Case ID: ohio-st_69/html/0041-01.html
Source: Caselaw Access Project
Author: {"author": "Price, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Buckingham, for Himself and Creditors of The Springfield Provision Co. v. The Springfield Building & Loan Association, and Miller, Receiver. and Buckingham v. The Springfield Building & Loan Association, and Miller, Receiver.
    (Nos. 8246 and 8247
    Decided October 13, 1903.)
    Syllabus same as in case of State National Bank v. Esterly, Receiver, supra.—Reporter.
    Error to tbe Circuit Court of Clark county.
    Tbe facts in case No. 8216, in substance, are as follows:
    Upon the twenty-first day of June, 1901, tbe same day that tbe receiver was appointed, a proceeding was brought by William L. Buckingham for tbe benefit of himself and all other creditors of tbe Springfield Provision Co., to assess and collect on the liability of tbe stockholders under tbe laws of Ohio. In this proceeding tbe Building & Loan Association, on tbe eighth of October, 1901, set up its claim. A referee was appointed to ascertain tbe creditors of tbe corporation, and on tbe fourteenth of April, 1902, reported to tbe court allowing the claim of tbe Building & Loan Association for flO,089.41, which report was confirmed and judgment was rendered against each of tbe stockholders for tbe full amount of their stock liability, and Oliver H. Miller was appointed receiver to collect and distribute the money to be paid by tbe stockholders pursuant to the judgment of the court. In July, 1902, said receiver collected a sufficient amount to pay a dividend of ten per cent, and, on the seventeenth day of November, was, by the court, ordered to pay a dividend of ten per cent, to all creditors exhibiting their claims, and, in- making such dividend, to pay the Building & Loan Association ten per cent, upon the balance of its claim as the same 'existed after the application of the proceeds of the sale of the mortgaged property, to-wit, on the sum of $2,-621.64, retaining $736.86, ten per cent, upon the ■amount so paid to the association, for the further order of the court.
    The question arises in case No. 8246 upon the distribution of this balance so reserved and upon the distribution of any future dividends from the stockholders’ funds, as to whether a dividend should be paid upon the amount of ther claim of the Building & Loan Association as it stood at the time of the filing of the petition, or upon the amount as it stands after the application of the proceeds of the mortgaged property.
    The question raised in No. 8247 is whether or not -a creditor of an insolvent corporation which is being settled in court, who has received a payment upon his ■claim from the sale by the receiver of securities held by such creditor has a right to prove and receive a dividend upon the entire amount of his claim as it stood before the application of the securities, or is he entitled to receive a dividend only upon the balance that may remain due after the application of his security to the reduction of his debt.
    The facts in case No. 8247 are in substance as follows:
    Oh June 21, 1901, Oliver H. Miller was appointed by the court of common pleas receiver of the Springfield Provision Co., a corporation existing under the laws of Ohio, and said receiver on that day took possession of the property of said corporation. Said corporation was insolvent and indebted to the Springfield Building & Loan Association in the sum of -$9,990.30, ¡secured by mortgage upon the real estate of the corporation. On August 27, 1901, said association answered, setting ,up its claim. There was a large dumber of other creditors of said corporation. The receiver, finder order of the court, sold the real estate upon which the association held its mortgage, to said .association, and on the tenth of June, 1902, paid the association the sum of $7,368.66, being the net proceeds of the mortgage sale, leaving a balance due the Building & Loan Association of $2,621.64. On July 16th, the receiver paid a ten per cent, dividend to the .general creditors of the Springfield Provision Co., paying to the Building & Loan Association ten per cent, on the balance due on its debt after the application of the proceeds of the mortgaged property, and retained for the further order of the court ten per cent, on the amount paid from the sale of the mortgaged property, being $736.86.
    The cross-petitioners herein are creditors of the •corporation. The question arises upon a proper distribution of the $736.86 and of any further dividends to be paid out of the general assets of the corporation, as to whether the association’s claim should receive a ■ dividend on the basis oi $9,990.30, as it originally stood, or upon $2,621.64, as it stood after the application of the proceeds of the mortgaged property.
    On these facts the court of common pleas held that the creditor of the insolvent corporation, the defendant in error, was entitled only to prove and receive dividends upon the balance of its claim after the application of the securities held by it, to-wit: the proceeds of the sale of the real estate covered by its mortgage. The circuit court, on appeal, held to the contrary ; that is, in substance, that the defendant in error was entitled to a dividend on the full amount of its claim without being reduced by application of the amount received from the security.
    . The cases are here on error to reverse the judgments-of the circuit court.
    
      Mr. Frank W. Geiger; Mr. Edwin 8. Houck and Mr. John L. Plummer, for plaintiff in error.
    
      Mr. M. T. Burnham and Messrs. Bowman & Bowman, for defendants in error.
   Price, J.

As stated in the principal case, counsel for the parties in these cases were heard orally in the-argument of The State National Bank v. Esterly, Receiver, just decided, and their briefs have been read and considered with the briefs in that case.

What we have said in Bank v. Esterly, Receiver, can well be applied to these cases, and further discussion of them is unnecessary.

-. The judgment of the circuit court in each case is reversed, and judgment is rendered in each case for-plaintiff in error.

Judgments reversed.

Burket, C. J., Spear and Davis, JJ., concur.

Shatjck, J., dissents.