Bayne v. Brewer Pottery Co.
| Decision Date | 21 December 1898 |
| Docket Number | 1,380. |
| Citation | 90 F. 754 |
| Parties | BAYNE et al. v. BREWER POTTERY CO. et al. |
| Court | U.S. District Court — Northern District of Ohio |
E. W Tolerton and John K. Rohn, for Samuel B. Sneath.
Hoyt Dustin & Kelly, for Daniel K. Bayne.
On the 1st day of May, 1890, the Brewer Pottery Company duly executed to Samuel B. Sneath, trustee, a mortgage to secure 60 bonds, each for the sum of $500, payable on the 1st day of May, 1895, with interest at the rate of 6 per cent. per annum, payable semiannually on the 1st days of May and November of each year. By this mortgage the Brewer Pottery Company conveyed to Samuel B. Sneath, trustee, property described as follows:
'Situated in the city of Tiffin, county of Seneca, and state of Ohio and known as 'Blocks thirty-five (35) and thirty-eight (38) in Second Highland addition to the city of Tiffin, Seneca county, Ohio,' containing eight (8) acres of land; together with all and singular the brick pottery plant situated thereon, and including all its engines, machinery, tools, molds, and all other personal property belonging thereto, and used by said company in its business of manufacturing.'
This mortgage was, on the 7th day of May, 1890, duly recorded as a mortgage of real estate in the Record of Mortgages, vol. 59, p. 165, of Seneca county, Ohio. The mortgage was never verified, as required by the statute of this state covering chattel mortgages, and was not filed as a chattel mortgage, nor refiled at the expiration of any of the several years since its execution, as required by the Ohio statutes governing chattel mortgages. In April, 1897, upon appropriate bill of complaint filed by the complainants, who are creditors, and bring the action in behalf of themselves and other creditors, Frederick A. Duggan was appointed an ancillary receiver of the Brewer Pottery Company, and thereupon he gave proper bond, and has ever since been discharging the duties of such receivership. Samuel B. Sneath filed his answer and cross bill in this action, setting up the mortgage above described, and upon appropriate proceedings the property was appraised and sold under the order of this court, and the fund arising from such sale paid into court to await the further order of the court. Before the sale was made, however, a commissioner was appointed by this court, and directed to separately appraise the real property and the chattels of the Brewer Pottery Company, in order that the court might thereafter determine the proper mode of distribution of the proceeds of the sale. Such appraisement was reported in three schedules, as follows, viz.: (1) Real estate containing eight acres of land, together with the brick pottery plant situate thereon, and including all its engines, machinery, and fixtures attached, not included in the second and third schedules, appraised at $40,000. (2) Fixtures, machinery, and appurtenances attached to the real estate, appraised at $550. (3) Tools, machinery, molds, saggers, bats, ware boards, not in any manner attached to said realty, but used by said company in the business of manufacturing, appraised at $12,363.
Two questions are presented in the case: First. Can a receiver of the property of this corporation avoid a prior chattel mortgage of the corporation on the ground that it was not filed as required by the law relating to chattel mortgages in the state of Ohio? Second. As to what property described in it, was it a chattel mortgage?
Conclusions of the Court.
1. The mortgage in this case was a mortgage of real estate as to the property embraced in schedules 1 and 2, and a chattel mortgage as to the property embraced in schedule No. 3. As to the property in schedule No. 3, it came within the provisions of section 4150 of the Revised Statutes of Ohio, which are as follows:
It is admitted that the provisions of this section with respect to the mortgage in question were not complied with, and that no attempt was made to do so.
2. The receiver, on his appointment, succeeded to the rights of creditors as well as of the debtor company, and he had the power to enforce the rights which the...
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