Case ID: ohio-st_65/html/0055-01.html
Source: Caselaw Access Project
Author: {"author": "Davis, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Irwin et al. v. Lloyd, Trustee, etc.
    
      Assignment for creditors — Judgment against assignor not valid against assigned estate, when.
    
    A judgment obtained, after an assignment for tbe benefit of creditors, by a creditor against the assignor, is not a valid claim against the assigned estafé.
    (Decided June 25, 1901.)
    Error to the Circuit Court of Hamilton county.
    On or about June 21,1887, Edward L. Harper made an assignment for the benefit of his creditors. The assignee failed to qualify, and the defendant in error, Lloyd, was appointed trustee by the probate court of Hamilton county. On the 25th of May, 1894, the plaintiff in error presented to the trustee, for allowance, an account against the assignor, amounting to $423,574.71, which was on the same day rejected by the trustee. All the items of-the said account and the right to sue thereon had accrued to the plaintiff» in error more than six years before the assignment of Harper. On August 10, 1894, the plaintiffs in error entered suit against the trustee to compel the allowance of the said claim; and upon trial of that cause, on September 28, 1896, the petition of the plaintiffs was dismissed by the court because it was barred by the statute of limitations. The cause having been duly appealed to the circuit court, on the 25th day of February, 1898, the plaintiffs voluntarily and without the knowledge of the trustee dismissed said cause without prejudice.
    On October 15, 1896, the plaintiffs in error sue the assignor, Edward L. Harper, on the same account which had been rejected by the trustee; and on December 8, 1896, the court of common pleas gave judgment by default against Harper for $671,860.00, although the entire claim was barred by the statute of limitations. The trustee was not a party to this action. Thereafter, on August 9, 1897, a certified copy of said judgment against Harper was presented to the trustee for allowance, as a claim against Harper’s assigned estate, and was by the trustee rejected on the same day. On September 1, 1897, the plaintiffs in error sued the trustee in the court of common pleas of Hamilton county, to enforce the allowance of said judgment against Harper as a claim against the assigned estate, and on the hearing the petition was dismissed, on the ground that the judgment was not a valid claim against the assigned estate. An appeal was taken to the circuit court, and on the final hearing in that court, on amended petition and answer thereto, the petition was dismissed and judgment rendered in favor of Lloyd, trustee, for costs. Separate findings of fact and conclusions of law were stated by the circuit court, at the request of the plaintiffs in error, and they now seek to reverse the said judgment of the circuit court.
    
      Charles W. Baker, for plaintiffs in error.
    It is claimed that the original claim presented to Trustee Lloyd, rejected, we will assume, by him May 25,1894, cannot be successfully made the basis of this action, because suit was not begun to compel such an allowance until August 10, 1894, more than thirty days after such a disallowance.
    It is sufficient to say in answer to this that this court has held repeatedly, that it is not a good defense if the money due the claimant is still in the hands of the assignee. Owens v. Ramsdell, 33 Ohio St., 439; Carpenter v. Dick, 41 Ohio St., 295; Kelly v. Mills, 2 Dec., 265; 1 N. P., 382; Harper v. Lackey, 40 Ohio St., 602; Railroad v. Hine, 25 Ohio St., 629; Secs. 6352 and 6097 of the Probate Code.
    
      As held by this court the one contains a clause of limitation, while See. 6352 does not.
    It is claimed that the claim is barred by the statute of limitations. But here is a trustee holding money in his hands, belonging to my clients and claiming to hold it as trustee. We respectfully submit that the statute of limitations does not run as to him, and did not begin to run in his favor as against Irwin, Green & Company until April, 1894, when the first dividend was declared, and July, 1896, when the second dividend was declared. Trustee Lloyd’s trust is a continuing and subsisting trust, therefore the statute at least does not run until the time of the order directing him to pay the dividends. Newton v. Hammond, 38 Ohio St., 430; Piatt v. Longworth, 27 Ohio St., 159; Hillier v. Stewart, 26 Ohio St., 652; Oliver's Appeal, 101 Pa. St., 299; McCarthy v. McCarthy, 74 Ala., 546; Pulliam v. Pulliam, 10 Fed. Rep., 23; Prince v. Towns, 33 Fed. Rep., 161; Oliver v. Piatt, 44 U. S. (3 How.), 332; Lewis v. Hawkins, 64 U. S. (23 Wall.), 119.
    We submit that by virtue of Sec. 4991 we are not barred by the statute of limitations. Atcherly v. Dickinson, 34 Ohio St., 537; Bates v. Railroad, 12 Ohio St., 620.
    Even a voluntary non-suit gives a right to a new action. Houtz v. Shepard, 79 Mo., 141; Belden v. Slaughter House Co., 38 La. Ann., 391; Doyle v. Wade, 23 Fla., 90; Loan Soc. v. Hutchinson, 8 Pac. Rep., 627 [68 Cal., 52], see note, p. 628; Succession of Saunders, 37 La. Ann., 769.
    It appears in this case that Harper was an undiscovered principal. That- his- dealing through Wilshire, Wilshire, Eckert & Co., Benjamin H. Hopkins and J. W. Hoyt and keeping himself undiscovered, was a fraud upon Irwin, Green & Company, and they did not discover the fraud until October, 1892, the court so finds in its finding of facts, record, page 11.
    By Sec. 4982 the plaintiff had the right to maintain his action at any time within four years thereafter. Cummings v. Dougherty, 1 Dec., 231; 31 Bul., 140; Sec. 4991; Meisse v. McCoy, 17 Ohio St., 225; Bank v. McIntire, 40 Ohio St., 528; Long v. Mulford, 17 Ohio St., 485; Piatt v. Longworth, 27 Ohio St., 159.
    
      H. P. Lloyd, for defendant in error.
    (a.) Under the Revised Statutes of Ohio applicable to the subject of appeals, but one appeal is allowed (Secs. 5227 and 5228, Rev. Stat.). No provision is made for a second appeal. The words “without prejudice” may, therefore, be treated as surplus-age. 2 Enc. PL and Pr., 356.
    (b.) . Although the word “cause” is employed in the entry of dismissal instead of the word “appeal,” the circuit court could not dismiss anything more than what was before that court under its appellate jurisdiction, viz., the appeal. To sweep away the judgment below would have required a mandate to issue to the court of common pleas. No claim is made that any mandate was issued commanding any such thing to be done. This dismissal of the appeal, therefore, left the judgment below in favor of the defendant unimpaired and in full force.
    We find only two cases in which this court has had before it the question of the results following the disposition of an appeal in the appellate court. Hull v. Bell Bros. & Co., 54 Ohio St., 228; Myers v. Jenkins, 63 Ohio St., 101 (44 Bul., 212).
    
      In the case in question, No. 100,789, Hamilton county common pleas, the time within which to prosecute error from the judgment has also long since expired. Therefore, under thg ruling of this court, the same effect would undoubtedly be given to the judgment of the common pleas court, left in full force and unimpaired by the voluntary dismissal of the appeal in the circuit court, as though the case had been heard on appeal and decided adversely to the plaintiffs in error. The effect of the dismissal of the appeal was to remove the cloud which it temporarily while pending, cast upon the judgment below. When that shadow was removed the judgment remained unimpaired and in full force and effect. Herman on Estoppel and Res Adjudicata, Sec. 116, p. 122; McLind v. McGlann, 60 Ga., 244.
    Where any fact has been directly in issue and judicially passed upon it is res adjudicata, no matter what the nature of it, and can not be subsequently adjudicated. 21 Am. & Eng. Enc. Law, 252.
    Whenever a cause of action, in the language of the law, transit in rein adjudicatam, and the judgment thereupon remains in full force and unreversed, the original cause of action is merged and gone forever. Broom’s Legal Maxims, *p. 325, citing United States v. Leffler, 36 U. S. (11 Pet.), 91.
    On the second hearing the circuit court could consider only the cause of action which came from the common pleas, viz., the action for the allowance of the judgment against Edward L. Harper which was disallowed by this defendant. Elliott’s Appellate Proced., See. 470; Grant v. Ludlow’s Admr., 8 Ohio St., 1.
    
      This court has established the rule that no one can participate in the distribution of the proceeds derived from the assignment unless he proceeds in the way pointed out in section 6852 of the Revised Statutes of Ohio. Haskins v. Alcott, 13 Ohio St., 210; Lahm v. Johnston, 32 Ohio St., 590.
   Davis, J.

It has long been the settled law in this state that, although a creditor may maintain an action against a person who has assigned his property for the benefit of his creditors, and prosecute the same to judgment; yet he may not subject the assigned property to the payment of his claim, except in the manner and proportions prescribed in the statutes regulating the mode of administering assignments. Haskins v. Alcott, 13 Ohio St., 210, 214. Such a judgment may be satisfied out of property acquired by the assignor after the assignment; but the judgment, without regard to the debt on which it is founded, cannot be a claim against the assigned estate, because the statute prescribes that all claims shall first be presented to the assignee, or trustee, for allowance, and if rejected by him, that an action can then be maintained against the assignee, or trustee, to compel him to allow the same. No other judgment is authorized against the assignee or trustee. The presentation of the claim in the form of a judgment against the debtor and a demand that the assignee, or trustee, shall allow the judgment, will not meet the requirements of the statute. The trustee has the right, in the interest of all of the creditors, to scrutinize and resist the original claim as it existed at ,the time of the assignment, and no evasion of the statute, by putting the claim into judgment, by means of collusion between the creditor and the debtor, or otherwise, will defeat that right. Here the trustee had exercised his statutory privilege by rejecting the original claim, for the reason that it was barred by the statute of limitations. In this he was sustained by the judgment of the court of common pleas. Having appealed to the circuit court, the plaintiffs saw fit to dismiss their appeal without prejudice. Although not so in terms, this was in effect a final dismissal, because there could be no second appeal. The contention as to that claim thereafter was res adjudicaba as far as it concerned the assigned estate, represented by the trustee. A judgment against the assignor, in an action to which the trustee was not a party, and he is a necessary party to bind the assigned estate, could not be accepted by the trustee as a judgment binding the assigned estate, disregarding the original cause of action; and especially so when the contention had been adjudged in his favor in the mode prescribed by the statute. It follows that the judgment of the circuit court should be

Affirmed.

Minshall, C. J., Williams, Buri-cet, Spear and Siiauck, JJ., concur.