1947; and 57 in 1948. But appellee complains that the associate dealer at Lima actually sold automobiles in the South-side area of Youngstown where Keener had been originally established in 1940, while he was not accorded a renewal of his Pontiac agency.

In the spring of 1948, Keener Motors, Inc., was offered a Pontiac dealership at Sewickley, Pennsylvania, which was in the metropolitan area of Pittsburg, some sixty miles from Youngstown. The anticipated shipment of Pontiacs to that point for the year 1948 was 190 automobiles, which was comparable to shipments to Keener’s location in Youngstown, to which he had been shipped 197 Pontiac automobiles in 1941. Keener turned down the Sewickley proposition.

Following this rejection of the tendered territory, Ditz, Assistant General Sales Manager of Pontiac Motor Division of the appellant company, wrote to Keener, personally, pointing out that he had advised Keener that the company had no intention of setting up another point in the Youngstown area for sometime to come, as production did not warrant it; and that Keener had turned down the offer of a similar point at Sewickley, Pennsylvania, because he felt it did not warrant the investment. He enclosed a release, which he requested Keener to sign and return for the company’s files so that it might be clear of its present obligation to him. This letter closed with the assurance that, if at some future time it should be decided that Youngstown warrants an additional Pontiac representation, the company would be glad to give Keener every consideration. He was thanked for his cooperation. Keener did not sign the waiver.

On June 11, 1948, Ward, General Sales Manager, wrote Keener Motors, Inc., the following final letter: “Subsequent to the effective date of the voluntary cancellation of your former Pontiac Franchise at Youngstown, Ohio, you received Mr. Verne L. Murray’s letter of March 12, 1943, wherein you were advised that since you had terminated your Pontiac Selling Agreement under conditions mutually agreeable to yourself and Pontiac Motor Division, your application for a Pontiac Franchise would be given preferential consideration after production of Pontiac automobiles had been resumed subject to the conditions enumerated in said letter.

“As you have been advised on several occasions, Pontiac Motor Division does not at the present time, contemplate reopening the dealership at Youngstown, Ohio, which you formerly operated. However, in accordance with the provisions of Paragraph 2 of Mr. Murray’s letter of March 12, 1943, Pontiac Motor Division has offered to you the open point at Sewickley, Pennsylvania, and you have turned down this offer.
“Inasmuch as Pontiac Motor Division does not currently have other open points available and does not contemplate having any open in the near future, we consider that we have fully complied with our obligation under Mr. Murray’s above-mentioned letter of March 12, 1943.”

Though the foregoing statement of facts derived from the 655 page record in this case may seem lengthy, the contending attorneys probably will think that we have omitted discussions of quite a bit of evidence which each, respectively, considers material to buttress his argument; but which we do not. Our attempt has been to set out only what we deem to be the salient facts upon which we must decide the issue of whether the District Judge erred in his refusal to direct a verdict in favor of the defendant below, now appellant.

The defendant moved for a directed verdict on several grounds, among others that the evidence offered did not establish or tend to establish a cause of action against it. The District Court took the motion under advisement, and the motion was renewed by the defendant at the conclusion of all the evidence in the case; whereupon the court, after hearing argument and after due deliberation, overruled the motion, stating orally his underlying reasons which are well summarized in the following quotation: “I think that the earlier promises of preferential consideration found in Murray’s letter to Keener of March 12, 1943, [identifying exhibit] ripened into a more tangible offer by Bathrick’s circular of October 4, 1945, and that plaintiff’s responsive letter and application of October 26, 1945, amounted to an acceptance of the offer, subject to the happening of the conditions of availability, or need and availability, and of current requirements later to be determined by the defendant.

“The Bathrick circular of October 4, 1945, invited the plaintiff — it was sent directly to him, it wasn’t a circular in the sense that it was just sent to all dealers, it was sent to the dealers by name, and also accompanying it was a receipt to be signed that they had received such invitation — so, to repeat, the Bathrick circular of October 4, 1945, invited the plaintiff to qualify by application, which he did very promptly on October 26, 1945. And the acknowledgment letter of Thompson of November 7, 1945, definitely rejecting consideration of the plaintiff’s application so recently filed at the invitation of Bathrick seems to me to call for jury consideration in respect of whether the plaintiff did receive the promised preferential consideration under all the facts and circumstances, and, of course, that would include also the consideration of the question of whether under all the circumstances the defendant’s discretion in determining the need of a dealership at the point where plaintiff had previously had one should also be a question of facts as to whether or not that came into existence; and also the question, as to which I am not entirely clear, as to whether the current requirements of the defendant in respect of the dealers at the time, in October 1945, or in early 1946, were such that the plaintiff under the facts and circumstances can be said to have qualified. So it seems to me that there are these questions of fact which warrant the submission of the case to the jury.”

In our judgment, the court erred in refusing to grant defendant’s motion for a directed verdict, for the reason that the plaintiff had failed to prove that the minds of the parties ever met in a binding legal obligation. To be binding in law, an agreement must be definite and certain. An offer must be so definite in its terms, or must require definite terms in the acceptance, that the promises and performances to be rendered by each party are reasonably certain. Restatement of the Law of Contracts, section 32. No person may be subjected by law to a contractual obligation, unless the character of the obligation is definitely fixed by an express or implied agreement of the parties. If the obligation to become binding rests on a future agreement to be reached by the parties, so that either party may refuse to agree, there is no contract. In other words: As long as both parties contemplate that something remains to be done to establish contractual relationship, no contract has been made. It would seem that these principles should be recognized as universally accepted.

From the entire evidence recorded in this case, it is obvious that the parties contemplated the execution in writing of a dealer’s selling agreement, should the formal application of Keener Motors, Inc., be acceptable to General Motors Corporation. The net undertaking of General Motors found in its correspondence with Keener was that preferential consideration would be given him if he applied for the renewal of his Pontiac dealership at Youngstown, which had been terminated by mutual consent. The bulletins and correspondence make it clear that appellant retained the right to make final decision in its own discretion as to whether or not it needed Keener’s representation in Youngstown, in addition to that given to the prior-in-right dealer, Buckeye, and the associate dealer, Raybuck, a returned soldier also entitled to preferential consideration.

The final decision of General Motors Corporation — reached after obviously careful consideration of Keener’s application for renewal of his Pontiac franchise — that it needed no second dealer at Youngstown because of inadequate post-war production constituted, in our judgment, no breach of any enforceable promise made to the appellee. The agreement to give preferential consideration was not a definite undertaking to enter into a contract the terms of which remained to be settled. The settlement of these terms could present difficulties sufficient to thwart a mutually satisfactory agreement. For example, such items as the number and the price of the automobiles to be sold by General Motors to Keener might have presented an insurmountable obstacle to agreement. For many other reasons, it might have been impossible for the parties to agree upon terms.

As to the controlling law of the case, we find no Ohio decisión directly in point, but there are certain elucidating Ohio authorities. In P. J. Spitz Co. v. Warner & Swasey Co., 52 N. E. 2d 758, 762, 39 Abs 281, Cuyahoga County Court of Appeals, 1945, a contract to employ the services of a real estate broker was held not to be created where there was merely an expression of intention or willingness by the subsequent buyer that if he bought certain property he would buy it through the broker at some future time and would pay his commission established by the Real Estate Board. The court quoted from Volume I, paragraph 25, of Williston on Contracts (Rev. Ed.), as follows: “Since an offer must be a promise, a mere expression of intention or general willingness to do something on the happening of a particular event or in return for something to be received does not amount to an offer.” The promise made by the prospective buyer to the real estate broker was closer to a definite promise than the expressions of the various representatives of appellant in the instant case.

In Asbury v. Hugh L. Bates Lodge, 62 Oh Ap 430, 435, 16 O. O. 134, 24 N. E. 2d 638, 640, Court of Appeals for Butler County, it was held that the acceptance in the circumstances did not establish a binding contract. The Court of Appeals quoted from section 25 of Restatement of the Law of Contracts, as follows: “If from a promise, or manifestation of intention, or from the circumstances existing at the time, the person to whom the promise or manifestation is addressed knows or has reason to know that the person making it does not intend it as an expression of his fixed purpose until he has given a further expression of assent, he has not made an offer.” The court then states that “the same lack of a fixed purpose known to the offeror would prevent a manifestation of intent to accept from binding the offeree.” Of less authoritative value, on account of its lesser relevancy, is Woods v. Fifth-Third Union Tr. Co., 54 Oh Ap 303, 7 O. O. 210.

The Court of Appeals for Hamilton County held, in The Trent Milling Co., v. Wells-Abott-Nieman Co., 10 Oh Ap 297, that a contract of exclusive agency for the sale of goods, which is so indefinite in terms as to duration, price and quantity that a court is unable to ascertain the intention of the parties, will not be enforced.

In Gedra v. Dallmer Co., 153 Oh St 258, 267, 41 O. O. 274, 91 N. E. 2d 256, decided March 22, 1950, the Supreme Court of Ohio made it clear that a jury not properly be permitted to return a verdict based on guess, speculation, or conjecture. True, the case was a tort action; but the same principle would, of course, apply to an action for breach of contract. It was held, that the Court of Common Pleas should have instructed a verdict in favor of the defendant.

The opinion of Judge Denison, written for this court many years ago in Horvath v. McCord Radiator & Mfg. Co., 6 Cir., 35 P. 2d 640, 642, is helpful here, in that, while the parties there were found to have expressed agreement in principle but fully recognized that there must be further agreement upon details before there was a complete legal obligation, it was held that the case “should be classified with those which deny the existence of an enforceable contract.” The decree of the trial court, which was reversed, had concluded that the minds of the parties had met with sufficient definiteness to make an enforceable obligation, requiring the execution of a formal contract relating to the exclusive license of a patent.

Perhaps the closest illustrative authority applying the principle to which we adhere is Ford Motor Co. v. Kirkmyer Motor Co., 4 Cir., 65 F. 2d 1001, in which it was held on the facts found that a contract for a dealership in automobiles, not binding the manufacturer to sell or deliver any specified quantity of automobiles and terminable at will, imposed no liability on the manufacturer if he terminated or refused to make sales to the distributor thereunder. The contract was found to be too lacking in mutuality and definiteness to become a binding obligation on the manufacturer. In the course of his opinion, Judge Parker made the following comment: “It appears that plaintiff has been disappointed in its expectations and has been dealt with none too generously by the defendant; but, while we sympathize with its plight, we cannot say from the evidence before us that there has been a breach of binding contract which would enable it to recover damages. While there is a natural impulse to be impatient with a form of contract which places the comparatively helpless dealer at the mercy of the manufacturer, we cannot make contracts for parties or protect them from the provisions of contracts which, they have made for themselves. Dealers doubtless accept these one sided contracts because they think that the right to deal in the product of the manufacturer, even on his terms, is valuable to them; but, after they have made such contracts, relying upon the good faith of the manufacturer for the protection which the contracts do not give, they cannot, when they get into trouble, expect the courts to place in the contracts the protection which they themselves have failed to insert.” 65 F. 2d 1006. Among the cases cited in the court’s opinion were Curtiss Candy Co. v. Silberman, 6 Cir., 45 F. 2d 451, 452, and Huffman v. Paige-Detroit Motor Co., 8 Cir., 262 F. 116. In the latter case, it was said: “It is quite manifest that the contract merely furnished a basis for future dealings to be observed no longer than was mutually satisfactory. There was no hard and fast commitment of either party, if he chose to break away.” 262 F. 117, 118.

This court, in Curtiss Candy Co. v. Silberman, supra [45 F. 2d 452], reversed a decree of the District Court on the ground that, while there was undoubtedly a mutual expectation of an indefinite continuance of a manufacturer’s exclusive distributorship arrangement with a local jobber, “the contract lacked that mutuality necessary to make it enforceable in so far as executory obligation was concerned.” In a recently decided case, Tennessee Enamel Mfg. Company v. Stoves, Inc., 6 Cir., 192 F. 2d 863, 868, we found, in reviewing the evidence that the alleged commitment which the District Court had held constituted a contract was too vague, hazy and nebulous to form a solid foundation for contractual liability; and reversed the judgment. We cited with approval Curtiss Candy Co. v. Silberman, supra, and pointed out that we had there held that an alleged contract between a manufacturer of candy and local jobbers for the distribution of its products was unenforceable for lack of mutuality. We said: “In that case, the salesman of the manufacturer had promised jobbers exclusive distribution privileges and accepted orders accordingly; and the jobbers subsequently had obtained confirmation of the arrangement from the manufacturer. The parties, however, had not reached a definite agreement concerning prices, terms, etc., nor had they come to any definite agreement binding the manufacturer to furnish in the future or the jobbers to buy any specific quantity of candy, or to maintain contractual relationship for any definite period of time.”

In Motor Car Supply Co. v. General Household Utilities Co., 4 Cir., 80 F. 2d 167, 170, Judge Parker again wrote upon the present subject matter: “The law is well settled that, where a contract for the future delivery of personal property confers upon either party an arbitrary right of cancellation prior to delivery, it is lacking in mutuality and will be held binding upon the parties only to the extent that it has been performed, [citing cases.] And, with respect to distributor’s contracts, like that here under consideration, it is equally well settled that such a contract, which does not bind the manufacturer to sell and deliver, and which is terminable at will, imposes no liability upon him if he terminates it or refuses to make deliveries to the dealer.” The following authorities were cited: Ford Motor Co. v. Kirkmyer, supra; Huffman v. Paige-Detroit Motor Co., supra; Curtiss Candy Co. v. Silberman, supra; Jordan v. Buick Motor Co., 7 Cir., 75 F. 2d 447; E. I. DuPont De Nemours & Co., v. Claiborne-Reno Co., 8 Cir., 64 F. 2d 224, 89 A. L. R. 238; Nebraska Aircraft Corporation v. Varney, 8 Cir., 282 F. 608; Studebaker Corporation of America v. Wilson, 3 Cir., 247 F. 403; Oakland Motor Car Co. v. Indiana Automobile Co., 7 Cir., 201 F. 499; Velie Motor Car Co. v. Kopmeier Motor Car Co. 7 Cir., 194 F. 324.

In Jordan v. Buick Motor Co., supra, an agreement of a manufacturer of automobiles , to give a dealer an exclusive agency for a certain territory, provided the dealer should as-quire $40,000 additional capital, was held unenforceable as a contract for indefiniteness, where the agreement did not fix a time for the exclusive agency contract or fix the prices or number of cars to be handled or the time and manner of their delivery. Judge Evans cited authorities and declared: “The weight of authority seems to be strongly against appellants’ contention that the agreement was sufficiently specific to be upheld. We are unable to escape the rulé which the decisions announce and apply.” 75 F. 2d 450.

In Bushwick-Decatur Motors v. Ford Motor Co., D. C. E. D. N. Y., 30 F. Supp. 917, 924, the District Court held in a well presented opinion that an alleged oral agreement of an automobile manufacturer that a more profitable territory would be allocated to one of its dealers whenever available was too indefinite, vague and uncertain to constitute an enforceable contract.

See also the opinion of Judge Phillips in Brooks v. Sinclair Refining Co., 10 Cir., 139 F. 2d 746, 747, wherein an agency contract, so far as it was executory, was found to be “wholly illusory” and it was held that its termination imposed no liability upon the principal who terminated it.

Applying the principles of decision' expounded in the authorities which have been discussed to the facts of the instant case, viewed in the light most favorable to the plaintiff below, Keener Motors, Inc., it is our inescapable conclusion that the District Judge should have granted the motion for a directed verdict made by appellant, General Motors Corporation, at the conclusion of all the evidence in the case.

Accordingly, the judgment of the District Court is reversed; and the case is ordered to be dismissed at the cost of appellee.