Case ID: ohio_3/html/0476-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

State of Ohio, for use of A. Stone, v. F. Sherman, G. Dunlevy, and M. German.
    Suit may be maintained against commissioner of insolvents and his securities, on their official bond, without creditor establishing his debt by judgment.
    This was an action of debt upon a bond-given by the defendant, Sherman, as commissioner of insolvents, and by the other defend* ants, as his sureties. The declaration set forth the bond and the condition; and assigned as a breach that while Sherman officiated as commissioner, one Turner applied for the benefit of the act for the relief of insolvent debtors—that a certificate was granted, and a large amount of property transferred to the commissioner, which - he proceeded to sell and convert into money—and received the-sum of five thousand dollars. But, that after the sale, the commissioner wholly neglected to advertise a meeting of Turner’s creditors, as required by law. It was then averred that Stone was, at the time of the insolvency, and from that time to the commencement of the suit, a creditor of Turner, for money paid, laid out and expended, at his special instance and request.
    And, for further breach of the condition, the declaration alleged, that afterward the commissioner received notes and money to a large amount, arising from the sale of said Turner’s property. But did not, at the expiration of six months, or at any time thereafter, or at any time since, make distribution according to law, among the creditors. The whole concluded with the usual averment, that an action had accrued, etc.
    The defendants demurred generally, and the cause was adjourned, here for decision from the Supreme Court of Washington county.
    *H. Stanbery argued in support of the demurrer..
    S. F. Yinton, against it.
   By the Court :

We conceive that the argument for the defendants proceeds upon a totally mistaken view of the case. It assumes that the commissioner of insolvents stands, in relation to the parties interested, and their claims, in the same condition as an executor or> administrator. That, in relation to the effects of the insolvent, he may sue or be sued in the same manner as the personal representative ot a deceased party. If this assumption was correct, the argument founded upon it would be conclusive. ' But we do not consider it as sustainable upon the statute.

Section 2 of the law defines the powers of the commissioner. He is to take charge of all property, including the credits of the. insolvent. He is empowered to sell and dispose of them, and dis. tribute the proceeds. He is also empowered “ to determine and adjust all controversies that may arise in the settlement of such estate, by compromise or arbitration; and may prosecute and defend any suit ” he may deem necessary. Suits pending at the time of assignment shall not abate. “Any new suit which may be commenced shall be brought in the name of said commissioner, or in the name of the insolvent, as the case may require.”

We do not understand this section of the law as subjecting the • commissioner to any action, in behalf of a creditor, upon account -of the transactions of the insolvent, previous to the assignment. • Suits pending when the assignment is made are to proceed as if no assignment had been made. New suits are to be brought in the name of the commissioner, or in the name of the insolvent, as the -case may require. This provision does not, in our opinion, refer to suits against the insolvent, or against his estate. It relates solely to cases where th e insolvent, or the commissioner, in his right, brings a suit. If a chose in action,, not assignable by the statute upon that subject, be delivered to the commissioner ; or if a claim to property, for which trespass or trover only would lie, be .delivered to him, and an action became necessary for the recovery, then suit must be brought in the name of the insolvent. *But if notes or bills of exchange be delivered and assigned, then a suit in the name of the commissioner would be the proper one. Or if & cause of an action accrue under the proceedings of the commissioner himself, then suit could only be brought in his name.

With respect to claims against the insolvent, existing at the time of assignment, the law does not contemplate the commencement of a new suit to adjust them. Section 5, amongst other things, provides for this case. The last proviso of the section is in these words : “Any dispute or contest arising between said commissioner .and any creditor of said insolvent, relative to the settlement of said creditor’s claim, may be appealed to the next court of common pleas, by said creditor, on his giving a written notice to said commissioner to that effect; which notice shall state the particular cause of exception or complaint; and said court shall settle, and determine, and adjust the same in a summary way, without pleadings.”

If any difficulty arise between the commissioner and a creditor, as to the justice or the amount of a claim against the insolvent, it is to be settled as here pointed out, and not by a -suit against either the insolvent or the commissioner. The proposition, therefore, that no creditor can entitle himself to an action against the securities of the commissioner, until the debt against the insolvent is established, by a judgment, seems to us wholly inadmissible.

Section 5 of the law directs the commissioner to sell the insolvent’s effects upon credit, and to take notes, with security, giving a limited credit. It then provides that, immediately after the sale} he shall call together the creditors, and settle and adjust their claims. It also provides, that, at the end of each succeeding six months, he shall continue to make distribution in money or property, as it may come into his hands. Until a meeting of the creditors was called for settling and adjusting their accounts, it could not be known that any dispute or contest would arise between a creditor and a commissioner. The failure to call this meeting was a palpable breach of the bond; for upon such call depended the periods of future accountability. The defendant’s argument not only requires a suit to be brought, which the law does not contemplate, but its unavoidable consequence is, to ^suspend the liability of the parties in the bond, until such suit should be deteimined. An absurdity which nothing but the clearest statutory-provision could induce the court to recognize.

The demurrer is overruled, and the cause remanded for further proceedings.