Ashland County Appeals.

We come now to the question as to whether this is an action for relief on the ground of fraud and comes within the saving clause of the statute which provides that the cause of action shall not accrue until the fraud is discovered. In Carpenter v. Canal Co. 35 Ohio St. 307, 316, Okey, J., says:

"These sections (now Sec. 11224 G. C.) extended to cases of an equitable as well as those of a legal nature."

Waiving all questions as to the anomalous petition and assuming that it makes a cause of action for the recovery of the secret profits of a promoter, is such an action one for relief on the ground of fraud or is it one of breach of duty on the part of the promoter?

The petition alleges that the furniture, fixtures and equipment for the bank were sold by the defendant to the bank company on May 11, 1907, and if there was any fraud practiced by the defendant it was at the time of the sale of the furniture to the bank, and the statute of limitations would begin to run against the bank from that date, unless there has been a toll of the statute by undiscovered fraud.

In 1 Clark and Marshall, Priv. Corp. p. 325, it is said:

"To render the promoter of a corporation thus liable to account for secret profits made by him in the transactions on behalf of the corporation, it is not necessary to show that there was a fraudulent intent on his part. It is enough if the profits were made secretly, and without the consent of the corporators."

In Pietsch v. Milbrath, 123 Wis. 647 [101 N. W. Rep. 388; 68 L. R. A. 945; 107 Am. St. Rep. 1017], second syllabus:

"The right of action against the promoters of a corporation to recover illegal profits made by them in buying for the corporation, at a price far in excess of its actual price, land on which they had obtained a secret option is one at law which is barred in six years from its accrual under Rev. Statutes 1808, Sec. 4222, and is not cognizable solely by a court of equity, within the exception of subdivision 7, which postpones the running of limitations until discovery of the right of action." Thompson, Corporations (2 ed.) Sec. 105, p. 117:

Bank Co. v. Raridon.

"The liability of promoters for secret profits made by them in transactions between them and the corporation is not based on the theory of fraudulent intent on their part, but grows out of their relation to the corporation and the duty which they owe such corporation and the persons with whom they are dealing. They are clearly liable, even in the absence of fraud, on a mere failure to make full disclosures of their position and purpose. Their liability is fixed and the right to recover established when it is made to appear that such secret profits were obtained by them without the knowledge or consent of the corporation or its members. It is not so much the purpose of equity to visit him with a penalty for concealment as it is to require him to account for the profits actually made by rea son of such concealment."

We have examined many other cases which bear more or less directly upon the questions here involved, but we think the cases cited are sufficient to illustrate the law as we understand its application in such cases as the one at bar. Our attention has not been called to any decisions to the contrary in this class of cases, and we have not been able to find any. We think on principle that these decisions are right. When cases are clearly within the provisions of the statutes limiting the time within which actions shall be brought, we have no power to refuse their enforcement though they may work an occasional hardship.

The judgment of the court of common pleas will be affirmed.

Shields and Powell, JJ., concur.

Lucas County Circuit.

INSANE PERSONS-PARTIES.

[Lucas (6th) Circuit Court, December 2, 1911.]

Wildman, Kinkade and Richards, JJ.

*BENJAMIN F. RENO V. GEORGE R. LOVE ET AL.

Substitution of Regularly Appointed Guardian in Action by Ward Discharged from Insane Hospital and Dismissal of Action not Prejudicial Error.

A discharge of a person from a hospital for the insane neither vacates an order of the probate court appointing a guardian therefor, nor, in the absence of resignation or discharge affirmatively appearing of record, collaterally impeaches the order of appointment; hence, in an action by such ward in his own name to recover damages for his alleged illegal arrest and confinement, an order substituting the guardian as party plaintiff and a judgment dismissing the action do not constitute prejudicial error.

ERROR.

Benjamin F. Reno, in person.

C. S. Northup, for the defendants served with process except defendants Chambers and Hurlbut.

KINKADE, J.

Mr. Reno brought an action in the court of common pleas against a large number of defendants to recover damages for his illegal arrest and illegal confinement for over four years in the Toledo State Hospital for the insane. Some of the defendants were state officials, some were county officials and all were charged with having conspired and combined to accomplish the arrest and imprisonment mentioned.

One of the defendants filed a motion in the case asking the court to substitute Thomas Biddle, guardian of Mr. Reno, as plaintiff. This motion was heard and granted. Mr. Biddle thereupon dismissed the action. Reno objected to the substitution and dismissal of the action and preserved his exception in due form. He now. files a petition in error, with bill of exceptions containing all the evidence heard on the motion, in *Affirmed, no op., Reno v. Love, 88 O. S. 623.

Reno v. Love.

this court to reverse the judgment of the court of common pleas in dismissing the action.

The trial court on hearing the motion had before it the affidavit of Mr. Reno and the testimony of two physicians, both of whom said Mr. Reno was insane. The trial judge stated the question of the plaintiff's sanity or insanity was not an issue on the hearing of the motion and that the only question before the court was whether the probate court of Lucas county had, before the commencement of the present action, appointed Mr. Biddle as guardian of Mr. Reno, and whether this guardianship had been terminated in any manner provided by law. Thereupon Mr. Reno, as shown by the bill of exceptions, admitted in open court that the records of the probate court of Lucas county, Ohio, did show that Mr. Biddle had been appointed by that court as his guardian prior to the filing of the petition in this case, and that said records did not show that such guardian had resigned or had been discharged by the probate court. At the same time Mr. Reno informed the trial court that the records of said probate court also showed that prior to the beginning of this action, he had been discharged from the state hospital for the insane. Thereupon the order of substitution and dismissal was made.

The plaintiff in error claims that the evidence before the trial court as shown in the bill of exceptions failed to show affirmatively that the probate court had jurisdiction over his person when the appointment of Biddle as his guardian was made and hence he was at liberty in this action, although admitting as he did that the records of the probate court did show the appointment, to treat the action of the probate court as a nullity and wholly disregard it. He further contends that even if this proposition be not correct, still his guardian was discharged by reason of his own discharge from the hospital and hence the guardianship no longer had any force.

We can not agree with either of these propositions. His discharge from the hospital could not of itself terminate the guardianship. The guardian may have been appointed on grounds other than those on which Mr. Reno was sent to the hospital but whether this be so or not, a discharge from the

Lucas County Circuit.

hospital can not be held as vacating the order of the probate court appointing the guardian. Section 11010 G. C., which corresponds with Sec. 6311 R. S., provides the manner in which guardians may be discharged and reads as follows:

"Section 11010. When the probate judge is satisfied that an idiot, imbecile, or lunatic, or a person as to whom guardianship has been granted as such, is restored to reason, or that letters of guardianship have been improperly issued, he shall make an entry upon the journal that such guardianship terminate. Thereupon it shall cease, and the accounts of the guardian be settled by the court."

The position taken here in argument that the judgments and orders of the probate court are not attended by the presumption that the court had jurisdiction to enter them (nothing to the contrary appearing in the record) and that the judgments and orders of the probate court may be collaterally impeached, is equally untenable. The law of Ohio on this subject is clearly stated in the case of Shroyer v. Richmond, 16 Ohio St. 455. I quote paragraphs six and seven of the syllabus:

"6. The probate courts of this state are, in the fullest sense, courts of record; they belong to the class whose records import absolute verity, that are competent to decide on their own jurisdiction, and to exercise it to final judgment, without setting forth the facts and evidence on which it is rendered.

7. Hence, an order appointing a guardian, made by a probate court, in the exercise of jurisdiction, can not be collaterally impeached. The record showing nothing to the contrary, it will be conclusively presumed, in all collateral proceedings, that such order was made upon full proof of all the facts necessary to authorize it."

The Supreme Court has several times followed this decision. See Hoffman v. Fleming, 66 Ohio St. 163 [64 N. E. Rep. 63]; Fisher v. Lanning, 76 Ohio St. 189, 198 [81 N. E. Rep. 182]; Union Sav. Bank & Tr. Co. v. Telegraph Co. 79 Ohio St. 89, 100 [86 N. E. Rep. 478; 128 Am. St. Rep. 675].

The admission in open court by Mr. Reno as shown in the bill of exceptions fully justified the court in ordering the substitution of Biddle as plaintiff in the action. This being true,