Lichter v. Land Title Guarantee & Trust Co.

150 N.E.2d 53, 77 Ohio Law. Abs. 321, 1955 Ohio Misc. LEXIS 358
CourtCourt of Common Pleas of Ohio, Franklin County, Civil Division
DecidedJuly 5, 1955
DocketNo. 188523
StatusPublished

This text of 150 N.E.2d 53 (Lichter v. Land Title Guarantee & Trust Co.) is published on Counsel Stack Legal Research, covering Court of Common Pleas of Ohio, Franklin County, Civil Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lichter v. Land Title Guarantee & Trust Co., 150 N.E.2d 53, 77 Ohio Law. Abs. 321, 1955 Ohio Misc. LEXIS 358 (Ohio Super. Ct. 1955).

Opinion

[323]*323OPINION

By LEACH, J.

HEARD ON DEMURRERS TO AMENDED PETITION.

In Steer and Adair v. The Land Title Guarantee and Trust Company and Ohio Turnpike Commission, decided May 19, 1953, 65 Abs 33, Hartex, J., of this court, in an action brought by a firm of attorneys as plaintiffs, declared that the performance of a contract of June 4, 1952, betweexx The Land Title Guarantee and Trust Coxnpaxxy and Ohio Turnpike Coxnmissioxx, called for the unlawful practice of law; that because the legal and proper activity of Land Title in the issuance of policies of title insurance or guaranty could not be effectively separated from the “illegal practice of law” phase of the contract, the entire contract became illegal and void. The amended petition irx that case had prayed inter alia “that the Court order defendant The Land Title Guarantee and Trust Company to pay back any sums received by it from defendant Turnpike Commission under said contract.” This request was rejected by Judge Harter, his opinion as to such reading:

“The amended petition further prays that this Court order the defendant, The Land Title Guarantee and Trust Company, to pay back any sums received by it from the Ohio Turnpike Commission under said contract. In equity and good conscience, the Land Title Guarantee and Trust Company should certainly do this since they (rather than the Turnpike Commission) were the ones guilty of over-reaching their corporate powers. There is, however, a procedural problem raised at this point. Plaintiffs do not sue as ‘taxpayers’ in this case. This is not, therefore, a so-called ‘Taxpayer’s Action.’ Even if it were a typical action by ‘taxpayers,’ as such, to interfere with or direct the acts, measures or proceedings of a public body or its officers or agents, there would still be legal obstacles to the granting of a ‘pay-back’ order. In the first place, this action is upon the ‘State of Ohio’ level — not the level of a municipality, or county, or township. There is substantial authority to the effect that a proceeding by a taxpayer to restrain an alleged uxxwarranted action of public officials cannot be maintained if the state itself is a necessary or proper party defendant, and this is so although the state is not a party to the record. See 52 American Jurisprudence— Taxpayers’ Actions. Section 6.

“In the second place, there is substantial authority for the proposition that a taxpayer cannot maintain an action to enjoin the wrongful expenditure of public funds, where such funds were not raised by taxation. The Ohio Turnpike funds were raised through the sale of bonds, not by taxation. Hence, these authorities might well become applicable, should this case be considered a true ‘taxpayer’s action.’ See 52 American Jurisprudence — Taxpayers’ Actions, Section 9.

“An annotation in 58 American Law Reports 588 indicates that there [324]*324is a sharp difference of authority among the states as to the right of individual citizens to challenge the acts of state officials.

“It is this Court’s view that since there is such doubt on this procedural question, the doubt should be resolved by refusing to grant the extraordinary order for paying back all money received by the Land. Title Guarantee and Trust Company. In other words, it is our opinion that relief as drastic and harsh as that here requested should be granted only upon clear authority.”

In the instant action this same relief, denied by Judge Harter at the behest of attorneys as plaintiffs, is sought by the plaintiff herein (1) as a resident, elector, taxpayer, owner of an automobile, purchaser of gasoline and user of the public highways in the State of Ohio (Second Cause of Action), and (2) as the owner of five Ohio Turnpike Revenue Bonds. (First Cause of Action.) Plaintiff seeks to compel Land Title to repay the sum somewhat in excess of $250,000.00 received by it for the rendition of all of its services under its contract with the Turnpike Commission. Plaintiff also seeks an order compelling the Ohio National Bank, Trustee under a Trust Agreement of June 1, 1952, to restore to the Trust Fund an amount of money equal to that paid to Land Title. (Fourth Cause of Action.) Here plaintiff apparently sues both as a taxpayer and as a bond holder. Finally plaintiff seeks judgment against the individual members of the Turnpike Commission and their sureties on their official bonds, again apparently suing both as a taxpayer and as a bond holder. (Third Cause of Action.) Turnpike Commission is made a party defendant although no specific relief is asked against it, apparently on the theory that Turnpike Commission should act as a conduit for the return of the monies from Land Title to the Trust Funds held by Ohio National.

All of the defendants herein have filed demurrers to the several causes of action on the grounds (1) that the plaintiff has not legal capacity to sue and (2) that the amended petition does not state facts which show a cause of action. All of the defendants except Land Title also demur on the grounds (1) that there is a misjoinder of parties defendant and (2) that several causes of action are improperly joined.

I

Does the plaintiff as a resident, elector, taxpayer, owner of an automobile, purchaser of gasoline and user of the public highways in the State of Ohio have the legal capacity to bring or maintain this action? To the extent that plaintiff seeks to have returned to the funds of Turnpike Commission, in the hands of the Trustee, an amount of money equal to that paid to Land Title by Turnpike Commission through the Trustee, we believe that the Ohio law is well established that no such right exists.

As stated in 52 American Jurisprudence — Taxpayers’ Actions, Section 9, referred to by Judge Harter, the right of a taxpayer to maintain an action to enjoin the wrongful expenditure of public funds, where such funds were not raised for taxation, has been denied in a majority of cases. To this same effect see 131 A. L. R. 1230. Obviously, of course, where a person does not have the legal capacity to maintain an action [325]*325to enjoin the wrongful expenditure of public funds, he does not have the legal capacity to maintain a suit for the recovery of money wrongfully expended.

That Ohio has adopted the majority rule in this respect is clear from the decision of the Ohio Supreme Court in the recent case of State ex rel. Masterson, a Taxpayer, v. Ohio State Racing Commission, 162 Oh St 366. There the plaintiff as a taxpayer sought to restrain the Racing Commission from expending funds or issuing permits for the conducting of horse racing in this state. The funds there involved had been appropriated by the General Assembly for that purpose. The appropriation, however,,was not from general tax revenues of the state but from “The State Racing Commission Fund” established by §3769.10 R. C. All of the income into such fund came from the taxes, fees and income due the State of Ohio “under the provisions of this act.” (The Racing Commission Act.) We quote from the Opinion of Weygandt, C. J., at page 369:

“From these provisions it is apparent that the respondent commission is not authorized to expend public funds in excess of the revenues it collects from a special class of taxpayers. It is clear, too, that no part of such expenditures can involve funds collected from taxpayers generally. Furthermore, the relator does not claim to be in the special class of taxpayers from whom these revenues are collected.

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Cite This Page — Counsel Stack

Bluebook (online)
150 N.E.2d 53, 77 Ohio Law. Abs. 321, 1955 Ohio Misc. LEXIS 358, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lichter-v-land-title-guarantee-trust-co-ohctcomplfrankl-1955.