Wright v. Franklin Bank

• Decision Date: 01 November 1898
• Citation: 59 Ohio St. 80,51 N.E. 876
• Parties: WRIGHT et al. v. FRANKLIN BANK et al.
• Court: Ohio Supreme Court

51 N.E. 876

59 Ohio St. 80

WRIGHT et al. v. FRANKLIN BANK et al.

Supreme Court of Ohio.

November 1, 1898

Error to circuit court, Hamilton county.

Action by James C. Wright against the Franklin Bank and others to enforce and marshal liens against the estate of Thomas B Youtsey. George P. Wilshire, receiver of the First National Bank of Newport, was subsequently made a party. A judgment was rendered, from which the receiver and plaintiff bring error. Affirmed.

The facts as disclosed by the record necessary to a full understanding of this case are as follows: In the year 1892 Thomas B. Youtsey and others became the owners of a tract of land in Hamilton county, Ohio, known as the ‘Hyde Park Syndicate Property.’ The interest of Mr. Youtsey in the property was somewhat greater than the undivided one-sixth part thereof. The legal title to the property was taken in the name of James E. Mooney, in trust for the persons composing the syndicate. As such trustee he had full power to sell, convey, or lease the property, or any part thereof, at such times, to such persons, and upon such terms as he might deem best. To enable Mr. Youtsey to pay for his interest in the property, the plaintiff in error James C. Wright executed as maker, for the accommodation of Mr. Youtsey, promissory notes, payable to the order of the latter, which were discounted by the First National Bank of Newport, Ky. of which Mr. Youtsey was the cashier at the time, and of which the other plaintiff in error, George P. Wilshire, is now the receiver. The proceeds of the notes so discounted were applied by Mr. Youtsey to the payment of his proportion of the purchase money of the syndicate property. Prior to January 16, 1895, the total amount of the notes executed by Mr. Wright for the accommodation of Mr. Youtsey, and discounted and used by the latter in paying for his interest in the property mentioned, was $14,650. January 16, 1895, to secure Mr. Wright, Mr. Youtsey executed and delivered to him the writing of which the following is a copy: ‘January 16, 1895. James C. Wright has in the First National Bank several notes payable to my order. All these notes were made by him for the purpose of enabling me to raise money with which to pay my interest in the Hyde Park Syndicate in Hamilton county, Ohio, and I have used said notes for that purpose. My interest in said syndicate is liable for the payment of said notes. The interest of said James C. Wright is that for the execution of said notes by him, and all previous and subsequent similar ones, he is to have, from the profits of said venture, six thousand dollars. This does not include money loaned by him to me in said venture, for which he holds my notes. T. B. Youtsey.’ The notes attempted to be secured by said instrument, five in number, and amounting to $14,650, have never been paid. The First National Bank of Newport, Ky. ceased to do business after January 16, 1897, and January 21, 1897, the plaintiff in error George P. Wilshire was appointed its receiver, and qualified as such. January 18, 1897, the defendant in error the Franklin Bank began an action in the common pleas court of Hamilton county, Ohio, against Thomas B. Youtsey to recover $20,000, and in the same case caused a writ of attachment to issue, and to be levied upon Youtsey's equitable interest in the Hyde Park Syndicate property. January 19, 1897, by the confession of Mr. Youtsey, it obtained a judgment against him for the amount of its claim. January 21, 1897, Mr. Youtsey, who was a citizen of Kentucky and a resident of Newport, Campbell county, in that state executed a deed of assignment for the benefit of his creditors to the defendant in error C. W. Nagel. This deed of assignment was recorded January 22, 1897, in the county clerk's office of Campbell county, Ky. and January 25 1897, in the recorder's office of Hamilton county, Ohio. January 23, 1897, the plaintiff in error James C. Wright began an action in the common pleas court of Hamilton county, Ohio, against Thomas B. Youtsey, to recover of him the sum of $25,717.81. Embraced in the sum sued for by Wright, and forming a part of his cause of action, was his claim against Mr. Youtsey for $14,650 and interest, the amount of the liability of Mr. Youtsey to Mr. Wright, as accommodation maker, of the five notes hereinbefore mentioned, the proceeds of which Mr. Youtsey had used in paying for his interest in the Hyde Park Syndicate property. By confession of Mr. Youtsey, Mr. Wright obtained a judgment against him immediately for the amount sued for, upon which an execution was issued forthwith, and levied upon the interest of Mr. Youtsey in the Hyde Park Syndicate property, which had been attached by the Franklin Bank. The day that the judgment was obtained and the execution levied,-January 23, 1897,-Mr. Wright began the action, from the judgment in which the petition in error in this case is prosecuted, against the Franklin Bank, Mr. Nagel, assignee, and others, to enforce and marshal the liens against Youtsey's interest in the Hyde Park Syndicate property. In his petition and the amendment thereto Mr. Wright asserts and relies upon the lien which he claims to have obtained by virtue of the writing of January 16, 1895, signed by Mr. Youtsey, and hereinbefore set out. The judgment which Mr. Wright obtained against Mr. Youtsey he subsequently assigned to the First National Bank of Newport, and the plaintiff in error George P. Wilshire, receiver of that bank, is entitled to the benefit of said assignment, and to the lien, if any, which Mr. Wright obtained by the above writing of January 16, 1895, and he was, therefore, by supplemental pleading, made a party to the action in the lower court, and filed his answer and cross petition, and he is before this court as one of the plaintiffs in error. Upon the hearing of the cause by the circuit court it adjudged that the Franklin Bank had a superior lien upon Mr. Youtsey's interest in the Hyde Park Syndicate property by reason of its attachment, and that C. W. Nagel, assignee of Mr. Youtsey for the benefit of his creditors, upon the sale of Mr. Youtsey's interest, would be entitled to the balance of the proceeds of sale of the property, after the satisfaction of the claim of the Franklin Bank. The petition in error in this court is prosecuted to reverse the judgment of the circuit court.

Syllabus by the Court

1. Lands held in trust cannot be sold on execution for the payment of the debts of the trustee, and judgments against such trustee are not liens upon such lands.

2. Any vested interest in lands, whether held by legal or equitable title, may be attached and sold, as upon execution, to pay the debts of the owner.

3. A mortgage upon an estate, or any interest therein, legal or equitable, to be valid as against third persons, must be signed, acknowledged, witnessed, and recorded, as provided in ...