Huber Mfg. Co. v. Sweny

• Decision Date: 23 November 1897
• Parties: HUBER MANUF'G CO. v. SWENY et al.
• Court: Ohio Supreme Court

48 N.E. 879

57 Ohio St. 169

HUBER MANUF'G CO. v. SWENY et al.

Supreme Court of Ohio.

November 23, 1897

Error to circuit court, Warren county.

In the matter of the assignment of James W. Sweny, Frank Brandon assignee, applied for an order of distribution. Clara W Sweny and the Huber Manufacturing Company filed claims. From a judgment finding that the claim of Clara W. Sweny was a first lien, the Huber Manufacturing Company brings error. Affirmed.

This cause had its origin in the probate court. The defendant in error Frank Brandon, as assignee for the benefit of creditors of James W. Sweny, filed in that court a written application asking for an order fixing the priority of liens, and of distribution of the proceeds of sales made by him of chattel property assigned, being an engine and separator. Plaintiff in error set up in its answer a chattel mortgage on the property executed by the assignor to it July 29, 1892, for $450, which mortgage was duly filed September 13, 1892, and refiled August 16, 1893, and claimed first lien on the fund. Clara W. Sweny set up two chattel mortgages on the property executed to her by the assignor. One was dated March 18 1892, for $500, and was duly filed, March 23, 1892. This mortgage she failed to refile within the year; and on May 17 1893, the mortgagor executed and delivered to her a new mortgage to secure the same debt, which was duly filed July 1, 1893. She claimed a first lien on the fund. Either mortgage, with the costs, was enough to exhaust the proceeds of the sale. On January 3, 1894, James W. Sweny executed the assignment by virtue of which the sales were made, and the assignee then took possession of the property. The action being tried in the common pleas court on appeal, at the October term, 1894, a judgment for the Huber Company resulted, adjudging that its claim was the first lien, and ordering distribution, which was entered on the journal. Motion for new trial by Clara W. Sweny followed within three days, which was submitted and overruled, and an entry made of that action, and a bill of exceptions was taken by her. The cause was furthr heard at that term, but no entry was made on the journal. At the January term following, an entry nunc pro tunc, setting aside the former entry of judgment and of order overruling motion for new trial, was made, to wit ‘Whereas, at the October term of this court, 1894, and after the making and entering of record of the orders and decrees in this cause, bearing date of Saturday, October 20, 1894, and recorded in Volume 36, pages 425 and 426, of the journal of this court, Clara W. Sweny and Frank Brandon, assignee, etc., made in open court an application to set aside and vacate said orders and decrees; and a hearing was had upon said application, but, by inadvertence, no order was made and entered upon the journals and records of this court at that time in reference to said application, although on said application the court granted a rehearing of said cause, and the same was fully argued by counsel, and submitted to the court; and it appearing to the court that an order should have been made and entered upon the journal of this court at the October term, 1894, vacating, setting aside, and holding for naught said former orders: Now, therefore, it is ordered, adjudged, and decreed that said orders of this court, bearing date Saturday, October 20, 1894, and recorded in Volume 36, pages 425 and 426, of the journal of this court, be, and the same are hereby, set aside, vacated, and held for naught, and that this judgment, order, and decree shall stand and be considered as the judgment of this court duly made and given as of the October term of this court in the year 1894. To all of which judgment, order, and decree of the court, setting aside and vacating its former order, as well as the making and entering the order at this time, the Huber Manufacturing Company, by its attorney, excepts.’ Then followed a finding and judgment that Clara W. Sweny had the first lien on the engine sold, the Huber Company a second lien, and ordering distribution accordingly, to which the company excepted. It appeared in the evidence, and was not denied, that, at the time the mortgage was taken by the Huber Company, it had actual notice of the prior mortgage to Clara W. Sweny. On error, the circuit court affirmed this judgment. A reversal of both judgments is asked.

Syllabus by the Court

1. The control of a court of common pleas over its own orders and judgments during the term at which they are rendered, and the power to vacate or modify the same at discretion, is not affected by the incidents that a motion for new trial has been heard and overruled, and that a bill of exceptions has been taken; and where an order vacating and setting aside such order overruling the motion has in fact been made at the term at which it was entered, but by inadvertence no entry of the same has been made upon the journal, such omission may be supplied by an order nunc pro tunc at the succeeding term.

2. Where, in the administration of an assignment for the benefit of creditors, the assignee, having sold chattel property which is subject to certain conflicting mortgage liens, held respectively by S. and H., and having filed a proper application for the purpose of bringing the mortgagees into court, in order that their conflicting liens and claims to the fund may be adjudicated, and the same are set up by proper pleadings, and it appears that either claim, with the costs, will exhaust the entire fund, leaving nothing for general creditors, and the question for the court is found to be only one of priority and of distribution, the controversy becomes one between the mortgagees alone, and is to be determined solely by a consideration of the respective claims of the mortgagees as between themselves.

3. In such case, the settled rule that a person taking a subsequent mortgage of chattels with actual notice of an unsatisfied prior mortgage on the same property is not a mortgagee in good faith, within the meaning of section 4155, Rev. St applies. And where it appears that S. has a mortgage which was not refiled within the year after its first filing, and another given later upon the same property to secure the same debt, duly filed before the assignment, and that the mortgage of H. was taken and duly filed before the second mortgage of S., and after the expiration of the year from the filing of the first mortgage of S., but with actual notice of that mortgage, the lien of S., by virtue of the first mortgage, will be held superior to the lien of H., although such mortgage, by reason of the failure to refile it in conformity to the statute, would be invalid as against general creditors.

W. F. Eltzroth and W. Chester Maple, for plaintiff in error.

George A. Burr, for defendants in error.

SPEAR, J. (after stating the facts).

Two questions are presented. A decision of either in favor of plaintiff in error would result in a reversl of the judgment. (1) Did the court of common pleas, at the January term, 1895 have power to vacate the judgment entered at the October term preceding, and, if so, did the order made have the effect to...