Case Name: Kiriakis v. Fountas
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1924-03-18
Citations: 109 Ohio St. 553
Docket Number: No. 18102
Parties: Kiriakis v. Fountas.
Judges: Marshall, C. J., Robinson, Jones, Matthias and Day, JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 109
Pages: 553–565

Head Matter:
Kiriakis v. Fountas.
Appeal — Oowrt of Appeals — Trial de novo — Introduction of evidence.
In a chancery case in the Court of Appeals, the parties have a constitutional right to have their case tried de novo, being permitted to introduce competent evidence under the legal rules applicable in the trial of questions of fact in trial courts.
(No. 18102
Decided March 18, 1924.)
Error to the Court of Appeals of Tuscarawas county.
Plaintiff, John Fountas, filed an action in the court of common pleas of Tuscarawas county, Ohio, alleging that on the 29th day of September, 1921, he made and delivered to defendant, A. A. Kiriakis, his promissory note for the sum of $1,-500; that the consideration for the note was the conveyance by defendant to plaintiff of a certain pool room and cigar store, together with all fixtures, equipment, and stock located in the building, which were on the same day conveyed by defendant to plaintiff by bill of sale duly executed; that on said date plaintiff covenanted with defendant to pay the note out of the proceeds of the business, and by way of securing the payment thereof it was agreed that defendant should make a daily audit and inspection of the business, the books and cash receipts thereof; that the proceeds of the business should be deposited in bank, and after payment to plaintiff of a sufficient amount for his board, room, and clothing, all of the overplus should be applied to the indebtedness; that in pursuance of this agreement the defendant has assumed more or less control of the receipts of the business and has taken an audit of the books of the business daily, and has taken the cash from the register and deposited the same in the bank in his own name; that defendant has paid plaintiff sufficient amounts therefrom for his immediate requirements; but plaintiff avers that defendant has wilfully, unlawfully, and fraudulently retained more of the funds derived from the proceeds of the business than is justly due him, and has derived, in the manner aforesaid, the sum of $1,751 in excess of all the debts, expenses, and overhead of said business, including all amounts paid to this plaintiff. The petition prays for the cancellation of the promissory note for $1,500, for an injunction enjoining the defendant from in any way transferring the note, and for an order requiring its surrender. The petition also prays for an injunction prohibiting the defendant from remaining in and about the place of business theretofore managed jointly by both parties, and from exercising any control whatever over the moneys or property belonging to the business. A prayer for the recovery of the sum of $251.10, alleged to have been wrongfully taken by the defendant from the business, is also included in the petition.
The defendant filed an amended answer and cross-petition. The answer consisted of two defenses, the first alleging that on the 29th day of September, 1921, plaintiff made and delivered to defendant his promissory note for the sum of $1,-500; that the consideration for the note was the conveyance to plaintiff of the undivided one-half interest in and to a certain pool room and cigar store located at 113 West High street, New Philadelphia, Ohio, together with the undivided one-half interest in and to all the fixtures, equipment, and stock located in said building; that it was further agreed that each should furnish one-half of the expenses for operating said business and for the purchase of stock and merchandise, and that the net profits of the business should be equally divided between them; that pursuant to such agreement plaintiff and defendant entered into the business of conducting the pool room in partnership; that plaintiff was to pay off said note out of his share of the profits arising from the business; and that plaintiff and defendant conducted such business as a partnership from the said 29th day of September, 1921, up to and until the 23d day of August, 1922, when defendant was restrained from exercising his rights as a partner therein by the order of the court. The first defense concluded with the denial of all facts not admitted.
In the second defense, and in the cross-petition, the defendant alleged in substance that on and prior to September 29, 1921, he was the owner of the place of business and of the chattel property in question; that on that date defendant executed a bill of sale and contract of partnership by which defendant sold and intended to transfer to the plaintiff the undivided one-half of the place of business and the chattel property in question, but that by a mistake of the scrivener, and the mutual mistake of the parties, and contrary to their intention, the bill of sale written purported to trans fer to plaintiff the entire interest of the business and chattel property described. The cross-petition asked that the bill of sale be reformed so as to conform to the real intention of the parties and prayed for judgment upon the note for $1,500, making due allowance for credits indorsed thereon.
The plaintiff filed a reply to this cross-petition, alleging in substance that the sale in question was of the entire interest in the pool room, stock, fixtures, and business, and denying all allegations not specifically admitted.
A temporary injunction was granted as prayed for in the petition, and a referee was appointed for the trial of the issues of both law and fact.
The referee rendered his report, and thereafter the court of common pleas made permanent the temporary injunction, approved the report of the referee, and rendered judgment thereon against the defendant for the sum of $212.94 and costs. The defendant excepted, gave notice of his intention to appeal, and filed the appeal bond fixed by the court.
Within the period required by law, the defendant filed in the Court of Appeals a transcript of the docket and journal entries together with all original papers from.the court of common pleas. Some objection being made to the amount of the appeal bond, the. defendant on May 15, 1923, filed in the Court of Appeals a motion for leave to amend the appeal bond. No disposition of this motion appears upon the record.
On May 18, 1923, the Court of Appeals caused the following entry to be made on its journal:
“This cause came on for hearing upon the mo tion of the plaintiff to dismiss the appeal, and upon consideration thereof the court finds that on January 11, 1923, the court of common pleas, wherein the action was then pending, by agreement of the parties appointed J. F. Kuhns referee for the trial of the issue both of law and fact, with instructions to separately make his findings of law and of fact and report them to said court of common pleas. That the said report was filed in. the court of common pleas on the 24th day of January, 1923, and thereafter approved and confirmed by the common pleas court. That there is no transcript of the evidence or bill of exceptions taken before the said referee on file in this court, and therefore the court finds that this cause is not appealable to this court, and the motion to dismiss the appeal is sustained. To all of which the defendant excepts.”
To this judgment error is prosecuted in this court.
Messrs. Seikel & Hill, for plaintiff in error.
Messrs. Mitchell & Mitchell, for defendant in error.

Opinion:
Allen, J.
The controlling question to be determined herein is whether or not the Court of Appeals erred in dismissing the appeal from the court of common pleas, on the ground that the case was not appealable by reason of the fact that there was no transcript of the evidence nor bill of exceptions taken before the referee on file in the appellate court.
Two major points arise in the consideration of this question: The first is whether the present action is a chancery case and in its nature appeal-able. The second is whether an action loses its chancery nature by reason of a rule of the Court of Appeals requiring that cases be tried upon a transcript of the evidence admitted in the court below, supplemented by oral testimony.
Looking to the pleadings, we find that the original action prayed the cancellation of a promissory note for $1,500, an injunction to prevent the defendant from negotiating or transferring the note, and from exercising any control over the moneys or property belonging to the business, and the recovery of the sum of $251.10. If the application for a money judgment is incidental and the application for injunction and cancellation is the main relief sought, the plaintiff's case is a chancery case. However, as injunction and -cancellation of evidences of debt are often sought as ancillary, instead of main, relief, there is considerable doubt whether the petition states a chancery case. The money judgment prayed for seems to be the main purpose of action.
However, the cross-petition filed by the defendant, in which he alleges the existence of a partnership, asks in substance for an accounting, and prays for reformation of the bill of sale on the ground of mutual mistake.
This cross-petition is clearly equitable, and establishes equitable jurisdiction. Where a court of equity obtains jurisdiction of an action, it will retain it and administer full relief, both legal and equitable, so far as it pertains to the same trans actions or subject-matter. Frank v. Davis, 135 N. Y., 275, 31 N. E., 1100, 17 L. R. A., 306, Under such circumstances a court of equity may go on to complete adjudication, even establishing legal rights and granting legal remedies which would otherwise be beyond the scope of its authority. Johnston & Grommett Bros, v. Bunn & Monteiro, 108 Va., 490, 62 S. E., 341, 19 L. R. A. (N, S.), 1064, The same rule is laid down in Ohio. Gants v. Gease, Gdn., 82 Ohio St., 34, 91 N. E., 872.
The present action, therefore, is of a chancery nature and appealable.
The Court of Appeals, however, held that the' action was not appealable, on the ground that "no transcript of the evidence or bill of exceptions taken before the referee" was on file in that court, and the record does indeed show that no bill of exceptions was taken upon the hearing before the referee and that no transcript of the evidence upon the hearing was filed.
We come, therefore, to the second and controlling question in the case, which is whether the fact that no transcript of evidence nor bill of exceptions has been filed in the Court of Appeals in a chancery case justifies the court in dismissing the appeal. Defendant in error urges that the dismissal of the appeal is justified under Eule 16 of the Court of Appeals, which reads:
"It is hereby ordered by the Court of Appeals that all cases coming into said Court of Appeals shall be tried on a transcript of the evidence presented in the court of common pleas supplemented by such additional oral evidence as may be neces sary to fully and fairly present the same to the Court of Appeals, which transcript of testimony shall be filed in the office of the clerk of courts at least fifteen days before the commencement of the ensuing term of the Court of Appeals, the costs of which transcript shall be paid by the party ordering the same and shall be taxed the same as a bill of exceptions.
"And on default of such transcript, a referee to hear the testimony of witnesses and report the same to the court may be appointed, as provided by statute."
Presumably the Court of Appeals dismissed the appeal in reliance upon this rule. The record shows no other reason for the action taken.
This court, however, has lately held that this rule of the Court of Appeals, which has considerable basis in convenience, does not and cannot abrogate the law of the state with regard to trials on appeal. Toledo & Ohio Central Ry. Co. v. Village of Hartford, 101 Ohio St., 520, 130 N. E., 942. In that case this court made the following entry:
"The court finds that the Court of Appeals erred in the admission of the transcript of testimony taken in a former hearing of the cause under the circumstances and within the limitations laid down by the court as shown by the record. It is therefore ordered and adjudged by this court that the judgment of the Court of Appeals be, and the same is hereby, reversed, and it is further ordered and adjudged that this cause be, and the same is hereby, remanded to the Court of Appeals with instructions to proceed with the trial of the cause de novo, the parties being permitted to introduce in evi deuce relevant testimony under the legal rules applicable in the trial of questions of fact in trial courts.
"Judgment reversed and cause remanded."
In the Hartford case certain other legal questions were raised, but one of the points upon which • reversal of the judgment of the Court of Appeals was granted was that counsel for appellants, on, appeal in the Court of Appeals, objected to the introduction of a transcript of the testimony in the court below. The Court of Appeals accepted the transcript as offered in evidence, over the objection of counsel for plaintiffs. Judgment was given for the appellees, and the appellants prosecuted error to the Supreme Court upon the ground, among others, that the appellants in the Court of Appeals had a right to have their case tried de novo, in like manner as if the case had never been tried before, and on its merits. This court sustained that contention.
The Ohio rules pertaining to appeal cases differ greatly from those of other states, being determined by the Constitution and statutes peculiar to this state.
Section '6, Article TV, of the Constitution of Ohio, reads as follows:
"The Courts of Appeals shall have original jurisdiction in quo warranto, mandamus, habeas corpus, prohibition and procedendo, and appellate jurisdiction in the trial of chancery cases, and, to review, affirm, modify, or reverse the judgments of the courts of common pleas, superior courts and other courts of record within the district as may be provided by law."
As stated in Grant v. Administrator of Ludlow, 8 Ohio St., 1, 29, 31:
"The best guide, perhaps the only safe guide, to determine what is the proper practice of appellate courts, is to be found in the appellate powers conferred by law, and the usages of courts under it.
"Under the Constitution of 1802 the Supreme Court of Ohio could be vested with original and appellate jurisdiction.
"An appeal to the Supreme Court did not simply present to that court the question whether the court below erred in law or in fact, but the appeal itself vacated, without revisal, the operation of all the law decided by the court below, and all the findings of fact, by the court or jury below.
"One of the peculiar features of this appellate jurisdiction was, that, unlike a writ of error, which passes upon the record, and unlike an appeal to the Supreme Court of the United States, the appeal to the Supreme Court of Ohio took up the subject-matter of the action at the point where the court below took it up, and proceeded from that point, in respect to pleadings, necessary parties in chancery, testimony, trial and judgment, in like manner as if the cause had never been tried below.
"Such were the incidents of appellate jurisdiction, known and practiced for more than two generations, when the Constitution of 1851 was adopted. By the provisions of this Constitution, the Supreme Court and district courts have such appellate jurisdiction as may be provided by law. What was meant by appellate jurisdiction, had been too well settled by legislation and practice, to need definition or interpretation. Civil actions were not to originate in the Supreme Court, or district courts; but when pending or decided in another tribunal, could be taken to and disposed of, in the appellate court, in such manner, and with such control over the pleadings, testimony, and necessary parties, as might be provided by law."
It has long been the law in Ohio that an appeal is a removal of a cause or matter from an inferior jurisdiction, after its decision, to a superior jurisdiction for retrial on its merits. City of Zanesville v. Zanesville Telegraph & Telephone Co., 64 Ohio St., 67, 83, 59 N. E., 781, 52 L. R. A., 150, 83 Am. St. Rep., 725.
In Mason v. Alexander, 44 Ohio St., 318, at page 328, 7 N. E., 435, at page 439, the court says:
"In Ohio the appeal itself vacates, without re-visa!, the whole proceeding as to findings of fact as well as law, and the case is heard upon the same or other pleadings, and upon such competent testimony as may be offered in that court. It takes up the subject of the action de novo, in respect to pleadings, necessary parties, trial and judgment, in like manner as if the canse had never been tried below."
As the appeal case is a trial de novo, even though the case below was referred to a referee, a transcript of the evidence before the referee was unnecessary. The referee's report is vacated by the appeal, together with the judgment. Lawson v. Bissell, 7 Ohio St., 129.
The plaintiff's right to have a trial de novo by the Court of Appeals, under the legal rules applicable to trials in a trial court, is a constitutional right which cannot be denied on the ground that there is on file in the Court of Appeals no transcript of the evidence, nor bill of exceptions, whether taken before the referee or taken in the court below.
Defendant in error claims, however, that even if the Court of Appeals erred in dismissing the appeal for the reason given, its judgment was right for the reason that no appeal bond was filed in the case as required by law. The record shows that the court of common pleas fixed the amount of the appeal bond at $200, and this bond was duly filed. The judgment being for $212.94, defendant in error urges that the bond was not in double the amount of the judgment, as required by Section 12229, General Code, and that hence the appeal was rightly dismissed.
The record shows, however, that upon May 15, 1923, three days before the entry of dismissal in the Court of Appeals, the plaintiff in error, who was appellant in that court, filed a motion for leave to amend his appeal bond, which motion was pending before the court at the time of the dismissal of the petition.
The court had power to permit the amendment' of this bond:
"If a litigant has intended to and in good faith' taken steps to file an appeal bond with the clerk of court, who approves the same, and a mistake has been made therein in any respect, whether in form or substance, Section 11363, General Code, authorizes the appellate court, in furtherance of justice, to permit its amendment." Austin v. Morris, 103 Ohio St., 449, 134 N. E., 471.
This objection is therefore untenable.
For the above reasons the judgment of the Court of Appeals is reversed, and the cause remanded to the Court of Appeals, with instructions to overrule the motion to dismiss the appeal and to grant plaintiff in error a trial de novo on appeal.
Judgment reversed and cause remanded.
Marshall, C. J., Robinson, Jones, Matthias and Day, JJ., concur.