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1977 Ohio App. LEXIS 8777, *

GENE DOROTHY SIMS, Plaintiff-Appellee Cross-Appellant v. BLOOMFIELD
SAVINGS BANK, Defendant-Appellant Cross-Appellee and RICHARD L.
C.A. No. 8461
Court of Appeals of Ohio, Ninth Appellate District, Summit County
1977 Ohio App. LEXIS 8777
December 14, 1977
CASE NO. 75-6-1489
COUNSEL: Andrew J. Michaels and Edmund M.
Sawan, Attorneys at Law, for Plaintiff-Appellee, Cross
Dennis Reimer and Richard L. McNellie, Attorneys at
Law, for Defendant-Appellant, Cross Appellee
J., CONCUR (Hunsicker, J., retired Judge of the Ninth
District Court of Appeals, and Harvey, J., retired Judge
of the Court of Common Pleas of Summit County, Ohio,
sitting by assignment pursuant to Article IV Sec. 6(C),

This cause was heard October 12, 1977, upon the
record in the trial court, including the transcript of
proceedings, and the briefs. It was argued by counsel for
the parties and submitted to the court. We have reviewed
each assignment of error and make the following
On June 25, 1975, Mrs. Gene Dorothy Sims filed a
complaint in the Common Pleas Court of Summit
County, Ohio, against Bloomfield Savings Bank of
Bloomfield, New Jersey, Richard L. Roudenbush,
Administrator, Veterans Administration, Joe Stratton and
Betty Stratton. [*2] The action, before final submission
to a jury, was dismissed as to Richard L. Roudenbush,
Administrator, Veterans Administration. Joe Stratton and
Betty Stratton were later dismissed without prejudice.
The action proceeded to final conclusion against
Bloomfield Savings Bank and a judgment was rendered
against that bank. From the judgment thus rendered, an
appeal is lodged in this court. The complainant, Mrs.
Sims, filed a cross-appeal. The chief issue by Mrs. Sims
is that she did not receive a larger verdict. The chief
issue by Bloomfield Savings Bank is that a verdict of any
amount in favor of the complainant, Mrs. Sims, is
On October 8, 1963, Mrs. Sims executed a note and
mortgage on real estate in favor of National First
Mortgage Company of Canton, Ohio, in the sum of $
13,500. This debt was guaranteed by a Veterans
Administration Loan Guaranty Certificate dated October
24, 1963, to the extent of 55.56% of the indebtedness
outstanding from time to time under this loan. The V.A.

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1977 Ohio App. LEXIS 8777, *

Loan Guaranty Certificate was issued to National First

Mortgage Co. and was assigned by it to Bloomfield
Savings Bank.
Mrs. Sims never lived in these mortgaged premises,
which consisted [*3] of four rental units. On December
14, 1965, Mrs. Sims transferred the property to Joe
Stratton and Betty Stratton. In the deed transferring the
property to the Strattons there is a statement saying there
is "the certain first mortgage loan in favor of National
First Mortgage of Akron, Ohio (sic) with a balance due
thereon in the approximate amount of $ 12,924.42, which
the grantees herein recognize and agree to assume."
The Strattons were delinquent many times in their
payments on the loan, which on December 23, 1963, had
been transferred by National First Mortgage Co. of
Canton, Ohio to the appellant herein, Bloomfield Savings
Bank of Bloomfield, New Jersey.
National First
Mortgage, however, continued to service the loan and
collect the payments. Bloomfield Savings Bank had full
knowledge that this obligation of Mrs. Sims carried a
Veterans Administration Guaranty upon which the
original maker of the note was liable to the Veterans
Administration in the event of default.
At the time of the execution of the loan by Mrs.
Sims, she was a three year veteran and an employee of
the Federal Aviation Administration. At the time of the
hearing of this complaint, Mrs. Sims was a 24 year [*4]
employee of the F.A.A. and worked but two places
during that period, Akron-Canton Airport and Cuyahoga
County Airport. The great majority of the time she was
employed at the Akron-Canton Airport and she lived in
the general location, either in Akron, Summit County,
Kent, Portage County, or Cuyahoga County near the
airport where she was employed. Mrs. Sims also said
mail addressed to her was forwarded from one address to
her new address when she moved her living quarters.
The delinquencies of Stratton were frequent but
some were reinstated. Mrs. Sims was notified of the
delinquencies and some of the reinstatements. After one
of the longer delinquencies, the foreclosure action was
started. National First Mortgage Co. notified the
Veterans Administration which concurred in the
recommendation by National First Mortgage Co. to
Bloomfield Savings Bank to proceed to file a foreclosure
This foreclosure action was begun January 27, 1971,
against Joe Stratton, Betty Stratton, Arthur E. Swanson,
Treasurer of Summit County, Ohio and Gene Dorothy
Sims, the appellee and cross-appellant here. Certified
mail service was made on the Strattons and Swanson.
On the day the complaint in [*5] foreclosure was filed,
Mr. Dennis Reimer, attorney for the complainant, filed an
affidavit under the provision of R.C. 2703.14 and R.C.

2703.16, saying the address of Mrs. Sims was unknown

and could not, with reasonable diligence, be ascertained.
This affidavit was executed and sworn to on the oath of
Mr. Reimer before a notary public. Under oath, before
the trial judge and the jury, Mr. Reimer said he did
"absolutely nothing" in trying to locate Mrs. Sims.
On March 3, 1966, Bloomfield Savings Bank
notified the Strattons that Mrs. Sims was not released
from the mortgage debt and that she was responsible in
the event the Strattons defaulted in payment of the
mortgage loan.
The real property herein was bid in at Sheriff's sale
by Bloomfield Savings Bank. On January 21, 1972, the
bid for the property was assigned by Bloomfield Savings
Bank to the Veterans Administration. The National First
Mortgage Co., as the service agent of the loan, hired a
real estate agency to look after the property. No rents
were paid. The property was severely vandalized and
was finally sold to one Shoaps for $ 1200.
In June, 1975, Mrs. Sims was notified, by the
Veterans Administration, that by reason [*6] of the
guaranty obligation the Veterans Administration paid
Bloomfield Savings Bank $ 5,929.14. It is this amount
plus interest that the Veterans Administration request
Mrs. Sims to pay. Nothing has been paid to the Veterans
Administration by Mrs. Sims.
On June 25, 1975, after receiving the demand of the
Veterans Administration, Mrs. Sims filed her action in
the Common Pleas Court and after a long and very
peculiar trial a verdict for Mrs. Sims in the amount of $
3562.57 was returned by the jury. From the judgment
rendered on the verdict the appellant Bloomfield Savings
Bank lodged an appeal to this court saying:
"The trial court erred:
"1. As a matter of law in holding that the appellee,
Gene Dorothy Sims, held a vendor's lien upon the
property in question.
"2. In holding that the appellee was a necessary
party to the foreclosure action where she did not retain
any interest in and to the real estate which was the
subject matter of the foreclosure action.
"3. In overruling the appellant's motions to dismiss,
which were filed after the initial complaint, at time the
trial commenced and during the trial; and, further erred
in overruling the appellant's motion for [*7] directed
verdict made at the close of plaintiff's testimony,
appellant's motion for mistrial, appellant's motion for
judgment notwithstanding the verdict and appellant's
motion for new trial for the reason that the appellee had
no vendor's lien, was not a necessary party to the lawsuit
and, therefore, could not have sustained damage.

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1977 Ohio App. LEXIS 8777, *

"4. In not holding that the complaint of the appellee

was one of indemnification and erred in not properly and
promptly dismissing the defendants, Betty and Joe
Stratton, and dismissing the appellant as a party
defendant on the theory of indemnification and on the
theory that no cause of action was stated.
"5. In admitting into evidence exhibits which were
given to the appellee on a motion to produce and which
were not properly identified by a witness and upon which
there was no proper foundation given from the witness
"6. In allowing into evidence the exhibits from the
Veterans Administration without proper foundation in
accordance with Section 2317.40 of the Ohio Revised
"7. In allowing into evidence, over objection, the
financial ability and condition of the appellee and the
financial condition of the defendant, Joseph [*8]
"8. In instructing the jury that Dennis Reimer,
Attorney at Law, the attorney representing the appellant
at the time of foreclosure action was an agent of the
plaintiff to such a degree that they would be bound by all
his actions and further holding that he was acting within
the scope of his employment for all matters testified to.
"9. In instructing the jury that the defendant-appellee
had a vendor's lien in and to the subject property.
"10. In instructing the jury that the party who signs
the affidavit indicating that reasonable diligence was
used, is the party committing the constructive fraud.
"11. In not instructing on negligence but instructing
only on constructive fraud.
"12. In instructing the jury that as part of the value
of the vendor's lien and as part of a vendor's lien in
general that this particular appellee could have paid off
the mortgage indebtedness and taken title and possession
of the property in question."
Mrs. Sims, as cross-appellant, says:
"The trial court erred:
"1. In instructing the jury regarding negligence and
in instructing the jury that the plaintiff had a duty to
notify the various defendants of her change of [*9]
address, since, as to the first instruction, the cause of
action was constructive fraud, a tort totally unrelated to
negligence, and, as to the second instruction, the issue in
the case was not whether the plaintiff was reasonably
diligent, but rather whether the agent for the Bloomfield
Bank was diligent in any manner whatsoever in
ascertaining the residence of the plaintiff; since the cause

of action was constructive fraud, the "contributory

negligence" of the plaintiff is not in issue.
"2. In not directing a verdict for the plaintiff as to the
fact that reasonable diligence was not used in locating
the plaintiff, since, from the evidence produced at trial,
reasonable minds could not differ as to the fact that no
diligence of any kind, reasonable or otherwise, was used
by the agent for the Bloomfield Bank in trying to locate
the plaintiff.
"3. In refusing to sustain plaintiff's motion for a
directed verdict and motion for a judgment
notwithstanding the verdict regarding the amount of
damages since, as a matter of law, said damages equalled
seven thousand one hundred twenty-five and 14/100
dollars ($ 7,125.14).
"4. In refusing to direct a verdict for the plaintiff
regarding [*10] fraud on the part of the agent for the
Bloomfield Bank, since, reasonable minds, based on the
evidence produced at trial, could not differ as to the fact
that a false affidavit was filed by the agent for the
Bloomfield Bank."
If Mrs. Sims, who was, as maker, primarily liable on
the note and mortgage held by Bloomfield, had a
vendor's lien on such premises it must arise as a result of
compliance with R.C. 5301.26. This section, in the part
applicable herein, says:
"* * * Such lien shall not be effective as against a *
* * mortgage * * * unless there is a recital or a
reservation of the lien in the deed, or in some instrument
of record executed with the same formalities as are
required for the execution of deeds and mortgages of
land. * * *"
The only mention of mortgage now held by
Bloomfield Savings Bank were the general words of the
deed given by Mrs. Sims to Strattons. These general
words were that Strattons recognize the mortgage as
outstanding in an approximate amount which the
Strattons agree to assume.
In Summers & Co. v. DCR Corp., 47 Ohio St. 2d
254 at 260 (1976), the court commented on R.C.
5301.26, stating what the record in the instant case
discloses when the court [*11] there said:
"* * *."A thorough examination of the record,
including the deed and purchase money mortgage, both
duly recorded by the appellants, reveals no such 'recital
or a reservation' of vendor's lien. * * *. (emphasis ours)
"* * *."
The words of assumption of the debt in the deed
from Sims to Stratton are not a compliance with the

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1977 Ohio App. LEXIS 8777, *

vendor's lien statute, notwithstanding the early cases

cited under the common law.
The trial court was in error in holding, as a matter of
law, that Mrs. Sims had a vendor's lien as a matter of law.
We accept appellant's assignment of error one.
Bloomfield Savings Bank made Mrs. Sims a party to
the foreclosure but say she was neither a lienholder nor a
necessary party to the action. Appellant cites, as a
leading case to justify its position, Squire v. Kofron, 58
Ohio App. 65 (1937). We have no difference with the
portion of that case quoted by appellant but Mrs. Sims
did not assume a mortgage executed by another. She was
the maker of the mortgage and made a party by
Bloomfield who asked for a judgment against her.
Bloomfield did not thereafter take a money judgment
against Mrs. Sims. Bloomfield knew at all times that
payment [*12] of its loan was guaranteed by an agency
of the United Stated Government. Bloomfield also acted
in accordance with that knowledge saying under oath
that Mrs. Sims' address could not, with reasonable
diligence, be ascertained. There is no evidence that
Bloomfield was disturbed by the vandalism reported to it
by National First Mortgage Co.
Bloomfield was
protected by the claim upon which Mrs. Sims also had a
right to be protected by notice of the dire consequences
that might occur if the mortgage were foreclosed.
Appellant says that Squire v. Kofron, supra, is a
leading case on the subject herein and, using that case,
we direct appellant to page 66 et seq on the quotation
from Pomeroy's Code Remedies and the statement of
necessary and proper parties in a foreclosure action.
Mrs. Sims was subject to a deficiency and the fact
that Bloomfield did not later assert that right in the
judgment decree did not make her any less necessary to
receive notice especially since Bloomfield knew that
they were protected as to a deficiency by the Veterans
Administration to whom Mrs. Sims was also liable.
We believe that under Civ. R. 19, Mrs. Sims was a
person needed for a just adjudication of the [*13] action
where as herein the maker of the debt, to be collected
through foreclosure, is known by such holder of the debt,
to be independently liable to another for any deficiency
that arises out of the failure to collect the debt by sale of
the premises.
We reject the appellant's second
assignment of error.
We realize, as we read the long and tortuous
transcript of the trial, that there were many instances
where this court, all of whom are former trial judges,
would have acted differently than did the court that heard
this case but no litigant is guaranteed a perfect trial, only
a fair trial. We think the parties were accorded a fair

We have said above that the court was in error in

finding that the assumption of the mortgage by Stratton
did not constitute a vendor's lien. We have also said
above that the knowledge which Bloomfield possessed of
the guaranty given by Mrs. Sims, made her a necessary
party for a just adjudication of this matter.
The two above determinations compel us to
conclude that the trial court did not err in denying the
many motions of appellant to relieve itself of liability to
Mrs. Sims by declaring a mistrial or dismissing the
action. We reject appellant's [*14] assignment of error
Under the present liberal system of pleading causes
of action, perhaps a motion to make definite and certain
would have been sustained and then Mrs. Sims would
have had to be more specific as to her claims against the
Strattons and the Veterans Administration. The clause
against Bloomfield was sufficiently specific to inform
them of the claims of Mrs. Sims. The trial would not
have lasted eight days if the Strattons and the Veterans
Administration were not held as parties until near the
close of the case but it was not error prejudicial to the
substantial right of the appellant, Bloomfield, to sue the
Strattons and the Veterans Administration. We reject
appellant's assignment of error four.
We have examined assignment of error five
regarding the admissibility of Bloomfield's documents
concerning this case. These documents were furnished
pursuant to Civ. R. 34. After examination we find no
merit in the assignment of error five.
The Veterans Administration was made a party to
this action by Mrs. Sims because they had asked her for
$ 5,924.14 plus interest from the day they met their
guaranty of loan to Bloomfield. It is difficult, when
reading the [*15] complaint, to determine just what Mrs.
Sims was claiming against the Veterans Administration.
We suspect that the purpose was to elicit the manner by
which the Veterans Administration conducted its
operation with respect to the loan guaranty. There was a
prayer that the Veterans Administration expunge from
their records the claims for deficiency and cancel all
claims against Mrs. Sims.
Eventually, Veterans Administration was dismissed.
We see no prejudice to the just rights of Bloomfield in
assignment of error six. We reject the assignment of
error six.
The financial condition of Mrs. Sims was not
improperly admitted in evidence to the jury since it
tended to demonstrate that she could have protected her
interest if she had been properly notified that she was
being sued on the note originally given National First
Mortgage Company. The Strattons, as parties to the

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1977 Ohio App. LEXIS 8777, *

action, and against whom both Bloomfield and Mrs.

Sims had just claims could show why they abandoned
the property to vandals. We realize the testimony went in
some instances beyond the usual scope of such
proceedings but not to the prejudice of Bloomfield. We
reject assignment of error seven.

was done herein, is guilty of constructive fraud is not

prejudicial. [*18] The constructive fraud relates to
Bloomfield through its agent who says Bloomfield told
him to swear to an obvious falsehood. There is no merit
in this assignment of error. We reject assignment of error

Counsel for Bloomfield [*16] argued at length as to

the nature of his agency and the failure of Mrs. Sims to
establish proof of this agency. Mr. Reimer said, under
oath, that he was instructed to file the foreclosure action
against Mrs. Sims and the Strattons. All of the questions
directed to Mr. Reimer bear on the question of the
foreclosure. It was Mr. Reimer who swore under oath
that he used reasonable diligence to discover the address
of Mrs. Sims. It was Mr. Reimer who swore under oath
that he did "absolutely nothing" to discover the address
of Mrs. Sims. It is Mr. Reimer who now says in his brief
at page 44:

In assignment of error eleven we again are faced

with the construction to be placed on the acts of counsel
for the appellant as to the reasonable diligence required
before notice by publication may be taken. There is also
in this assignment of error a claim that the trial court did
not instruct on the subject of negligence. As we read the
instructions of the trial court, that court discussed fraud,
constructive fraud and negligence. While we readily
admit that the instruction on negligence was not as
complete as it was possible to be, there was no specific
complaint to this instruction as required by Civ. R. 51.
The trial court did not commit prejudicial error in so
instructing the jury. We reject assignment of error

"The only evidence presented at the time of trial as

to what the Appellant did or did not do with regard to
finding the Appellee was the testimony of the attorney
that he could not remember what he did or did not do to
find out her whereabouts. * * *"
"* * *."
Just what should this court believe? At all times the
address of Mrs. Sims could have been easily discovered
not by reasonable diligence but by any diligence.
Bloomfield had information in its files which showed
where Mrs. Sims had worked for one employer for many
years. She still worked at the same place at the time the
action [*17] was filed. We find no error prejudicial to
the substantial rights of the appellant as to assignment of
error eight.
In our previous discussion of this subject, when
considering assignment of error one, we said the
assumption of the mortgage herein by the Strattons did
not comply with the requirements of R.C. 5301.26 to
create a vendor's lien. The trial court was in error in
instructing the jury that such a lien did exist in this case.
We sustain assignment of error nine.
Was the trial court correct in its instruction on
constructive fraud? Constructive fraud is defined as "an
act, done or omitted which amounts to positive fraud or
is construed as fraud by the court because of its
detrimental effect upon public interest and public or
private confidence. Even though the act is not done or
omitted with an actual design to perpetrate positive fraud
or injury upon other persons." 37 Am. Jur. 2d, Fraud and
Deceit Sec. 4 P. 23, and authorities there cited.
The instruction given by the trial court complies
with the standard definition of fraud. The statement that
the admitted conduct of one who signs an affidavit, as

We have said herein that Mrs. Sims was not the

owner of a vendor's lien on these premises as contended
by her. She did not have the right of redemption
accorded such a lienholder. What Mrs. Sims did have is
the right to receive notice of the foreclosure [*19] in
sufficient time to permit her the privilege of purchasing
the property at sheriff's sale in order to protect herself
from, in the case of a low bid, the risk of having to make
payment to the Veterans Administration on her guaranty
to repay them any deficiency.
We said herein that because of this guaranty, known
to Bloomfield as well as to National First Mortgage
Company, Mrs. Sims had such an interest in this
foreclosure proceedings that notice under the joinder rule
(Civ. R. 19) must, under the circumstances herein, be
given to her. This failure to give notice to Mrs. Sims was
a constructive fraud on the part of Bloomfield which
denied to Mrs. Sims a valuable right. We reject
assignment of error twelve.
We have herein a cross-appeal. The assignments are
set out above and we shall comment upon these
assignments in the order given.
It was possible under the instruction of the trial court
for the jury to find that reasonable diligence was
exercised in trying to locate Mrs. Sims. We say
"possible" because the court so instructed. It thus raised
the question of the conduct of Mrs. Sims in failing to
notify the holder of her note and/or the Veterans
Administration of her many [*20] changes of residence
in and outside of Summit County, Ohio. These changes
of address did not constitute negligence as a matter of
law on her part that excused the failure of Bloomfield
Savings Bank to locate her. This feature was not covered

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1977 Ohio App. LEXIS 8777, *

fully by the trial court but no specific objection was

taken to such failure; hence, it is not prejudicial error
Civ. R. 51A.
We reject cross-appellant's
assignment of error one.
The jury returned a verdict for Mrs. Sims. The
claim then raised by the cross-appellant's assignment of
error two is moot; and, hence, we find it is not prejudicial
to the substantial rights of the cross-appellant. We reject
cross-appellant's assignment of error two.
We have been disturbed throughout the study of this
appeal by the subject of damages. Counsel for appellant
never dwelt on what we thought was a most obvious
question. Mrs. Sims made no payment up to the trial of
this case on the guaranty executed in favor of the
Veterans Administration. Whether she has made any
payment since the trial is not a subject before us. The
verdict of the jury was equal to one-half of the total
claim of the Veterans Administration. How the jury
arrived at that [*21] sum from the evidence submitted is
as much a mystery to us as it is to counsel.
The rules respecting damages are well known.
Compensatory damages are awarded for the actual loss
sustained by the injured party. It contemplates the direct
pecuniary loss suffered. There is no showing of actual
loss in this case, only a possible loss of some amount
which the Veterans Administration may or may not
accept to settle the claim they have against Mrs. Sims.
There can be no award herein for punitive damages
for the evidence does not justify such an award. There
remains then the question of nominal damages which is
an award for the wrong committed against a person
where no actual damages have been sustained. The right
to award nominal damages arises in this case. The award
given in the instant case is far in excess of nominal
damages and far less than the possible award for the
actual loss Mrs. Sims may suffer when and if sued by the
Veterans Administration. The award of a verdict here for
any sum above nominal damages is not called for by the
evidence. Bickley v. Sears, Roebuck & Co., 62 Ohio
App. 180 (1938); Younce v. Baker, 9 Ohio App. 2d 259
There are some situations where [*22] damages
have been awarded where the fact of injury is certain but
the amount of damage is uncertain. See, 16 O.Jur. 2d
Rev., Damages Sec. 15; 78 ALR 858. We find an Ohio

Supreme Court Case, Burkhardt v. Burkhardt, 42 Ohio

St. 474 (1885) that discusses this feature of damages but
many cases in other jurisdictions may be found in 22
Am. Jur. 2d, Damages Sec. 25. We do not believe, under
the facts of the instant case, the principles above apply
herein at this time.
The trial court did not err in refusing to grant the
motion for a directed verdict made by counsel for Mrs.
The cross-appellant's assignment of error three is
The evidence relating to the affidavit to secure
service on Mrs. Sims was so patently false that the trial
court should have so instructed the jury. It does not
follow from that fact, however, that a verdict for other
than nominal damages should have been awarded Mrs.
Sims. The failure of the trial court to direct a verdict
with regard to fraud arising out of the false affidavit did
not result in prejudice to Mrs. Sims for the jury returned
a verdict in her favor for a sum far greater than any
award of nominal damages shown to this jury.
Cross-appellant's [*23] assignment of error number
four is rejected.
For the reasons herein above stated, the judgment is
reversed and the cause is remanded to the trial court for
further proceedings.
The court finds that there were reasonable grounds
for this appeal.
We order that a special mandate, directing the Court
of Common Pleas to carry this judgment into execution,
shall issue out of this court. A certified copy of this
journal entry shall constitute the mandate, pursuant to
App. R. 27.
Immediately upon the filing hereof, this document
shall constitute the journal entry of judgment, and it shall
be file stamped by the Clerk of the Court of Appeals at
which time the period for review shall begin to run.
App. R. 22(E).
Costs taxed to the parties equally.