author: By HUNSICKER, PJ.:

text:
    STATE, ex rel SHAKER SQUARE CO. and THE STOUFFER CORP., Plaintiff, v. GUION, Individually and as Bldg Comm, et., etc., Defendants, SOLOMON, Defendant and Cross-Petitioner.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 23238.
    Decided October 2, 1957.
    Baker, Hostetler & Patterson, McConnell, Blackmore, Cory, Burke & Kundtz, for plaintiff.
    William D. Guión; individ. and as Building Comm., and John Rohrich et al., individ. and as members of the Board of Zoning Appeals: Ralph S. Locher, Director of Law, Joseph H. Crowley, Chief Counsel, J. Arthur Began, Asst. Dir., of Law, and Daniel J. O’Laughlin, Asst. Dir., of Law, for defendants.
    Helen B. Solomon, Frank Solomon, Jr., for defendant and Cross-Petitioner.
    (HUNSICKER, PJ, DOYLE, J, of the Ninth District, and GRIFFITH, J, of the Seventh District, sitting by designation in the Eighth District.)
   OPINION

By HUNSICKER, PJ.:

This is an original action in mandamus.

The action seeks to compel the issuance of a permit to The Shaker Square Company, herein called “company,” authorizing the construction, use and operation of a parking lot on premises owned by the company. This parking lot is proposed to be used by The Stouffer Corporation, herein called “Stouffer,” in conjunction with the operation of the Stouffer restaurant located at Shaker Square in the city of Cleveland, Ohio.

The defendants are the members of the Board of Zoning Appeals of the city of Cleveland, the Building Commissioner of that city, and an intervening owner of land in the neighborhood and within the same use district as the proposed parking lot.

The company bought, on March 20, 1953, a vacant lot at the corner of Kemper Road and Cormere Avenue, Cleveland, Ohio. At the time of purchase, they knew it was zoned for one-family residence purposes.

Directly across Cormere Avenue, the company owns land in a district zoned for multifamily use. This land abuts a district zoned for general retail use, in which is located the Stouffer restaurant and other retail establishments. Some of the lands in the multifamily district, which lie immediately behind the Stouffer restaurant, are devoted to nonconforming uses conducted as a parking lot and two parking garages.

These uses existed prior to the adoption of the Cleveland zoning plan. The parking lot is used by Stouffer, and the garages by the residents of the multifamily dwellings, known as Moreland Apartments, although Stouffer also parks patron’s and employees’ cars in the garages.

Stouffer has an oral lease of this lot at the corner of Cormere Avenue and Kemper Road, and wishes to use it as additional parking space for the automobiles of its restaurant patrons.

Application was made to William D. Guión, the Building Commissioner of Cleveland, for a permit to construct, on the land-in question, a parking lot. This application was refused. An appeal was then taken to the Board of Zoning Appeals of the city of Cleveland. This board, on November 2, 1953, entered the following order with respect to the application for a parking lot permit:

“WHEREAS, Shaker Square Company, owner, and the Stouffer Corporation, lessee, appealed from the decision of the Commissioner of Buildings for permission for an eight-year permit to construct a private parking lot for 66 cars of appellant’s patrons on the 111' x 103' corner lot located in an A-Dwelling House District on the northwest corner of Cormere Avenue and Kemper Road not in conformity with the residence limitations of Section 5.1107 (981-6) (a) 1, but possible under the off-street parking provisions of Section 5.1119 (981-16 td]) of the Municipal Code.
“WHEREAS, this vacant corner lot fronts on the west side of Kemper Road and extends about 120 feet west on the north side of Cormere Avenue and has a 50-foot setback from Kemper Road and a 5-foot setback from Cormere Avenue.
“WHEREAS, after public notice and written notice mailed to 18 directly affected property owners, public hearings were held on October 19 and November 2, 1953.
“WHEREAS, after due consideration of the testimony submitted at the said hearing the Board finds that the permit should be conditionally granted for the following reasons:
“1. Local conditions and the need of the community justify the Board in making the exception requested.
“2. The granting of the permit will not be harmful to neighboring properties or to their occupants.
“3. The refusal of this permit would work an unreasonable hardship upon the owner with no corresponding gain to the community, now, therefore,
“BE IT RESOLVED, that the decision of the Commissioner of Buildings heretofore rendered in the within matter be and the same is hereby reversed and the permit appealed for is granted in accordance with the sketch submitted and with the requirements of Section 5.1119 (c) of the Municipal Code on condition that the lot be closed after 8:00 p. m. each night and all day Sunday.”

On November 9, 1953, the Board of Zoning Appeals granted a rehearing of its approval of the appeal lodged by the company and Stouffer. Thereafter, after a rehearing held on November 23, 1953, the Board of Zoning Appeals entered the following order with reference to this appeal:

“On motion by Mr. Kreinberg, seconded by Mr. Robrich, the previous favorable decision was reconsidered and reversed and the following resolution was adopted.
“WHEREAS, Shaker Square Company, owner, and the Stouffer Corporation lessee, appealed from the decision of the Commissioner of Buildings for permission for an eight-year permit to construct and use a parking lot for 66 cars of appellant’s patrons on the vacant parcel of land located in a A-One-Family District at the northwest corner of Cormere Avenue and Kemper Road not in conformity with the residence limitations of Section 5.1107 (a), but possible by special permit under the off-street parking provisions of Section 5.1119 (d), said parking lot to observe the setback building line of 50 feet on Kemper Road and 5 feet on Cormere Avenue as required by Sections 5.1154 (a) and (c) and 5.1153 (a) of the Municipal Code.
“WHEREAS, this vacant lot fronts about 140 feet on the west side of Kemper Road and extends west about 200 feet along the north side of Cormere Avenue, is 103 feet wide along the rear lot line and 207 feet long along the north lot line and is across Cormere Avenue from the parking lot of the appellant’s granted by the Board in Calendar No. 51-478.
“WHEREAS, after public notice and written notice mailed to 18 directly affected property owners, a public rehearing was held on November 23. 1953.
“WHEREAS, after due consideration of the testimony submitted at the hearing, the Board finds that the permit granted November 2, 1953, should be reconsidered and rescinded and should be refused for the following reason:
“The Board is without authority to grant the permit under Section 5.1119 (c) or under Section 5.1119 (d) of the Municipal Code, since the lot is not adjoining or across the street from a nonresidence district and the enterprise which creates the need for the added parking space is not in the same use district in which the lot is located.
“BE IT RESOLVED, that the decision of the Board of Zoning Appeals heretofore rendered in the within matter be and the same is hereby reconsidered and reversed and the permit appealed for is refused.”

After the Board of Zoning Appeals adopted the resolution of reconsideration denying the permit as above set out, the company and Stouffer as joint relators, filed this action in mandamus to compel the defendant city officials to issue the permit for the construction, use and operation of the parking lot in question.

The action sought herein is defined in §2731.01 R. C., as follows:

“Mandamus is a writ, issued in the name of the state to an inferior tribunal, a corporation, board, or person, commanding the performance of an act which the law specially enjoins as a duty resulting from an office, trust, or station.”

In State, ex rel. Butram, v. Industrial Comm., 124 Oh St 589, at p. 595, the court said:

“Mandamus can be invoked to compel an officer to exercise a discretion, but can never be invoked to direct the manner of its exercise.”

The writer of this opinion has questioned the propriety of this action in mandamus, but in the light of the recent Supreme Court pronouncement in the Gottfried case, post, an examination will be made of the problem as presented by counsel, even though the factual situations are not similar.

In the instant case we are not dealing with a void zoning ordinance which would leave the property without any control, but we are dealing with a zoning ordinance whose validity we believe cannot be seriously questioned in the respects that relators now seek to allege its invalidity.

The Supreme Court of Ohio, in the case of State, ex rel., Selected Properties, Inc., v. Gottfried et al, 163 Oh St 469, said:

“1. If a zoning ordinance of a municipality does not contain sufficient criteria or standards to guide the administrative officer or tribunal in the exercise of the discretion vested in it, such enactment is unconstitutional and invalid.
“2. A municipal zoning ordinance which provides merely that the use of property for a gasoline and oil filling station in a retail business district is allowed only in accordance with the provisions of a variance permit issued by the Board of Appeals is unconstitutional and void for want of standards or criteria for the guidance of such administrative tribunal and for the protection of citizens.”

And at page 475, the court further stated:

“Since the parties have agreed and stipulated that if the questioned section of the ordinance is invalid there is a clear mandatory duty to issue the requested permit and since the validity of an ordinance of their municipality is of public and general interest to the citizens of Parma, the controversy presents a typical situation for use of the remedy of a writ of mandamus, which, under the common law as restated by §2731.01 R. C., commands the performance of an act specifically enjoined by law as a duty resulting from an office, trust or station.”

The company and Stouffer say to this court that, since the Board of Zoning Appeals exercised its discretion and ordered the issuance of the permit and determined that the Building Commissioner was in error when he denied the parking lot permit, the later rescinding of the order for such permit, after a rehearing by the Board of Zoning Appeals, was a nullity.

Relators insist that the first order granting the parking lot permit is the only valid order with reference to the use of the lot in question herein; and that the reason stated in the reconsideration order is erroneous, inasmuch as there does exist, in the charter and zoning ordinances of the city of Cleveland, express authority to allow a use variance as to the lot in this case; and hence this court should grant the order of mandamus.

A master commissioner was appointed to take testimony, and, in addition to the testimony and the many exhibits offered by the parties, there were a number of stipulations, by the litigants, presented for our examination.

The evidence is in conflict as to the need for additional parking facilities at Shaker Square; however, as to the Stouffer restaurant, there was demonstrated a need for more parking space in the immediate vicinity. In addition, there is confusion and traffic tie-ups on Cormere Avenue opposite the present parking facility, which surely would .be eased if some way could be found to provide additional space.

We have herein, however, primarily only a legal question that poses the problem of authority, under the charter and zoning ordinance, to create a variance in behalf of the company and Stouffer with reference to the lot at the northwest corner of Cormere Avenue and Kemper Road.

The Board of Zoning Appeals has only such authority as is granted to it by the charter and the zoning ordinance. Section 76-6 (b) of the charter of the city of Cleveland provides that the Board of Zoning Appeals “shall * * * hear and decide appeals made for exceptions to and variations in the application of ordinances governing zoning * * * in conformity with the purpose and intent thereof * * *.”

The general charter provision for zoning does not enlarge the above-named power.

There is nothing in the size or location of the lot under question herein that makes it a peculiar or hardship situation. It is subject to development for a single-family dwelling, as zoned by the ordinance, not alone as to size, but it would, as thus developed, fit into the surrounding community, although such neighborhood is primarily a multifamily or apartment neighborhood.

We have heretofore stated generally that the question of invalidity' of the zoning ordinance herein, as it applies to provision for off-street parking, cannot be seriously questioned in this action. Stouffer has a nonconforming parking lot which was in existence before the zoning regulations were adopted. It also has an additional parking facility by reason of the action of the Board of Zoning Appeals. This facility is nonconforming only because this Board, in the proper exercise of its discretion, has granted a permit for such use. This exception arises from the very ordinance Stouffer now wishes to declare invalid. Suffice it to say that the zoning ordinance does make provision for off-street parking, and for permitted variances in certain use districts.

We turn now to an examination of the zoning ordinance, and especially to those sections which the company and Stouffer say grant express power to provide the parking facility sought in this case.

Sec. 5.1119 (c) and (d) of the Zoning Ordinance says:

“(c) Parking Lots. When in its opinion the best interests of the community will be served thereby, the Board of Zoning Appeals may permit temporarily or permanently the use of land in a Residence District other than a Limited One-Family District for a parking lot where the land abuts or is across the street from a District other than a Residence District * * *.”
“(d) Public Parking Lots and One-Story Garages. The Board of Zoning Appeals may, after public notice and hearing and subject to appropriate conditions and safeguards, permit the location of a public parking lot or one-story public garage in a Residence District provided the Board finds there is heed for such facility to serve the permitted uses in said District.”

In subsection (c) above, the use of land for a parking lot is restricted to land in a “Residence District * * * where the land abuts or is across the street from a district other than a Residence District * * *.” The term “Residence District,” under Sec. 5.1105 (a), includes a multifamily district.

The evidence herein is that the lot which the company and Stouffer wish to use as a parking lot is across from a multifamily use district, even though it presently is a nonconforming parking lot.

In subsection (d) above, the location of a public parking lot may be placed in a “Residence District provided the Board finds there is need for such facility to serve the permitted uses in said District.”

Thus, again there is a limitation of power, preventing the Board of Zoning Appeals from acting except where a residence district needs the additional parking facility. In this case, the use district which needs additional parking facilities is that occupied by Stouffer, a general retail use district.

Our examination of the pertinent sections of the zoning ordinance does not disclose any power by which the Board of Zoning Appeals could presently, by way of variance or otherwise, lawfully grant the requested change in the use of the lot at the northwest corner of Cormere Avenue and Kemper Road, even though such a change would be helpful to an already overloaded parking facility.

Coming now to the second amended answer of Helen B. Solomon to the petition as amended, and the specific requests for relief set out therein, this court believes that all matters which could properly be determined have been concluded by the matters discussed above.

The request for a perpetual injunction as prayed for by Helen B. Solomon is denied, and the additional requests, in her second amended answer to the petition as amended, for a declaration of uses, scope and substance of terms, and a declaration with respect to evidence, are each and all denied.

In the light of this opinion and the conclusions reached by this court, it is not necessary to pass on any of the several motions made by the parties during the course of the trial.

Counsel for the city of Cleveland shall prepare and submit a journal entry in accord with the rules of court, showing court costs assessed against relators, The Shaker Square Company and The Stouffer Corporation.

The writ of mandamus sought herein is denied.

DOYLE, J, GRIFFITH, J, concur.


source: Caselaw Access Project

author: By HORNBECK, J.

license: Public Domain

text:
    RIGGLE, Plaintiff-Appellant, v. RIGGLE, etc. et, Defendants-Appellees.
    Ohio Appeals, Tenth District, Franklin County.
    No. 5438.
    Decided May 6, 1957.
    John F. Seidel, Columbus, for plaintiff-appellant.
    Gale R. King, Columbus, for defendants-appellees.
    (HORNBECK, J, of the Second District, sitting by designation in the Tenth District.)
   OPINION

By HORNBECK, J.

This is an appeal on questions of law from a judgment against the plaintiff and in favor of defendant in the amount of $4,176.00, which sum was determined to be the arrearage in a support money order made in a divorce proceeding wherein the decree was granted to defendant, from December 20, 1939, to 1953, inclusive.

When we refer to the defendant, we at all times refer to Cleo Riggle, now Cleo Pike.

Three errors are assigned:

1. The overruling of plaintiff’s demurrer of date October 13, 1955.

2. Granting an injunction for cause that had ended for which there was no statutory enactment enabling a judge to act in this cause by way of injunction.

3. That the finding and judgment are against the weight of the evidence not supported thereby, and for other irregularities occurring at the trial and the abuse of discretion by which the plaintiff was prevented from having a fair trial.

Without comment, we hold against appellant on the second assignment of error.

Upon the third assignment of error, namely, that the judgment is against the manifest weight of the evidence, we find that this relates particularly to the amount of the judgment which is representative of the arrearage on the court order.

It was the claim of the defendant that the plaintiff had made no payments whatever referable to the court order requiring the plaintiff to pay the sum of $6.00 per week which was made originally on January 22, 1938, except those admitted by her.

Plaintiff contended that by an agreement with defendant subsequent to the support order and in lieu thereof, he was to provide clothing and necessaries for their child which, throughout the succeeding years, he did. He offered proof of articles purchased and some money advanced. Upon this issue of fact the trial judge held with the defendant. We can not say that he erred in so doing.

Further facts essential to an appreciation of the first assignment of error, viz., the overruling of the demurrer, are that the plaintiff sued defendant for divorce on July 20, 1937. On July 23, 1937, defendant answered and by cross-petition prayed for a decree of divorce. Plaintiff charged gross neglect of duty and defendant charged gross neglect of duty and extreme cruelty and also denied the allegations of the petition. The matter pended without further pleadings, although the parties were in court on other matters several times until May 23, 1939, when another answer and cross-petition was filed. On August 9, 1939, plaintiff withdrew his petition and on that date, a divorce was granted to the defendant and a separation agreement between the parties was incorporated in the decree.

The motion of defendant was for an order fixing and determining the arrearage for child support due from plaintiff to the defendant, Cleo Riggle Pike.

To the motion of defendant, plaintiff filed the following demurrer:

“Now comes the plaintiff, Malcolm Riggle, and demurs to any further proceedings herein for the reason that the proceedings in this cause were based upon a separation agreement, is a collusive agreement, and voids all proceedings had in this cause.”

This demurrer was filed August 12, 1952, overruled, and the entry journalizing the’ ruling was filed in 1955.

No doubt the purpose sought to be accomplished by this demurrer was to invalidate that part of the separation agreement relating to the support of the minor and the amount thereof.

The separation agreement recited the differences between the parties, the actions that had been brought on behalf of both of them, their desire to settle and adjust their differences which relate to the support of the minor, the amount of the former support order, and the modification thereof. Then, it specifically provided for plaintiff to pay defendant’s attorney a sum of money which was to be in full for all money payments delinquent under the original support order of $10.00 per week, in full of all claims against the plaintiff by the defendant; that he would continue to pay the sum of $6.00 per week for the support of the minor child until it was established that he was able to-pay $10.00, at which time he would pay that sum. Rights of visitation were provided for the father with the child although the custody was to be granted to the mother. The contract then provided:

“This agreement shall be in full of all rights of the parties, one against the other, and in-the event that either party dies, .his or her estate shall be administered as if the said deceased party had survived the surviving party.”

Then follows the paragraph upon which it is contended the divorce proceedings were collusive, that the decree should be set aside and that the support money order avoided.

“It is agreed between the parties that said Malcolm Riggle shall, upon the signing of this agreement, immediately withdraw his petition and make no defense against said Cleo Riggle’s cross-petition. If said Cleo Riggle shall not pursue her action within a month from the date of this agreement, said agreement shall act as an entry of dismissal of said case above stated and said Malcolm Riggle shall be free to file a petition asking for divorce, and further be free to pursue said petition to a divorce decree, provided always, that any decree affecting the parties shall incorporate therein, subject to the approval of the court, the terms and conditions of this agreement.”

The agreement further provided for separation and that the parties live apart.

It might be observed that the motion for a new trial which followed the hearing on the claim of defendant of the amount of arrearage sets forth no ground which questions the validity of the action of the court in overruling the demurrer.

The trial judge properly, we believe, treated the demurrer as an attack on the divorce decree and as the equivalent of a motion to vacate the divorce decree, and either invoking relief under the statute or upon the inherent power of the court. This action would have been necessary before the court could abrogate the support order. The separation agreement as such, might be a binding contract on the parties especially as to that part which provided for the amount of support money for the child, but there was no place for it in the divorce proceedings unless and until a decree was properly granted to the defendant.

The trial judge, in a written opinion, in passing on the demurrer, held that that part of the agreement which we have quoted was collusive; cites and discusses the late case of Jelm v. Jelm, 155 Oh St 226; and then holds that the legal maxim that, “When one of two innocent parties must suffer, the one who made it possible shall suffer and that the plaintiff is chargeable with laches,” held that the demurrer should be overruled. He also called attention to the fact that since the divorce decree, both the plaintiff and the defendant had remarried.

Plaintiff cites and relies upon Stoutenburg v. Lybrand, 13 Oh St 228. In that case, the promissory note upon which suit was instituted by one who claimed to be an innocent purchaser for value before due, and to which a demurrer was sustained, the court held that the note given in connection with a divorce decree secured by collusion of which the holder had knowledge, was given without any consideration whatever. Further, that the plaintiff was not an innocent purchaser; that he had full knowledge of the want of consideration for the note and that it was not transferred to the plaintiff before maturity.

This case was decided on a judgment entered in the trial court after the sustaining of a demurrer to the answer of defendant to a suit on the note. The first paragraph of the syllabus must be read in the light of the answer in which defendant denied any agreement on his part to the collusion.

The case was decided in 1861 and the first syllabus has never been since cited nor allusion made to it by the Supreme Court.

If there were no other reasons to support the judgment here under review, the first paragraph of the syllabus of the Stoutenburg case would cast some doubt upon the order, if it be conceded, as the trial judge did, that the separation agreement was collusive.

In a note in 2 A. L. R. 708, it is said that:

“According to the weight of authority, agreements relating to alimony or the adjustment of property rights, which do not directly induce the procurement of a divorce, do not constitute such collusion as will bar a decree. Although such agreements may contemplate the pos sibility of a divorce, and depend for effectiveness on its being obtained, they will not bar a decree, provided they are made in good faith, with no undue influence or imposition by one party on the other, and are fair and equitable. In other words, there seems to be no presumption that a contract for the settlement of property rights, made in contemplation of a possible divorce, is necessarily collusive, but the court will look to all the facts and circumstances of the case to determine whether the contract has that effect in each particular case.”

Cases from eight states are cited to support the text.

In this case, the part of the agreement which is sought to be avoided is that which required the father to pay support money for his child. This was an obligation that the law imposed upon him. The amount which he agreed to pay was modest in the extreme. In all probability, had he met the full obligation to provide necessaries for his child the sum expended would have been far in excess of that which he agreed to pay. Had a stranger provided such necessaries, he could have recovered from plaintiff the amount so advanced. How, then, can it be urged that this part of the agreement afforded a consideration for the collusive terms of the separation agreement?

There is no doubt that a court should and would deny a decree to a party to a divorce action if collusion appeared before adjudication. This is but a matter of sound public policy. However, public policy should also enter a case where circumstances which have developed long since the granting of the decree, clearly indicate that it would be against such poiicy to declare the decree void. Here, for instance, if such action were taken, both parties and three spouses, who are innocent, would be branded as bigamists. The father, who is equally chargeable with the mother in the collusion, if any, would be permitted to benefit by reason of his own fraudulent practice. Thus, disregarding the maxim of equity that he who seeks equity must do equity and that he must come into court with clean hands, all that he would accomplish would be to compel the defendant to resort to another action on the separation agreement.

We do not cite nor discuss many of the cases cited by the parties because most of them are from states other than Ohio where there is divergence in adjudication, whether a divorce decree secured by collusion is void or voidable. There is very little case law in Ohio on the question. We are in accord with the epitome of the annotator of the cited adjudications from fifteen states in 109 A. L. R. 849-b:

“Generally, in the absence of considerations of equity, or public policy, a divorce decree will not be vacated at the instance of either party guilty of collusion.”

In Singer v. Singer, 41 Barb. (N. Y.) 139, in refusing to set aside a decree of divorce collusively obtained, the court said:

“If the motion was properly made, and in due season, the court would order any judgment of divorce obtained by collusion or fraud to be set aside; not from any regard to the parties concerned, but from motive of public policy. In such case, it should be made apparent that the party so moving was acting from good motives, and not for any expected personal advantage. But where the judgment of divorce has been acquiesced in for the period of several years, and the plaintiff has again been married, some better reason than the mere gratification of a personal feeling, or the desire to obtain a further sum of money from the plaintiff, should be made clearly to appear before the court would be warranted in granting such an application. As I have already said, the ground on which such an order could be made would be one of public policy, but no such reason should suffice where, after the acquiescence of both the parties and the judgment for three years, an innocent person has become involved by marriage, and the opening of the judgment would involve her in distress, and perhaps disgrace.”

During all the years this case has pended and in the various proceedings which have transpired, the plaintiff has not until this very last motion even suggested the invalidity of the decree because of collusion. The Jelm case, supra, which overruled Parish v. Parish, 9 Oh St 534, and had the effect of overruling the holdings in many other cases in other courts must be read in the light of the facts there developed. The adjudication there is but a holding that, either under statute or upon the inherent power of the court, the Common Pleas Court has a right to vacate its own decree of divorce, after the term at which it was rendered, for fraud practiced by the successful party in obtaining the judgment. This case is not authority to the effect that the court is required to vacate a decree of divorce, either under the statute or upon its inherent power where collusion appears, without respect to circumstances and that the court has no discretion in the matter.

We have thus far discussed this case upon the assumption that the separation agreement is collusive, as held by the trial court and assumed by counsel on this appeal. But there are two other valid reasons, in our opinion, either of which would preclude this court from reversing the order to which the appeal is directed.

The first is that the appeal in this case from the judgment on the demurrer sought to be reviewed is not timely.

The demurrer must be considered as invoking the action of the trial judge to vacate the divorce decree either under the statute or by its inherent power. The court refused to grant that relief by overruling the demurrer, of date October 13, 1955. The notice of appeal was filed on January 6, 1956. The refusal to vacate the decree was a final order. Cox v. Cox, 104 Oh St 611, which is reviewable. The notice of appeal was not filed within the statutory period.

The second reason supporting the order appealed from is that the separation agreement having been made a part of the formal decree in the divorce action between the parties, the question of the collusive character was passed upon and determined by Judge King. Manifestly, he had before him all that was before the judge on the demurrer in this case and probably more. By his act in ordering the separation agreement to be made a part of the decree, he adjudicated the question of its collusive effect. Even if he were incorrect in this conclusion, it was a binding judgment which has not heretofore been challenged and certainly cannot be adjudicated in this proceeding.

However, the more probable reason supporting the action of Judge King is, that upon the development at the trial of the divorce case, he was satisfied that the language of the separation agreement which upon its face seems collusive, did not in fact so operate. It,is common knowledge that divorces are not granted without a development of the facts nor without proof justifying a decree to the aggrieved party, §3105.11 R. C. In any event, the effect of the separation agreement was adjudicated and by formal order it was made a part of the decree.

Judge Williams, in the opinion in Tucker v. Tucker, 143 Oh St 660, after setting out certain statutory safeguards to prevent collusion in divorce cases, says:

“One of the aims of those protective enactments is the prevention of collusion between the parties. The court will always scan waiver of process, entry of appearance, withdrawal of answer, consent to a trial without contest and like steps in determining whether in the light of all the circumstances collusion exists between the parties and will dismiss the action when collusive conduct is shown; * *

The judgment will be affirmed.

PETREE, PJ, BRYANT, J, concur.


author: Per CURIAM.

text:
    AMERICAN RADIATOR & STANDARD SANITARY CORPORATION, Appellant, v. TITAN VALVE & MANUFACTURING COMPANY, Appellee.
    United States Court of Appeals, Sixth Circuit.
    No. 13043.
    Decided June 10, 1957.
    Victor DeMarco, Cleveland, George H. Rudolph, Jones, Day, Cockley & Reavis, Cleveland, on the brief, for appellant.
    Morris Berick, Cleveland, Joseph P. Lombardo, Halle, Haber, Berick & McNulty, Cleveland, on the brief, for appellee.
    Before SIMONS, Chief Judge, and ALLEN and MILLER, Circuit Judges.
   OPINION

Per CURIAM.

This appeal arises out of an action for indemnity brought by plaintiff-appellant, American Radiator & Standard Sanitary Corporation, hereinafter called American, against defendant-appellee, The Titan Valve & Manufacturing Company, hereinafter called Titan.

American, a manufacturer of radiators and heating apparatus, had sold one of its hot-water heaters to Raymond P. Fix, and had installed it in Fix’s home in Rock Rapids, Iowa. As Fix was endeavoring to light the pilot light on the heater an explosion occurred and Fix was seriously injured. He recovered judgment against American in an action filed in the District Court of South Dakota, which was reversed in the Court of Appeals for the Eighth Circuit, 200 F. (2d), 529. On retrial the jury reached the same verdict as on the first trial, namely, $30,000 in favor of Fix, the plaintiff, and no appeal was taken from the second judgment.

The thermal unit in Fix’s heater had been manufactured by Titan at its factory in Cleveland, Ohio, and delivered to American at its plant in Buffalo, N. Y., where it was incorporated by American into its heater. American paid the judgment and later sued Titan for the amount of the judgment, attorneys’ fees and other expenses, claiming that Titan’s negligence caused the injury. The parties waived jury trial and the case was tried to the court.

American asserts that it is entitled to recover under an implied warranty of fitness established in §1315.16(A) R. C., which provides:

- “When the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, and it appears that the buyer relies on the seller’s skill or judgment, whether he is the grower or manufacturer or not, there is an implied warranty that the goods shall be reasonably fit for such purpose.”

American also relies on the Restatement of the Law of Torts, the Restatement of the Law of Restitution, page 407, Section 93(1), which provides:

“Where a person has supplied to another a chattel which because of the supplier’s negligence or other fault is dangerously defective for the use for which it is supplied and both have become liable in tort to a third person injured by such use, the supplier is under a duty to indemnify the other for expenditures properly made in discharge of the claim of the third person, if the other used or disposed of the chattel in reliance upon the supplier’s care and if, as between the two, such reliance was justiable.”

The District Court found that American did not rely on Titan’s skill or judgment, that it would not have been justified in relying on Titan’s skill or judgment, that American was negligent in not detecting the defect in the pilot valve and entered judgment for defendant, dismissing the complaint.

The principal ground for the court’s decision on the question of American’s reliance on Titan’s skill or judgment was that American, which over a long period had purchased thermal units from Titan for its heaters, after receiving the units from Titan, without exception checked them in an elaborate series of tests. All damaged cartons received from Titan were immediately checked. Spot checks were made of all other thermal units and every thermal unit incorporated in a heater was subjected to an extended functional test devised to determine whether the heater operated properly. The supervisory employees of American testified that no heater was sent out without being subjected to this functional test. American’s witnesses testified that the purpose of the functional test was to determine, among other things, whether the pilot valve would function and would automatically shut off the flow of gas to the burners when the pilot light was out. In the course of these tests many defective units wm'j ciRKo/v-reu and at once rejected and Titan accepted such rejection without question.

The particular thermal unit which caused the injury to Fix was tested ty Professor Lee J. Amidon of South Dakota State College, an expert for American, who concluded that the defect which caused the explosion was due to faulty adjustment. This test was made without unsealing the paivs. Later, after disassembling the parts, Amidon determined that the íaulty, adjustment which prevented the safety valve from stopping the flow of gas to the main burner when the pilot was off, was due to improper calibration. The actual defect in calibration could not be ascertained by visual inspection of the unit. For that purpose the sealed portion of the thermostat of the safety valve had to be opened and the parts examined. However, if a safety pilot is improperly adjusted so that gas can flow to the burners when the pilot light is out, that fact is easily discovered by simple tests. This was in substance the testimony of American’s witnesses and was the specific conclusion of the Eighth Circuit Court of Appeals. American Radiator & Standard Sanitary Corporation v. Fix, supra, 200 F. (2d), 536. The fact that the safety pilot was improperly adjusted was also discoverable by American’s functional test. As American’s chief inspector testified, “We designed the test on our tank to make sure that our unit was an operating unit.” He said that the valve “functioned in that we tested it for its ability to shut off itself, that no gas would flow through it when it was not supposed to. * * *”

While American employed printed tags which it attached to its heaters bearing the statement that the safety pilot was properly calibrated at the factory, the court considered it a fair inference that American made this statement in reliance upon its own and not upon Titan’s tests.

The jury in the South Dakota case, in answer to special interrogatories, found that the safety valve which caused the injury was defective at the time it reached American’s factory at Buffalo, N. Y. It also found that the same defect existed at the time the safety valve left American’s factory. These special findings were incorporated in and made a part of the second judgment entered by the District Court of South Dakota, from which no appeal was taken.

American contends that since its overall test of the heater is functional and since this test does not open the sealed unit of the safety valve, it could not have discovered improper calibration and thus could not have located the particular defect in the safety pilot involved. However, Amidon testified in substance that a test similar to the one he made, by connecting the gas, turning it on, lighting it, heating it, letting it cool off, and turning the gas on again, would have revealed that the gas continued to flow, that this unit was not functioning, that the safety valve was not serving the purpose for which it was intended and in that condition was not fit for the intended purpose. By thus making a simple test which did not involve the opening of the sealed unit, Amidon determined that the unit did not function properly and was not properly adjusted.

In view of the fact that American regularly and systematically inspected Titan’s valves and rejected them in large numbers, we conclude that the findings of the District Court are not clearly erroneous. It is a reasonable inference from the record, based upon substantial evidence, that American in assemblying its heater failed to rely upon Titan’s skill or judgment, but relied upon its own tests. It is also a reasonable inference, as found by the District Court, that American could not justifiably rely upon Titan’s skill, for, as shown by American’s long experience with the large number of units that continually had to be rejected, Titan’s skill could not be counted upon. Thus no implied warranty arose under §1315-18 R. C., and the Restatement of the Law of Restitution, Section 93, gives no assistance to American.

It is to be borne in mind that both parties were skilled manufacturers, with an equal opportunity to inspect the pilot valve. Because American was repeatedly installing the safety pilot in one of its heaters for the market, it owed its customers the duty of reasonable care in determining whether the pilot installed was workable and suitable. Its failure to make the simple test which would have discovered the defect in the safety pilot involved constituted negligence even though it had no original obligation with reference thereto. Verplanck v. Morgan, Oh Ap, 90 N. E. (2d), 872; Gaynier v. Ohio Fuel Gas Company. 101 Oh Ap 324, 1 O. O. 277, 139 N. E. (2d), 624; Erie Railroad Company v. Stewart, 6 Cir., 40 F. (2d), 855; Indian Towing Company v. United States, 350 U. S., 61, 76 S. Ct., 122, 100 L. Ed., 48.

The additional contention that American’s tests might not have discovered the defect because Amidon tested the pilot in a room with 70° to 80° temperature and American’s factory tests were conducted in a room with 65° temperature has no merit. American’s chief inspector testified that if the safety valve was not properly calibrated he “assumed at that time that it would not” have passed American’s operational test. He admitted that if the safety valve had reached American’s plant calibrated exactly as found by Amidon, it would not have passed the operational test. It is mere surmise that the slight change in temperature of 5° to 15° would have caused a valve calibrated, as Amidon testified, “for general use,” to permit the flow of gas at the point at which the automatic valve should shut it off. It was shown that room temperature was only “the rock bottom for safety” in such a test and that a safe testing temperature for this particular mechanism would be several hundred degrees above room temperature.

In the South Dakota case the jury found in a specific finding incorporated in a judgment not appealed by American and hence conclusive against American (Massachusetts Bonding and Insurance Company v. Dingle-Clark Company, 142 Oh St 346, 347, 27 O. O. 285, 52 N. E. [2d], 340), that the safety valve was defective at the time it left American’s factory. The District Court found that the improper calibration of the safety valve was due to Titan’s negligence. It also found that American’s failure to discover the improper calibration constituted active -negligence on the part of American. As both American and Titan were guilty of active negligence, indemnity must be denied. Union Stock Yards Company of Omaha v. Chicago, Burlington & Quincy R. Company, 196 U. S., 217, 25 S.

Ct., 226, 49 L. Ed., 453; Hartford Accident & Indemnity Company v. Gulf Refining Company, 5 Cir., 230 F. (2d), 346, certiorari denied Gulf Refining Co. V. Black Warrior Towing Co., 352 U. S., 832, 77 S. Ct., 49, 1 L. Ed. (2d), 52.

The judgment of the District Court is affirmed.

ON DENIAL OF REHEARING.

The principal point urged by appellant in its petition for rehearing is that the opinion incorrectly stated that appellant relied in this case upon the Restatement of the Law of Torts, The Restatement of the Law of Restitution, page 405, Section 93(1).

This contention is shown by appellant’s pleadings to be incorrect. While the complaint does not quote the Restatement verbatim, the gist of it is set forth in paragraphs 4 and 5 of the complaint. The use of the words “dangerously defective” in paragraph 5 demonstrates reliance upon the Restatement and the facts set forth in the complaint in effect allege “justifiable” reliance.

The petition for rehearing is denied.


author: By HUNSICKER, J.

text:
    FISCHBACH, Appellant, v. OHIO STATE RACING COMMISSION, Appellee.
    Ohio Appeals, Ninth District, Summit County.
    No. 4560.
    Decided November 30, 1955.
    Hershey, Hatch, Browne, Wilson & Cook, for appellant.
    C. William O’Neill, Atty. Geni., William A. Carroll, Atty Geni., for appellee.
   OPINION

By HUNSICKER, J.

This is an appeal on questions of law from a judgment of the Common Pleas Court of Summit County, Ohio, affirming an order of the Ohio State Racing Commission.

C. B. Fischbach, the appellant, an owner, breeder and licensee of racing horses, was on July 10, 1954, fined $200; and the order further said “the entries of any of his horses will not be accepted for the remainder of the Thistledown meeting.” This action was taken by the stewards of the Thistledown race track.

A hearing was thereafter held by the Ohio State Racing Commission, wherein the citation and notice of hearing set out that Mr. Fischbach “was fined $200 and the entries of any of his horses will not be accepted for the remainder of the Thistledown meeting. This action was taken because Mr. Fischbach created a disturbance, and questioned the accuracy of the photo finish camera; third race, Thursday, July 8, 1954.”

The racing rules which Mr. Fischbach was accused of violating read as follows:

Rule 54:

“If any licensed person uses improper language to the racing officials or threatens such officials, or if any person uses profane or in-decedent language, carries or exhibits a deadly weapon, or otherwise disturbs the peace of any race track enclosure, he may be ejected, fined, suspended or ruled off.”

Rule 84:

“The Stewards shall have the power to fine not in excess of two hundred and fifty ($250.00) dollars, suspend, rule off or expel at their discretion any person for disorderly conduct or breach of the peace, or for violations of the Rules of Racing or any regulations they may establish not inconsistent with the Rules of Racing. Any such regulations adopted by the Stewards shall be reported promptly in writing to the Commission, and shall remain in effect unless and until the Commission shall otherwise order.”

A cursory examination of these rules discloses no authority for assessing a fine or imposing a restriction upon entry of horses because a licensee or other person questions the accuracy of the photo finish camera. We are consequently relegated to an examination of this record to determine whether there is any evidence that Mr. Fischbach created a disturbance within the meaning of the rules above set out.

There was nothing in the rules which said that creating a disturbance was an offense punishable by fine and suspension, but the rule 54 did say that one who “otherwise disturbs the peace of any race track enclosure” could be fined; and rule 84 said that one could be fined “for disorderly conduct or breach of the peace.” Although there is only a slight similarity between the charge as made by the racing officials and the rules under which they were required to operate, and the judgment could be reversed for the reason that there was no authority in law for conviction based upon a charge that was not an offense within the rules, yet we will discuss the charge of “creating a disturbance” as though it were meant to be (1) “or otherwise disturbs the peace of any race track enclosure” under rule 54, and (2) “disorderly conduct” under rule 84.

Mr. Fischbach, from the place where he was sitting near the finish line, thought his horse had won the third race. A photograph of the finish was several minutes being posted, and others, including a track usher, believing the Fischbach horse had won the race, escorted Mrs. Fischbach and the Fischbach trainer to the winners’ circle. Then it was announced that another horse was the winner. Many persons came to Mr. Fischbach and commented on the race. There is not one iota of testimony to show that Mr. Fischbach instigated, encouraged or continued whatever conduct those about him engaged in. There is a statement by Mr. Fischbach, elicited on cross-examination, that he agreed with those about him that his horse had won the race, but there is not one word of testimony by Mr. Fischbach, or by anyone else, that he audibly expressed to those then about him his disagreement with the outcome of the race.

Thereafter, Mr. Fischbach, with his trainer, a Mr. Green, went to the office of the general manager of the Thistledown race track. At that office, and at that time, Mr. Fischbach did in a loud voice (heard only by Mr. Green, his trainer, Mr. Pondfield, the general manager, and Miss Stecki, the stenographer in Mr. Pondfield’s office) complain about the race.

According to Mr. Pondfield, the following occurred:

“A. Mr. Fischbach stuck his head in the door of my office, and I said, ‘Come in, C. B.’
“He said, ‘No, I will wait till you get done.’
“He was with Green at the time, incidentally.
“I said, ‘That is all right. You come on in,’ because my office is always open to Mr. Fischbach; always has been. He came in, and the first words were ‘What the hell kind of a place are you running here?’
“I said, ‘C. B., what do you mean? What are you trying to tell me?’
“He went on a lengthy tirade; when the horses passed him, his horse was — mentioned by inches, so much in front, and he knows the picture was dummied, or something happened. He was deprived of the race. I tried to cool him down; tell him things like that can’t happen. He said something about the picture was taken before or after the finish line. I went on trying further to cool him down and tell him it is absolutely impossible to take a picture before or after the finish line. We use a slit camera, vertiele aperture. It is fixed. You don’t move it. You don’t follow the horses to take it as they reach the finish line. It would be physically impossible to do anything like that. I tried to reason with him: tried to talk with him.
“In answer to something, he said, ‘You keep on doing that and they are going to close up your damn place.’
“I further reasoned with him, and finally ran out of patience. I said, ‘You mean to tell me, C. B., you are accusing our officials, our placing judges, the camera, me, my organization, of trying to deprive you of a race?’
“He said, ‘I don’t give a damn what you think it is. I will never race another horse here,’ and walked out. The next morning I wrote the letter.”

It is upon a statement similar to the oral testimony of Mr. Pond-field’s, set out in a letter to the racing stewards, that they charged Mr. Fischbach with the offense of creating a disturbance and questioning the accuracy of the photo finish camera. (Neither of which charges constitutes an offense within the rules of the Ohio State Racing Commission.)

What, then, is “creating a disturbance,” as we liberally interpret these rules? Was Mr. Fischbach’s conduct even remotely related to such conduct as “disturbs the peace of any race track enclosure” or to “disorderly conduct”?

The rules set out above, under which the action herein against Fischbach was taken, do not define the offense of disturbing the peace, and there are very few reported cases in Ohio which treat of the subject before us. There is, of course, a relationship between the offense charged herein and breach of the peace and disorderly conduct.

In the case of City of Cleveland v. Thomas Lavelle, et al., decided in the Police Court of Cleveland, 3 O. L. R. 648, that trial court determined that there can be no disorderly conduct in a person following another person and calling him names when such names were not used in a public place. The trial judge in that case stated, at p. 6-50, that, “in order to constitute disorderly conduct, the offense must be to ‘disturb the peace and quiet of the municipality.’ That does not mean the entire city, because that would be beyond reason; it must be more than to disturb the peace and quiet of one or a few persons — it must be a neighborhood.”

In the case of In re Carroll, 12 W. L. B. 9, a Common Pleas Court in Franklin County said, at page 11:

“The words ‘breach of the peace’ may be regarded in two senses. Open, active outbreak and violence in the commission of some unlawful act would be the one sense, and the thief who stealthily enters one’s house and commits a quiet larceny illustrates the other sense.”

I Restatement of the Law of Torts, Sec. 116, says:

“A breach of the peace is a public offense done by violence or one causing or likely to cause an immediate disturbance of public order.”

In People v. Most, 171 N. Y. 423, at page 429, that court defined breach of the peace as “an offense well known to the common law. It is a disturbance of public order by an act of violence, or by any act likely to produce violence, or which, by causing consternation and alarm, disturbs the peace and quiet of the community.” See also: People v. Phillips, 284 N. Y. 235, 30 N. E. 2d 488.

In Town of Ponchatoula v. Bates, 173 La. 824, 138 Sou. 851, the court said:

“* * * A disturbance of the peace may be created by any act or conduct of a person which molests the inhabitants in the enjoyment of that peace and quiet to which they are entitled, or which throws into confusion things settled, or which causes excitement, unrest, disquietude, or fear among persons of ordinary, normal temperament.”

In City of Fort Scott v. Arbuckle, 164 Kans. 49, 187 P. 2nd 348, the court said, at page 358:

“* * * what constitutes a disturbance of the peace and quiet of a neighborhood or what constitutes rude behavior or disorderly conduct or boisterous talking so as to constitute a disturbance of the peace depends on the person uttering the language, the person to whom uttered, and all the surrounding facts and circumstances.”

In legal textbooks there is no classification known as “disturbing the peace,” but reference is always made to “breach of the peace.” According to Sec. 1 of Breach of the Peace in 11 C. J. S., the term is generic, “and includes all violations of the public peace or order, or decorum; in other words, it signifies the offense of disturbing the public peace or tranquillity enjoyed by the citizens of a community; a disturbance of the public tranquillity by any act or conduct inciting to violence or tending to provoke or excite others to break the peace; a disturbance of public order by an act of violence, or by any act likely to produce violence, or which, by causing consternation and alarm, disturbs the peace and quiet of the community. The word ‘peace,’ as used in this connection, means the tranquillity enjoyed by the citizens of a municipality or a community where good order reigns among its members.”

The same text, in Sec. 3, says that, in the absence of threats or incitement to violence, abusive and insulting language does not constitute a breach of the peace, unless the statute so provides. In the instant case, the rules did not define the offense characterized in those rules as “disturbs the peace.” See also: 8 Am. Jur., Breach of Peace, Secs. 6 and 8.

When we consider the testimony in the instant action, with the universal rules with respect to breach of the peace, or, as the rule herein set out, “disturbs the peace,” we find that there is no reliable, probative and substantial evidence to justify a finding such as was imposed on Mr. Fischbach in this case.

The judgment herein is reversed; and this court, finding that there was no authority in law or under the evidence to impose the penalty herein, renders final judgment for the appellant, C. B. Fischbach.

Judgment reversed, and final judgment for the appellant.

STEVENS, PJ, DOYLE, J, concur.


author: By QUATMAN, PJ.

text:
    TEEGARDEN, Plaintiff-Appellant, v. FOLEY et, Defendants-Appellees.
    Ohio Appeals, Second District, Franklin County.
    No. 5378.
    Decided July 27, 1956.

      Hamilton & Kramer, Power, Griffith & Jones, John Robert Jones, of Counsel, Columbus, for plaintiff-appellant.
    C. William O’Neill, Atty. Geni., Hugh A. Sherer, Chief Counsel, Thomas R. Lloyd, Special Counsel, Columbus, for defendants-appellees.
    Howard M. Metzenbaum, K. M. Costello, Cleveland, David dayman, Shocknessy, Summers & Miss Florence Denton, James M. Hengst, Paul R. Gingher, Columbus, Amici Curiae.
    (QUATMAN, PJ, MIDDLETON and YOUNGER, JJ, of the Third District, sitting by designation in the Second District.)
   OPINION

By QUATMAN, PJ.

This matter originated with the filing of a petition in the Common Pleas Court of Franklin County, Ohio, in which a declaratory judgment was sought concerning a certain portion of §1317.08 R. C., formerly §6346-22 GC, and for injunctive relief. The petition names the members of the Motor Vehicle Dealers’ and Salesmen’s Licensing Board, the Director of the Department of Highways, and the Attorney General, all of Ohio as parties defendant.

This action was commenced at a time when Ohio was still operating under the provisions of the former General Code. There is not here involved, any controversy by reason of the change of section numbers or substantive matters brought about by adoption of the present Revised Code.

The section in question is contained in Chapter 1317 R, C., entitled, the Retail Installment Act, and sometimes referred to as the “Metzen-baum Act” in honor of its legislative sponsor. More particularly, plaintiff seeks to have declared unconstitutional the third paragraph of §1317.08 R. C., which provides:

“No person shall enter into any agreement with any retail seller regarding the purchase, assignment, or transfer of any retail installment contract whereby the retail seller shall receive or retain, directly or indirectly, any benefit from or part of any amount collected or received, or to be collected or received, from any retail buyer as a finance charge or as the cost of insurance or other benefits to the retail buyer, in excess of two per cent of the principal balance of the retail installment contract. No person shall, directly or indirectly, pay to the retail seller, and no retail seller shall, directly or indirectly, receive or retain any part of the amount collected, or to be collected, as a finance charge or retail buyer’s cost of insurance or other benefits on any retail installment contract purchased, assigned, or transferred from him, in excess of two per cent of the principal balance of the retail installment contract, provided this paragraph does not apply in case of a bona fide sale of a retail installment contract, if, as part of the consideration for such sale and purchase, the retail seller agrees to act, and does act. as agent for the purchaser in making collection of all amounts due on and otherwise completely servicing said retail installment contract, including billing, posting, and maintaining complete records applicable thereto.”

A demurrer, consisting of four parts, was filed to this petition, setting forth, (1) that the court lacked jurisdiction; (2) that there was a misjoinder of parties defendant; (3) that there was a defect in parties defendant; and, (4) that the petition failed to set forth sufficient facts to constitute a cause of action. The demurrer was overruled, as well as a subsequent motion to reconsider.

The defendants then filed their answer, consisting of two parts. First, they reassert the matters raised by their demurrer, and, secondly, allege certain facts tending to controvert the allegations of plaintiff’s petition.

The plaintiff thereupon filed a motion for judgment on the pleadings. The motion was overruled, but the court elected to treat the allegations of defendants’ second defense as allegations of fact and, for purposes of ruling on the motion for judgment on the pleadings, treated these facts as being admitted, and found in favor of the defendants.

Thereafter, the plaintiff filed a reply controverting the allegations of the second defense, to which the defendants filed a demurrer. The demurrer having been overruled, the matter came on for hearing and the court, having heard all the evidence and examined the exhibits, rendered judgment in favor of the defendants.

It is from this judgment that appeal is taken to this court, sitting by assignment from the Third District of Ohio, on questions of law and fact.

Having regard first to the question of the jurisdiction of the court to entertain the petition, we quote §2721.03 R. C.:

“Any person interested under a deed, will, written contract, or other writing constituting a contract, or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise, may have determined any question of construction or validity arising under such instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder.”

This section seems sufficiently clear and unambiguous as to define and assure the plaintiff in the instant case of his right to a declaratory judgment under the allegations of the petition.

In Olds v. Klotz, 131 Oh St 447, the Supreme Court determined that injunction will lie against the enforcement of an unconstitutional law in order to prevent an irreparable injury to a petitioner’s business equity.

Defendants assert that there is a misjoinder and defect in the parties defendant. While there might be considerable question as to the interest of the Director of Highways or the necessity of including the Attorney General as parties defendant, we are of the opinion that their inclusion is not prejudicial. Sec. 2721.12 R. C., specifically provides that in any action for a declaratory judgment in which a statute is alleged to be unconstitutional, the Attorney General shall be served with copies of the pleadings and shall be entitled to be heard. This would appear to at least make him an interested party.

It is further contended that the defendants-appellees as Dealers’ and Salesmen’s Licensing Board are not proper parties because, one, they have no jurisdiction or control over the enforcement of the statute under consideration; and, secondly, the statute provides its own penalty and therefore the Board would be without authority to further penalize through revocation or suspension of license.

The Dealers’ and Salesmen’s Licensing Board is granted the following authority under §4517.12 R. C.:

“The board may suspend or revoke any license if the licensee has in any manner violated the rules and regulations issued pursuant to §§4517.01 to 4517.18, inclusive, R. C., or has violated §4501.02 R. C., or has violated any law relating to the selling, taxing, licensing or regulation of sales of motor vehicles.”

While Chapter 1317 R. C. (supra), nowhere specifically mentions the sale of automobiles, or any other specific chattel, as being intended to be regulated by its provisions, it requires no difficult process of reasoning to conclude that the sale of all goods and chattels sold on an installment plan are governed and in effect regulated by its provisions.

It is well recognized, and the evidence in the instant case substantiates the fact, that the great majority of all automobile retail sales are made on an installment basis. This fact is further emphasized by the frequent reference to installment sales, in Chapter 4517, R. C., supra. The ability of the retail seller of an automobile to successfully dispose of the time payment note he is required to accept is of prime importance to both the seller and the buyer. The balance of the provisions of Chapter 1317, R. C., supra, is also highly regulatory of the retail seller and substantially affects the retail automobile industry. The writer is therefore of the opinion that the violation of any of the provisions of Chapter 1317 R. C., supra, by a retail automobile dealer might very well subject him to a suspension or revocation of his license by the defendant Board, in addition to the penalties provided in the act. The writer is further not impressed with the argument that the Board would be without jurisdiction to so act for the reason that the statute under consideration carries its own penalty. If we were to carry this line of reasoning to its logical conclusion we would arrive at a point where any professional man or other licensee could violate any penal statute at random without fear of suspension or revocation of his license by a board or court as may be provided in such instances by statute. The fact giving rise to suspension or revocation of a license is invariably based on the violation of some penal statute, ordinance or regulation.

It is the contention of the plaintiff that the statute in question, or at least the third paragraph thereof, is unconstitutional for the reason it purports to restrict the amount that may be paid to the plaintiff, and other reail sellers similarly situated, as consideration for the purchase of retail installment contracts, and to limit the purchase price to the maximum amount therein fixed is unconstitutional and void in that it deprives plaintiff and all others similarly situated, from their freedom to contract, liberty and property without due process of law and that the restriction is wholly unwarranted by any consideration of public health, safety, morals, welfare or any other objective with reference to which the State of Ohio under its police power may properly regulate lawful private business and private property contract rights.

There can be no question but that the retail automobile dealer has a definite property right in the note that he accepts in payment of the auto he sells. He is its sole owner, and at his discretion he may determine to retain it and await its payment in full, or he may contract to sell it to another individual or lending institution.

The evidence discloses that it is the practice of the industry to dispose of the note by assignment to a third party. This practice is most often prompted by the financial inability of the dealer to retain sufficient capital to operate his automobile business and also be in the money-lending business. Early in the practice and at a time when the country was not at its present level of economic prosperity, the dealer, in order to dispose of the note, was compelled to take a marginal loss referred to in finance circles as a “discount.” However, with the advent of more prosperous times and attendant increased sales, a very keen competition developed among the lending institutions for the “purchase” rather than the “discount” of installment notes. This development brought with it an added source of income to the dealer in that he could realize an additional profit over and above what profit he may have realized on the sale of the automobile. It also placed him in a position where he could bargain with the multitude of lending institutions competing for an assignment to them in installment notes.

The undisputed evidence further discloses that the automobile dealer in at least seventy-five per cent of all sales made on the installment note plan, does in fact control the financing of the sale. Stated another way, this means that seventy-five per cent of all persons purchasing automobiles on a time payment plan will rely on the automobile dealer to arrange the financing and will make no attempt to “shop” for a possible lower finance rate. Having in mind that the vast majority of those who purchase automobiles do so on a time-payment plan, and further recognizing the tremendous volume of sales daily transacted within the retail auto industry, one can well appreciate the impact this financing has on our economy. Recognizing this market, a number of nationwide financing institutions have been established that restrict their services solely to the purchasing from dealers, of time or installment notes.

The evidence further discloses that such institutions, in order to encourage automobile dealers to deal with them in the assignment of their installment notes, actively solicit such business through the medium of trained agents and the offering of complete financing arrangements to the dealer in both his purchases and sales.

The plaintiff in the instant case testified that he sells forty per cent of his installment notes to such an institution. Such an arrangement offers an economic benefit to the automobile dealer by offering him the services of a specialist in his particular field of finance, devoted solely to the retail automobile trade, and indirectly but most certainly to its economic survival. Such an institution, as supported by the testimony, presents severe competition to other lending institutions offering financing services to the public at large, and could potentially drive many such general institutions out of the automobile finance market. Were this result based on normal competition and predicated upon such factors as efficiency of operation, service rendered, etc., there could be no complaint. However, where it can be determined that the business practices of any particular segment of our economy, while benefiting some, nevertheless has an injurious effect on the common weal, such practice becomes a proper subject for legislative investigation and possible control. 10 O. Jur., 2nd, 469. Constitutional taw, Section 389; 36 American Jurisprudence, 482, Section 5.

The Installment Sales Act, Chapter 1317 R. C., was carefully drafted for the single purpose of protecting the consumer when making time purchases by requiring the retailer to make a complete and full disclosure of the terms of the sale and by fixing maximum rates of interest and service charges. These rates have been determined to be eight per cent maximum per annum on each one hundred dollars of credit extended, plus a maximum of twenty-one dollars service charge in any twelve month period. The Act further protects the consumer where the retailer requires insurance against unlawful rates. The Act does not specify the reason for limiting the dealer to a maximum of two per cent of the principal balance upon sale of the installment note, nor is the legislature called upon or required to explain its reasons in the enactment of laws.

While this court well recognizes the resentment that is frequently expressed by commerce and industry toward what often appears to be governmental interference rather than assistance, we are also aware that limited amounts of regulation are not only desirable but necessary for the survival of free competition and the protection of consumers. The right of the legislature of this state to fix and regulate rates permitted to be charged in the field of finance has long been established. The Supreme Court of this state, as early as 1882, defined the constitutional power of the legislature to enact laws regulating freedom of contract. We quote the following passages from the case of Smith v. Parsons, 1 Ohio, 236:

“Although a state legislature can not pass laws impairing contracts, yet they may regulate them, prescribe their form, their effect, and the mode of their discharge, and every contract is supposed to be made with reference to those Taws. * * *”
“It is admitted that the states have not given up the entire power of legislating on the subject of contracts. They may, for instance pass laws preventing usury, and fixing the interest of money. * * * These laws are applied to all subsequent engagements, and fix the rights of the parties at the very instant the contract is closed, so that the contract, in its inception, receives an impress from the law, and the effect of the law being coexistent with the contract, can never be said to alter or impair it.”

The growth of our commerce and industry since 1822 has brought with it highly complex problems requiring some measure of control by a centralized agency. The result has been an expansion upon the principles enounced in Smith v. Parsons, supra, rather than their restriction, the most outstanding pronouncement of national interest being that of United States Supreme Court in Nebbia v. New York, 291 U. S., 502. This case establishes the right of a state legislature to regulate a given industry by the fixing of prices where the purpose is to prevent abuses and maladjustments and is done in the public interest.

We have merely to examine the statute books of this state to determine to our satisfaction that the retail automobile industry as well as that of commercial finance are subject to governmental regulation. Recognizing, then, the right of the legislature, under its police powers, to invade the domain of these industries by means of legislative enactments, we have but to determine if the enactment under question is reasonably related to the object sought to be accomplished, and, in addition, has a real or substantial relation to the public health, safety, morals, and to the general welfare.

While, as we have stated, the statute in question does not set forth its purpose in limiting a dealer to a two per cent maximum consideration upon the sale of installment notes taken in trade, the testimony of the many expert witnesses as contained in the record, as well as the exhibits, bears ample proof of this purpose.

This testimony tends to prove that any increase in the amount paid to the dealer by the purchaser of his installment notes will in turn have a bearing on the interest rate which the note itself bears. Any amounts paid by the financial institution to the dealer, in consideration of the assignment of the installment note must be figured into its cost. Since the assignee’s profit can come only from the interest figured on the note, all costs must be deducted from this figure in order to determine a profit.

On a twelve-month note if the base rate is six per cent and the financial institution is required to pay to the dealer upon its transfer, an amount equal to two per cent of the principal, the purchaser realizes a gross of but four per cent into which it must figure its costs. This two per cent is eliminated, however, when the financial institution makes a direct loan to the purchaser, the dealer not participating. Consequently, the financial institution in that instance will realize a gross of six per cent as compared to four per cent from a dealer. Aside from such items as increasing the efficiency of its operation, reducing its cost of money, and other internal factors the only way the financial institution can regain its loss as between the figure of six per cent and four per cent is to raise the base financing charge to eight per cent. The legislature within its province and discretion has undoubtedly determined that it is unlikely that on a two per cent participation the base cost will level off at the maximum point, and the evidence in this case indicates that the average transaction now taking place, under the statute does so at less than the eight per cent figure. However, should the two per cent limitation be removed there is a reasonable likelihood that base charges would rise.

This court cannot be concerned with the wisdom of the economic policy as adopted by the legislature and incorporated in this measure. Such matters are beyond the powers of this court to determine from a jurisdictional viewpoint and also one of competency. We need only determine that in its more favorable aspect, the legislation enacted bears some reasonable relation to the object sought to be accomplished. Blackman v. Board of Liquor Control, 65 Abs 97 (1952), appeal dismissed in 158 Oh St 368, motion to certify overruled.

The matter here under consideration has been the subject of legislation in at least eight other states. The Indiana statute differed in one important respect from the one under consideration in that it granted to a board, discretionary powers to establish maximum rates.

In Department of Financial Institutions v. Holt, 231 Indiana, 292, 108 N. E. (2nd) 629, the Indiana Supreme Court found the provision to be unconstitutional, and for the reasons asserted by the plaintiff herein. The Holt case, supra, can be distinguished first, on the basis that the statute there under consideration did not establish máximums but delegated that authority to a state agency. Secondly, the Indiana Supreme Court expressly refused to follow the trend apparent in the decisions of other courts in regard to price fixing legislation.

“This court has in the past consistently refused to follow the ‘pattern’ or ‘drift’ apparent in the decisions of other courts which approve mere legislative price fixing.” (Page 635, Holt case, supra.)

This is a direct affront on the decision of the United States Supreme Court in the Nebbia case, supra, which latter decision has been adopted by the Supreme Court of this state.

In State, ex rel. Allstate Insurance Company v. Bowman, 130 Oh St 347, Stephenson, J., took the following quote from the Nebbia case, supra, in determining the judgment of the United States Supreme Court regarding the legislative authority of a state to regulate trade and the authority of its courts to interfere:

“So far as the requirement of due process is concerned, and in the absence of other constitutional restrictions, a state is free to adopt whatever economic policy may reasonably be deemed to promote public welfare, and to enforce that policy by legislation adapted to its purpose. The courts are without authority either to declare such policy, or, when it is declared by the legislature, to override it. If the laws passed are seen to have a reasonable relation to a proper legislative purpose, and are neither arbitrary nor discriminatory, the requirements of due process satisfied, and judicial determination to that effect renders a court functus officio.” (Nebbia v. New York, 291 U. S. 502, supra.)

The restriction on dealer participation was removed by act of the Wisconsin legislature in June of 1953. The supervisor of consumer credit of the Wisconsin State Banking Commission was called as a witness by the defendants and testified that after the removal of dealer participation limitations, the base rate on financing charges generally increased, and that this was particularly true of those finance companies doing a large volume of business.

The argument is advanced that the statute under consideration is arbitrary for the reason that it allows a fixed rate of two per cent only and that this fails to take into consideration that the purchaser of an installment note will realize a greater profit on notes, payments on which extend beyond a twelve-month period, and that it also fails to take into consideration notes that are assigned on a recourse or repurchase basis. It is contended that in those instances the potential profit is greater to the purchaser and so the dealers’ participation should also be greater than two per cent. While these arguments appear to contain considerable merit, there are arguments to the contra that the legislature must have considered in determining to make the two per cent inflexible. There is the argument that a financial institution incurs greater risk on longer term loans; that the time expended by the dealer in servicing a 24-month finance plan and then assigning it is no greater than that expended in servicing a 12-month plan. An even stronger argument is to the effect that since the dealer controls the majority of the financing arrangements he would tend to unnecessarily encourage longer term notes if it meant a larger profit to him on its assignment, thus deliberately increasing the finance cost to the consumer.

A stipulation contained in the record states that the statute has no application to situations where finance companies assign installment notes between each other and is therefore discriminatory. It also discloses how certain automobile dealers are able to establish what appear to be “dummy” corporations under the guise of lending institutions who receive assignments on notes from the dealer corporation and then reassign the notes to legitimate financial institutions at a rate higher than the two per cent maximum, and in that manner evade the operation of the statute.

In the first instance there is insufficient evidence contained in the record for the court to determine the extent of rediscounting that occurs or to what extent such rediscounting is done at a rate in excess of two per cent for it to conclude that the statute discriminates. In the second instance, it would appear improper that either the plaintiff or “those similarly situated” can be heard to complain that they can successfully evade the statute by raising a corporate veil or “dummy” partner. Both of these instances may well be proper fields for legislative investigation and correction. However, we do not feel called upon to make a finding concerning these matters in the case here presented.

Upon the issues joined, and for the reasons herein stated, we find the statute in question to have been validly enacted under the police powers of the legislature of this state and reasonably designed to promote the public health, safety, morals, and welfare, and to accomplish its purpose under the law.

MIDDLETON and YOUNGER, JJ, concur.


author: By THE COURT.

text:
    GIORDANO, Petitioner, v. ALVIS, Warden, Respondents.
    Ohio Appeals, Tenth District, Franklin County.
    No. 5660.
    Decided May 29, 1957.
    Joseph Giordano, No. 87062, Columbus, on behalf of himself.
    William Saxbe, Atty. Geni., William M. Vance, Asst. Atty. Geni., Columbus, for respondents.
   OPINION

By THE COURT.

This is an action in habeas corpus wherein the petitioner is seeking his release from the custody of the respondent, who is Warden of the Ohio Penitentiary, for the alleged reason that the indictment does not state an offense.

The record reveals that the petitioner was indicted under the Habitual Criminal Act (§13744-1 GC), by the grand jury for Columbiana County at its April Term, 1947; that he was found guilty of the charge and sentenced to the Ohio Penitentiary and to be kept at hard labor until legally discharged.

It will be noted that the indictment charges three prior convictions, to wit:

(1) Robbery in the year 1947:

(2) Burglary in 1934; and

(3) Assault with intent to rob in 1939,

but it contains no allegation that he had ever been in prison for any of these offenses. He relies upon the case of Blackburn v. State, 50 Oh St 428, which fully supports his contention. However, since this decision the statute has been amended and such an allegation is no longer required. Sec. 13744-1 GC, at the time of the return of the indictment in 1947 provided:

“A person convicted in this state of * ® *, who shall have been previously two times convicted of any of the hereinbefore specified felonies separately prosecuted and tried therefor, either in this state or elsewhere, shall be adjudged an habitual criminal * *

At the time of the Blackburn decision the court had under consideration the Habitual Criminal Act of May 4, 1885, 82 Ohio Laws, 237. This Act provided:

“Every person who, after having been twice convicted, sentenced and imprisoned in some penal institution for felony, whether committed heretofore or hereafter, * * * shall be convicted, sentenced, and imprisoned in the Ohio Penitentiary for felony hereafter committed, shall be deemed and taken to be an habitual criminal * * (Emphasis ours.)

We are therefore of the opinion that the indictment properly charges an offense, and the application for a writ shall be denied.

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


text:
    ALUMINUM AND MAGNESIUM INCORPORATED, etc., Plaintiff-Appellee, v. S. L. GRUNDSTEIN & SONS, INC., Defendant-Appellant.
    Ohio Appeals, Second District, Franklin County,
    No. 5497.
    Decided June 1, 1956.
    Watson, Davis & Joseph, R. P. Cunningham, Jr., Columbus, for plaintiff-appellee.
    Sidney G. Kusworm, Sr., Dayton, Mitchell N. Nachman, Columbus, for defendant-appellant.
   OPINION

By THE COURT.

This is a motion seeking an order dismissing the appeal on law and fact for the reason that the Court has no jurisdiction to entertain such an appeal. The record reveals that the action was one for the recovery of money only and which was paid through error or mistake. Under §2501.02 R. C., as amended, effective October 4, 1955, the appeal may be had on law only. The motion will, therefore, be sustained but the appeal will be retained as one on law. It appears that counsel for the appellant has so treated the appeal since a bill of exceptions, assignments of error and brief have been filed. These will not be required to be re-filed as the notice of appeal specified that it was also on law. The appellee will be granted 15 days within which to file answer brief.

No. 5497.

Decided October 22, 1956.

MILLER, PJ, HORNBECK, J, concur.

WISEMAN, J, not participating.

OPINION

By THE COURT.

This is an appeal on questions of law from a judgment rendered by the Municipal Court of Columbus in favor of plaintiff in an action in which plaintiff sued to recover money paid to the defendant by mistake for scrap metal sold and delivered by the defendant to the plaintiff.

This Court, on motion of appellee, dismissed the law and fact appeal on the ground that the action was a civil action for the recovery of money only, and, therefore, a law and fact appeal did not lie. The action was not one cognizable in a court of equity, and being an action at law for the recovery of money, the Municipal Court had jurisdiction.

Although an action for money had and received based on a mistake is in its nature a substitute for a suit in equity, the action is based on an implied promise at law, and is a suit at law. The rules of evidence and burden of proof, applicable to a suit at law, apply. The fact that equitable defenses may be interposed does not convert the law action to one in equity. Vol. 27, O. Jur., Section 1, page 145.

The action was within the jurisdiction conferred on the Municipal Court of Columbus with respect to the amount claimed as provided in §1901.17 R. C. The action was properly brought within six years after the cause of action accrued. Ward v. Ward, 12 O. C. D. 59; §2305.07 R. C.

Plaintiff’s exhibits one to five were admissible, as they were properly identified as part of the permanent records of plaintiff company. The exhibits were in the nature of original entries and made in the regular course of business at or near the time of the transaction, and identified by employees of the plaintiff company who made the entries, or under whose supervision they were made. Schmitt v. Doehler Die Casting Co., 143 Oh St 421, 55 N. E. (2d) 644; §2317.40 R. C. Any alterations found on the entries were subject to explanation and would not go to the competency but only to the weight to be given such evidence.

After the close of plaintiff’s case the defendant was permitted to file an amended answer, consisting of a general denial and six defenses which were jurisdictional and equitable in character, to wit: no jurisdiction, stale claim, laches, quasi-estoppel, defendant’s position has been financially and materially changed and defendant’s credit was adversely affected. In chief, defendant attempted to introduce evidence to the effect that his credit was affected by the institution of the suit, and other evidence of similar import. The court sustained objections to this line of testimony. No proffer was made as to the testimony which would have been elicited from the witness had he been permitted to answer. Hence, this assignment of error is not well made.

The case was thoroughly tried by the court without the intervention of a jury. There was a definite conflict in the evidence. The trial court was the sole judge of the credibility of the witnesses. The evidence is of such a nature that the trial judge was required to believe certain witnesses and to disbelieve others. No one can read the record without being convinced that either the plaintiff’s claim or the defendant’s defense is wholly without foundation. Either the plaintiff is making a false claim, or the defendant is making a false defense, and doing it knowingly. However, it was the province of the lower court to determine the credibility of the witnesses. In resolving the issues in favor of plaintiff the trial judge points out the discrepancies in the evidence as presented by the defendant, and wherein such evidence was unworthy of belief. There is evidence of a substantial character which supports the judgment. We cannot say that the judgment is against the manifest weight of the evidence, or contrary to law. We find no assignment of error well made.

Judgment affirmed.

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