Sayler v. Simpson

• Decision Date: 10 May 1887
• Citation: 45 Ohio St. 141,12 N.E. 181
• Parties: SAYLER, Assignee, etc., and others v. SIMPSON and others.
• Court: Ohio Supreme Court

12 N.E. 181

45 Ohio St. 141

SAYLER, Assignee, etc., and others v. SIMPSON and others.

Supreme Court of Ohio.

May 10, 1887

Error to circuit court, Hamilton county.

The Simpson & Gault Manufacturing Company having made an assignment for the benefit of creditors, May 25, 1885, Robert Simpson and others who held chattel mortgages, executed to them by the company on May 23d, two days previous to the assignment, filed applications in the probate court of Hamilton county, after a sale of the property had been made under order of that court, asking for an order directing the assignee to pay their respective claims secured by the mortgages out of the proceeds of the property mortgaged. The assignee, and certain of the general creditors, opposed the application, and filed pleadings, alleging that the mortgages constituted fraudulent preferences, and one of the creditors objected to the jurisdicton of the court. The court took evidence upon the questions raised, and sustained the mortgages, and ordered their payment. Appeals were taken from the judgment of the probate court successively to the court of common pleas and to the circuit court, upon which the former court held the order of the probate court void for want of jurisdiction, and the latter court reversed such holding. The assignee and certain creditors now bring error.

J. R. Sayler and Bateman, Harper & Baily for plaintiffs in error.

Thos McDougall and Avery & Holmes , for defendants in error.

WILLIAMS, J.

The mortgagees having appeared and filed their applications in the probate court for the payment of their mortgages, the assignee answered, and the unsecured creditors named also intervened to contest them, and for that purpose filed appropriate pleadings. These admitted the execution and deposit of the mortgages as required by statute, before the filing of the deed of assignment, whereby they became and were at that time prima facie statutory liens on the property. The real ground of attack upon them was that notwithstanding their apparent priority over the assignment they were, under the circumstances of their execution, a part of it, and did not, for that reason, constitute incumbrances. After a decision adverse to the assignee and unsecured creditors, appeals were perfected by then to the court of common pleas.

There was no want of jurisdiction in either court over the persons of the parties thus voluntarily invoking and submitting themselves to such jurisdiction. This is conceded. And the assignee having, under the orders of the probate court, sold the mortgaged property, and being in possession of the proceeds, it cannot be doubted that whatever liens existed, by virtue of the mortgages on the property, were transferred to the fund, and attached thereto in the order of their priority on the property. But the claim is that the probate court was without power to adjudicate upon the validity and adjust the priority of those liens. It is not disputed that the probate court is one of limited and special jurisdiction, possessing only such as is conferred by statute, with such auxiliary and incidental powers as are necessary and proper to carry into effect those expressly granted. Davis v. Davis , 11 Ohio St. 386. Nor is it claimed that there is any constitutional impediment to conferring on that court, by appropriate legislation, the jurisdiction in question. The important inquiry is, has it been done? We are of opinion it has. The several provisions of the statutes relating to assignments by insolvent debtors, and proceedings thereunder, adequately endow probate courts with jurisdiction to order the sale of the assigned property, and the payment of all incumbrances and liens thereon by the assignee out of the proceeds according to their priority; and they may, in the exercise of such jurisdiction, decide upon the validity of such liens, and determine to what extent, and in what order, they are entitled to be so paid.

Section 6351, Rev. St., as amended January 30, 1885, (82 Ohio L. 14,) provides that ‘ the probate court shall order the payment of all incumbrances and liens upon any of the property sold, or rights and credits collected, out of the proceeds thereof, according to priority: provided, that the assignee may, in all cases where the real estate to be sold is incumbered with liens, or where any questions in regard to title require a decree to settle the same, commence a civil action, for the sale of such real estate, in the court of common pleas of the proper county, making all persons in interest, including the wife of the assignor, parties to such proceeding, and, upon hearing, such court shall order a sale of the premises, the payment of incumbrances and the contingent dower interest of said wife. * * * All the provisions of said section 6350 in relation to the wife of the assignor as a party to proceedings thereunder, and her rights by virtue thereof, also the provisions of said section as to ordering property sold at private sale, and upon terms of credit, shall apply to proceedings under this section.’

Section 6350, as amended April 13, 1880, (77 Ohio L. 189,) provides that the assignee shall proceed to sell the real and personal property assigned upon such terms as the court may order, and shall make due return thereof; and, ‘ when any real estate is to be sold under the provisions of this section, the wife of the assignor may be made a party, and she may file her answer, and ask the court to have said real estate sold free of her contingent right of dower, and to allow her, in lieu thereof, such sum of money, out of the proceeds of the sale, as the court deems the just and reasonable value of her contingent dower interest therein; and such answer of the wife of the assignor shall have the same force and effect, and shall be taken and held to be in all respects, as a deed of release to the purchaser of such real estate of the contingent dower interest of such wife. It is further provided that where said wife has executed a mortgage jointly with her husband on any of the real estate aforesaid, or where the husband alone has executed a mortgage as security for the payment of the purchase price, or part thereof, on any of the said real estate, such court shall order the sale of the same free from the contingent right of dower of such wife, and shall find and determine the just and reasonable value of such wife's contingent dower interest in the balance of the proceeds of such sale of real estate, after the payment of such incumbrances, as preclude her right of dower therein.’

The part of section 6350 quoted above was added by the amendment of April 13, 1880. Before it was so amended, it was contended that, where a mortgagor whose wife had joined in the execution of the mortgage on his real estate subsequently assigned for the benefit of creditors, the probate court had exclusive jurisdiction to order the sale of the land, and the mortgagee could not in any other tribunal enforce such sale upon the principle that where a court of competent jurisdiction acquired possession of the subject-matter of litigation, and the right of a party to prosecute his action once attached, the right of the court to retain the case, and of the party to prosecute it, could not be defeated by the institution of proceedings in another court, although of concurrent and co-ordinate jurisdiction. This principle was fully recognized in Dwyer v. Garlough , 31 Ohio St. 158, but was denied application in the case solely on the ground that, under the statute then in force, no authority was given the probate court to cause the wife's dower interest in the land to be sold, but only the property assigned, which did not include her interest; while by the terms of the mortgage the mortgagee was entitled to have it, as well as the husband's estate, sold; and the remedy then afforded by a sale...