author: By HASTINGS. J.

text:
    RAY, Estate of, In re.
    Probate Court, Morgan County.
    Decided January 24, 1958.

      Robert S. Christie, McConnelsville, Berry, McCulloch, Felger & Fite, Piqua, for exceptors.
    Robert Daniel, McConnelsville, for executor.
    Emmett Abel, McConnelsville, for Residuary Legatees of Mary Catherine Ray, Deceased.
    (HASTINGS, J, of Fairfield County, sitting by assignment.)
   OPINION

By HASTINGS. J.

The first question raised is that of jurisdiction of the Court to hear the exceptions filed to the Inventory as raised by the motion of residuary legatees of Mary Catherine Ray, a deceased, to dismiss said exceptions.

Sec. 2115.16 R. C., reads as follows:

HEARING ON INVENTORY. “Upon, the filing of the inventory required by §2115.02 R. C., the probate court shall forthwith set a day, not later than one month after the day such inventory was filed, for hearing on the inventory and shall give at least ten days’ notice of the hearing to the executor or administrator and to such of- the following as are known to be residents of the state and whose place of residence is known. (A) Surviving spouse; (B,) Next of kin; (Cl Beneficiaries under the will; (D) The attorneys, if known, representing any of the aforementioned persons.

“Such notice may be waived in' writing by any of the foregoing. For good cause the hearing may be continued for such time as the court deems reasonable. Exceptions to the inventory or to the year’s allowance may be filed at any time prior to five days before the date set for the hearing or the date to which such hearing has been continued by any person interested in the estate or in any of the property included in the inventory but such time limit for the filing of exceptions shall not apply in case of fraud or concealment of assets. When exceptions are filed notice thereof and time of hearing thereon shall forthwith be given to the executor or administrator and his attorney by registered mail or by personal service, unless such notice is waived. At the hearing the executor or administrator and any witness may be examined under oath. The court must enter its finding on the journal and tax the costs as may be equitable.”

The jurisdiction and authority of the Probate Court under said section is expressed by the Supreme Court in Bolles v. Toledo Trust Co., 136 Oh St 517 at page 521 as follows: “Plaintiff insists, however, that a case on exceptions to an inventory is a special statutory proceeding at law and only questions of legal title may be considered. This view is not broad enough. Of course the Probate Court exercises limited jurisdiction and on appeal and trial de novo the jurisdiction of the Court of Common Pleas would not be extended beyond that of the court below. Nevertheless the Probate Court is vested with full power to determine what property is lawfully included in an inventory as assets and as incidental thereto has jurisdiction to inquire whether inventoried personal property belongs to an.exceptor as the beneficiary of a trust. Under §10501-53 GC, the Probate Court has “plenary power at law and in equity fully to dispose of any matter properly before the court,” unless otherwise provided by statute.. Compare Goodrich, Admr., v. Anderson, ante, 509. There is no statutory provision which limits or denies to that court power to hear and determine fully and completely all questions raised by exceptions to an inventory of the assets of a decedent’s estate. The application of the doctrine of res judicata is not narrowed herein because the court of origin was not invested with general jurisdiction.”

The matter alleged in said exceptions clearly says, that, of the item in Schedule D of said Inventory listing as an asset in said estate a checking account in First National Bank, Chesterhill, showing a- balance of $13,607.37, the sum of $10,132.32 is the property of the late John P. Ray, whose estate is being administered by exceptor in his capacity as administrator of said estate, and therefore in the opinion of the court is proper grounds for exceptions, and the court has jurisdiction to hear said exceptions. While the said administrator is not a person interested in the estate of Mary Catherine Ray, deceased, he is in his capacity as administrator of the estate of John P. Ray, deceased, interested in the property excepted to and therefore has that right and it is immaterial if others not so entitled may have been joined with said exceptor.

The record discloses the inventory was filed March 8, 1954, and thereafter on March 16, 1954, notice of filing said inventory and appraisement was personally served on Frank David Ray, a minor, and on Lola Ray. his mother, and on the 11th and 18th days of March, 1954, notice by publication was made upon all other persons as required by said §2115.16 R. C., except upon the beneficiaries under the Will as designated in “(C)” of said statute; that the exceptions to said Inventory and Appraisement were filed May 7, 1954, a hearing had on said exceptions was set aside and a new trial thereof granted.

Thereafter, upon discovery that proper notice had not been given to all those entitled thereto under the statute, on October 16, 1957, an order of the court fixed the time of the hearing on said inventory to be on Tuesday, the 12th day of November, 1957, at ten o’clock A. M., and that at said time would be heard the exceptions to said Inventory already filed, and ordered that-notice of said time of hearing be given by registered mail at least ten days prior thereto to the executor of said estate, to the next of kin of said decedent, to the beneficiaries under the will, and to the attorneys, if known, representing any of the aforementioned persons. Thereafter notices of said time of hearing were served on such persons as required by said order.

Notice of hearing not having been given to all persons entitled thereto by the statute, no hearing on said Inventory and Appraisement could be had until such was given. The fact that the hearing, of which notice was properly given to all those entitled thereto, was not had within one month after the filing of said Inventory and Appraisement does not invalidate said proceeding because said time limit in said statute is not mandatory but directory. The later date for said hearing would inure to the benefit of all parties and not just to those who had not been given notice of the first hearing date. There could be but one hearing on the Inventory and Appraisement and said hearing would be for the benefit of all parties interested therein. '

In Re: Estate of Gottwald, 164 Oh St 405. The Court held—

1. The hearing of exceptions to an inventory under §2115.16 E. C., is a summary proceeding conducted by the Probate Court to determine whether those charged with the responsibility therefor have included in a decedent’s estate more or less than such decedent owned at the time of his death.

2. Incidental to such hearing, the Probate Court can determine title to personal property included in such inventory, but it is a matter of discretion whether such summary proceeding shall be employed or the exceptor ordered to pursue other remedies.

3. Under §2115.16 R. C., the Probate Court is not required to conduct an accounting between an exceptor to the inventory and the executor of a decedent’s estate.

The Court exercised its discretion to hear the exceptions herein which would therefore give it jurisdiction in the matter at hand, and the motion to dismiss the exceptions is overruled, to which legatees of Mary Catherine Ray, except.

The next question before the Court is whether the checking account in First National Bank, Chesterhill, with amount of $13,607.37 was the property of Mary Catherine Ray at the time of her death and properly stated in the inventory or, was, at the time of said decedent’s death. $10,132.32 of said account owned by the late John P. Ray, deceased, and leaving only $3,475.05 as owned by said Mary Catherine Ray at the time of her death with a resulting listing in said inventory account in the sum of $3,475.05.

Said bank account in said The First National Bank, Chesterhill, Ohio, having a balance of $13,607.37 at the time of death of said Mary Catherine Ray was carried in the name of Mary C. Ray, and had been opened on March 3, 1953, with the deposit of a check in the amount of $12,345.81. executed by said Mary C. Ray to withdraw the entire balance of an account at that time carried by said bank in the name of “Mary C. Ray or John P. Ray, address Chesterhill, Ohio.” Said John P. Ray had died on the 4th day of February, 1953, and at that time there was a balance of $20,264.63 in said account carried by The First National Bank, Chester-hill, Ohio, in the 'name of “Mary C. Ray or John P. Ray.” Exceptor alleges in his exceptions that said account carried by said The First National Bank, Chesterhill, Ohio, in the name of “Mary C. Ray or-John P. Ray” and leaving a balance therein of $20,264.63 was not a “joint and survivorship account” but was a “tenancy in common account (without survivorship rights)”; that at the death of John P. Ray, one-half of the balance of said account became the sole and separate property of his estate and that there is now due to the estate of John P. Ray, deceased, from said account the amount of $10,132.32 and that the value of the share of the estate of Mary Catherine Ray in said account is $3,475.05.

At the time of the death of John P. Ray, the account in said bank, entitled “Mary C. Ray or John P. Ray” does not in the — entitlement indicate such account to be a survivorship account, and, no evidence being introduced to indicate that by any contract between the bank and one or either of said parties or between said parties; that said account was to be delivered to the survivor, then the survivor Mary Catherine Ray, is not entitled to said account at the death of John P. Ray as such survivor.

This account then appears to be from the title thereof carried at said bank to be a joint account and in Ohio, it is presumed that the interest of the joint depositors is equal in the absence of evidence to the contrary. In re: Thatcher, 30 O. N. P. N. S. 515; In re: Chittock, dec., 47 O. O. 226; Foraker v. Kocks, Admrx., 41 Oh Ap 210; 7 Corpus Juris. 640.

Upon trial upon the evidence introduced, the following facts were established:

On the 20th day of January, 1932, Mary C. Ray, who was one and the same person as the Mary Catherine Ray, whose estate is now being administered and about which this proceeding is concerned, opened a checking account in The First National Bank, Chesterhill, Ohio, with a deposit of $200.00, being issued a pass book by said bank in the name of Mary C. Ray, wherein was posted deposits with respective dates thereof on successive lines throughout each page and line in said book and including the last entry dated October 23, 1948, $150.00. That on the 4th day of March, 1939, one Frank Ray died leaving said Mary C. Ray, his surviving spouse of the age of about 73 years and his only child, John P. Ray of the age of about 34 years, who was also the son of said Mary C. Ray, and his estate was administered by said son, John P. Ray, who had been married for about 8 years, and who himself had a son, Frank David Ray. who receives the bulk of this estate in trust by his grandmother’s will.

Said the First National Bank, Chesterhill, Ohio, kept a running bookkeeping ledger sheet of the said account opened in the name of Mary C. Ray, being numbered 1, 2, 3 and 4, each headed with the name Mary C. Ray, address Chesterhill, Ohio, whereon were posted the successive deposits and withdrawals, and showing in said ledger account on the last line of page 4 dated August 11, 1939, a balance due depositor $965.51. Sheet No. 4 having been filled with entries a sheet No. 5 was begun starting with the balance brought forward $965.51. Said sheet No. 5 was marked at the top with the name of Mary C. Ray, address Chesterhill, Ohio, just like the prior sheets but there now appears, as an apparent different typing from that above noted, after the name Mary C. Ray the word “or” and immediately below in said same different typing “John P. Ray.” The successive ledger sheets for said account were carried in the names Mary C. Ray or John P. Ray, address Chesterhill, Ohio, until said account was closed out by Mary C. Ray on March 3, 1953, by a withdrawal of the entire balance of $12,345.81, with which said sum said Mary C. Ray on the same day established a new bank account in the name of Mary C. Ray. Upon completely filling said pass book first issued under the name of Mary C. Ray on October 23, 1948, said bank opened a new pass book in account with Mary C. Ray or John P. Ray, with a deposit on November 2, 1948, of $150.00 and thereafter entered successive deposits to said account including the last entry of February 2, 1953 — $150.00. Said account was the only checking account of said Mary C. Ray and to said account she deposited her income consisting of rents received from her rental properties and from which she made withdrawals for expenses on said properties, her house and for her living expenses.

Exceptor sought to show a control of said account by John P. Ray, that he made regular substantial deposits of his own money into said account and withdrawals for his own benefit. However, the evidence disclosed the bank book was at all times at the bank, and at no other time did John have it in his possession except perhaps when he went over the transactions with his mother; that none of his funds could be identified as being deposited in said account, except generally that a very small amount of rent for a small office building in Chesterhill, which was not always rented and for perhaps $12.00 that had been deposited in said account; that except for several small checks, about three in number, for personal items for his wife and pictures of his son, each in a small amount, no checks were issued by John P. Ray for other than what might have been repairs for Mary C. Ray’s properties; that Mary C. Ray had drawn numerous checks for upkeep and insurance on a Chrysler car, sometimes used for both John P. Ray and his mother, Mary C. Ray; that John P. Ray and his mother periodically, in his mother’s home, went over the matter of the account and checks issued, and no doubt the small checks issued for John’s personal benefit were considered and approved by his mother, and consideration taken for the small amount of rent taken into said account from said small office building in a manner satisfactory to both John P. Ray and his mother, Mary C. Ray; that John P. Ray lived in places remote from Chesterhill and always had a bank account where he lived wherein he deposited his salary income and withdrew his living expenses. Exceptor introduced no evidence tending to establish any contract or agreement regarding said account or delivery thereof or possession tending to prove a gift to John of any part of said fund.

The bank officers testified there was no contract regarding said account; that, though there must have been some instructions thereof to add John P. Ray’s name to said account, they had no record nor knowledge of who may have given such; that no signature cards were obtained; that they considered John P. Ray an agent of his mother and that the name of John P. Ray was added to said account for convenience; that the deposits to said account were income to Mary C. Ray from her rental properties, except for perhaps a very small part of the rent from said Chesterhill office building, and that the withdrawals by Mary were for her living expenses and upkeep of property, and that those by John were for upkeep and taxes on Mary’s properties in Columbus.

It is the opinion of this Court from the evidence, that Mary C. Ray made no gift of this account to her son, John P. Ray, for the evidence fails to disclose a delivery coupled with the intention to pass the property. Bender v. Cleveland Trust Co., 123 Oh St 588; distinguished from Cleveland Trust Co. v. Scobie, 114 Oh St 241, because here we have no intention to transfer. That the deposit of the small amount of rents from the office building in chesterhill, which was not always rented and apparently not much of a building and possibly rented for $12.00, if it were deposited in said account, was not a sufficient consideration for the transfer of a joint interest in the account, because this would cause an unjust enrichment of John P. Ray to the detriment of Mary C. Ray. Bauman v. Walter, 160 Oh St 273; that John P. Ray was only acting as an agent for his mother for the purpose of helping her care for her properties in Columbus, she being of such an age that she might need help on this;

That Mary C. Ray considered that the money in this account was her own as further evidenced by the fact she wrote checks herself for the care of John’s Chrysler car, the fact that no where is it shown that she ever gave the bank the usual written instructions for transferring the account: and that on the death of her son, and after making a settlement with her son’s estate by a check on said account, she withdrew all the balance remaining in said account;

That The First National Bank, Chesterhill, Ohio, the only party having knowledge of the transactions being now able to speak considered John P. Ray an agent for his mother, made the change in said account by adding the name of John P. Ray to said account as a matter of convenience without any written order therefor from Mary C. Ray, further evidenced by the fact that the deposit book was carried in the name of Mary C. Ray until November 2, 1948, long after changing the ledger sheet by adding the name of John P. Ray shortly after August 11, 1939; and in permitting her to withdraw all the balance in said account after the death of said John P. Ray;

That, the money in the account in The First National Bank, Chester-hill, Ohio, held in the name of Mary C. Ray and also when held in the name of Mary C. Ray or John P. Ray, was the property of Mary C. Ray and no part thereof was the property of John P. Ray, and that the $20,264.63 balance in said account on the 4th day of February, 1953, the time of death of John P. Ray, was the property of Mary c. Ray and no part thereof belonged to the estate of John P. Ray, deceased; and that what remained of said balance, transferred into a new account in the name of Mary C. Ray was the property of Mary C. Ray.

In this finding the Court is of the opinion that the facts in this case are very similar to those in Ferguson v. Deuble, 27 Abs 533, except in this case there was no withdrawal of the funds by the agent. This case is an application of Rule 2, set forth in In re. Schroeder, 75 Abs 555 as “If there be no deposit contract and no express provision for survivor-ship, then in savings and checking accounts the controlling factor should be the way the account is opened and maintained by the depository ”

This Court believes the evidence in support of the above opinion is so clear and convincing that it overcomes the presumption of equal joint ownership between Mary C. Ray and John P. Ray.

It is the judgment of this Court that the exceptions to the inventory are not well taken, and overrules the same, that the first item in Schedule D, First National Bank, Chesterhill, Checking Account with the value of $13,607.37 is a properly listed asset in the estate of Mary Catherine Ray, deceased, and the inventory as filed is approved and confirmed. Costs are adjudged against said exceptor. Exceptions to be reserved for the parties, and journal entry prepared in accordance with the above.


source: Caselaw Access Project

author: By McNEILL. J.

license: Public Domain

text:
    PORTER, Plaintiff, v. RAILWAY EXPRESS AGENCY INC., Defendant.
    Common Pleas Court, Allen County.
    No. 42147.

      Durbin, Navarre & Rizor, Lima, for plaintiff.-
    Otis T. Lippincott, John R. Evans, Lima, for defendant.
    (McNEILL, J, of Van Wert County, sitting by assignment.)
   OPINION

By McNEILL. J.

This cause came on for hearing on the 2nd day of October, 1957, upon defendant’s motion for new trial. Plaintiff, via defendant, shipped thirteen chinchillas from Lima, Ohio, to San Angelo, Texas. Between St. Louis, Missouri and Kansas City, Missouri, the temperature became . extremely hot, and three chinchillas died. The remaining chinchillas were taken off the car at Kansas City and taken to a veterinarian, who kept them in an air conditioned room, returned them to defendant, and defendant then trans-shipped them with several large cakes of ice between the crates. The evidence indicates that the chinchillas were in good condition when the car personnel changed at Wichita Falls and Altus, Oklahoma. The evidence further discloses that somewhere between Altus, Oklahoma and Sweetwater, Texas, the chinchillas began to suffer and that seven more died. There is no testimony that new ice was furnished at either of the two stops, but the evidence is to the contrary.

These chinchillas were sold under contract and there is evidence as to the price per pair that made up the contract price. However, there is no evidence as to which animals survived, and the jury was instructed that they must presume that the most valuable animals survived. The jury returned a verdict in the amount of $4335-00. The chinchillas were shipped under a declared value of $5,000.00. The shipper’s receipt showing the rate or scale per item shipped was left blank. Only the total valuation was entered.

Defendant objects to the fact that the court shifted the burden of going forward upon defendant after plaintiff showed that the animals were delivered to the defendant in good condition and that seven were dead upon arrival.

“A prima facie case of liability is made against a terminal carrier where evidence is offered that a shipment of livestock, * * * was received in good condition by ihe initial carrier and was delivered in an injured or damaged condition at the destination by the terminal carrier.”
“To rebut such prima facie case it is incumbent on the terminal carrier to produce evidence that the injury or damage was not the result of negligence or a breach of contractual duty in connection with the carriage, or that such injury or damage was due to the inherent vice, weakness or natural propensities of the livestock * * *” Grosjean v. The Pennsylvania Road Co., 146 Oh St 643.

In attempting to counter-balance the prima facie case, defendant showed that the natural propensity of chinchillas is to reach a state of exhaustion rapidly in extremely high temperatures, which causes their death, and such, extreme temperatures did exist due to natural elements. However in attempting to counter balance the presumption, defendant showed that at Kansas City the chinchillas were taken to a veterinarian of their choosing, were placed in an air-conditioned place, and upon being returned for shipment, were shipped with several cakes of ice around their crates. The chinchillas went through two messengers in good shape from Kansas City to Altus, Oklahoma. The plain inference from the evidence is that the ice was not renewed. The chinchillas again began to suffer and the messenger in charge from Altus to Sweet-water, Texas even attempted to take pieces of ice from the water cooler and place it around their crates in an effort to relieve them. This occurred, according to his statement, in the late afternoon and he did not take over the chinchillas until after three o’clock, p. m. Consequently, this must have occurred shortly after he boarded .the train and the jury might properly infer that no ice was placed on the car at the Altus stop. The balance of the chinchillas were taken off at Sweetwater, Texas, put in an air conditioned room, recovered, and shipped to San Angelo, Texas.

In the Grosjean case, supra, the court held:

“Where all the evidence on the subject is to the effect that there was no negligence, fault or breach of contractual duty on the part of the carrier in transporting a shipment of livestock, the bare fact that the livestock were afflicted with a disease upon arrival at their destination is insufficient to fix responsibility therefor on the carrier.”

That just conclusion of such remarks of the Court is that if there was negligence on part of the carrier that they are responsible.

Even though the natural propensity of the animal may have been such as that normally defendant would not be liable, after they were once advised of the means to be taken to insure safe arrival, and after they initiated such means, if they did not continue with it, it may well constitute negligence.

In the case of Dailey v. Chicago, St. P. M. & O. R. Co., 194 N. W. 676, it was held:

“A railroad company is not generally held liable for injuries to live stock due to a condition of pregnancy unless it has actual or constructive knowledge of this fact. In the absence of such knowledge the condition will be regarded as a hidden or concealed defect, and the company will not be charged with greater care than that ordinarily exercised in handling animals not pregnant. But where the fact that the animal is in a pregnant condition is plainly apparent to the railroad company, or where it is in possession of facts that would lead a reasonable person to infer this condition, then the company will be liable for injuries due thereto, and caused by its negligence in not handling the animal with due care under the circumstances, though not expressly informed of the fact by the shipper.”

also see: Estill v. New York, L. E. & W. R. Co., 41 Fed. 849; Gulf, W. T. & P. Ry. Co. v. Staton, 49 S. W. 277; New York & Railroad Co. v. Estill, 147 U. S. 591.

In applying these rules, as set forth, the jury was charged that defendant could not be liable for the damage to the three chinchillas that died prior to arrival in Kansas City as defendant had shown that that was due to the inherent defect in the animal and that counterbalanced the presumption made by plaintiff’s prima facie case. However, the court did charge the jury in accordance with the foregoing cases that once having found the propensity of the animal, and having been advised of the necessary shipping precautions and having initiated the necessary safeguards the jury could' find them negligent in not continuing such safeguards, if a reasonable person under the same facts and circumstances would have continued such safeguards.

The jury evidently found such negligence as this was the only issue of negligence submitted to them. The court believes that the foregoing cases sufficiently sustain, as a matter of law, the finding of the jury.

We come now to the element of damages. Plaintiff testified as to the value of the chinchillas and testified as to the price per pair, which he had sold under contract to San Angelo, Texas. Two other breeders and one former breeder of chinchillas testified as to the reasonable value of thése animals. The testimony further indicated that there was only a general market as against local markets, in that the value of chinchillas at the present time is for breeding purposes; that sales are made from time to time, but that there is not a usual type market as we associate the term. The total value of the chinchillas shipped was somewhere in the neighborhood of $8500.00. There was no testimony as to which chinchillas survived or which died, and the court charged the jury that they must presume that the most valuable chinchillas survived, or died between St. Louis and Kansas City, on which there could be no liability on the part of the defendant.

The valuation on the remaining chinchillas was $4335.00, which was the amount of the verdict the jury returned in favor of the plaintiff.

Defendant contends that plaintiff, a breeder of chinchillas, and other breeders should not have been permitted to testify as to their value, but that some other “expert” testimony should be used. The court is unable to determine what more expert testimony can be had but that of the breeders and raisers who have all made sales.

It is claimed that these chinchillas had no value at death, and this was not disputed by defendant. There was no showing of a market price at the point of destination, other than the general market price of the chinchillas. In the case of Strickler v. The Baltimore & Ohio Rd. Co., 165 Oh St 523, the court cited the general rule that the carrier is not chargeable with or liable for special damages resulting from delay in transportation or delivery of goods entrusted to it for shipment, unless notice of the special circumstances rendering prompt delivery and transportation is given.

Generally, the market value at the place of arrival is the determining valuation. However, if there is no market value at the place of destination, the closest market is that controlling. However, if the market price cannot be determined at the point of destination, it can be determined that the shipping point is the nearest place of the market. Wood v. Chicago, M. & St. P. Ry. Co., 151 N. E. 229.

In this case the evidence was that there was not a local market, but a general market throughout the country, and that the price at any given place would probably be the same.

In 9 A. J. §783, P. 907, it is stated:

“The contract price, rather than the market value of goods may constitute the proper basis for estimating the damages * * * the right to recover on the basis of the contract price, where such price exceeds the market value, is subject to the condition that the carrier had notice * * * although some courts have stated the rule without referring to such condition. Where the contract price is the only evidence of the market value, it should be taken as the measure of damages.”

Also see: 13 C. J. S., §264 e., P. 615.

No decisions have been reached in Ohio as to whether the contract price shall be used if it exceeds the market price. However, in this case, there is no evidence of any market other than the general market. There is the general market value and there was a contract price, which is consistent with the general market value. No evidence was offered against these valuations in any form by defendant. Consequently, the contract price in this case may be regarded as the market price.

In addition, defendant contends that liability for shipment was limited to five thousand dollars and that the verdict should be pro-rated and could not be more than the amount surviving would be to the total value. The court charged the jury that they could find the amount of loss of plaintiff not to exceed five thousand dollars. Where a price per pound, per hundred weight, or per animal is stated, generally a pro-ration takes place and recovery is limited to so much per pound or per animal. 13 C. J. S. §113, P. 221.

However, in this case there is no stipulated price per unit, but only the total valuation and in such case the rule is different.

“The rule entertained by the weight of authority is that where the contract of carriage provides that the amount recoverable in case of loss or damage shall be limited to the declared value of the shipment, such agreement in case of partial loss, is to be construed as permitting recovery for the loss or damage actually sustained, the amount recoverable, however, not to be greater than that agreed on as compensation for a total loss; and it necessarily follows that where this rule obtains the shipper is not limited to a recovery of such proportion of the amount named in the contract as the value of the property destroyed bore to the value of all the property shipped.”

13 C. J. S. §113, P. 223. The note cities decisions of California, Illinois, Indiana, Iowa, Missouri, New Jersey, New York, Ohio, Pennsylvania, Texas and Virginia. The Note in 10 C. J., P. 185, cites similar decisions from Tennessee, Alabama, Montana, Indiana, and South Carolina.

In Ohio, there is only one case that has been decided, that a Municipal Court case in which the same rule was announced. Blum v. C. C. C. & St. L. Ry. Co., 25 O. N. P. ns 112. Also see: Spaner Bros., v. Central Canada Exp. Co (Alberta), 23 C 43 D L R 400, 23 Can. Ry. Cas. 332.

This doctrine is well set forth in the case of Candee v. Delaware L. & W. R. Co., 109 Atl. 202, certiorari denied, 253 U. S. 490, 40 Sup. Ct. Rep. 584.

* * a shipment of goods * * * and of a value not exceeding $1200 as 'stated for the purpose of enabling the carrier to apply the proper published rate,’ * * * in case of loss or damage and no statement as to any ratio of recovery in case of partial loss or damage the amount of the shipper’s recovery depends upon proof of his actual loss or damage within the limits of the declared value of the entire shipment, and not upon the ratio the weight of the articles, destroyed or damaged, bore to the entire shipment.”

The same effect is found in the case of Chanango Textile Corp. v. Willock, 288 N. Y. Supp. 270.

“we are of the opinion that in the case before us the plain language of the agreement to the effect that the declared value of the shipment shall establish the limit of the carrier’s liability should not be interpreted to mean that in the event of partial damage recovery is to be that proportion of the actual loss which the declared value bears to the actual value. If the carrier had intended to bind the shipper to such provisions, it was incumbent upon the carrier to so state in plain and unambiguous language.”

This Court certainly concurs in this view as the contract was made up, printed, prepared and filled in by the carrier, and if he had so desired to limit himself, he certainly could have so stated.

For these reasons the motion for new trial of the defendant should be, and hereby is overruled.

Entry has been entered in accordance herewith this date.


author: Per CURIAM.

text:
    DEPENDABILT HOMES, INC., Plaintiff-Appellant, v. GRANT WAYNE COMPANY, Defendant-Appellee.
    Ohio Appeals, Tenth District, Franklin County.
    No. 5846.
    Decided July 15, 1958.
    Benjamin F. Levinson, Columbus, for plaintiff-appellant.
    Collis Gundy Lane, Theodore L. Horst, Columbus, for defendantappellee.
   OPINION

Per CURIAM.

This court heretofore considered the errors assigned upon appeal by Dependabilt Homes, Inc., plaintiff-appellant, and being of the opinion that the lower court arrived at the correct judgment, overruled the said assignments of error. .

Plaintiff-appellant has filed a motion for re-hearing in four branches and an alternative motion to certify the case to the Supreme Court of Ohio as being a judgment in conflict with the judgments of the Courts of Appeals of Ashland County and Lucas County, Ohio. In the'motion for re-hearing, the first two grounds are that this court should have reversed the judgment of the court below in order to give' plaintiff-appellant “an opportunity to have its day in court” and that plaintiff-appellant “had no trial in the Common Pleas Court.” These grounds bear a marked similarity to the first two assignments of error which complained of irregularities “preventing the plaintiff-appellant from having a fair trial” and the claimed failure of the trial court to allow said plaintiff-appellant “to modify, explain or add to the opening statement.”

Unfortunately for the position taken by plaintiff-appellant, the bill of exceptions does not lend support to the claims of plaintiff-appellant. It is true that there was no jury trial, but the record shows that plaintiff-appellant voluntarily waived his right to such trial. It was the act of plaintiff-appellant in so- doing that clothed the trial court with the power to sit as judge and jury. See bill of exceptions, page two, where counsel for plaintiff-appellant dictated .into the record the following statement: “Let the record show we waive the jury.”

This is followed by a detailed statement apparently making reference to the evidence plaintiff-appellant intended to offer in support of his petition, at the conclusion of which counsel for plaintiff-appellant stated (see bill of exceptions, bottom page ten): “That, if the Court please, is our case.”

This is followed by a detailed statement by counsel for defendantappellee. It was after both opening statements that the trial court gave its decision to the effect that contingencies provided for in a written offer to purchase could not be relied upon by the purchaser after the sale had been fully consummated and the deed delivered, but on the contrary that the purchase contract was merged in the deed.

We are unable to find where plaintiff-appellant sought to call any witnesses whatsoever and we are also unable to find where the court excluded or refused to admit any testimony offered by plaintiff-appellant, and this is for the reason that apparently no attempt was made by plaintiff-appellant to offer any evidence whatsoever.

The other two branches of the motion for re-hearing namely, conflict with a judgment of the Court of Appeals of Ashland County and “other reasons apparent upon the face of the record,” appear to be without merit.

The court, therefore, is of the opinion that the motion for rehearing and each branch thereof, for the reasons above set forth, must be overruled and it is so ordered.

As above stated, plaintiff-appellant also moved in the alternative to certify this case to the Supreme Court of Ohio as being a judgment in conflict with the judgments of the courts of appeals of two other counties.

Before giving consideration to the holdings in the two cases claimed to be in conflict with our recent decision, we desire to refer back to plaintiff’s Exhibit No. 1, attached to the bill of exceptions, entitled “OFFER TO PURCHASE REAL ESTATE.” It was signed by Leo Brown, who later assigned his rights to the Dependabilt Homes, Inc., plaintiff-appellant. It was addressed to the Columbus Realty Company, Brokers, as agents for the owners of the lots in question, The Grant Wayne Company of Hilliards, defendant-appellee herein. The said offer described the lots by number, subdivision and the street on which they abutted in the village of Hilliards, Ohio. The price for all of them was $7,500 and the terms were cash. There were the usual provisions with respect to abstract of title, a good and merchantable title in present owner, the furnishing of a general warranty deed, provisions as to payment of taxes and vague provisions respecting the payment of liens and assessments. The offerer placed a three day time limit for acceptance and allowed himself thirty days for compliance on his part having reference perhaps to liability for the payment of five percent sales commission. The offer concluded with the following paragraph:

“Remarks: Contingent — that all utilities are in and paid also contingent on F. H. A. approval. If improvements are necessary for such approval grantor to pay said improvements.”

The court below in effect held that the language just above quoted constituted a contingency, which the offerer might have relied upon in refusing to go ahead with his offer to purchase real estate. While the language above quoted is extremely vague and uncertain, we need not determine the effect of that at this time.

From the same exhibit we observe that The Grant Wayne Company accepted this three day offer the very day it was made and we learn from the opening statement of plaintiff-appellant that after the assignment of the contract from Leo Brown to the plaintiff-appellant, the said Dependabilt Homes, Inc. on November 29, 1954 paid the full purchase price of $7,500 “and received a deed * * * for the seven lots from the Grant Wayne Company to the Dependabilt Homes, Inc., which deed is recorded in Deed Record 1850, Page 638, Franklin County, Ohio, Recorder’s Office.” (See bill of exceptions, page 3.)

The trial court no doubt noted that the language above quoted from the offer to purchase is in the present tense. It states that the offer is contingent upon the fact “that all utilities are in and paid.” (Emphasis added.)

It is well to have the above matters clearly in mind when examining the two cases referred to by plaintiff-appellant. The request to certify this case is based upon Article IV, Section 6, Ohio Constitution, as amended effective January 1, 1945. So far as pertinent here, this section provides:

„* * * and whenever the judges of a court of appeals find that a judgment upon which they have agreed is in conflict with a judgment pronounced upon the same question by any other court of appeals of the state, the judges shall certify the record of the case to the supreme court for review and final determination.”

It must be borne in mind that before we can certify a case as being in conflict, we must determine that the judgment upon which we have agreed is in conflict with the judgment pronounced “upon the same question” by another court of appeals.

The first case claimed to be in conflict is Galvin v. Keen, 100 Oh Ap 100, decided November 30, 1954 by the Court of Appeals of Ashland County. This case was a suit for damages for alleged breach of contract due to the alleged faulty construction of a house which the defendant built for the plaintiff. One of the defenses was that after completion of the house and before the date of delivery of the deed to plaintiff, said plaintiff inspected the premises and found them acceptable. The court in the Galvin case, supra, denied any recovery whatever “as to defects or noncompliance with the contract, either known or which should have been known by a proper inspection, such defects are waived, and no recovery permitted.” (See Syllabus 2, Galvin v. Keen, supra.)

It would appear that a prospective purchaser could determine with but little trouble — either by inspection or inquiry — whether in fact such utilities were in fact “in.”

The court in Galvin v. Keen, supra, allowed recovery for damages for hidden or latent defects as to drainage tile, water-proofing of the basement walls and sub-flooring under the kitchen and bathroom floors. The court referred to them as “latent defects which the plaintiffs could not and did not know about * * * when the deed was delivered.” (See opinion by Putnam, P. J., Galvin v. Keen, supra, at page 103.)

At page 105 of the opinion in this case the court said:

'“To summarize, it is our judgment that in such a case as this the execution of the contract is not merged in the deed as to latent defects not known to the vendee and not in conformity to the contract. As to other defects and noncompliance with the contract, either known or which should have been known by a proper inspection, these would be waived and no recovery permitted.”

It is our opinion that the case of Galvin v. Keen, supra, so far as it is similar upholds and does not conflict with the judgment heretofore rendered by this court.

The other case referred to is styled Brint, et al, v. Doyon, 7 Abs 427, decided by the Court of Appeals of Lucas County on February 4, 1929. In that case there is only a scanty statement of facts, but it would appear that the plaintiff in the court below was the purchaser of property in an allotment. Said paintiff sued to recover damages for failure on the part of the allotter to install certain improvements, which apparently were to be installed within a reasonable time after the consummation of the sale. There was, in that case, no representation whatever that the improvements were in place either when the contract was executed August 3, 1918, nor when the purchase price was paid and the deed delivered on September 3, 1918.

There were various defenses in that case including a claim of co-tenancy and the claimed merger of the contract and the consequent extinguishment of rights under the contract between delivery and acceptance of the deed. The court overruled both of these objections for the simple reason that the installing of these improvements was, by the terms of the written contract, to be performed within a reasonable time in the future. Stated another way, there was an express agreement on the part of the allotter to install said improvements within a reasonable time in the future, which admittedly had not been done. There were other questions relating to the measure of damages which are not important here. One of the headnotes in this case provides as follows:

“Deed extinguishes obligations of prior contract so far, and only so far, as it excludes them.”

In the course of the opinion in the Brint case, supra, by Lemert, J., page 427, it is said:

“It is further contended that the acceptance of the deed by Doyon merged his rights under the written contract. In other words, that Doyon’s rights under the written contract were all extinguished by the acceptance of the deed which did not carry the provisions of the contract with reference to the improvements. We understand the rule to be that a deed extinguishes the obligations of a prior contract so far, and only so far, as it excludes them.”

As before stated, both the facts and the holding in the Brint v. Doyon case, supra, differ in so many respects that we can not find they involve “the same question.”

For the reasons above set forth the alternative motion to certify as being in conflict, above referred to, is not well taken and, therefore, must be overruled.

PETREE, PJ, BRYANT and MILLER, JJ, concur.


author: By Mil iLER, J. By MILLER, J.

text:
    LONGONA, d. b. a. DRY DOCK CAFE, Appellant, v. BOARD OF LIQUOR CONTROL, Appellee.
    Ohio Appeals, Tenth District, Franklin County.
    No. 5854.
    Decided February 18, 1958.
    Hyman S. Topper, Toledo, for appellant.
    William Saxbe, Atty. Genl., Chester Hummell, Paul W. Dixon, Asst. Attys. Genl., Columbus, for appellee.
    (HORNBECK, J, of the Second District, sitting by designation in the Tenth District.)
   OPINION

By Mil iLER, J.

This is a law appeal from a judgment of the Common Pleas Court affirming an order of the Board of Liquor Control revoking the appellant’s Classes C-2, D-1, D-2 and D-3 liquor permits. The charge upon which the Board acted reads as follows:

“On or about March 25, 1956, you and/or your agent or employee did knowingly and willfully allow in and upon the permit premises improper conduct, to-wit: improper handling and discharging of fire arms resulting in homicide — in violation of the provisions of the Liquor Control Act and the regulations of the Board of Liquor Control.”

The record reveals that the permit holder, appellant, entered a plea of not guilty to the charge and the case was submitted to the Board upon an agreed stipulation of facts. From these facts it appears that Arvella Longona was the husband of the owner of the permit premises and was working on the same as a bartender when an argument arose between one Charles Pfitzer and Reba Lemons, who were common law nusband and wife, and bartender Longona; then a fist fight ensued between Pfitzer and Longona. Mrs. Lemons also took part in the fight and hit Longona over the head with a metal shuffieboard puck and began throwing glasses and ashtrays at Longona, who then went behind the bar and got a gun. He stated he pointed the gun at Mrs. Lemons but did not intend to shoot her. However, it was discharged into the body of Mrs. Lemons from which her death ensued.

It further appears that Longona was indicted, convicted and sentenced for manslaughter and placed on probation by the trial court.

The charge was brought under §4301.25 R. C., and Regulation 52 of the Board of Liquor Control, the pertinent parts of which read respectively as follows:

“The board of liquor control may suspend or revoke any permit issued pursuant to Chapters 4301. and 4303. R. C., for the violation of any of the applicable restrictions of such chapters or of any lawful rule or regulation of the board or other sufficient cause, and for the following causes:
“No permit holder shall knowingly or willfully allow in, and upon or about his licensed premises improper conduct or (of) any kind, type or character; any improper disturbances (;) lewd, immoral activities or brawls; * * *.”

It will be noted that the permit holder, her agent or employee was charged with knowingly and willfully allowing upon the permit premises “improper conduct, to-wit, improper handling and discharging of firearms,” etc. Since the charge is limited to the handling of the gun, the question presented is whether Longona was acting within the scope of his employment when the shooting occurred. Certainly it may not be argued that Longona was acting upon the apparent scope of his employment since such an act has no relation to the conduct of a retail liquor business.

It also appears from the stipulation that Mrs. Lemons had previously worked for Longona and the argument arose out of this employment. It was entirely foreign to the business in which the permittee was engaged. We are, therefore, of the opinion that, inasmuch as the act of Longona was not within the scope of his employment, before the charge may be established the evidence must reveal that the permittee personally knew of and permitted Longona’s unlawful act. The burden was upon the Department to offer some proof from which such an inference could be drawn. Such proof was entirely lacking, but on the contrary the evidence failed to disclose that the permittee was even on the premises at the time of the altercation.

In Kosick v. Board of Liquor Control, 74 Abs 237, this court held that in order to substantiate a charge that a liquor permit holder knowingly and willfully allowed in and upon the permit premises improper and immoral activity, it must be shown that the permittee or her agent willfully and knowingly allowed such acts. In the case at bar the evidence fails to show that the permittee willfully and knowingly allowed the discharging of the gun. Contra, it does show that Longona was acting beyond the scope of his employment at the time and his unlawful act may not be imputed to his employer.

We are therefore of the opinion that the trial court erred in its determination that the order of the Board of Liquor Control was supported by the proper degree of proof and in accordance with law.

Decided March 18, 1958.

Hyman S. Topper, Toledo, for appellant.

William Saxbe, Atty. GenL, Chester Hummell, John W. Leibold, Asst. Attys. Geni., Columbus, for appellee..

(HORNBECK, J, of the Second District, sitting by designation in the Tenth District.)

The judgment will be reversed.

PETREE, PJ. HORNBECK, J, concur.

LONGONA, d. b. a. DRY DOCK CAFE, Appellant, v. BOARD OF LIQUOR CONTROL, Appellee.

No. 5854.

OPINION

By MILLER, J.

This is a motion requesting the court to reconsider its opinion rendered herein on February 18, 1958. In this opinion we held that Arvella Longona, the bartender for the owner of the permit premises, was not acting within the scope of his employment when the firearm was discharged. The record reveals that the argument and fight arose out of a matter which was foreign to the operation of the permit holder’s place of business and the result thereof was the firing of the gun. We find a similar factual situation in the case of Vrabel v. Acri, 156 Oh St 467, wherein the bartender committed a wrongful and malicious act upon one of the patrons. The question then arose as to whether or not he had acted within the scope of his employment. The court said at page 473:

“* * * The wilful and malicious attack by Michael Acri upon the plaintiff in the Acri Cafe can not reasonably be said to have come within the scope of the business of operating the cafe, so as to have rendered the absent defendant, assuming her joint proprietorship of the cafe, accountable.
“Since the liability of one partner or of one engaged in a joint enterprise for the acts of his associates is founded upon the principles of agency, the statement is in point that an intentional and wilful attack committed by an agent or employee, to vent his own spleen or malevolence against the injured person, is a clear departure from his employment and his principal or employer is not responsible therefor. See the celebrated case of Little Miami Rd. Co. v. Wetmore, 19 Oh St 110, 2 Am. Rep., 373, and compare Nelson Business College Co. v. Lloyd, 60 Oh St 448, 54 N. E., 471, 46 L. R. A., 314, 71 Am. St. Rep., 729.”

The cases of Wittenberg v. Board of Liquor Control, 52 Abs 65, Rio Bar, Inc. v. State, 69 Abs 206, and Mozingo v. Board of Liquor Control, 69 Abs 597, which have been cited by counsel for the Board of Liquor Control are all distinguishable from our case upon the facts and do not appear to us to be controlling.

We adhere to our former opinion and the motion will be overruled.

PETREE, PJ, HORNBECK, J, concur.


author: By WEICK, District Judge.

text:
    HUSTON, d. b. a. HUSTON IMPLEMENT COMPANY, Bankrupt, In re.
    United States District Court N. D. of Ohio, E. D.
    No. 74482.
    Decided July 17, 1956.
    Hugh I. Troth, Ashland, for petitioner.
    Arthur W. Negin, David Arbaugh, Mansfield, for trustee.
   OPINION

By WEICK, District Judge.

This is a proceeding to review a turnover order of the referee in bankruptcy, in which he ordered the Massey-Harris-Ferguson, Inc. of Columbus, Ohio, hereinafter referred to as Massey, to surrender to the trustee in bankruptcy certain farm equipment or to pay its value amounting to $3,215.60.

The basis for the referee’s order was that Massey, within four months prior to bankruptcy, had repossessed from the bankrupt, while he was insolvent, farm equipment which it had theretofore sold him for resale, under a conditional sales agreement not filed with the county recorder, and that this transaction amounted to a preference, void under Section 60, subs, a and b of the Bankruptcy Act, 11 U. S. C. A. §96, subs, a and b.

The referee in bankruptcy adopted findings of fact and conclusions of law from which it appears that the bankrupt was a dealer in farm equipment and had made purchases, for a number of years, of equipment from Massey or its predecessors, for resale.

On February 4, 1955, the bankrupt and his wife executed a promissory note to Massey for $9,460.20 and a chattel mortgage on farm equipment to secure the same. These instruments are pleaded in Massey’s answer and cross-petition and are attached thereto as exhibits and a balance of $6,612.59, as of the date of adjudication, was claimed.

The mortgage, however, does not appear to describe any of the chattels involved in the turnover order and the referee made no such finding.

On February 17, 1955, Massey and the bankrupt entered into a sales and service agreement (Exhibit “A”) which appointed the bankrupt as a dealer and recited that it was accepted by Massey on June 6, 1955. This agreement was not pleaded in Massey’s answer or cross-petition.

The agreement provided:

“1. Goods Covered-
“This agreement shall apply only to farm tractors, farm equipment, attachments and service parts, to be sold at retail, as offered for sale from time to time by the Massey-Harris Division of the Company and delivered to the Dealer by it and shall continue until superseded by another written agreement between the Company and the Dealer or otherwise terminated.”
“15. Title Retainment
“The title for all goods shipped under this agreement is to remain in the Company and all goods will be held by the Dealer, at all times, subject to the Company’s order and full right of repossession after default by Dealer, until the purchase price is fully paid in United States money.”
“22. Cancellation for Cause
“It is agreed that in the event the Dealer shall be in default of any of his obligations under this agreement, or shall violate any of the terms of this agreement, or shall make or attempt to make an assignment for the benefit of creditors, or shall be decreed bankrupt or institute voluntary bankruptcy proceedings under any other insolvency law, or shall have a permanent or temporary receiver appointed for the management of the Dealer’s Affairs, then the Company may, at its option:
“(a) Immediately cancel this agreement and declare all indebtedness of the Dealer due and payable, and repossess all goods on hand for which the Dealer is indebted to the Company, or
“(b) Establish terms of cash with order or sight draft with Bill of Lading or C. O. D. on any goods to be shipped or delivered thereafter to the Dealer, or
“(c) Exercise any other legal remedy available to the Company under the laws of the State in which this agreement is made.”

The agreement, on its face, applies only to purchases to be made by the bankrupt after the date when the agreement became effective.

Retention of title was provided “for all goods shipped under this agreement.”

The referee found that all of the chattels described in the turnover order had been sold, delivered and invoiced by Massey to the bankrupt in 1954 (prior to the conditional sales agreement) except one No. 14 26" tooth harrow with draw bar, Invoice M 3192 (Exhibit “B”) $78.60, which was sold on June 10, 1955. Obviously, the 1954 sales of equipment to the bankrupt were not under the conditional sales agreement.

Massey claims, in its brief, that its predecessor company, the Massey-Harris Company, had entered into a conditional sales contract with the bankrupt and his then partner Earl Huston on November 10, 1950; that the bankrupt is the successor of the co-partnership; that Massey is the successor of the predecessor company by merger; that the present conditional agreement supplements the first one.

The referee made no such findings of fact, and the transcript of testimony, which is attached to his certificate, contains no evidence of any previous conditional sales agreement. The referee was, therefore, .fully justified in not making such á finding.

It would appear to be clear that the 1954 items were sold by Massey to the bankrupt on open account without any security and the repossession of the equipment by Massey for credit on its account, on December 19, 1955 (three weeks before bankruptcy), was a preference void under the Bankruptcy Act.

This leaves for consideration the validity of the conditional sales agreement as applied to the only item it covers, namely, one harrow worth $78.60.

No affidavit was attached to the conditional sales agreement as to the amount of the claim, and the conditional sales agreement was not filed with the county recorder as required by §1319.11 R. C., which provides that a conditional sales agreement which does not comply with the statutory provisions shall be void “as to all subsequent purchasers and mortgagees in good faith and for value, and creditors * *

Under Ohio law an unfiled chattel mortgage or conditional sale agreement was void as against execution creditors, Cass v. Rothman, 42 Oh St 380, against an assignee for the benefit of creditors, Hanes v. Tiffany, 25 Oh St 549, Betz v. Snyder, 48 Oh St 492, 28 N. E. 234; 13 L. R. A. 235, against a state court receiver for an insolvent debtor, Doyle, Receiver v. Yoho Hooker Youngstown Co., 130 Oh St 400, 4 O. O. 566, 200 N. E. 123, against an executor or administrator of an insolvent estate, Keller v. Schaeffer, Admr., 29 Oh St 264 and against a trustee in bankruptcy, York Mfg. Co. v. Cassell, 201 U. S. 344, 26 S. Ct. 481, 50 L. Ed. 782; In re Bettman-Johnson Co., 6 Cir, 250 F., 657; Potter Mfg. Co. v. Arthur, 6 Cir., 220 F. 843.

Until such time as Massey repossessed the equipment, it had nothing but a secret lien void against attaching creditors.

Its lien was perfected, if at all, within three weeks before bankruptcy when it repossessed the. equipment. Until then, so far as creditors were concerned, its lien had not attached.

But Massey claims that its lien was valid against the trustee in bankruptcy because it was actually perfected by the repossession before bankruptcy. 9 O. Jur (2d), 860, pp. 197, 198, citing Cass v. Rothman, supra, Calder v. Bliss Auto Sales, 18 Oh Ap 242.

Even conceding that Massey’s lien had attached and was perfected on December 19, 1955 when it repossessed the equipment, this still does not dispose of the question whether or not the attachment of such lien, on the eve of bankruptcy, was a preference void under Section 60, subs, a and b of the Bankruptcy Act.

Section 60, sub. a(1) of the Bankruptcy Act provides:

“A preference is a transfer, as defined in this title, of any of the property of a debtor to or for the benefit of a creditor for or on account of an antecedent debt, made or suffered by such debtor while insolvent and within four months before the filing by or against him of the petition initiating a proceeding under this title, the effect of which transfer will be to enable such creditor to obtain a greater percentage of his debt than some other creditor of the same class.”

The word “transfer” was redefined in the 1952 amendment of Section 1(30) to the Bankruptcy Act, 11 U. S. C. A. §1(30) as follows:

“ ‘Transfer’ shall include the sale and every other and different mode, direct or indirect, of disposing of or of parting with property or with an interest therein or with the possession thereof or of fixing a lien upon property or upon an interest therein, absolutely or conditionally, voluntarily or involuntarily, by or without judicial proceedings, as a conveyance, sale, assignment, payment, pledge, mortgage, lien, encumbrance, gift, security, or otherwise; the retention of a security title to property delivered to a debtor shall be deemed a transfer suffered by such debtor;* * *"

Whatever may have been the law before this all-inclusive language certainly now embraces not only an unfiled conditional sales agreement, but also a repossession under it. 3 Collier on Bankruptcy 14th Ed. Supp. p. 93. §60.43, Text p. 944.

Section 60 sub. a(2) provides in part as follows:

“For the purposes of subdivisions (a) and (b) of this section, a transfer of property other than real property shall be deemed to have been made or suffered at the time when it became so far perfected that no subsequent lien upon such property obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee.”

Under this section the effective date of the perfection of the lien would not relate back to the date of the sale.

The policy of the law was set forth in Section 60, sub. a(6) which provides:

“The recognition of equitable liens where available means of perfecting legal liens have not been employed is declared to be contrary to the policy of this section.”

In the case at bar, available means for the perfection of the lien of the conditional sales agreement were provided in §1319.11 R. C. This law was not complied with by Massey who held the secret lien for more than six months until only three weeks before bankruptcy and then repossessed the equipment in order to get ahead of the creditors who were then pursuing the bankrupt.

Prior to the enactment of Section 60, sub. a and Section 1(30) of the Bankruptcy Act, Massey’s repossession of the equipment would have validated its conditional sales agreement as against the trustee in bankruptcy. Calder v. Bliss Auto Sales, supra; Humphrey v. Tatman, 198 U. S., 91, 25 S. Ct. 567, 49 L. Ed. 956; Thompson v. Fairbanks, 196 U. S., 516, 25 S. Ct., 306, 49 L. Ed., 577.

In Corn Exchange National Bank & Trust Co. v. Klauder, Trustee in Bankruptcy, 318 U. S., 434, 63 S. Ct., 679, 87 L. Ed., 884, the Supreme Court in construing Section 60, subs, a and b of the Bankruptcy Act held:

“Within four months of bankruptcy the debtor had assigned accounts receivable as security for concurrent loans. Notice to those who owed the accounts was not given, although under applicable local law notice was necessary in order to preclude possible superior rights in subsequent bona-fide purchasers of the accounts. Held, that the assignments were preferential under Section 60(a) of the Bankruptcy Act and thus avoidable by the trustee in bankruptcy under Section 6 (b) thereof.” (Syl.)

Mr. Justice Jackson, who delivered the opinion of the court, said:

“The Committee of the House of Representatives which reported Section 60, sub. a as quoted above was fully aware of the vicissitudes of its predecessors. These are recited in detail elsewhere, and need not be repeated here beyond a general statement that for thirty-five years Congress has consistently reached out to strike down secret transfers, and the courts have with equal consistency found its efforts faulty or insufficient to that end. Against such a background, Section 60, sub. a was drawn and reported to Congress with this explanation of its purpose and effect. ‘The new test is more comprehensive and accords with the contemplated purpose of striking down secret liens. It is provided that the transfer shall be deemed to have been made when it has become so far perfected that neither a bona-fide purchaser nor creditor could thereafter have acquired rights superior to those of the transferee. As thus drafted, it includes a failure to record and any other ground which could be asserted by a bona-fide purchaser or a creditor of the transferor, as against the transferee. A provision also has been added which makes the test effective even though the transfer may never have actually become perfected.’ ”

The learned Justice, .in a footnote- to the opinion, cited the statement of Professor McLaughlin at the hearings on the revision of the Bankruptcy Act held by the House Judiciary Committee as follows:

“He stated Thompson v. Fairbanks, 196 U. S., 516, 25 S. Ct. 306, 49 L. Ed., 577, as applying a rule of state law that a mortgagee by taking possession of the mortgaged property at a time subsequent to the execution of the mortgage thereby validated it as of the time of execution. He said that Section 60, sub. a would prevent such validation by relation back. Similar disapproving reference was made to Bailey v. Baker Ice Machine Co., 239 U. S. 268, 36 S. Ct. 50, 60 L. Ed. 275; Carey v. Donohue, 240 U. S. 430, 36 S. Ct. 386, 60 L. Ed 726; and Martin v. Commercial National Bank, 245 U. S. 513, 38 S. Ct. 176, 62 L. Ed. 441, with the explanation that ‘You are going to have taken away some advantages that some people have enjoyed, and certain practices are going to be altered to some extent. But you have that every time you pass any kind of a commercial law.’ ” 318 U. S. at page 438, 63 S. Ct. at page 682, 87 L. Ed. 884, footnote 11.

There can be no question now that Congress, by clear and appropriate language, has outlawed secret liens. There is no room for judicial construction except to give effect to the law.

Repossession, within four months from bankruptcy, no longer validates a lien or makes it retroactive.

The order of the referee in bankruptcy was correct and is, therefore. affirmed.


author: By PHILLIPS, J.

text:
    GREEN, Plaintiff-Appellant, v. BAKER et, Defendants-Appellees.
    Ohio Appeals, Seventh District, Mahoning County.
    Nos. 3936, 3937.
    Decided October 29, 1957.
    John A. Ruffalo, Youngstown, for plaintiff-appellant.
    Frank J. Battisti, Youngstown, for defendants-appellees.
   OPINION

By PHILLIPS, J.

Plaintiff appeals on questions of law from a judgment of the court of common pleas dated April 4, 1957, overruling his motions for a now trig! in his actions against members of the Department of Police of the City of Youngstown for damages for alleged assault and battery, false imprisonment and malicious prosecution, being numbered on the docket of the court of common pleas as 148225 (appeal number 3936) and 148227 (appeal number 3937), and by agreement of the parties and consent of the trial judge consolidated for all purposes in that court, and disposed of in this court in this opinion.

By petition filed in case number 148225 plaintiff alleges inter alia as follows:—

“Plaintiff further says that on the 12 day of January, 1955 at about 10:00 o’clock P. M., they were in the Mill Creek Tavern at 1596 Mahoning Avenue m the City of Youngstown; that the defendants without just cause or excuse committed an assault and battery upon this plaintiff and inflicted severe, personal and physical injuries upon plaintiff; that said defendants beat plaintiff with their fists and with a mace and caused numerous cuts, wounds and abrasions in and upon plaintiff’s body and especially upon plaintiff’s head and face and thereby caused his nose to be fractured and displaced so that the right side of his nose was completely blocked and that he has received permanent injuries to his face, head and nose and that he was thereby caused great pain and suffering, severe nervous shock and mental anguish and was put to great expense for medical treatment and hospital care; and that he will continue to suffer from said injuries for the rest of his natural life. That by reason of said injuries, he lost a large amount of time from his employment. * * *
“Wherefore plaintiff prays for judgment against the defendant for compensatory and punitive damages in the sum of $10,000.00 and his costs herein expended.”

In his original petition filed in case number 148227 plaintiff alleges inter alia as follows:—

,,* * * kjg arres|; and imprisonment by the defendants was without a warrant and without reasonable or probable cause and was brought about by the false and malicious acts of said defendants.
“Plaintiff further says that by reason of said forcible and unlawful arrest and detention and malicious prosecution by the defendants, he suffered great mental shock and has been greatly damaged in his reputation in the community and placed in contempt and derision among his friends and associates and he was compelled to expend a large amount for the services of counsel and his bond in order to be released from said imprisonment and malicious prosecution.
“Wherefore plaintiff prays for compensatory and punitive damages in the sum of $5,000 and reasonable sum for his attorneys fees together with his costs herein expended.”

By supplemental petition filed in the trial court in the case numbered 148227 plaintiff alleged his acquittal in the Municipal Court of Youngstown of the charges for which he was arrested; that he incurred expenses of $563.90 in defending himself and was compelled to lose work, and sought damages against defendants for that amount and the sum of $5,000.00 for which he prayed judgment in his original petition.

By answers filed in both cases defendants admitted that they were duly authorized officers of the Police Department of the City of Youngstown and arrested plaintiff and caused him to be lodged in jail, and generally denied each and every other fact stated, averment made and allegation set forth in plaintiff’s petition, and by affirmative defense in case number 148225 alleged:—

“Comes now the defendant and for his further answer and affirmative defense says that the plaintiff on.said date was creating a disturbance, and that this defendant, while acting as a police officer performing his duties of his office, caused said plaintiff to be placed under arrest, and that said plaintiff resisted said arrest, and that said defendant used such force as was reasonable and proper to effect said arrest.
“Wherefore, having fully answered, defendant prays that the plaintiff’s petition be dismissed and that he may go hence with his costs.”

By affirmative defense in case number 148227 defendants alleged:—

“Comes now the defendant, and for his further answer and affirmative defense says that on the date set out in plaintiff’s petition this plaintiff, together with his brother, Thomas A. Green, were creating a disturbance, as a result of which they were placed under arrest, and that in effecting said arrest this plaintiff resisted the same by force and the use of vile, vulgar and profane language.
“Wherefore, having fully answered, defendant prays that the plaintiff’s petition be dismissed and that he may go hence with his costs.”

Each of the parties introduced evidence to support the allegations of their respective pleadings not necessary to set forth in detail here, except to say that the bill of exceptions discloses that in the afternoon of the day of plaintiff’s arrest defendant, Thomas Baker, met others in The Mill Creek Tavern for the purpose of playing shuffle board. Subsequently plaintiff entered the Tavern, began drinking and became loud and profane using loud, profane, obscene and vulgar language. Upon refusal to cease and desist, defendant, Thomas Baker, asked them to quiet down, which they refused to do. Refusing his second request to be orderly defendant, Thomas Baker, ordered a police cruiser dispatched to the Tavern, and ordered the trouble makers away.

The evidence discloses that later that evening the parties returned to Mill creek Tavern and plaintiff started taunting defendant, Thomas Baker, and using loud, vulgar and obscene language resulting in a call to the police station and the arrival of the same officers who had been summoned earlier in the day, and defendant, Thomas Baker, ordered plaintiff arrested and placed in jail. Upon being requested to enter the cruiser plaintiff refused to comply and resisted arrest and struck defendant, Thomas Baker. Thereupon defendant, Thomas Baker, to subdue plaintiff struck him in the face and broke his nose. Finally plaintiff was subdued by the defendants and accompanying officer Farinelli.

The cases were submitted to the jury, which returned a verdict for the defendants. The trial judge overruled plaintiff’s motions filed in each case for a new trial, and entered judgment for the defendants on the verdicts of the jury.

Plaintiff assigns grounds of error as follows:—

“1. That the verdict of the jury is contrary to law.
“2. That the verdict of the jury is manifestly against the weight of the evidence and contrary thereto.
“3. That the verdict of the jury was a result of passion and prejudice.
. “4. That the verdict and findings of the jury should have been for the plaintiff instead of the defendants.
“5. That the court erred in receiving evidence on behalf of defendants to which the plaintiff then and there objected and excepted.
“6. That the court erred in refusing to receive evidence on behalf of the plaintiff to which refusal the plaintiff then and there excepted.
“7. That the court erred in refusing to permit the plaintiff to introduce evidence of malicious prosecution under the pleading.
“8. That the court erred in his general charge to the jury.
“9. That the court erred in depriving the plaintiff of the right of trial by jury guaranteed to him under the Constitution of the United States and the State of Ohio.
“10. That the court erred in depriving the plaintiff of his rights, privileges and immunities under the laws and the Constitution of the State of Ohio and the United States.
“11. Other errors apparent on the record.”

By brief plaintiff propounds the question:—

“Was the ruling of the court in refusing to receive evidence based upon an action for malicious prosecution a deprivation of plaintiff’s right of trial by jury as guaranteed to him under the Constitution?”

Supporting this assigned ground of error plaintiff cites the case of Gibbs v. Village of Girard, 88 Oh St 34, where it is stated in syllabus two:—

“The right of trial by jury, being guaranteed to all our citizens by the constitution of the state, cannot be invaded or violated by either legislative act or judicial order or decree.”

The trial judge did not err to plaintiff’s prejudice as urged in this assigned ground of error.

Plaintiff claims by brief:—

“The exclusion by the court of Exhibit 1, Affidavit for Disturbance, which document gave evidence as to sworn statement of the Commission of the Crime and the finding of the Municipal Court that the defendant, Thomas Green, was not guilty as charged (R. P. 386), and Exhibit 2, Warrant for Disturbance (R. P. 387), was prejudicial to the plaintiff and such an order of the court prohibiting this evidence was tantamount to a direction of a verdict in favor of the defendant in the action of malicious prosecution.”

I do not think so.

Plaintiff propounds the question “Did the court err in refusing to permit plaintiff to introduce evidence of malicious prosecution under his petition and supplemental petition?”

Plaintiff states by brief that:—

“The testimony of the witnesses, Thomas Green, Donald Baker, Sam Farinelli and Tom Baker, adduced at trial and particularly the testimony of Thomas Baker established the fact that he was the one that demanded the arrest, jailing and booking of the plaintiff.”

In support of this assigned ground of error plaintiff directs our attention to the case of Siegel v. The O. M. Scott & Sons Co. et al, 73 Oh Ap 347 at page 351:—

“The general rule is that to maintain an action for malicious prosecution, the following elements must be shown: (1) The institution or continuation of original judicial proceedings, either civil or criminal; (2) by, or at the instance of, the defendant; (3) the termination of such proceedings in plaintiff’s favor;' (4) malice in instituting the proceedings; (5) want of probable cause for the proceeding; and (6) the suffering of injury or damage as a result of the action or prosecution complained of. 34 American Jurisprudence, 706, Malicious Prosecution, Section 6. See, also, 38 Corpus Juris. 386, 387. * * *
“The test of liability in such an action is: Was defendant' actively instrumental in putting the law in force? To sustain' the action, it must affirmatively appear as a part of the case of the party demanding damages that the party sought to be charged was the proximate and efficient cause of maliciously putting the law in motion. 38 Corpus Juris, 395.”

I am in accord with the defendants’ argument as stated in their brief that:—

“It is notable that the appellant did not dismiss his action in false arrest or imprisonment; nor did he file an ‘amended’ petition, setting forth a new cause of action in malicious prosecution; nor did he request leave to file an amended petition so as to change the original cause of action from false arrest to malicious prosecution. He simply filed a ‘supplemental petition,’ alleging a verdict of ‘not guilty’ and requested attorney’s fees.
“At the trial the court held, in substance, that the original petition set forth a claim in false arrest or imprisonment; and that the mere filing of a supplement alleging a verdict of ‘not guilty’ does not amount to an abandonment of the original cause of action and set forth in its stead a new cause of action in malicious prosecution. The ruling of the court was only proper under the circumstances.
“Sec. 2309.05 R. C., provides that a petition may be amended at any time before the answer is filed and that it may be done before the answer is filed ‘without leave.’ However, it was said in Weber & Co. v. Kemper Bros., 8 Dec. Rep. 403, that:—
“ ‘Amendments are so allowed by virtue of that section, but they must be such amendments as would be allowed, after answer, by leave of court, and not entirely different claims or causes of action.’ And see also 31 O. Jur. 321, at pp. 916, 917.’
“Sec. 2309.58 R. C., provides for amendments after the answer has been filed. Pursuant to that section, the court may permit an amendment as follows:—
“ ‘Before * * * judgment, in furtherance of justice and on such terms as it deems proper * * * when the amendment does not substantially change the claim or defense * *
“For general discussion of this language, see 31 O. Jur., Secs. 328, 329, 330 and 335 at pp. 923, 925, 927, 935.
“Whether the appellant might achieve an amendment of his pleadings as sought in the instant case is discretionary with the trial court; and the court’s refusal to permit a showing of malicious prosecution upon the filing of the supplement can not be held erroneous unless it is affirmatively shown that the court abused its exercise of discretion. See Clark v. Clark, 20 Oh St 128. The statutory guides offered to the court in the exercise of its discretion pursuant to §§2309.5 and 2309.58 R. C., are whether the amendment is in ‘furtherance of justice’ and whether the amendment will ‘substantially change the claim or defense.’
“Defendant was prepared to defend against false arrest or imprisonment, the theory of the complaint. To recover upon that complaint, the essential proof is an arrest without legal process. To recover upon the malicious prosecution, however, the essential elements of proof are an arrest by and through legal process without cause and a verdict of ‘not guilty’ of the charge. See Prosser on Torts, Hornbook Series, 1941 at p. 74.
“It is apparent that the issues to be joined and the facts to be proved in false arrest or imprisonment are different from those in malicious prosecution: and that a judgment upon one will not bar an action upon the other. See West v. Landis, 16 Abs 312, wherein the court states that the amendment is proper only when the following causes may be answered in the affirmative: ‘Does the same evidence support both?’ and ‘Will the judgment on the latter bar recovery on the former?’ If so, they are the same.’
“If the appellant chose another cause of action he should have pleaded over or he should have stated a second cause of action by way of an amended petition. His pleading, however, was an attempt to confuse and hide the theory of the action, thus allowance of the change of cause of action would not have been in the ‘furtherance of justice,’ and certainly it would have permitted an amendment which does in fact ‘substantially change the claim or defense.’ It would seem that the court would, indeed, have abused its discretion if it had allowed the appellant to proceed upon malicious prosecution and to abandon the claim of false arrest or imprisonment.”

The quoted argument definitely demonstrates the trial court’s reasons for refusing to admit the evidence upon which error is claimed to have intervened. I find no error in this respect. '

Further plaintiff claims that the verdict of the jury is not sustained by sufficient evidence, is contrary to the manifest weight of the evidence, and is contrary to law, and should have been for the plaintiff instead of the defendants, and that the verdict of the jury is the result of passion and prejudice.

Plaintiff’s arguments with respect to these assigned grounds of error are not persuasive.

Appellant’s counsel has failed to call our attention to “other errors apparent on the record,” as alleged as a ground of error, or to comply in respect thereto with the provisions of Rule VII of this court that his briefs “shall contain a statement of the questions presented and a succinct statement of so much of the cause, referring to the pages of the record, as is necessary to show how the questions arose, together with a statement of the authorities relied upon.” Accordingly I will not pass upon this assigned ground of error.

Finding no error in any of the respects urged, upon which I have passed, the judgment of the court of common pleas is affirmed.

NICHOLS, PJ, GRIFFITH, J, concur in judgment.


author: By RILEY, J.

text:
    FRANKLIN (City), Plaintiff, v. HARRISON, Jr., Defendant.
    Franklin Municipal Court.
    No. 6587-4-4196.
    Decided October 28, 1957.
    Finkleman & Ross, Middletown, for plaintiff.
    Geo. H. Elliott, Clinton D. Boyd, Jr., Middletown, for defendant.
   OPINION

By RILEY, J.

This case comes before this court on the following statement of facts.

On January 7, 1957 the City Council of the City of Franklin, Ohio passed an Ordinance No. 1956-29 entitled “An Ordinance providing for an Excise Tax on Water and Sewer Bills in the City of Franklin, Ohio and to declare an Emergency.”

WHEREAS, the subject matter herein contained constitutes an emergency, in that it provides for the daily operations of the Municipal departments of the City of Franklin, Ohio.

THEREFORE, BE IT ORDAINED by the Council of the City of Franklin, Ohio:

Section 1. As used in this section and in other sections relating to the same subject matter in this chapter, the words “Director of Safety Service” shall mean the Director of Safety Service of the City of Franklin, Ohio and the word ‘person” shall include individuals, firms, partnerships, associations, corporations and combinations of individuals of whatever form and character.

Section 2. That for the purpose of providing revenues for the General Fund of the City of Franklin, Ohio in addition to those raised from general property taxes permitted under the constitutional limitations and from other sources for the support of local government functions, •there is hereby levied from the first date allowable by law a tax of 50% computed on the rate charged for water and sewer by the City of Franklin, Ohio and used by consumers.

Section 3. The tax hereby levied shall not apply when the consumer or user is the United States Government.

Section 4. The Water Department of the City of Franklin, Ohio furnishing or delivering the services on which this tax is levied shall in each and every bill or statement rendered therefor after the first date allowable by law set forth an item for said tax as a separate item or in connection with any other tax on said bill carrying out the amount thereof and including the same in the total of said bill or statement so rendered and collect said tax from the consumer or payer of said bill or statement at the time of payment thereof.

Section 5. The Water Department receiving any payment on bills or statements taxable under the provisions of this ordinance, shall on or before the last day of each calendar month make a return to the Director of Safety Service in form as the Director of Safety Service may prescribe, showing the aggregate amount of taxable payments for such bills or statements collected during the preceding calendar month, the amount of tax thereby imposed and collected on the same, and such other facts and information as the Director of Safety Service may require on the form prescribed by him.

Section 6. The Safety Service Director of the City of Franklin, Ohio, shall at the time of such report cause the amount of taxes paid to be credited to the General Fund.

Section 7. Whoever being a consumer or payer, refuses to pay the full and exact tax, as required by this chapter, shall be guilty of a misdemeanor and upon conviction thereof shall be fined one hundred dollars for the first offense, and two hundred dollars for the second and each subsequent offense.

Section 8. It shall be the duty of the Director of Safety Service to collect and receive the tax imposed by the provisions of this ordinance. It shall also be the duty of the Director of Safety Service in addition to keeping records now required by law or ordinance, to keep a record showing the amount received by him from each person hereunder and the date of such receipt.

Section 9. All taxes imposed by the provisions of this ordinance remaining unpaid on the date fixed for payment in accordance with Section 2 of this ordinance, shall bear interest in addition to the amount of the unpaid tax at the rate of six per cent per annum.

Section 10. All taxes imposed by the provisions of this ordinance together with all interest and penalties, shall be recoverable by the City of Franklin, Ohio by proper suit, action or proceedings in any court of competent jurisdiction.

Section 11. If any sentence, clause, section, word or words, or part of any of the provisions or sections of this ordinance, is for the reason found to be unconstitutional, illegal or invalid, that unconstitutionality, illegality or invalidity shall not affect or impair any of the remaining provisions, sentences, clauses, sections, word or words and parts of this chapter.

Section 12. It is hereby declared as the intent of this Council that this ordinance would have been adopted had unconstitutional, illegal or invalid sentence, clause, section, word or words or part thereof, not been included therein.

Section .13. That this ordinance is an emergency in that the public peace, health, safety and welfare of the inhabitants of the City of Franklin require its passage without delay and this ordinance shall become effective immediately and be in force from and after its passage. Passed January 7, 1957.

Attest:

(Helen Kennedy)

Clerk

(John Hoffer)

President of Council

Approved:

(C. C. Black)

Mayor

The defendant, Robert Harrison, Jr., is the owner of certain real property in the City of Franklin and failed and refused to pay the tax provided by the aforementioned ordinance and on the 9th day of July, 1957, a warrant for his arrest was issued upon the defendant by one E. M. Woodward, whereby the defendant was arrested for having failed to pay said tax.

On July 17th, 1957, a demurrer to the affidavit was filed on behalf of the defendant on the grounds that the facts stated in such affidavit did not constitute an offense in that said ordinance 1956-29 violated the provisions of the Constitution, of the Ijnited, States and the Statutes, of the State of Ohio.

Therefore, we have two points or legal questions raised by said demurrer,

First: Is said Ordinance 1956-29 in contravention of provisions of the Constitution of the United States?

Second: Is said Ordinance 1956-29 in contravention of the Laws of the State of Ohio?

Ordinance No. 1956-29 is entitled:

“An Ordinance providing an excise tax on water and sewer bills in the City of Franklin, Ohio and to declare an emergency.”

Section 2 of said ordinance reads “That for the purpose of providing revenues for the General Fund of the City of Franklin, Ohio in addition to those raised from general property taxed permitted under the constitutional limitations and from other sources for the support of local government functions, there is hereby levied from the first date allowable by law a tax of 50% computed on the rate charged for water and sewer by the City of Franklin, Ohio, and used by consumers.”

It has repeatedly been held that the designation given to the ordinance by the council or legislative body is not determination of the validity or nature of the tax. Its character must be determined by its incidents, operations and effect.

Under the ordinance in question the result has been an increase to the water and sewer consumer and user, who pays such bills when rendered by the Water Department.

Therefore another question to be decided by the court-is whether the raising of such funds by such means has any authority under the Statutes of Ohio or the Constitution?

It is well established that a Municipal Corporation can only levy taxes within the limits prescribed by the State Legislature or the Constitution: “as was stated in the case of Cincinnati v. Roettinger, 105 Oh St 145,” “as municipalities get their authority for levying taxes from the legislature, the legislature must be held to have the power to place proper limits thereon.”

Article XII, Section 6, Ohio Constitution, provides:

“The General Assembly shall provide for the organization of cities and incorporated villages, by general laws, and restrict the powers of taxation, assessment, borrowing money, contracting debts and loaning their credit, so as to prevent the abuse of such power.” •

The provision of Article XII, Section 2, Ohio Constitution, restrains municipalities from levying taxes beyond established limitation without special authority from the voters or from the charter of such municipal corporation.

It is further provided in Article XVIII, Section 13, Ohio Constitution:

“Laws may be passed to limit the power of municipalities to levy taxes and incur debts for local purposes, and may require reports from municipalities as to their financial condition and transaction, in such form, as may be provided by law, and may provide for the examination of vouchers, books and accounts of all municipal authorities or of public undertakings conducted by such authorities.”

The General Assembly in §5705.02 R. C., places a limitation upon property taxes levied in this state not to exceed ten mills on each 1,000.00 dollar of valuation.

In further accord with the aforementioned constitutional powers of the Legislature to restrict and limit the power of a municipality to tax and to control the expenditures of tax revenues, the General Assembly has enacted legislation which specifically limits and restricts the use and expenditure of water and sewer revenues. Sec. 743.05 R. C., formerly §3959 GC, provides as follows:

“After payment of the expenses of conducting and managing the water works, any surplus of a municipal corporation may be applied to the repairs, enlargement, or extension of the works or of the reservoirs, the payment of the interest of any loan made for- their construction, or for the creation of a sinking fund for the liquidation of the debt. In those municipal corporations in which water works and sewerage systems are conducted as a single unit, under one operating management, a sum not to exceed ten per cent of the gross revenue of the water works for the preceding year may be taken from any surplus remaining after all of the preceding purposes have been cared for and may be used for the payment of the costs of maintenance, operation and repair of the sewerage system, and sewerage pumping, treatment, and disposal works for the enlargement or replacement thereof. Each year a surn equal to five per cent of the gross revenue of the preceding year shall be first retained from said surplus as a reserve for water works purposes.” “The amount authorized to be levied and assessed for water works purposes shall be applied by the legislative authority to the creation of the sinking fund for the payment of any indebtedness incurred for the construction and extension of water works and for no other purpose.”

Also §729.52 R. C., provides as follows:

“The funds received from the collection of sewer rentals under §729.49 R. C., shall be deposited weekly with the treasurer of the municipal corporation. Money so deposited shall be kept as a separate and distinct fund and shall be known as the sewer fund. When appropriated by the legislative authority of the municipal corporation, the fund shall be subject to the order of the director of public service of a city or of the board of trustees of public affairs of a village. The director or board shall sign all orders drawn on the treasurer of the municipal corporation against such fund, which fund shall be used for the payment of the costs of the management, maintenance, operation, and repair of the sewerage system and sewerage pumping treatment, and disposal works. Any surplus in such fund may be used for the enlargement or replacement of the system and works, for the payment of the interest on any debt incurred for the construction thereof, and for the creation of a sinking fund for the payment of such debt but shall not be used for the extension of a sewerage system to serve unsewered areas or for any other purpose.”

It has been repeatedly held by numerous cases that revenues derived from municipally owned and operated water works may not be transferred to the general fund of said municipality and be used to meet the general government expenses and municipal obligations.

Roodman v. Cleveland, 78 Oh Ap 401, 34 O. O. 140; Lakewood v. Rees, 132 Oh St 399, 8 O. O. 213; Hartwig Realty Co. v. City of Cleveland, 128 Oh St 583; Cincinnati v. Roettinger, 105 Oh St 145.

In the instant case the mere title of the ordinance on Section 2 of the same, designates the same as an excise tax but in reality it is an attempt by the Council of the City of Franklin to evade the constitutional and statutory limitations upon taxes.

It is apparent that this ordinance is an effort upon the part of the municipality to deliberately impose a tax to make up a deficiency in the general expense of the municipality which cannot be met within the limits of taxation otherwise provided and is an effort to evade the statutory and constitutional limitations on the subject. Cincinnati v. Roettinger, 105 Oh St 145.

If the legislature intended no restrictions — what would prevent the council this year to establish a 50% excise tax and the next year to make it 75% and the next year more?

If all such taxes may be levied, then'all municipal financial difficulties could be solved by the indefinite increase on said tax each year as suited the council of said city. Such an assumption would sanction the imposition of the burden of furnishing funds required for the administration of the affairs of a city upon the user of water and sewer bills.

Therefore Ordinance 1956-29 whether an excise tax, rental, rate or whatever title it may be given is in direct contravention of the laws of the State of Ohio.

Secs. 743.05 and 729.52 R. C.

The court now comes to the other part of said demurrer to-wit: “is in contravention of the provisions of the Constitution of the United States.”

The ordinance under consideration imposes the burden of furnishing to the general fund money in sufficient quantity to meet the expenses of the city and puts this burden on the user of water in direct proportion to such use.

Now does such an ordinance deny to the defendant the equal protection of the law?

Is there a reasonable relation between the difference in water used and this taxpayer’s responsibility to support the general fund of the city? It seems to appear to the court that the user and non-user has a decided advantage on burden.

X is an industrial plant with several hundred thousand invested, it furnishes its own water and therefore contributes nothing to the general fund which in turn is the fund out of which appropriations for the different departments are made to give this industry the protection that such an investment requires — fire, police, streets, etc. While Z is a poor home owner who perhaps even takes in washings, she therefore by-using city water contributes in tax to the General Fund and therefore Z pays a larger contribution to this tax than X because X is a non-user.

We can also take the example of many hqmes and additions where home owners are non-users, getting the benefit of a tax imposed upon users wherever the city uses fund money for their protection as in the case of X, while they contribute nothing.

Since the general fund of the city is liable for the payment of the operating expenses of the city; payment of salaries, maintenance and purchase of equipment et cetera, such expenditures made from the general fund go to the equal benefit of all the people. But X, a non-user, with all the many other and numerous non-users contributes as taxes, nothing to this fund. In the case of Yeagill v. State, 20 O. C. C., 646:

“Whenever a burden is placed on persons or a class of persons, or whenever a privilege or protection is given a person or to a class of persons, to the exclusion of others, it must be based upon some existing distinction or reason not applicable to persons not within its provisions.”

According to the Supreme Court: Whether there is a. real and substantial distinction in the classification attempted, or it is merely artificial, arbitrary or fictitious made for the purpose of avoiding consitutional requirements, 110J. 22nd, 15.

The court feels that this ordinance, without genuine reasons, imposes a burden upon the users of water from which it exempts another group, both of them occupying substantially the same relation toward the subject matter of the legislation and therefore discriminates and places a burden on one not imposed on- the other, and violates the Constitution.

The demurrer of the defendant is hereby sustained by the court on both counts and the defendant discharged; and the attorneys may so prepare an entry in compliance with this decision. “Noting exceptions to City of Franklin.”