
    The Ohio Electric Railway Co. v. The United States Express Co.
    
      Pleadings — Amendment—Adoption of former averments — Prafyer not adopted, when — Pleadings strictly construed, when— Jurisdiction of person — Challenge not waived 6y defending, when — Amendment of petition — Change of nature of action —Service or waiver of summons necessary, when.
    
    1. The adoption of the averments of a pleading is not an adoption of the prayer thereof.
    2. Where the jurisdiction of the person is dependent upon the language of a pleading, the pleading will be construed strictly and its scope will not be extended beyond its clear expression.
    3. A defendant appearing only for the purpose of objecting to the jurisdiction, upon the overruling of such objection is not bound to rely at his peril solely upon his exception thereto, but may make full defense without waiving such objection.
    4. The statutes of Ohio do not authorize the filing of an amendment to a petition, which substantially changes the claim of the petitioner, and the rendering of judgment in pursuance thereof against a defendant without service of summons, waiver or entry of appearance is reversible error.
    (No. 17030
    Decided July 5, 1922.)
    Error to the Court of Appeals of Hamilton county.
    On the first day of May, 1909, The Ohio Electric Railway Company and The United States Express Company entered into a contract whereby the railway company granted to the express company the exclusive right of forwarding express matter over the interurban street railroad lines and the steam railroad line of the railway company, the railway company reserving to itself the right to continue to haul freight and certain classes of packages, baggage and other specified articles, and the express company agreeing to pay to the railway company a sum equal to fifty per cent, of the gross revenue derived by the express company from the forwarding of express matter over the lines of the railway company ; such contract also providing a mode of determining the gross revenue and guaranteeing that fifty per cent, of the gross revenue shall amount annually to at least $115 per mile of single track; and further providing that the express company shall establish its own tariff of rates over the line of the traction company, which rates, unless required by law or necessity of competition, shall not be less than double the rate of the traction company for carrying similar matter as freight. Such contract further provided:
    “XI. All and singular the terms of this agreement are made and the rights and privileges hereby granted shall be exercised subject to all Federal, State and Municipal laws, ordinances, franchises or regulations now or hereafter in force, and it shall be the right of either party to comply therewith, and with all mandates, judgments, orders and decrees duly rendered in pursuance thereof, without any liability to the other party for damages occasioned thereby, and, in case of the substantial impairment thereby of the benefits to either party contemplated by this agreement to such an extent that a readjustment of the terms of this contract shall not be mutually satisfactory, either party shall have the right to terminate this agrément upon three months’ written notice to the other.”
    
      In addition to the other amounts to be paid by the express company to the railway company, it agreed to pay to the railway company the sum of $100,000, ¡payable $50,000 contemporaneously with the execution of the agreement and $50,000 in five annual installments of $10,000, each to be paid on the first day of June of each year beginning with the first day of June, 1914. The $50,000 cash contemporaneous with the signing of the contract was paid, and the 50 per cent, of the gross revenue, amounting to $65,-744.35 per year, was paid for five years, up to May 31,1914.
    In 1913 the parcels post was established and the interstate commerce commission reduced the rates from 16 to 20 per cent., as found by the trial court. N egotiations were had between the express company and the railway company looking to a readjustment of terms, and no agreement having been reached, on May 28, 1914, notice was given by the express company to the railway company that it would terminate the contract June 30, 1914, the notice having been reduced to one month by agreement on account of the negotiation.
    On June 25,1914, the railway company filed a petition in the court of common pleas of Hamilton county against the express company, in which petition it alleged:
    “That on May 1,1909, plaintiff and defendant entered into an agreement by which the plaintiff granted to the defendant the exclusive right of forwarding express matter to and from points on plaintiff’s interurban railroad lines, subject to the terms and conditions in said agreement set forth; that by its terms said agreement was to continue in force for a period of ten years, ending May 31,1919; and that the same is now in full force and effect and plaintiff has performed all of the conditions imposed upon it by said agreement.
    “Plaintiff further states that Paragraph XVIII of said agreement reads as follows:
    “ ‘XVIII. In addition to the other amounts to be paid by the Express Company to the Traction Company under this contract, the Express Company shall also pay to the Traction Company the sum of one hundred thousand dollars ($100,000), payable as follows: fifty thousand dollars ($50,000) in cash, contemporaneously with the execution of this agreement, and fifty thousand dollars ($50,000) in five annual installments of ten thousand ($10,000) dollars each, to be paid on the first day of June of each yeah, beginning with the first day of June, 1914.’
    “Plaintiff further states that the defendant paid to plaintiff the sum of fifty thousand ($50,000) dollars in cash upon the execution of said agreement as provided in the aforesaid paragraph; that an installment of ten thousand ($10,000) dollars became due and owing from defendant to plaintiff on June 1,1914, and that the defendant refused and still refuses to pay s'aid sum of ten thousand ($10,000) dollars, although due demand has been made therefor; and that there is due and owing the plaintiff from defendant the sum of ten thousand ($10,000) dollars with interest thereon from June 1,1914.
    
    “Wherefore plaintiff prays judgment against defendant in the sum of ten thousand dollars ($10,000) with interest thereon from Jume 1,1914, and for its costs.” (Italics ours.)
    
      On the same day summons was issued and service made upon the express company. On June 30, 1914, the express company ceased operation under the contract, and all operation within the state of Ohio, and left the state, it being a New York corporation.
    On October 9,1914, the express company answered the petition of the railway company, admitting the execution of the contract, the payment of the sums averred to have been paid in the petition in pursuance of the contract, but denied that the contract was longer in force, or had been in force since June, 1914; denied that the railway company had performed all the conditions imposed upon it by the contract; denied that an installment of $10,000 became due.and owing on June 1, 1914; and denied that that sum was then due and owing. It set up the provision of Section XI of the contract, and, by second defense, set up the fact that by federal, state and municipal laws the rates permitted to be charged by the express company had been materially reduced, and the business diverted from it, so that it was deprived of the business and earnings contemplated by the contract; that it had sought a modification of the contract, which had been refused; that on the 29th day of May, 1914, it had given notice to the railway company that it would terminate the contract on June 30,1914, and that by reason thereof the contract came to an end on June 30,1914; and that in any event the railway company would have no right to recover under Section XVIII of the contract any amount exceeding the sum of $833.33, with interest, but that it had not the right to recover even that amount because of its failure to perform other provisions of the contract.
    
      For a third defense the express company alleged that by the terms of the contract it was to have had the exclusive right of forwarding express matter between certain points at certain comparative rates; that the railway company violated the contract in this respect, and had carried by parcel post over its lines express matter, being matter which the express company by the contract had the exclusive privilege of carrying over the railway company’s lines; and by way of counterclaim it prayed that an account be taken of the amount received by the railway company from the transportation of parcels post and from the transaction of “Merchants Despatch” business at less than one and one-half times the first-class freight rates of the railway company; and that the railway company be required to pay to it the amount so ascertained to be due.
    On February 4, 1915, the railway company filed what it designated an “Amendment to Petition,” in which it set forth the pertinent terms of the contract and to which it attached a copy of the contract as an exhibit. In it plaintiff railway company averred the entering upon the performance of the contract by the express company and the payment of all sums due up to June 30, 1914, except the payment under the contract due and owing for the month of June, 1914; and averred that it had performed all the covenants of the contract on its part and was ready and willing to continue to do so, but that on June 30,1914, the express company “wholly without right, repudiated said contract, refused to be longer bound by its terms and discontinued entirely the operation of said express business over plaintiff’s lines.” Plaintiff further averred that thereupon it made every effort “to make a new contract with other express companies for the operation of said express business upon as favorable terms to it as said contract of May 1, 1909, with the defendant,” but no express company would enter into a similar contract; that it was necessary in the public interest that the operation of said express business should not be discontinued, and plaintiff was thereupon compelled to and did enter into a contract with the Adams Express Company to operate said express business for a period of one year from and after July 1, 1914; that said Adams Express Company offered more favorable terms for the operation of said express business than any other company, but it was only willing to agree to pay plaintiff 45% of the gross receipts derived by it from the operation of said express business without any minimum guaranty whatsoever. Plaintiff further stated that the results of the operation of said express business by the Adams Express Company show a large loss to the plaintiff compared with the amounts which it received from the defendant under the terms of the contract of May 1, 1909, and plaintiff averred that such loss will continue for and during the remainder of the term of said contract of May 1, 1909, to-wit, until May 31,1919.
    Plaintiff therefore prayed judgment against the defendant for its damages in the sum of $300,000, and for its costs.
    On March 23, 1915, the express company filed the following motion: “Now comes the defendant, appearing for the purposes of this motion only, and moves the court to strike from the files of this cause the paper heretofore filed herein and designated as an amendment to the petition herein.”
    
      On June 13, 1916, this motion was sustained, and the amendment to petition filed February 4, 1915, was by order of the court stricken from the files, and an application of the railway company to file an amendment to its petition was granted, and the journal entry sustaining the motion to strike from the files the amendment to petition of February 4, 1915, and granting leave to file amendment to petition June 13, 1916, contained the clause “and defendant is granted 30 days within which to plead thereto; to all of which the defendant excepts.”
    The amendment to petition filed June 13, 1916, was substantially like the amendment filed February 4,1915, and contained this clause: “Plaintiff further states that it fully performed all of the covenants of said contract on its part and was ready and willing to continue to do so, but that, nevertheless, on May 28, 1914, the defendant, having determined to go out of the express business and to liquidate its affairs, wholly without right, gave notice to plaintiff in writing that after June 30, 1914, it would refuse to be longer bound by its terms and would discontinue entirely the operation of said express business over plaintiff’s lines; that plaintiff protesting against said repudiation of said contract notified defendant prior to June 25 that plaintiff would hold defendant liable for said breach of said contract.”
    It further prayed judgment against the defendant for its damages in the sum of $300,000 and for its costs.
    On August 18, 1916, the express company filed “An Answer to amendment to Petition,” which answer is in part as follows:
    
      “Now comes the defendant and not waiving its objection to the filing of the amendment to the petition herein nor its exception to the granting of leave to file the same, which objection and exception it hereby expressly reaffirms, by way of answer,” etc.
    To this answer three interrogatories are attached.
    The cause came on for trial before the court, a jury having been waived by stipulation, and on November 17,1919, a separate finding of facts and conclusions of law, and judgment, were entered by the court, the judgment being for plaintiff in the sum of $297,684.50, with interest from the 6th day of October, 1919, and costs.
    Motion for a new trial was filed on November 18, 1919, for the reasons:
    “1. Said conclusions of fact and said decision are not sustained by sufficient evidence.
    “2. That said conclusions of fact and said conclusions of law and said decision are contrary to law.
    “3. For errors of law occurring at the trial and excepted to by this defendant at the time.”
    Motion for new trial was overruled, and petition in error was-filed in the court of appeals. One of the grounds of error was: “Said court erred in granting leave to the defendant in error to file an amendment to the petition.”
    The court of appeals found that the trial court ‘ ‘ erred in permitting the filing of the amendment to petition on June 13,1916, and in rendering judgment for more than the amount claimed in the petition herein, to-wit, ten thousand dollars ($10,000) being the sum payable under the contract of May 1,1909, on June 1, 1914, with interest from June 1, 1914,” and rendered final judgment for that amount.
    
      
      Mr. Paul C. Martin; Mr. Joseph S. Graydon and Messrs. Maxwell Ramsey, for plaintiff in error.
    
      Messrs. Platt & Field and Messrs. Harmon, Colston, Goldsmith & Hoadly, for defendant in error.
   Robinson, J.

Voluminous briefs, and citations of authorities pro and con, have been filed in this case. It seems to us, however, that a statement of the case, which we have attempted to make at length, is decisive of the rights of the parties hereto.

The petition sets out that “on May 1,1909, plaintiff and defendant entered into an agreement by which the plaintiff granted to the defendant the exclusive right of forwarding express matter to and from points on plaintiff’s interurban railroad lines, subject to the terms and conditions in said agreement set forth; that by its terms such agreement was to continue in force for a period of ten years, ending May 31, 1919; and that the same is now in full force and effect and plaintiff has performed all of the conditions imposed upon it by said agreement.” It quotes Section XVIII of that agreement as follows: “XVIII. In addition to the other amounts to be paid by the Express Company to the Traction Company under this contract, the Express Company shall also pay to the Traction Company the sum of one hundred thousand dollars ($100,000), payable as follows: fifty thousand dollars ($50,000) in cash, contemporaneously with the execution of this agreement, and fifty thousand dollars ($50,000) in five annual installments of ten thousand ($10,000) dollars each, to be paid on the first day of June of each year, beginning with the first day of June, 1914.” It avers “that an installment of ten thousand ($10,000) dollars became due and owing from defendant to plaintiff on June 1, 1914,” and then prays judgment for that sum “with interest thereon from June 1,1914.”

It was, therefore, a suit upon a contract in full force and effect for an installment of the initial consideration specifically provided for in the contract, due and unpaid. The summons issued was endorsed “Action for money only, amount claimed $10,000 and interest thereon from June 1,1914.”

The answer filed to that petition sought to reduce the amount of the installment of $10,000 provided for in the contract upon the theory that the $10,000 due on June 1, 1914, was in part payment for the services of the railway company under the contract for the year beginning June 1, 1914, and that, therefore, it ought not to recover thereon but for such proportion of $10,000 as that portion of the year between June 1 and June 30 bore to the whole year. The answer denied that the railway company had complied with the provisions of the contract, set up certain violations thereof, by reason of which business was diverted from defendant, sought an accounting, and prayed that the amount so found by the accounting be treated as a counterclaim.

The issues thus made were as to the merits of the claim of the railway company to recover the sum of $10,000, due by the terms of the contract, the merits of the counterclaim of the express company for damages for a breach of the contract by the railway company in respect to rates on business designated as “Merchants Despatch” and the carrying of parcels post mail, and the right of the express company to terminate the contract as affecting the claim of the railway company to the $10,000.

On. February 4, 1915, tbe railway company filed a pleading, designated “Amendment to Petition,” in which it averred the contract and the breach thereof on June 30, 1914, by the express company; and averred damage and prayed judgment for $300,000.

On March 23, 1915, the express company filed the following motion: “Now comes the defendant, appearing for the purposes of this motion only, and moves the court to strike from the files of this cause the paper heretofore filed herein and designated as an amendment to the petition herein.”

On June 13,1916, the above motion was sustained, but the journal entry sustaining it contained a provision as to the filing of another pleading, also designated “Amendment to Petition,” as follows: “And the plaintiff having tendered to the court an amendment to its petition and made application to file the same, said matter was argued by counsel; and the court having fully considered the matter does find said application well taken and sustains the same.

“It is therefore ordered that said application be granted and said amendment to petition be filed in this cause and the same is this day filed and defendant is granted 30 days within which to plead thereto; to all of which the defendant excepts.”

The entry does not imply an application on the part of the express company for leave to plead.

The “Amendment to Petition” filed June 13,1916, was like the amendment of February 4, 1915, except that instead of alleging the breach to have occurred on the 30th day of June, 1914, it alleged that “on May 28, 1914, the defendant, having determined to go out of the express business and to liquidate its affairs, wholly without right, gave notice to plaintiff in writing that after June 30, 1914, it would refuse to be longer bound by its terms and would discontinue entirely the operation of said express business over plaintiff’s lines; that plaintiff protesting against said repudiation of said contract notified defendant prior to June 25 that plaintiff would hold defendant liable for said breach of said contract ” It contained the following prayer: “Wherefore, plaintiff prays judgment against the defendant for its damages in the sum of $300,000.00 and for its costs.”

Between the day of the filing of the petition and the filing of the “Amendment to Petition,” February 4, 1915, the express company had withdrawn from the state of Ohio, and at the time of trial had not returned thereto, and had terminated the contract, either in pursuance of its terms or by breach, and a different and new cause of action had been created by the termination of the contract. By the “Amendment to, Petition” of February 4, 1915, a cause of action was stated for a breach which it was averred occurred five days subsequent to the filing of the original petition, and by the “Amendment to Petition” filed June 13, 1916, it was averred in substance that on May 28,1914, the cause of action arose by reason of the notice of the express company of that date that “after June 30, 1914, it would refuse to be longer bound by its terms and would discontinue entirely the operation of said express business over plaintiff’s lines.”

By this “Amendment to Petition” it was sought to bring a different and new cause of action other t.bfi-n the one averred in the original petition into the case, upon which a summons had been served upon the express company and jurisdiction over the person of the express company obtained, no service upon the express company having been obtained upon the “Amendment to Petition” filed February 4, 1915, nor upon “Amendment to Petition” filed June 13, 1916.

Without passing upon the question whether the “Amendment to Petition” filed June 13, 1916, was effective to state a cause of action antedating the filing of the original petition, or determining when the cause of action averred in the “Amendment to Petition” of June 13, 1916, under the circumstances ,of this case, arose, it nevertheless was an action for damages for a breach of the contract, anticipatory or actual, as distinguished from the original cause of action for the recovery of an installment due upon a contract “in full force and effect,” and substantially changed the claim of the railway company. It was in fact the filing of a new suit, based upon a different and inconsistent ground, under the title and case number of the original suit, and the granting of leave to file same against a defendant upon whom service could not he had was substantial error.

In the answer to the “Amendment to Petition” the express company adopted all and singular the averments of its original answer filed in this cause, which answer contained averments that the railway company had violated the contract in reference to rate on “Merchants Despatch” business, and violated the contract in that it had since January 1, 3913, carried parcels post mail express matter, by reason of which the express company had been deprived of a large amount of earnings which it otherwise would have made, and had suffered loss and damage, all of which would be not only a proper basis for recovery as against the cause of action set up in the original petition of the railway company, but also a proper counterclaim for recovery against the cause of action set up in the “Amendment to Petition” filed June 13, 1916. No prayer for such relief, however, was contained in the answer to the “Amendment to Petition.”

An answer to a petition filed before the filing of an amendment to such petition is not an answer to such amendment to the petition, and only becomes so when adopted as such. The language of the adoption by the express company is “it adopts as a part hereof, as if the same were herein set out at length, all and singular the averments of its original answer filed in this cause.”

Where the jurisdiction of the person is dependent upon the language of a pleading, the pleading will be construed strictly, and its scope will not be extended beyond its clear expression.

There was no adoption of the prayer for affirmative relief of the original answer, and the answer to the “Amendment to Petition” containing no prayer, it, including the adoption from the original answer, was defensive only and did not invoke the jurisdiction of the court over the person of the pleader.

A defendant having made timely objection to the jurisdiction of the court, upon the overruling of such objection is not bound to rely upon his exception thereto at his peril, but may make full defense without waiving such objection.

The “Amendment to Petition,” having averred an additional and a different cause of action from that averred in the original petition, required service of summons, waiver of service, or an entry of appearance, before the court acquired jurisdiction of the person of the express company. No such service, waiver or entry of appearance having been had, the court was without jurisdiction to enter judgment thereon.

The judgment of the court of appeals will be affirmed.

Judgment affirmed.

Johnson, Hough and Matthias, JJ., concur.  