Peterson v. Teodosio

• Decision Date: 30 May 1973
• Docket Number: No. 72-609,72-609
• Citation: 34 Ohio St.2d 161,63 O.O.2d 262,297 N.E.2d 113
• Parties: , 63 O.O.2d 262 PETERSON, Admx., Appellee, v. TEODOSIO et al., Exrs., Appellants.
• Court: Ohio Supreme Court

Page 161

34 Ohio St.2d 161

297 N.E.2d 113, 63 O.O.2d 262

PETERSON, Admx., Appellee, v. TEODOSIO et al., Exrs., Appellants.

No. 72-609.

Supreme Court of Ohio.

May 30, 1973.

Syllabus by the Court

1. Where a partnership is dissolved by the death of a partner, the accrual of a cause of action for an accounting by the estate of the deceased partner is not delayed for the reason that no appointment of a representative of the estate is made, and the statute of limitation begins to run from the date of such dissolution.

2. It is incumbent upon those beneficially interested in an estate to secure the appointment of a representative to assert claims in favor of the estate.

3. Where a husband-wife partnership is dissolved by reason of the death of the wife, and the surviving spouse falsely represents to the Probate Court that his wife had no assets in excess of $1,000, thereby securing a release of administration, and the surviving spouse continues to hold the partnership assets as his own, such holding does not create a 'continuing and subsisting trust' within the exception provided for in R.C. 2305.22.

4. Where a surviving partner who is the husband of a deceased partner has possession of the partnership assets subsequent to the death of his wife, and who is under a duty with respect to such assets to wind up the affairs of the partnership pursuant to the Uniform Partnership Act and to account to his wife's estate for her interest, falsely represents to the Probate Court, as surviving spouse, that his wife had assets less than $1,000, thereby securing a release from administration, and claims the assets as his own, and neither winds up the partnership nor accounts to his wife's estate, an action by the administratrix of the wife's estate to require an accounting for the impressing of a constructive trust upon the assets is an action upon the ground of fraud and the four-year limitation set forth in R.C. 2305.09(C) is applicable.

5. Where, upon the face of a complaint in an action based on fraud, it appears that the fraud occurred more than four years before the action was commenced, no averment is made that the fraud was discovered within four years of commencement of the action, and the answer sets forth the defense of the statute of limitation, entry of judgment upon the pleadings on defendant's motion is proper.

6. It is an abuse of discretion for a court to deny a motion, timely filed, seeking leave to file an amended complaint, where it is possible that plaintiff may state a claim upon which relief may be granted and no reason otherwise justifying denial of the motion is disclosed.

On May 7, 1971, a complaint was filed in the Common Pleas Court of Summit County against the co-executors of the estate of Julius Razza, alleging in its material parts that the plaintiff, Florence Peterson, was appointed on April 19, 1971, as the administratrix of the estate of Mildred Razza and that during her lifetime Mildred Razza was the wife of Julius Razza who died on March 17, 1970. It was alleged further that during the life of Mildred Razza she was engaged as co-owner, joint venturer or partner with her husband in a real estate business known as Julius Razza Realty Company, and that all money and property of the realty company was jointly owned by Mildred and Julius Razza.

The complaint then alleged the following:

'4. Said business partnership was dissolved by operation of law upon the death of Mildred Razza on June 7, 1959, but the said Julius Razza, subsequent to the death of Mildred Razza, did not as a surviving partner terminate and wind up the affairs of the partnership pursuant to Chapter 1779, Ohio Revised Code, nor was said partnership otherwise terminated but was wrongfully continued to be operated by the said Julius Razza.

'5. Furthermore, the said Julius Razza, now deceased, made application to the Probate Court of Summit County, Ohio, for an order releasing the estate of Mildred Razza from administration, claiming that the assets in her possession were less than one thousand dollars ($1,000), and said estate was, on July 6, 1959, ordered by the Judge of the Probate Court of Summit County, Ohio, released from administration. Said statements by Julius Razza, now deceased, that his wife, Mildred Razza, deceased, had no assets in excess of one thousand dollars ($1,000) were not true, for the reason as above stated that Mildred Razza was a co-owner of all of the property belonging to Julius Razza Realty Company or standing in the name of Julius Razza.

'6. The said Julius Razza, deceased, therefore had in his exclusive control and possession, subsequent to the death of Mildred Razza and until the death of Julius Razza on March 17, 1970, substantial assets belonging to the estate of Mildred Razza, deceased, which should now be turned over to the plaintiff.'

The relief prayed for was an accounting and a money judgment in accordance therewith, the impressing of a constructive trust upon the assets of the Julius Razza estate, and an order enjoining distribution of assets.

The answer, filed on May 21, 1971, asserts seven defenses, among which was the defense that the action was barred by the ten-year statute of limitation. (R.C. 2305.14.) On August 12, 1971, defendants filed a motion, pursuant to Civ.R. 12(C), for judgment on the pleadings upon the ground that the action 'was barred by the applicable statute of limitations, Revised Code, Section 2305.14.' The motion was sustained by entry on September 28, 1971. On October 1, 1971, plaintiff moved to set aside the entry for the purpose of allowing the filing of an amended complaint, which motion was denied and final judgment entered in favor of appellants on October 7, 1971. The amended complaint, tendered with the motion, added additional allegations that plaintiff, as a daughter of Mildred Razza, relied upon the statement of Julius Razza and his named counsel to the Probate Court, and that discovery that substantial assets existed was not made until May 1970.

Upon appeal, the Court of Appeals reversed the judgment of the Common Pleas Court, holding that the facts alleged in the complaint gave rise to a constructive trust and that R.C. 2305.14 did not apply, since the constructive trust was a 'continuing and subsisting' trust within the meaning of R.C. 2305.22, and therefore is excepted from the application of the statute of limitation. The court did not pass upon a second assignment of error asserted in the Court of Appeals, and reasserted here, that the trial court committed prejudicial error in its refusal to allow the filing of an amended complaint.

The cause is now before this court pursuant to the allowance of a motion to certify the record.

Hershey, Browne, Wilson, Steel, Cook & Wolfe and Johm L. Wolfe, Akron, for appellee.

Rini & Hecht and Ralph V. Cosiano, Cleveland, for appellants.

STEPHENSON, Justice.

The initial question this appeal presents is whether the cause of action, as pleaded in the complaint in this case, is barred by the statutes of limitation. ^* The next question is, if so barred, whether the trial court committed prejudicial error in overruling appellee's motion to file an amended complaint.

In deciding the initial question of the applicability of the statutes of limitation, three subsidiary questions must be considered: (1) Is the accrual of a cause of action by a deceased partner's estate against a surviving partner dependent upon the appointment of a representative of the deceased partner's estate? (2) Do the allegations of the complaint allege a trust that is a 'continuing and subsisting trust,' within the meaning of that term as used in R.C. 2305.22? (3) Are the allegations of the complaint sufficient to make applicable the four-year limitation of R.C. 2305.09(C) for 'relief on the ground of fraud,' and the provision in R.C. 2305.09 as to discovery?

Since the judgment below was entered upon the pleadings, pursuant to Civ.R. 12(C), appellee herein was entitled to have all the material allegations in the complaint, with all reasonable inferences to be drawn therefrom, construed in her favor as true. 2A Moore's Federal Practice 2342, Paragraph 12.15; 5 Federal Practice and Procedure, Wright and Miller, Section 1368. Civ.R. 12(C) is a continuation of the former statutory practice and presents only questions of law, and determination of the motion for judgment on the pleadings is restricted solely to the allegations in the pleadings. Conant v. Johnson (1964), 1 Ohio App.2d 133, 204 N.E.2d 100.

It is the contention of appellee that, irrespective of any other consideration the cause of action did not accrue until the appointment of appellee as administratrix. She argues that, where there is a right of recovery which arises by reason of death, the cause of action does not accrue until there is existence one who may be plaintiff and one who may be defendant. The principle was enunciated as a fundamental rule of law in Hoiles v. Riddle (1906), 74 Ohio St. 173, 78 N.E. 219, See, also discussion in Taylor v. Thorn (1876), 29 Ohio St. 569; Treasurer v. Martin (1893), 50 Ohio St. 197, 33 N.E. 1112. In Wrinkle v. Trabert (1963), 174 Ohio St. 233, 188 N.E.2d 587, this court, overruling Hoiles v. Riddle, held that the statute of limitations begins to run upon a claim for personal injuries at the time the injuries are sustained, even though the person against whom the action would be brought is killed in the accident in which the injuries occurred. The rationale of the holding is that it is incumbent upon one who has a claim against an estate, if no administrator is appointed, to exercise his statutory right and procure such appointment so he can proceed. Thus, the Ohio law, as enunciated in Wrinkle v. Trabert, supra, is that a cause of action arising out of a death accrues at the time of death, notwithstanding there has been no representative of the estate of the deceased appointed. The weight of authority outside Ohio clearly...