Frederickson v. Nye

Full title: FREDERICKSON v. NYE ET AL

Court: Supreme Court of Ohio

Date published: Jun 3, 1924

110 Ohio St. 459 (Ohio 1924)

144 N.E. 299

Opinion

No. 18120

Decided June 3, 1924.

Remedies — Election as bar — Action by vendor for money judgment for fraud — Inconsistent with action in equity to establish constructive trust — Election of one remedial right bars another, when.

1. An action by a vendor asking for a money judgment based on fraud in the transfer of property, averring title in the vendee, is an action at law in deceit, and is inconsistent with an action in equity averring equitable title in the vendor and seeking to establish a constructive trust ex maleficio in favor of the vendor relying upon the same fraud as set out in the law action.

2. In order that an election of one remedial right shall be a bar to the pursuit of another, the same must be inconsistent and the election made with knowledge and intention and purpose to elect. The mere bringing of a suit is not determinative of the right, but the party making the election must have received some benefit under the same, or have caused detriment to the other party, or pursued his remedy to final judgment.

ERROR to the Court of Appeals of Hancock county.

So much of the facts as are necessary for a determination of the questions involved herein may be stated as follows:

(1) Sadie M. Morgan, prior to December 12, 1921, being the owner of certain property in Champaign, Ill., disposed of the same through one Metzger and acquired the legal title to what is known as the Grattan Baker farm of 400 acres in Seneca county, Ohio, against which, and for a part of its purchase price, she and her husband, Fred. R. Morgan, gave to Grattan Baker notes secured by first mortgage, which indebtedness on said 12th day of December, 1921, amounted to $45,470, including interest to that date.

(2) That, on said last-named date, Sadie M. Morgan and her husband, Fred. R. Morgan, executed to their son, Elbin P. Morgan, a note for $10,000, payable one year after date to his order, and secured the payment thereof by a second mortgage on said Grattan Baker farm.

(3) At the same time and as a part of the same transaction, and by means of the same scrivener and notary public, Sadie Morgan and Fred. R. Morgan executed to one Amos P. Easton a deed conveying to him this Grattan Baker farm, subject to the two mortgages above referred to, amounting to $55,470, which indebtedness secured by mortgages the said Easton by the terms of said deed assumed and agreed to pay.

Afterwards, on the 10th day of January, 1922, Elbin P. Morgan purchased and obtained from defendants in error, Nicholas and John Nye, certain property in Hessville, Sandusky county, Ohio, consisting of real estate and a dwelling house, also a store building and stock of merchandise, for a consideration of $12,500, subject to a mortgage of $4,000, which, in the conveyance, Elbin Morgan assumed to pay, leaving $8,500 due the Nyes in the transaction. Elbin Morgan paid for the said property with the $10,000 note, secured by the second mortgage on the Grattan Baker farm, which note Elbin Morgan indorsed, without recourse on him, and the Nye Brothers paid Elbin Morgan $1,500 in cash, being the difference between the $8,500 of the purchase price ($12,500 less the $4,000 mortgage indebtedness assumed) and the face of the $10,000 note, secured by the second mortgage, as aforesaid.

On the 15th day of February, 1922, Elbin Morgan traded this Hessville property for the Davis-Morrison block in Findlay, being the property described in the petition in this case, and obtained a conveyance thereof, subject to existing mortgages thereon aggregating $18,900.

Afterwards, to wit, on the 24th day of February, 1922, Nicholas C. Nye and John Nye filed in the court of common pleas of Seneca county, Ohio, an action at law seeking to recover damages by reason of fraud perpetrated upon them by the said Morgans because of the payment of the $10,000 promissory note used in securing their property. An injunction restraining the Morgans from disposing of their property was granted, and a motion for appointment of a receiver to take charge thereof was made, which motion, however, was denied. To this petition the Morgans filed an answer on the 28th day of February, in which they denied the fraud complained of, and averred that the Nyes did not rely upon any representations made by the Morgans regarding the Grattan Baker farm, but consulted others as to the value of the property in question. On the 17th day of June, 1922, the temporary restraining order theretofore granted in the Seneca county court, was dissolved, and on the last day of July, 1922, Elbin P. Morgan conveyed the real estate in Findlay, known as the Davis-Morrison block, to Harry G. Frederickson, subject to the mortgages thereon, aggregating $23,900 on the part of Frederickson.

On August 30, 1922, the petition in the instant case was filed in Hancock county, being a proceeding in equity whereby a trust was sought to be established in favor of Nicholas Nye and John Nye upon the Findlay real estate, known as the Davis-Morrison block, averring the same fraudulent transactions as were relied upon in the case filed in Seneca county, which latter suit had been dismissed.

The answer of the Morgans and Frederickson, defendants, filed in the Hancock county case, denied the fraud complained of and set up the affirmative defense of the action brought in Seneca county. It alleged that at the time of beginning such case in Seneca county the plaintiff Nyes had a choice of remedies, either to begin an action at law in deceit, asking money judgment (in the court of common pleas of Seneca), or to begin a suit in equity, seeking to declare a constructive trust ex malificio by reason of the fraud complained of, and, possessing such choice of remedies, that they (the Nyes) made an irrevocable election to begin their action at law in Seneca county. A reply was filed by the Nyes to these answers, and the issues were thus made up.

The matter came on for trial in Hancock county, and a motion for judgment on the pleadings was sustained by the common pleas court in favor of the Morgans and Frederickson, upon the theory that there had been an election of remedial rights. Appeal was prosecuted to the Court of Appeals, and in that court the same motion for judgment on the pleadings was made. The Court of Appeals upon considering the motion for judgment on the pleadings sustained the same as to the Morgans, but overruled the motion as to Frederickson, so that this case proceeded on appeal before the Court of Appeals of Hancock county against Frederickson alone. The Court of Appeals, upon hearing, rendered a decision in favor of the Nyes, giving them a judgment for $6,000, and making the same a lien upon the property of Frederickson, the Davis-Morrison block.

The plaintiff in error, Frederickson, prosecutes error in this court to reverse this judgment of the Court of Appeals, and the defendants in error file a cross-petition in error wherein they seek the same relief as sought in their original petition, to wit, the declaration of a trust ex malificio; that is, that Frederickson holds the title to the Davis-Morrison block in trust for the benefit of Nicholas Nye and John Nye.

Mr. W.H. Kinder and Messrs. Niles Peters, for plaintiff in error.

Mr. Geo. H. Phelps, for defendants in error.

DAY, J.

Two questions are involved in a determination of this case: First: Was there such an election of remedial rights by the Nyes in filing and pressing the Seneca county case as prevents them from asserting their claims in equity in the Hancock county case? Second: If there was such an election, which controls as to the Morgans, does the same operate as to their grantee, Frederickson?

The petition filed in the instant case, in Hancock county, among other averments, pleads as follows:

"The legal title to which now stands in the name of the defendant, Elbin Morgan, but which in equity, in view of said fraud these plaintiffs furnished the consideration for its purchase, and the defendants and neither of them have any just or equitable right to the same or any part or any interest therein. * * * Wherefore, plaintiffs pray that a trust for them be established and declared in said Findlay real estate above described and enforced for their protection, and they be decreed to be the real owners of the same."

In the petition of plaintiffs filed in the action in Seneca county there appear, among other declarations, the following averments:

"These plaintiffs relying upon the representations as to the worth of the said defendants, and the value of said farm, were induced to and did sell the said property, real estate, and goods of the value of $12,500 to the said Elbin Morgan, no part of which said sum has been paid * * * and Elbin Morgan immediately went to Findlay and conveyed plaintiff's property in Hessville, to one Harry A. Culler, and received in consideration for the real estate, property and goods which these plaintiffs had conveyed to the defendants a certain business block in the city of Findlay, Ohio. * * *

"Plaintiffs say that by reason of the facts herein alleged they have been defrauded in the sum of $10,000 together with interest thereon from the 10th day of January, 1922, for which amount they pray judgment. Wherefore, plaintiffs pray that they may have judgment in the sum of $10,000 with interest * * * and that a restraining order issue from this court temporarily restraining and enjoining the defendants and each of them from disposing of, conveying, selling or incumbering the property belonging to the said defendants * * * and that these plaintiffs may be first paid the same sum of $10,000 coming into the hands of the said receiver."

It is apparent that the petition in the Hancock county case avers the legal title to the Findlay block as in the Morgans and Frederickson, and the equitable title as in the Nyes, and that the action was clearly one in equity seeking to establish a constructive trust in the property in question in favor of the Nyes.

It is equally apparent that the action in the Seneca county case avers the title to the property, both legal and equitable, as in the Morgans, and what the plaintiffs wanted was a judgment for $10,000, the amount of which they claimed to have been defrauded, and that the property should be sequestered or sold to pay the same. This was an action at law in deceit with a prayer for money judgment.

Were these remedial rights which the Nyes were seeking to establish so inconsistent that the selection of one would be a bar to the assertion of the other?

It is to be noted that under the theory of one case, to wit, the law action in deceit (Seneca county), the title to the property is averred to be in the Morgans. In the other cage, while the legal title is conceded to be in the Morgans and their grantee, the equitable title is claimed to be in the Nyes.

Manifestly the Nyes could not claim that the property belonged to the defendants below and ask a money judgment and at the same time maintain an action upon the basis that the property did not belong to the defendants below, but in equity belonged to them.

At some stage the Nyes must necessarily be put to their election. An election of remedial rights is a choice made with knowledge between two inconsistent substantive rights, either of which may be instituted at the instance of the chooser, who cannot, however, enjoy both. Such an election goes not to the form, but to the substance, affecting some right of title selected. Such a choice, therefore, discards the alternative inconsistent right or claim.

An election of remedies or forms of action or procedure does not necessarily involve a choice as between two existing substantive rights. A form of action or remedy is but a means of administering justice rather than an end in itself. There is, therefore, a marked distinction between an election between remedies or forms of action and an election of remedial rights. One goes to the substance and the other to the form. Where the remedies afforded are inconsistent, it is the election of one that bars the other; where they are consistent, it is the satisfaction which operates as a bar. It is the inconsistency of the demands that makes the election of one remedial right an estoppel against the assertion of the other, and not the fact that the forms of action are different.

The theory of the Seneca county case was that the title to the property was in the Morgans and their grantee, and a money judgment was the relief sought. It amounted to an affirmance of the contract of conveyance of the properties in question. On the other hand the theory of the Hancock county case, being the action in equity, was that of disaffirmance of the contract of conveyance of the property, and assertion that while the legal title passed the equitable title was in the Nyes.

Now, a remedy based on the theory of an affirmance of the contract, or other transaction, is inconsistent with a remedy arising out of the same facts based on the theory of its disaffirmance or rescission, so that the election of either must be an abandonment of the other.

As we view the case presented, in order to make the two cases brought by the Nyes consistent, the Seneca county case must be treated and regarded as an action in equity for relief upon the ground of fraud, but unfortunately the averments of the petition charging that the property belonged to the defendants and asking for a judgment in the sum of $10,000 make the case one at law as an action in deceit based on fraud.

It is true that there is a prayer for injunction and a receiver, but this does not make the action one in equity. As is said by Matthias, J., in Complete Building Show Co. v. Albertson, 99 Ohio St. 11, 15, 121 N.E. 817, 818:

"But an action for the recovery of money as a debt or as damages is essentially an action at law and cannot be converted into a suit in equity by the mere use of words and phrases usually found only in pleadings in equitable actions, no matter how often repeated nor the extent of variation of such allegations. The essential and material averments of the petition will be scrutinized, and the pleading, stripped of all surplus and immaterial statements, examined to ascertain the essential character of the action. * * * The only equitable relief prayed for in this action is that of injunction, and that does not appear to have been urged. Even if it were, it was merely ancillary and incidental and cannot serve to change the nature of an action from one at law to a suit in chancery."

The authorities denying the right to pursue one remedy after having already elected another inconsistent one are numerous:

Clark v. Kirby, 204 App. Div. 447, 451, 198 N. Y. Supp., 172, 175:

"The law is elementary that where one has suffered by reason of the misrepresentation of another, and has been led to part with his money in reliance upon said false and fraudulent misrepresentation, he has three independent remedies: First, he may affirm the contract into which he had been induced to enter and sue for his damages for the fraud perpetrated upon him. Second, he may rescind the contract itself and bring action to recover back the moneys which he has paid. Third, he may bring an action in the nature of the action at bar in a court of equity to obtain a rescission of the contract into which he had been induced to enter, with incidental relief. An action for rescission is entirely independent and inconsistent with an action for damages by reason of the false and fraudulent representations. An the first [third] action the contract is treated as a nullity and the plaintiff asks the intervention of a court of equity to obtain a nullification of said contract. In the action for damages for fraudulent representations which induced him to enter into the contract, he affirms the contract and brings his action to recover damages by reason of such false representations. In the one action he treats the contract as nonexistent, and in the other action he affirms the contract. Each remedy is inconsistent with the other."

Grizzard v. Fite, 137 Tenn. 103, 191 S.W. 969, L.R.A., 1917D, 652:

"The Supreme Judicial Court of Massachusetts in Connihan v. Thompson, 111 Mass. 270, stated the doctrine thus: 'The defense of waiver by election arises where the remedies are inconsistent; as where one action is founded on an affirmance, and the other upon the disaffirmance, of a voidable contract, or sale of property. In such cases any decisive act of affirmance or disaffirmance, if done with knowledge of the facts, determines the legal rights of the parties once for all. The institution of a suit is such a decisive act; and if its maintenance necessarily involves an election to affirm or disaffirm a voidable contract or sale, or to rescind one, it is generally held to be a conclusive waiver of inconsistent rights, and thus to defeat any action subsequently brought thereon.' "

Robb v. Vos, 155 U.S. 13, 43, 15 Sup. Ct., 4, 39 L. Ed., 63, reviews a great number of cases from that court, as well as from the highest courts of several of the states, and concludes as follows:

"The rule established by these cases is that any decisive act by a party, with knowledge of his rights and of the facts, determines his election in the case of inconsistent remedies, and that one of the most unequivocal methods of showing ratification of an agent's act is the bringing of an action based upon such an act."

See Kinney v. Kiernan, 49 N.Y. 164; Moller v. Tuska, 87 N.Y., 166; Farwell v. Myers, 59 Mich. 179, 26 N.W. 328; Acer v. Hotchkiss, 97 N.Y. 395; the English cases cited in 10 Am. St. Rep., 487; Sanger v. Wood, 3 Johns. Ch. (N. Y.) 416; Lloyd v. Brewster, 4 Paige (N. Y.) 537, 27 Am. Dec., 88; Bulkley v. Morgan, 46 Conn. 393; O'Donald v. Constant, 82 Ind. 212; Theusen v. Bryan, 113 Iowa 496, 85 N.W. 802; Lowenstein Bros. v. Glass, 48 La. Ann., 1422, 20 So. 890; Bohanan v. Pope, 42 Me. 93; Thomas v. Watt, 104 Mich. 201, 62 N.W. 345; Conrow v. Little, 115 N. Y., 387, 22 N.E. 346, 5 L.R.A., 693; Clausen v. Head, 110 Wis. 405, 85 N.W. 1028, 84 Am. St. Rep., 933.

In some jurisdictions it is held that the commencing of an action to enforce one of two or more remedial rights arising out of the same facts, in the absence of mistake or some other legal excuse, in a court having jurisdiction to entertain such proceeding, is such a decisive act as constitutes a conclusive election, barring the subsequent prosecution of inconsistent remedial rights. It is held in other jurisdictions that the mere commencement of a proceeding is not such a conclusive election as will prevent plaintiff from obtaining a dismissal thereof and from instituting another proceeding to enforce an inconsistent remedial right.

Assuming that two or more remedies by action are inconsistent, the question is as to the effect, as a conclusive election, of merely bringing suit or of proceeding under an action to any point short of obtaining judgment; that is, how far must an action be carried in order to amount to an election?

The cases in Ohio do not seem entirely harmonious on the subject.

In Buell v. Cross, 4 Ohio, 327, 330, this statement is made:

"A person having an option of law or equity, after selecting one tribunal, cannot resort to the other. 1 Ohio Rep., 435, 2 Ohio Rep., 268. 3 Johns. Chy. 356."

It seems that a judgment creditor had his choice of bringing a suit in equity against an administrator or reviving a judgment by scire facias, the conclusion being that the creditor, having seen fit to revive his judgment by scire facias, was precluded from pursuing an independent action in equity.

In Clinton Bank of Columbus v. Hart, 5 Ohio St. 34, there was an action on a joint and several obligation, and it was held that the payee had an election to sue jointly or severally and that nothing short of a judgment on the merits could be pleaded in bar to another action on the other form, but that both remedies could not be pursued at the same time.

In Becker v. Walworth, 45 Ohio St. 169, 176, 12 N.E. 1, 4, there was an action to recover rent from an executor personally, and the defense was made that the landlord had collected rent from the defendant in his capacity as executor only, and, therefore, had elected to hold the defendant as such executor and not personally. The petition as originally filed was against Becker, as executor, but before answer, and on leave, the petition was amended so as to charge him personally, this being done before answer and issue tendered. The court in its opinion says:

"That until prosecuted to final judgment, the claim made against the executor as such would not stand in the way of a claim against him personally."

It would, therefore, seem that in that case the question as to whether final judgment was necessary to constitute an election was not raised, as the amendment was made before answer and issue made, and before any detriment or loss occurred to the defendant.

By later cases in Ohio it may be inferred that the selection of a remedy, even though it does not proceed to final judgment, is sufficient to constitute an election of remedy that will bar sub sequent action upon any other remedy.

In Zutterling v. Drake, 10 Ohio Cir. Ct. R. (N.S.) 167, it was held that "an election between remedies can be made but once, and where a plaintiff has chosen to ask for specific performance he can not subsequently maintain a suit for damages."

This case was affirmed in this court without opinion in Drake v. Zutterling, 82 Ohio St. 410, 92 N.E. 1113, upon the concurrence of three judges. (The court at that time consisting of six members only.) Whether or not the remaining judges took part in the case, or for what reason they did not give their views, does not appear.

The question was again before this court in the case of Mignery v. Olmstead, Adm'r, 91 Ohio St. 416, 417, 110 N.E. 1063, and it would seem by that decision that the court regarded the election as made upon the filing of a petition seeking a recovery on one of two inconsistent remedies. It was held that "plaintiff in error having selected his remedy when he prepared and presented his claim against the estate of James Mignery, deceased, he could not maintain an action upon the instrument in question for the land."

That case arose on the following state of facts: An action was begun in the probate court by the administrator of the estate of James Mignery, deceased, to sell real estate to pay debts. The heirs being made parties, a son, Ernest P. Mignery, filed an answer and cross-petition, wherein he set up what purported to be a written promise by his deceased father, together with his mother, by the terms of which he was to secure at $90 per acre a farm upon which he then lived. It further appeared that said Ernest Mignery, prior to filing his cross-petition for specific performance of the alleged agreement, had filed a claim against the estate of his father for services and money advanced. It was the conclusion of this court that, having elected to present his claim as upon an account and have it allowed, he could not also pursue his alleged claim for specific performance as to the land in question.

The case of Lee v. Thoma, 1 Ohio App. 384, affirmed by this court in 91 Ohio St. 444, 110 N.E. 1062, is to the effect that an action for specific performance is a bar to subsequent action for damages alleged to have been sustained through the failure of the defendant to carry out the contract which formed the basis of the first suit. Cases arising under statutory provisions, such as the Workmen's Compensation Act, Section 1465-76, General Code, providing that one electing to proceed under the Industrial Commission Act is barred from maintaining suit at law, do not apply. Such cases do not apply for the reason that they arise under purely statutory provisions. Conrad, Adm'x., v. Youghiogheny Ohio Coal Co., 107 Ohio St. 387, 140 N.E. 482, and Carnegie Steel Co. v. Zebich, 108 Ohio St. 449, 141 N.E. 367.

It might seem that the conclusions of this court, as found in the last three cases ( Drake v. Zutterling, supra, Lee v. Thoma, supra, and Mignery v. Olmstead, supra), indicate that the election of a remedial right, as evidenced by the mere filing of a petition, would constitute an irrevocable election to pursue an inconsistent remedy. In view of the fact that none of these cases announces a rule of law by syllabus, we are constrained to the conclusion that if any such construction of the doctrine of election of remedial rights is placed thereon the same should yield to the broader and more just doctrine that in order that an election of one remedial right shall be a bar to the pursuit of another, or other remedial rights, the same must be inconsistent and the election made with knowledge and intention and purpose to elect, and that there must be an actual election in fact made; that the mere bringing of a suit is not determinative of that right, but the party against making the election must have received some benefit under his election, or have caused detriment or loss to the other party, or pursued his remedy to final judgment. This we believe to be more in accord with the principles announced by Judge Spear in Becker v. Walworth, supra.

In the annotated case of Register v. Carmichael ( 169 Ala. 588, 53 So. 799), found in 34 L.R.A. (N.S.), 309, the editor of the note makes this observation:

"That 'an election, to be conclusive, must be efficacious to some extent at least. The mere bringing of a suit is not determinative of the right. The party against whom the estoppel is pleaded must have received some benefit under his election,' or have caused some detriment to the other party."

The rule is well stated by Judge Spear in Becker v. Walworth, supra, at page 176 (12 N.E. 1, 4):

"It is not necessary to undertake to lay down any general rule, as to election, by which all cases should be governed. Indeed it is apparent that no general rule can be given, but that every case must be left to be decided upon its own particular circumstances."

However, the record in the instant case does not present the precise question as to whether the mere filing of a petition electing a remedial right was an irrevocable bar, because in this case the parties went further.

Upon the filing of the action at law in Seneca county, February 24, 1922, an injunction was obtained which restrained the Morgans from incumbering or disposing of their property, and while the same was dissolved on the 17th of June following, yet between those dates their exercise of the right of control and ownership over their property was denied them. It is thus apparent that the Nyes inflicted some loss and detriment upon the Morgans, and in this action, in which the injunction was obtained, answers had been filed and issues joined. To deprive one of the free control of his property and the right to alien or incumber the same is to deprive him of a substantial right.

The General Code recognizes this principle by requiring the giving of a bond before an injunction shall issue. Nor is it sufficient to say that one against whom an injunction is issued, and whose property rights are affected thereby, may recover upon the injunction bond, thus making himself whole. Such procedure may require the employment of counsel and entail other expenses incident to trial. All of this causes detriment to the party affected thereby.

The Nyes might have reviewed this action of the common pleas court of Seneca county, but instead of so doing they waited from June until the last of August, and, then, abandoning the law case, began the action in equity in Hancock county. Clearly as to the Morgans the filing of the law action was an irrevocable election on the part of the Nyes to pursue that remedy, and the Court of Appeals was right in sustaining the motion for judgment on the pleadings as to them.

The question then remains whether the election was made against Frederickson, who acquired the property from Elbin P. Morgan in July, after the dissolution of the temporary injunction. It is not claimed that he (Frederickson) had any part in the transaction in the beginning, but that he took the property with knowledge of what the Morgans had done theretofore; in other words, the misdeeds of the Morgans against the Nyes formed the basis of the action in equity against Frederickson. He was Morgan's grantee in the deed and took the property, it is claimed, with knowledge of what Morgan had done fraudulently in securing said property.

As to the fraud committed by Frederickson, the journal entry of the Court of Appeals in that respect shows as follows:

"And being fully advised in the premises the court find the issues and equities in favor of the plaintiffs, and against the defendant, Harry G. Frederickson.

"That the plaintiffs suffered damages to the extent of $6,000 on account of the fraud alleged in the petition which should be charged as an equitable lien upon the property described in the petition under the facts alleged in the petition and amendment thereto which the court also find to be true as therein alleged."

Upon what portion of the record this finding of the truth of the allegations of fraud as against Frederickson is based we do not discover, unless it be the fact that Frederickson gave his brother-in-law, Elbin P. Morgan, a note for $5,000 and $1,000 in Liberty bonds in payment for the Findlay property, upon which there was already a mortgage amounting to over $18,000. Summed up, these facts would amount to about this: That Frederickson was the brother-in-law of Morgan; that Morgan had a lawsuit concerning this Findlay property, a fact which Frederickson probably knew. This would seem to be the basis of the finding of the Court of Appeals, that Frederickson's part of the fraud was to prevent the Nyes from working out on the property their claims against the Morgans. Frederickson had no part in the wrongs complained of until after they were completed, and he comes into the case entirely after the election of remedial rights was made, and after the dissolution of the injunction.

Does he stand in any different relation than Morgan would himself? We think not. The law action could have been pursued against Frederickson by making him a party, charging against him the same things that are charged in the equity action. Whatever wrong or fraud Frederickson is answerable for in this action he must have acquired by reason of becoming Morgan's successor in title to the real estate in question. If the election as against Morgan is good, it must follow that one who stands in Morgan's shoes cannot be charged with any greater wrong than Morgan. If Frederickson is to be held, then Morgan should be held also. The election of the remedial right had been made by the Nyes, and they are bound thereby.

In Terry v. Munger, 121 N.Y. 161, 168, 24 N.E. 272, 273 (8 L.R.A., 216, 18 Am. St. Rep., 803), Peckham, J., says:

"But it is urged that this election of the plaintiffs is not binding upon them in favor of the defendant herein, because it was only against the defendants in the other action that they made their election. It is said there is no case to be found where an election has been treated as binding in favor of a stranger to the transaction, and that the defendant herein is such stranger so far as the plaintiffs' transaction with the defendants in the other action is concerned.

"I do not think this claim can be maintained. In the first place, what is the nature of the plaintiffs' act in electing to consider the transaction as a sale? It is a decision or determination upon their part to in effect ratify and proclaim the lawfulness of the act of taking the property, and it is an assertion on the plaintiffs' part that in so doing the plaintiffs' interest in the property was purchased, and that thereby their whole title was transferred and they ceased to own any part of the property, and that those who took it impliedly promised the plaintiffs to pay them the value of their interest in such property. This being so, why does not such transfer of title bind the plaintiffs as to the whole world? Surely, the title which plaintiffs once had in the property cannot at the same time rest with them and pass to those who took it. If the title really once passed, that would be a fact actually existing, which anybody ought to have the right to prove if it became material in protecting his own rights, unless there were some equitable considerations in such case which should prevent it. I cannot see that any exist here. With full knowledge of all the facts, the plaintiffs deliberately elected to treat the transaction, in which this defendant's share was well known, as a sale of the property, and now they propose to recover from this defendant damages for the conversion by him of the very same property which they have already said they sold by virtue of the very transaction which they now claim amounted to a conversion of the property by this defendant. Why should the defendant not be permitted to set up such sale as a complete defense to this action? The plaintiffs have done nothing by reason of defendant's acts which should estop him from setting up this defense. Their situation has not since been altered for the worse by anything the defendant has done. If not, then the fact that the plaintiffs sold the property, by virtue of the transaction which they now seek to treat as a conversion of it by this defendant, must and ought to operate as a perfect bar to the maintenance of this action. And this is not in the least upon the principle of equitable estoppel. It is upon the principle that the plaintiffs, by their own free choice, decided to sell the property, and, having done so, it necessarily follows that they have no cause of action against defendant for an alleged conversion of the same property by the same acts which they had already treated as amounting to a sale." Citing Conrow v. Little, 115 N. Y., 387, 22 N.E. 346, 5 L.R.A., 693; Fowler, Ex'r., v. Bowery Savings Bank, 113 N.Y. 450, 21 N.E. 172, 4 L.R.A., 145, 10 Am. St. Rep., 479; Bank of Beloit v. Beale, 34 N. Y., 473.

We are, therefore, constrained to the conclusion that the Court of Appeals should have rendered the same decree that was made by the court of common pleas, and this matter coming into court upon error to the Court of Appeals, where it was heard upon appeal, we reverse the judgment of the Court of Appeals and render the judgment which it should have rendered, to wit, final judgment in favor of the plaintiff in error.

Judgment reversed.

MARSHALL, C.J., ROBINSON and MATTHIAS, JJ., concur.

WANAMAKER, J., not participating.

JONES, J. (dissenting).

The original action, claimed to be in bar of the present one, was an action at law against the Morgans for damages arising out of the same transaction which is the basis of the present action in equity. Although issues were joined the action at law was not heard, but was dismissed without prejudice at the plaintiffs' costs. Record, p. 228.

Counsel for plaintiff in error frankly state in their brief that there are diverging decisions in the various jurisdictions upon the question of what constitutes an election, viz: (1) That an election cannot he said to have been made until the case has been pursued to final judgment; (2) that an election is held to be a bar to a future action where some affirmative relief has been sought and obtained in the former; and (3) that the mere beginning of a case constitutes a final and irrevocable election, even though it be dismissed by the plaintiff before the affirmative relief is obtained or an adjudication had. We agree that the mere beginning or the beginning and dismissal of a case does not constitute an election, and are furthermore of the opinion that here there was no affirmative relief sought or obtained in the law action which precluded a future action by the Nyes.

The law action brought in Seneca county was dismissed in pursuance of Section 11586, General Code, which provides that "an action may be dismissed without prejudice to a future action" by the plaintiff, before its final submission to the court or jury. Giving this section that liberal inter pretation which safeguards all litigants in, this state the right to have any action heard upon its merits, this statute provides in explicit terms that such dismissal shall he without prejudice to a future action. This means any action touching the same subject-matter or transaction upon which the original action was based. The equity action brought by the Nyes, it is true, had a prayer that they be decreed to be the owners of the property acquired by Frederickson under the fraudulent conspiracy charged. But they also prayed for other and further relief in equity as the nature of the case should require.

The Court of Appeals found that plaintiff in error was guilty of fraud, and decreed, not that the title of the property should be restored to the Nyes, but that the latter should have an equitable lien thereon to the extent of the $6,000 as a result of the fraud perpetrated upon them. It found that Frederickson had conspired with the Morgans in the transaction upon which both the action at law and the action in equity were based. Now Frederickson urges in argument, not that he himself suffered any detriment because of the bringing of the first action, and the obtaining of the provisional order of injunction therein, but that the Morgans must have suffered some detriment in the law action because of a provisional injunction obtained therein which was later dissolved. Frederickson, the plaintiff in error, suffered no detriment by reason of the injunction — the injunction did not affect him — nor does it appear from this record that the Morgans were prejudiced thereby, for the reason that the Nyes executed a bond to the Morgans in the sum of $500, conditioned that they should pay the defendants any damages they might sustain by reason of the injunction. So that we have the real defendant in the equity action attempting to interpose an estoppel in pais, which could be urged only by the Morgans, who were fully protected by the injunction bond, and who sustained no special damages shown by this record.

While there may be some reason for holding that the filing of an action in a court of law may be an election in some jurisdictions, that principle should not apply in a state such as ours, where there. exists but one form of action, whether it be law or equity. Tn this state lawyers do not have to stamp their petition as one in equity or law, nor does the character of the prayer determine its nature. Under the liberality of our pleadings the facts are set forth, from which the court determines whether the action is at law or in equity. Raymond v. T., St. L. K. C. R. R. Co., 57 Ohio St. 271, 48 N.E. 1093. I do not believe that in the present case the so-called actions brought by the Nyes at law or in equity were so inconsistent but that relief in either forum could he obtained by them. Our statute of jeofails, (Section 11363, General Code) provides great liberality in amending pleadings, "before or after judgment, in furtherance of justice," when the amendment does not substantially change the claim or defense. After the law case was dismissed by the Nyes without prejudice to a future action, had the Nyes refiled the same petition they could, under the statute cited, amend their petition by disclaiming the allegation affirming title in the Morgans, and, by so amending, affirm that the equitable title was in the Nyes. The Nyes were not forestalled by the allegations contained in their first action from amending their pleading in that respect.

We think the language of Walker, J., in Warren v. Susman, 168 N.C. 457, 84 S.E. 760, is especially applicable here, in this state, where the Code permits the joinder of equity and law actions and liberality with regard to amendments. After citing authorities from Rhode Island and Georgia, Judge Walker, at page 464 of 168 N.C. ( 84 S.E. 760, 763), said:

"The Court added that it does not follow, because the original and amended bills are contradictory, that the amendment will be rejected, but amendments will be liberally allowed to change the nature of the bill and rectify mistakes. Our present Code system was adopted for the very purpose here indicated, and is liberal in its allowance of amendments. * * * It is said to modify the doctrine of election of remedies (7 Enc. of Pl. and Pr. p. 368), and to require the trial of cases to proceed according to right and justice, rejecting antiquated and refined technicalities. In a case similar to the one at bar, this court held that the proper course was to amend and substitute the last allegation for the first, the two remedies sought being inconsistent."

The syllabus in Wm. T. Spice Son v. Steinruck, 14 Ohio St. 213, declares that the restriction upon amendments, to the effect that they " 'must not change substantially the claim or defense,' does not refer to the form of the remedy, but to the general identity of the transaction forming the cause of complaint." Upon this subject, Minshall, J., in Root v. Railroad Co., 45 Ohio St. 222, 232, 12 N.E. 812, 816, said:

"A further point is made upon the pleadings, that the amendment filed to the original petition, is inconsistent with it. This may be so, but we see no reason why a party may not be permitted to change the averments of his pleading."

An action for money had and received may be changed to one for accounting. In Jayne's Ex'x. v. Platt, 47 Ohio St. 262, 24 N.E. 262, 21 Am. St. Rep., 810, it was held that a claim declared upon in an amended petition, though stated in a different form, if based upon the same facts and transaction as the claim stated in the original petition, could be amended. So it has been held that if a plaintiff files an action to recover for an accident caused by a carrier in intrastate commerce he may amend his petition by founding his action upon an allegation that the same occurred while the carrier was engaged in interstate commerce.

In the present case the equity action was based upon the same transaction set forth in the previous law action. The only difference between the two was the relief asked. As to that feature, obviously plaintiffs could change the form of their pleading from an action at law to one in equity. The syllabus in Raymond v. Railroad Co., supra, states the rule as follows:

"Under our system of pleading, a plaintiff may be permitted to substitute an amended petition in place of the original which may have the effect to change the form of action from an equitable to a legal action, the basis and ultimate object of the action remaining the same."

The damages sustained in either case arose from the same subject-matter. Had the Nyes exercised their privilege of bringing a second law action they could amend their pleadings, and there is no reason why they could not later seek a different remedy in equity if the cause of action arose out of the same subject-matter.

Since the Court of Appeals, through its journal entry, found that the plaintiff in error must have been guilty of the fraudulent conspiracy, as alleged in the pleading of the Nyes, the decree of that court awarding to the latter the sum of $6,000, and making it a lien upon the property in Hancock county, should be affirmed.

ALLEN, J., concurs in this dissent.