In re Ackermann

• Decision Date: 08 April 1936
• Docket Number: No. 6929.,6929.
• Citation: 82 F.2d 971
• Parties: In re ACKERMANN. WELLS v. CERMAK.
• Court: U.S. Court of Appeals — Sixth Circuit

82 F.2d 971 (1936)

In re ACKERMANN.

WELLS v. CERMAK.

No. 6929.

Circuit Court of Appeals, Sixth Circuit.

April 8, 1936.

Byron Kuth, of Cleveland, Ohio (Kuth & Ehrke, of Cleveland, Ohio, on the brief), for appellant.

Richard D. Bovington, of Cleveland, Ohio (Bovington & Gresinger, of Cleveland, Ohio, on the brief), for appellee.

Before MOORMAN, SIMONS, and ALLEN, Circuit Judges.

SIMONS, Circuit Judge.

In Ohio a mortgage of personal property is void as to creditors where the mortgagor retains possession of the property with power of disposition. Francisco v. Ryan, 54 Ohio St. 307, 43 N.E. 1045, 56 Am.St.Rep. 711. The question here to be determined is whether the mortgagee had perfected his lien prior to the adjudication of the mortgagor as a bankrupt, and this in turn depends upon whether the mortgagee was in possession of the chattels at the time a state court receiver was appointed, or whether the chattels were then in custodia legis. Upon a turn-over order of the referee, challenged by the mortgagee, the mortgage was held to be void as against the bankruptcy receiver and his successor trustee. Reviewing the referee's report, the court concluded that the mortgagee had "won the race," and set aside the turn-over order. The trustee appeals, and the facts follow:

On February 1, 1934, the bankrupt Ackermann gave the appellee, Cermak, a promissory note secured by chattel mortgage on the fixtures and stock in trade of a drug store situated in Lakewood, Ohio. The mortgaged property was permitted to remain in Ackermann's possession, with power to sell the stock in the course of business. The note contained power of attorney permitting the payee to confess judgment in case of default. On February 4, 1934, one of Ackermann's creditors served notice upon him that the following day it would apply for the appointment of a receiver for himself and wife upon the ground of their refusal to apply certain rentals to the payment of his debt to it. Ackermann, intending to resist the application, left Cermak in charge of the store while he attended the hearing. The creditor filed suit on February 5th, obtained a cognovit judgment against the Ackermanns, caused execution to be issued and returned unsatisfied, and applied for the appointment of a receiver in supplementary proceedings under section 11894, subsection 4, of the Ohio General Code. At 3:30 p. m. on that day a judge of the common pleas court heard the application for a receiver and granted it. At 4:30 p. m. the judge caused his bailiff to put upon the file cover a notation of the name of the receiver selected and the amount of his bond. During Ackermann's absence from his store, Cermak communicated with his attorney and was told that his mortgage was invalid as to the stock in trade until he had entered into possession under his mortgage. Upon Ackermann's return at 5:30, Cermak took possession of the mortgaged premises, Ackermann yielding up his keys. On February 6th the order of the common pleas court appointing the receiver was signed and journalized. On February 10th Ackermann filed an involuntary petition in bankruptcy and was adjudicated. On February 17th the common pleas court entered a nunc pro tunc order changing the entry of February 6, 1934, so as to read: "February 5th, 1934 — application granted. Joseph E. Feighan appointed receiver. Bond $500.00."

No question arises as to the jurisdiction of the bankruptcy court to proceed summarily. Objection was not made by the respondent to the power of the court to entertain the petition for the turn-over order on the ground that he was an adverse claimant, and consent to adjudication thereon is plainly inferable. Under the circumstances, the appeal both as to question of fact and law lies under section 24a, Bankr.Act, as amended (11 U.S. C.A. § 47(a). Harrison v. Chamberlin, 271 U.S. 191, 46 S.Ct. 467, 70 L.Ed. 897; Beeler v. Schumacher, 71 F.(2d) 831 (C. C.A.6), affirmed 293 U.S. 367, 55 S.Ct. 230, 79 L.Ed. 433.

The title of a receiver to the property he is ordered to administer generally dates from the time of his appointment. Horn v. Pere Marquette Railway Co., 151 F. 626 (C.C.A.6). If the state court receiver was appointed when the judge of the court of common pleas announced the granting...