Opinion
No. 28487
Decided December 3, 1941.
Eminent domain — Compensation — Section 19, Article I, Constitution — Exceptional, absolute right or continuing or subsisting trust not created — Public official, receiving compensation money, not trustee of continuing and subsisting trust — Section 11236, General Code — Legislature may provide method and limitation for exercising constitutional right to compensation — Limitation runs from time public official to pay compensation money — Ten-year limitation applies to action to recover compensation money — Section 11227, General Code.
1. Section 19, Article I, of the Constitution of Ohio, providing that "where private property shall be taken for public use, a compensation therefor shall first be made in money, or first secured by a deposit of money," does not create an exceptional, absolute right or continuing or subsisting trust as to such compensation.
2. The receipt of such compensation money by a public official in his official capacity with the duty to pay the money upon the demand of the proper party does not constitute such official a trustee of a continuing and subsisting trust within the purview of Section 11236, General Code. (Paragraph 1 of the syllabus in the case of Townsend v. Eichelberger, 51 Ohio St. 213, approved and followed.)
3. It is within the legislative power of the General Assembly to provide a specific and reasonable method and limitation for the exercise of such right to compensation conferred in general terms by the Constitution of Ohio.
4. In the absence of fraud or concealment on the part of a public official the applicable statute of limitation begins to run from the time it was his duty to pay such compensation money upon the demand of the proper party. (Paragraph 2 of the syllabus in the case of Townsend v. Eichelberger, 51 Ohio St. 213, approved and followed.)
5. Under the provisions of Section 11227, General Code, an action by a proper party for the recovery of such compensation money received by a public official must be instituted within ten years from the time such money became payable upon the demand of such proper party.
CERTIFIED by the Court of Appeals of Lucas county.
On December 6, 1940, the relator, George McLeary, the assignee of Henry McLeary, instituted this action in the Court of Appeals of Lucas county for the purpose of obtaining a writ of mandamus to require the respondents, as the commissioners, the auditor and the treasurer of that county, to appropriate and pay him the sum of $3,000 awarded to his assignor and deposited with the clerk of the Court of Probate in an appropriation proceeding in the year 1928.
The relator's petition reads in part as follows:
"On August 10, 1928, The Toledo Edison Company filed an action in the Probate Court of Lucas county, Ohio, in which Henry McLeary was named as defendant. This was cause No. 11343 in said court. In its petition, The Toledo Edison Company prayed that certain real estate owned by said Henry McLeary be appropriated and transferred to it for the purpose of erecting thereon electrical transformers and an electric power line. A jury was impaneled and sworn. Evidence was offered and the jury returned a verdict in the sum of three thousand dollars ($3,000) in favor of said Henry McLeary and against The Toledo Edison Company. The jury assessed the value of the land taken by said The Toledo Edison Company at fifteen hundred dollars ($1,500) and it assessed the damages against the remainder of the tract at one thousand five hundred dollars ($1,500). Judgment was entered on this verdict. * * *
"The Toledo Edison Company paid to the Clerk of the Probate Court of Lucas county the sum of three thousand dollars ($3,000) in payment of the judgment in said cause No. 11343 in the Probate Court of Lucas county, Ohio. On October 10, 1933, Charles E. Chittenden, judge and ex officio clerk of the Probate Court of Lucas county, Ohio, paid to the County Treasurer of Lucas county, Ohio, said sum of three thousand dollars ($3,000). * * *
"The real estate sought to be appropriated by The Toledo Edison Company in said cause No. 11343 in the Probate Court of Lucas county, Ohio, has been duly conveyed and transferred to The Toledo Edison Company. * * *
"No part of said sum of three thousand dollars ($3,000) has been paid to Henry McLeary or to anyone else for or on his behalf. On September 19, 1940, said Henry McLeary assigned all of his right, title and interest in the judgment in said cause No. 11343 in the Probate Court of Lucas county, Ohio, and in the proceeds of said judgment to said George McLeary, relator herein. * * *
"George McLeary, relator herein, has made demand upon Charles E. Chittenden, judge of the Probate Court of Lucas county, and the defendants herein for the payment of said sum of three thousand dollars ($3,000) to this relator or to his assignor, Henry McLeary. All those upon whom such demand has been made have refused to make such payment or order such payment to be made. The defendants, County Commissioners of Lucas county, Ohio, have refused to appropriate from the general funds of Lucas county, Ohio, the said sum of three thousand dollars ($3,000) to be paid to this relator or his assignor, Henry McLeary, who are the lawful owners of said money and are lawfully entitled thereto.
"It is the duty of the defendants herein under the law of the state of Ohio, and it is the general duty of their respective offices to appropriate money from the general treasury of Lucas county, Ohio, for the payment of said sum of three thousand dollars ($3,000) to this relator or Henry McLeary, his assignor. Said duty is especially enjoined and imposed upon the defendants, County Commissioners of Lucas county, Ohio.
"George McLeary, relator herein, has no other remedy by which he may compel the payment of this sum and [ sic] the remedy of mandamus sought to be enforced herein.
"Wherefore, George McLeary, relator, prays that a writ of mandamus be issued by this court and that the defendants, County Commissioners of Lucas county, Ohio, be ordered and directed to appropriate from the general funds of Lucas county, Ohio, the sum of three thousand dollars ($3,000) to be paid to George McLeary, relator herein and to direct the Auditor of Lucas county, Ohio, to issue a warrant in the sum of three thousand dollars ($3,000) on the Treasurer of Lucas county, Ohio, payable to said George McLeary, and for such other and further relief to which he may be entitled."
To the relator's petition the respondents filed a demurrer which the Court of Appeals sustained "for the reason that the petition shows on its face that the statute of limitations has run against said cause of action set out in relator's petition." The court then rendered judgment by dismissing the petition.
Although the case originated in the Court of Appeals and therefore was appealable as a matter of right, that court found its judgment in conflict with that pronounced upon the same question by the Court of Appeals of the Third Appellate District in the case of State, ex rel. Hudson, Admr., v. Kelley, Sheriff, 55 Ohio App. 314, 9 N.E.2d 746, and certified the record of the instant case to this court for review and final determination.
Messrs. Fraser, Effler, Shumaker Winn, Mr. Robert B. Gosline and Mr. Hyman S. Topper, for appellant.
Mr. Thomas J. O'Connor and Mr. J.S. Rhinefort, for appellees.
Was the Court of Appeals in error in sustaining the respondents' contention that the relator's claim is barred by Section 11227, General Code, providing that certain actions shall be brought within ten years?
The relator contends that this provision is inapplicable for three reasons.
First, he insists that it is made so by the terms of related Section 11236, General Code, which reads in part as follows:
"The provisions of this chapter, respecting lapse of time as a bar to suit, shall not apply in the case of a continuing and subsisting trust * * *."
This at once presents the question as to whether the relator's claim involves a continuing and subsisting trust. The relator relies upon Section 19, Article I, of the Constitution of Ohio, which requires that, with certain exceptions, "where private property shall be taken for public use, a compensation therefor shall first be made in money, or first secured by a deposit of money; * * *." The relator's view of this provision is that it creates an absolute guaranty of payment of money to the owner or his assignee when his private property is taken for public use. This absolute guaranty, he says, constitutes a continuing and subsisting trust. He insists that this right, being absolute, may be asserted by the owner or his assignee in any manner and at any time until payment is received, and that the General Assembly is without power to supplement the constitutional provision by the enactment of any regulation for the exercise of such right. However, it is fundamental that the Legislature may provide a specific and reasonable method and limitation for the exercise of a right conferred in general terms by the Constitution. In this instance a study of the constitutional and statutory language discloses no intention to create or to recognize an exceptional, absolute right or continuing and subsisting trust as to such compensation. This view is consistent with that announced by this court in the first paragraph of the syllabus in the somewhat similar case of Townsend v. Eichelberger, 51 Ohio St. 213, 38 N.E. 207, which reads as follows:
"The receipt of money by a sheriff in his capacity as sheriff, on a sale made upon an order in partition, and his duty on demand to pay it to the parties entitled, does not constitute him a trustee of a continuing and subsisting trust, within the meaning of Section 4974, Revised Statutes."
It should be observed that Section 4974, Revised Statutes, is now designated as Section 11236, General Code, upon which the relator relies.
Likewise it should be noted that the relator makes no claim of fraud or concealment or even ignorance; nor does he complain that the ten-year period established by the provisions of Section 11227, General Code, is unreasonable.
The relator's second contention is that even if no continuing and subsisting trust was created and the limitation of Section 11227, General Code, is applicable, nevertheless his claim is not in fact barred, because the ten-year period did not commence to run until payment was subsequently demanded and refused in the year 1940 — concededly a delay of twelve years. In his brief the relator suggests that this inaction was due to the fact that the assignor is eccentric and makes few trips to the county seat five miles distant. However that may be, this court is limited to a consideration of the allegations of fact appearing in the petition to which a demurrer was filed.
In urging the necessity for demand and refusal of payment the relator relies upon one paragraph of Section 286, General Code, which provides that public money received under color of office by a public official shall be paid into the treasury and "be retained until claimed by the lawful owner." However, it is necessary to examine the entire paragraph which reads as follows:
"The term 'public money' as used herein shall include all money received or collected under color of office, whether in accordance with or under authority of any law, ordinance or order, or otherwise, and all public officials, shall be liable therefor. All money received under color of office and not otherwise paid out according to law, shall be due to the political subdivision or taxing district with which the officer is connected and shall be by him paid into the treasury thereof to the credit of a trust fund, there to be retained until claimed by the lawful owner; if not claimed within a period of five years after having been so credited to said special trust fund, such money shall revert to the general fund of the political subdivision where collected."
It is immediately observed that such money is not to be held indefinitely until claimed. If not claimed within a period of five years it shall revert from the special trust fund to the general fund of the political subdivision. This would seem to refute the relator's contention that a demand and refusal are necessary before the statute of limitation can begin to run. However, the relator insists that the word "revert" is not employed in the statute in its ordinary acceptation but that this provision is simply a bookkeeping requirement to the effect that such money shall be merely transferred. The difficulty with this theory is that a careful study of the context discloses nothing tending to indicate inaccuracy of expression on the part of the General Assembly; nor can it be assumed that this provision was incorporated in the statute without purpose. Surely it was not intended to require the treasurer to perform a wholly vain act by placing in its own general fund money the county under no circumstances could use. Again this view is in harmony with that announced by this court in the second paragraph of the syllabus in the case of Townsend v. Eichelberger, supra, in which it was held that in the absence of fraud or concealment on the part of a public official the statute of limitation begins to run from the time it was his duty on demand to pay such money to the party entitled to it.
The third contention of the relator is that under the theory of equitable conversion the money paid into the Court of Probate in an appropriation proceeding, is merely substituted for the land itself and must be treated as realty in determining the rights of any claimant thereto. Hence he urges that only the twenty-one-year statute of limitation could apply. He places reliance upon Section 11075, General Code, which provides in part that "the conflicting claims of parties to such fund shall be determined by the court * * * as if the land had not been converted into money." However, by its very terms this provision is limited in its application to those who would have conflicting claims to the land if it had not been converted into money. Patently the present controversy involves no conflicting claims to the land. In the relator's petition it is alleged that in the appropriation proceeding his assignor was adjudged to be the owner of the property and as such was awarded the sum of $3,000 consisting of $1,500 for the value of the land taken and $1,500 for damage to the remainder of the tract. The demurrer of the respondents concedes the truth of these allegations, and they assert no interest in the land. The present controversy relates solely to the money that came into the hands of the respondent county treasurer by virtue of his statutory duty alone.
For the foregoing reasons this court is of the opinion that the judgment of the Court of Appeals sustaining the respondents' demurrer to the relator's petition is correct and must be affirmed.
Judgment affirmed.
TURNER, MATTHIAS and ZIMMERMAN, JJ., concur.
WILLIAMS, HART and BETTMAN, JJ., dissent.
The funds in controversy in this case were deposited with the clerk of the Probate Court in 1928. He, in turn, paid them to the county treasurer on October 10, 1933. During that interim the liability to the owner of such funds was that of the clerk of the Probate Court and his bondsmen, which liability came to an end upon payment of the money to the county treasurer. The county treasurer, or the county itself, could not be liable for these funds prior to October 10, 1933, because the money did not come into his or its hands until that date. Consequently, the statute of limitation did not begin to run in favor of the county treasurer or the county prior to October 10, 1933.
During the period from October 10, 1933, to October 10, 1938, by virtue of the provisions of Section 286, General Code, the treasurer held these funds as a "special trust fund" for the "lawful owner." During this time, at least, the statute did not run against the treasurer or county, both because no demand had been made for the funds by the owner, and because by Section 11236, General Code, the statute of limitation did not apply in case of a "continuing and subsisting trust." In no event has the ten-year statute of limitation run in favor of the treasurer or the county.
Section 286, General Code, providing that "if not claimed within a period of five years after having been so credited to said special trust fund, such money shall revert to the general fund of the political subdivision where collected," is not a statute of limitation in favor of the county. This statute must be strictly construed in favor of the lawful owner of the fund, and there is no provision therein that he cannot maintain an action to recover such funds after a certain date, as is provided in all statutes of limitation.
Furthermore, the relation between the county and the landowner, whose money representing his land was paid into the county for his use and benefit and subject to his demand, was not that of debtor and creditor but rather that of trustee and beneficiary. By reason of the statute, the county was a mere stakeholder of the money pending the determination of the litigation between the landowner and utility which condemned his land. When the litigation was concluded, the money was subject to the demand of its owner for payment. The county could not be in default for payment and no suit to recover the money could be maintained against it until such demand had been made. Where a condition precedent to a cause of action exists, such as demand and refusal, the cause of action does not accrue, as respects limitations, until the condition has been performed. Under the circumstances of this case, the statute of limitation did not begin to run against the beneficiary until he had made a demand for his money and payment had been refused. No such demand having been made, the claim was not barred and the assignee of the owner is entitled to enforce payment. Keithler v. Foster, 22 Ohio St. 27; West v. American Tel. Tel. Co., 311 U.S. 223, 239, 240, 85 L.Ed., 139, 61 S.Ct., 179, and footnote.
The controversy in the case last cited had its origin in the Probate Court of Cuyahoga county and was first litigated in the state courts. (See West v. American Tel. Tel. Co., 54 Ohio App. 369, 7 N.E.2d 805.) The Supreme Court of the United States, in reversing the judgment of the Circuit Court of Appeals in West v. American Tel. Tel. Co., 108 F.2d 347, holds that the rule stated in Keithler v. Foster, supra, is the law in Ohio. The court in its opinion said:
"Since the cause of action under the Ohio law did not arise until demand which was either on June 2, 1934, when the suit was brought in the state court, or June 18, 1937, when the formal demand was made, the statute of limitations did not begin to run until one or the other of these dates."
The footnote, appended to the official opinion in the same case, in referring to the cases of Douglas v. Corry, Exrx., 46 Ohio St. 349, 21 N.E. 440, 15 Am. St. Rep., 604, and Townsend v. Eichelberger, 51 Ohio St. 213, 38 N.E. 207, upon which appellee in this case relies, says:
"In Keithler v. Foster, 22 Ohio St. 27, the demand on a sheriff for moneys collected on an execution sale in 1855 was not made until 1867. The Supreme Court in holding that the suit brought on the sheriff's bond in 1868 was not barred by the ten-year statute of limitations said that where 'the statute begins to run, in cases like this, from the time of demand, it would be but reasonable to hold, in the absence of other special circumstances, when no demand is shown to have been made within the statutory period for bringing the action, that, for the purpose of setting the statute in operation, a demand will be presumed at the expiration of that period, from which the statute will begin to run.'
"In Douglas v. Corry, 46 Ohio St. 349; Townsend v. Eichelberger, 51 Ohio St. 213, on which respondent relies, no suit was brought until after the expiration of the additional limitation period after the demand was made or presumed as in Keithler v. Foster, supra.
"Here, even if demand were presumed at the end of a four-year period, which began to run either in 1927 or 1929, the state court action was timely when begun on June 2, 1934."
In my opinion, the rule stated in Keithler v. Foster, supra, which has been so recently approved by the Supreme Court in West v. American Tel. Tel. Co., supra, is applicable here. The county did not have the slightest right or interest in this money, and the award to it as against the rightful owner or his assignee constitutes unjust enrichment.
WILLIAMS and BETTMAN, JJ., concur in the foregoing dissenting opinion.