Case ID: ohio-law-abs_37/html/0268-01.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

FALK v MONNING
    Ohio Appeals, 1st District, Hamilton County.
    No. 6099.
    Decided April 13, 1942.
    Sol Goodman, Cincinnati, and Harry Falk, Cincinnati, for appellee.
    
      William R. Collins, Cincinnati, and Raymond Huwe, Cincinnati, for appellant.
   OPINION

BY THE COURT:

The estate of the plaintiff’s decedent, as a judgment creditor of John Frederick Monning, instituted an action against the defendant-appellant herein and The First National Bank of Norwood to set aside a conveyance to the defendant-appellant herein of an undivided one-half interest in certain real estate of which the defendant-appellant owned the other undivided one-half.

The allegations of the petition in that case were that the plaintiff had a lien upqn the one-half conveyed in fraud of the rights of the decedent’s estate as a judgment creditor and that the defendant-appellant was a trustee of that undivided one-half. While the First National Bank of Norwood was made a party, there was no allegation as to the nature of its interest in the undivided one-half.

There was no allegation that the defendant-appellant had wrongfully transferred the one-half to an innocent purchaser or mortgagee and no prayer for a personal judgment based on such a wrongful act.

It developed at the trial of that case that The First National Bank had loaned $2,000 and taken a mortgage upon the entire title, without any knowledge of the fraudulent conveyance to the mortgagor of the undivided one-half by John Frederick Monning.

The court having found that the conveyance was fraudulent charged the defendant-appellant as a trustee of the undivided one-half, but subject to the Norwood Bank mortgage, ordered the entire title sold, the costs paid, the one-half owned by defendant-appellant first subjected to the payment of the Bank’s mortgage and any unpaid balance satisfied out of the one-half fraudulently conveyed to defendant-appellant and any balance applied on the plaintiff’s judgment.

No provision was made for reimbursing the plaintiff in the event, which actually happened, of part of the one-half fraudulently conveyed being used to satisfy the Bank mortgage, and no personal judgment for money was either prayed for or rendered.

This action is for a personal judgment for .the amount ($647.88) of the proceeds of the one-half fraudulently conveyed that were taken to satisfy the debt of the defendant-appellant to the Bank.

The trial court rendered judgment-for $345.91, and both parties have appealed from that judgment.

According to the allegations of the petition, the action to set aside the fraudulent . conveyance and subject the undivided one-half to the plaintiff’s judgment was quasi in rem. 27 O. Jur., 595.

In view of the bank’s lien upon the entire title and its cross-petition for foreclosure, it involved the sale of the entire title and the partition of the proceeds, but as there was no prayer for a personal judgment, there was no such issue in the case. 27 O. Jur., 670.

In 23 O. Jur., 726, it is said of a judgment in rem: “The judgment rendered binds the property subjected to the jurisdiction of the court, but beyond this the judgment is of no validity — . When it has converted the property, it is functus officio, and validity remains to it no longer for any purpose.”

We are therefore of the opinion that when the defendant-appellant gave a mortgage on the premises, of which she was a fraudulent grantee, she committed a wrong or tort against the fraudulent grantor’s creditors, and that there is no bar to this action to recover the damage resulting to them because of the wrong.

Had no fraudulent conveyance been made, there would have been some costs necessarily incurred by the plaintiff in subjecting this undivided one-half to the payment of the judgment. The trial court rendered judgment for less than the difference between the selling price and the amount received by the plaintiff in the action in which the property was sold. Presumably, that difference represents the normal costs of execution which would have been incurred on a sale on execution. Our attention has been called to nothing in the record that would overcome this presumption.

The judgment is affirmed.

MATTHEWS, PJ„ ROSS & HAMILTON, JJ., concur.