Allison v. Ohio Savings & Trust Co. (51 Ohio App. 253, 1935)

Lemert, J.

This is an action commenced by Isaac Henniger in his lifetime against the defendant, The Ohio Savings & Trust Company, seeking an accounting for money paid to it by and for said Isaac Henniger in trust for him as the beneficiary of the funds thus created and accumulated. The petition enumerates certain funds known by plaintiff to have been received by the defendant for his benefit, and asks for a full account of such sums, together with others, and for a judgment for the amount so shown to be due.

The defendant, The Ohio Savings & Trust Company, in its answer and cross petition, admits that it is a corporation, and that at the times mentioned in the petition Charles A. Lahmer was its president and treasurer. The answer of the defendant excepts as to said admissions, denies the averments of the petition, and affirmatively alleges, by way of the cross petition, that it had no knowledge of the matters and things -set forth in the petition, and further avers that all transactions and matters of business had with the plaintiff, Isaac Henniger, were between Charles A. Lahmer, as an individual, and said Isaac Henniger, and that the said Charles A. Lahmer was then and there the president and treasurer of said defendant banking company, but that the same were in no way transactions or obligations of this defendant, and that by reason thereof defendant was unable to make any accounting, and it asks to have said Charles A. Lahmer made a party defendant, with the statement and averment that Charles A. Lahmer could and should account to plaintiff in his individual capacity.

The said Charles A. Lahmer was then made a party defendant on his own motion, and answered by admitting all of the allegations of the petition, and submitted with said answer a statement of his transactions had with the plaintiff, Isaac Henniger.

The plaintiff filed an answer and reply to the separate answer and cross-petition of Charles A. Lahmer, averring that the statement of account of said Charles A. Lahmer is an account of his administration of the business and affairs of said Isaac Henniger, deceased, had with the defendant The Ohio Savings & Trust Company, and transacted by said Lahmer in his capacity as president and treasurer of said bank in behalf of the banking company as its agent.

The pleadings thus present this issue: The defendant, Lahmer, files an account of the transactions had with the plaintiff, Henniger, claiming to have acted for Henniger in his individual capacity, which is denied by the plaintiff, and also present the further issue that two items of debit were investments of approximately ten thousand dollars in Cleveland real estate bonds, contrary to the express instructions of plaintiff, for which amount the plaintiff asks judgment, with interest from the date such funds so invested were received from the Gilliam Manufacturing Company, to-wit, June 2, 1935.

After this action was filed the plaintiff died, and Homer Gr. Frew, named as executor in the will of Henniger, was substituted as plaintiff. After trial in Common Pleas Court Homer Gr. Frew, executor, died, and this plaintiff, Dwight C. Allison, became administrator de bonis non, with the will annexed, and was substituted as plaintiff in Frew’s place. The Court of Common Pleas found in favor of the defendant, The Ohio Savings! & Trust Company, against the plaintiff, and found in favor of the plaintiff and against the defendant, Charles A. Lahmer, for the sum of $13,047.30, which is the sum of money received from The G-illiam Manufacturing Company, with interest at the rate of 3%% which is the amount that should have been received had the money been invested in government bonds, as Henniger had instructed it to be invested. Against this amount the court below credited the actual amounts that were received from the other investments, including liquidating dividends that were received from other bonds, and the court further allowed the defendant, Lahmer, the sum of $1,200 for his administration of such fund, leaving a final balance and judgment in favor of the plaintiff in the sum of $6,060.23 against the defendant, Charles A. Lahmer. From this decision Charles A. Lahmer appealed to this court. The plaintiff administrator then appealed by giving notices, which are filed in lieu of a bond by fiduciaries, as provided by statute, which brings the defendant, The Ohio Savings & Trust Company, into this court on appeal from the judgment in its favor rendered by the court below.

From a careful examination of the record we are of the opinion that the transactions involved in this case were had by Henniger with The Ohio Savings & Trust Company, as shown by the exhibits and the ledger sheets involving the various transactions as they appear in the record. It will be noted that the answer of the defendant, The Ohio Savings & Trust Company. makes the admission and averment that during all of the times referred to in the petition the said Charles A. Lahmer was the president and treasurer of said institution, and the record further shows that Lahmer took the notices that Henniger had received from The Gilliam Manufacturing Company, advising him that his stock would he redeemed and that the company had been sold, and that he took the plaintiff’s stock in said company; that he sent the stock to said company and received a check in return for the same in the sum of $10,242.90; that this check was received by the bank, and the cash thus received was credited to an amount already in bank in the name of Isaac Henniger; and shows, further, in the answer of the said The Ohio Savings & Trust Company to the first interrogatory attached to plaintiff’s petition, that said sum of $10,242.90 is listed as a deposit made by Lahmer, but that as a matter of fact it went into an account carried in the name of Henniger; all this being shown by the ledger sheets, upon which Mr. Henniger’s name appears at the top, such sheets being the ledger sheets of the defendant, The Ohio Savings & Trust Company. The pass book of Isaac Henniger with The Ohio Savings & Trust Company, marked “Exhibit A”, shows the deposits of Isaac Henniger with said bank, and contains items for a certain period of time, which are the same items contained in the account filed in this case by defendant; Lahmer.

The exhibits show that the account of said Isaac Henniger with said bank was entered in his name, the same being the monthly statements of said bank issued to said Henniger; and the checks issued by said Henniger were drawn upon his said account in The Ohio Savings & Trust Company. The record shows that the defendant bank qualified to do a trust business in the year 1921, and further shows that the money received from the Gilliam stock was invested in Cleveland real estate bonds, to-wit, approximately five thousand dollars in Euclid Avenue Seventeenth Street bonds and Superior Twelfth Street bonds, contrary to the instructions given by said Henniger to invest said money in government bonds.

It is plain and clear to us from the evidence in the record that Henniger so instructed Lahmer to invest in government bonds the money received from the Gilliam bonds.

Considering the whole of the record in this case it clearly shows that said Lahmer was acting in his capacity as president and treasurer of the defendant, The Ohio Savings & Trust Company — and, in fact, he would have had no right to act in any other capacity within the banking house of the said The Ohio Savings & Trust Company, considering the kind and nature of the business that he was transacting for Mr. Henniger. He was transacting banking and trust business, for Mr. Henniger within the defendant The Ohio Savings & Trust Company’s banking institution, and all the documents and bookkeeping had with the bank so indicated that the business was had by and with the bank.

We are of the opinion that the record shows that a trust existed and was created. The receipt of Henniger’s money is admitted in the testimony of Mr. Lahmer, as is also the making of these investments about which complaint is made. Mr. Lahmer had control over the fund and issued checks against it freely. All of the relations between Henniger and the bank show that a trust fund was thereby created and existed. So the question resolves itself into whether or not Lahmer, the bank, or both, are liable on account of the management of this fund for the plaintiff Henniger.

We believe it to be elementary that no relief can be rendered against one from whom no relief is sought. In the instant case the only relief sought is against The Ohio Savings & Trust Company. Nowhere is any relief asked against Lahmer. Even after Lahmer came into this action and set up his version of the facts, plaintiff continued to protest that there was no claim of liability against him, and sought to have his appearance and his pleadings stricken from the files, on the ground that he was not a proper party. Yet, despite this condition of affairs, when the trial court found there was no evidence to sustain a claim against the bank, it nevertheless proceeded to render a judgment against Lahmer, whom plaintiff insisted was not liable.

“A valid decree cannot be rendered against defendant against whom no relief is sought.” 21 Corpus Juris, 676.

The bank book and ledger sheets show that the account of Isaac Henniger was had with The Ohio Savings & Trust Company, and the account submitted by Charles A. Lahmer is an account of the funds of Isaac Henniger, claimed to have been deposited with The Ohio Savings & Trust Company by said Lahmer to the credit of Isaac Henniger, when it really appears that the funds were received from Henniger by Lahmer while acting as president and treasurer of the said The Ohio Savings & Trust Company, and deposited to the credit of Henniger in said bank; the funds thus arising from the redemption of Isaac Henniger’s stock in The Gilliam Manufacturing Company passing into the deposit account with The'Ohio Savings & Trust Company. In equity this fund or amount was impressed with the character of a trust, and a trust company is liable to account to the owner therefor. 3 Pomeroy Equity Jurisprudence, Section 1047.

A collection of The Gilliam Manufacturing Company’s redemption of stock money was a special deposit of money, for the reason that it was marked in an unusual manner, so that it could be readily identified, and consequently was field by tfie bank as a trust for the depositor.

“When paper is received for collection a trust relation often exists in the beginning which is changed by agreement or custom into that of debtor and creditor after the collection of the proceeds, hut a hank cavmot divest itself of the trust relation and assume the other at its own convenience.” 5 Cyc., 516. (Italics ours.)

“It is the duty of an agent to account to his principal for all funds or property belonging to his principal which come into his hands by virtue of his agency, * * * and if he fails to apply them to tfie purposes for which they were received, the principal may recover the same.” 31 Cyc., 1470, 1471.

We note that tfie defendant, Charles A. Lafimer, filed no cross-petition asking pay for services rendered in connection with said trust. He rendered no account of tfie same and made no claim for compensation in tfie pleadings. There is absolutely no evidence in tfie record of tfie trial court upon which to base an allowance to him for such services, yet $1,200 was deducted from tfie amount of tfie fund by tfie lower court. We are of tfie opinion that this amount should not have been allowed, for tfie reason that plaintiff has suffered interminable delay in recovering this trust fund, and has been compelled to fight and employ counsel, and has already fought this case through two courts to make recovery.

Defendants in this case in their brief contend that tfie plaintiff is not entitled to a recovery, on both the question of estoppel and tfie question of ratification. From a careful examination of tfie pleadings and tfie whole of tfie record in this case we are of tfie opinion that neither can be properly urged, for tfie reason that neither estoppel nor ratification is affirmatively pleaded as a defense, and there is nowhere in tfie record coming to us from tfie court below a showing that any such defense was made. If attempted? tjie record fails to show any evidence along that line, and for that reason neither the defense of estoppel nor ratification can avail the defendants in this case.

We are therefore of the opinion that the record before us does not warrant a recovery against Charles A. Lahmer, individually, but that the plaintiff is entitled to a finding and judgment against the defendant, The Ohio Savings & Trust Company, in' the sum of $7,260.23, for which amount judgment is hereby awarded.

Decree accordingly.

Sherick, P. J., and Montgomery, J., concur.