Court Opinion

ID: 6745580
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:49:39.334551+00
Date Added: 2024-06-11T16:02:04.013739
License: Public Domain

DISSENTING OPINION
By LEVINE, J.
I disagree from the conclusion reached by the majority of this court which affirmed the judgment of the Common Pleas Court. In this suit to enforce the super-added stockholders’ liability, all of the parties filed answers. A few of the answers contained general denials. The majority of the answers admit that the defendants were stockholders but by way of defense allege fraud in the inducement when they became stockholders. As to those defendants who filed general denials it seems to me clear that they put in issue the important fact alleged in the petition that they were stockholders. If this court is correct in its former holding in the case of Murfey, Blossom and Company v State of Ohio ex Fulton, Supt., decided December 23, 1935, that the defendants are entitled to trial by jury, it is quite clear to me that the Common Pleas Court committed error in denying these defendants a trial by jury.
As to those defendants who admitted that they were stockholders but by way of defense alleged fraud in the inducement, the majority of the court apparently is of the opinion that fraud in the inducement would not constitute a defense in this case. From this view I dissent. The suit to enforce the super-added liability is based upon an implied contract. This court held in the case of Murfey, Blossom and Company v State ex Fulton, that the constitutional provision for the super-added liability of stockholders in a bank and the statutory provisions contained in the General Code to the same effect, are all deemed to have been included in the stockholder’s contract when he became a stockholder. If there was fraud in the inducement or duress in the making of a contract it destroys the element of assent which is essential to make any contract binding. If the court finds that there was fraud in the inducement it must, at the request of the party defrauded, hold that the contract is null and void. In other words, that there was no contract. If there was no contract between the parties for the reason of fraud there can be no suit for super-added liability as the relationship of stockholder was completely demolished. There is but one exception. If the party upon discovery of the fraud which induced him to become a stockholder sleeps upon his rights and fails to exercise diligence to resort to the legal remedy afforded him to rescind the contract, or, if upon discovery of the fraud he takes or continues to take the benefits of his contractual relationship by collecting dividends or otherwise, he would be estopped from asserting the defense of fraud.
The record in this case shows that there was no trial on the merits and no evidence was offered. The trial court merely concluded that the defense of fraud is not available to the parties, regardless of the circumstances. In my opinion, the trial court was in error for the reasons above set forth. The substantial rights of the parties were seriously affected when the court denied them trial by jury and in effect dismissed their defense contained in the answers without any evidence having been offered by anyone to show the application of the doctrine of estoppel under the circumstances.
In the case against Louis Hutner we find the answer admitted that he was a stockholder, but denied everything else.
I am of the opinion that he presented no defense whatsoever. Having admitted in his answer that he was a stockholder, it becomes necessary for him to set forth matters of defense which- would exonerate him notwithstanding. This he failed to do. The trial court, in my opinion, was correct in rendering judgment against him, and I therefore concur in the judgment of this court as to Louis Hutner.