Case ID: ohio-st_76/html/0200-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Crew, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Major, Sheriff, v. The International Coal Company et al.
    
      Foreclosure of mortgage given to secure bonds — Bondholders become purchasers — Purchase price paid in bonds- — Sheriff not entitled to poundage — Section 1230, Revised Statutes.
    
    1. Under Section 1230, Revised Statutes, a sheriff is not entitled to poundage upon the sale of mortgaged premises under an order of sale in foreclosure, where the real estate so sold by him is bid off and purchased by one who is entitled to the whole of the proceeds arising from the sale, although such purchaser was not a party to the suit in which the decree of foreclosure was made and the order of sale issued.
    2. In a suit for the foreclosure of a mortgage commenced and prosecuted by the mortgagee, as trustee for the holders of the bonds secured by said mortgage, such proceedings were had that the mortgaged property was duly advertised and sold by the sheriff, and was bid off and purchased by said bondholders; the purchase price being paid by them- — as authorized by the provisions of the mortgage and the terms and conditions of the sale — by their paying in cash a sufficient sum to cover the costs and expenses of sale, and the residue by the surrender to the sheriff of the bonds secured by said mortgage in an amount sufficient to cover the balance of said purchase price, Held, that the sheriff was not entitled to charge and collect poundage on the amount of the bonds so surrendered, as for “money actually made and paid.”
    (No. 10257
    Decided April 16, 1907.)
    
      Error to the Circuit Court of Belmont County.
    On March 6th, 1905, The Mercantile Trust and Deposit Company of Baltimore, Maryland, as Trustee, brought suit in the court’ of common pleas of Belmont County, Ohio, against The International Coal Company, to foreclose a mortgage given by the latter company to secure one thousand of its bonds, of the par value of one thousand dollars each. Of the bonds which said mortgage was given to secure, but seven hundred and fifty were issued and sold, and these at the time of the commencement of said suit were all held and owned by the defendants in error herein, T. Edward Hambleton, Frank S. Hambleton, S. L. Mooney and W. C. Mooney. In said foreclosure suit The International Coal Company filed its answer admitting the truth of the allegations of plaintiff’s petition, and consenting that .judgment might be taken against it for the full amount claimed in said petition, and that a decree of foreclosure might be entered and an order of sale issued, as in said petition prayed for. On submission of said cause to the court of common pleas that court made and entered upon its journal the following findings:
    “The court finds from the evidence that this action is prosecuted by said Trustee under the authority given by said mortgage for the benefit and protection of the holders of all of the bonds secured thereby, and in pursuance of the written notice given to it by the holders of all said bonds as aforesaid.
    • “The court further finds from the evidence that the owners of all said bonds, to-wit: T. Edward Hambleton, Frank S. Hambleton, of the city of Baltimore, state of Maryland, and S. L. Mooney and W. C. Mooney, of the town of Woodsfield, state of Ohio, did, by an' instrument duly executed and signed by them, give notice to the said Trustee, The Mercantile Trust and Deposit Company, that default had been made in the payment of the several semi-annual installments of interest, as aforesaid, and did in said instrument, decree that the principal of all of said bonds, secured by this mortgage, should become then, and at that time, due and payable. And said Trustee was further notified by the owners of said bonds to immediately commence an action in a court of competent jurisdiction within the state of Ohio for the foreclosure of said mortgage and the sale of the said property, in order to secure and protect the interest of the owners of said bonds.
    “And the court further finds that this action was commenced, and is prosecuted by the plaintiff, The Mercantile Trust and Deposit Company, Trustee as aforesaid, in pursuance of such notice and for the purpose of obtaining a judgment against the defendant for the full amount due upon said bonds, principal and interest, and for a decree of foreclosure, and sale of the property conveyed by said mortgage as aforesaid.
    “And the court further finds that it was provided in and by the terms of said mortgage, that if a sale of said property was ordered and the same was bid in by said Trustee for the use and benefit of the holders of said bonds, or if the holders should buy the property directly, that upon the payment of a sufficient amount of cash on the day of sale, to pay the costs, expenses of the sale and the fees and charges of the receiver and counsel, that the balance of the purchase money to be paid by the said Trustee, or the owners of said bonds, if they or either of them made the purchase, by the surrender of the bonds secured by said mortgage, in an amount sufficient to cover the balance of the purchase money.
    “The court further finds that said mortgage is the best and first and only lien upon said property, rights and franchises described therein and that by its terms and conditions it has become absolute.
    “Therefore, the court being fully advised in the premises, finds that there is due from the defendant, The International Coal Company, as the principal sum of said bonds so issued and secured by said mortgage, the sum of seven hundred and fifty thousand dollars ($750,000) with 5 per cent, interest from November 1, 1904, and that there is due from said defendant, as interest thereon up to the first day of November, 1904, the further sum of $93,750.00, which sum bears interest at the rate of 6 per cent, from the time said several installments of interest became due and payable, and that there is due from said defendant, in the aggregate of principal and interest of said bonds the sum of $869,348.10, and the said sum is due and payable to the parties hereinbefore named as the owners and holders of said bonds.”
    On said findings the court rendered judgment in favor of the plaintiff, The Mercantile Trust and Deposit Company, and against the International Coal Company, for the sum of $869,348.10, and costs of suit, and allowed and entered a decree of foreclosure wherein it was provided that: “Unless within ten days from this date, or the entering of this decree, The International Coal Com-parry shall pay or cause to be paid to the plaintiff as trustee, in trust for the use and benefit of the holders of .the bonds secured by said mortgage as aforesaid, said sum of $869,348.10,’ or shall pay said sum directly to the owners of said bonds as hereinbefore set forth, and shall pay or cause to be paid to the clerk of this court the costs of this action, then,' that. an order of appraisement and sale shall issue from this court directed to the sheriff of Belmont county, Ohio, commanding him to cause said lands and tenements to be appraised, advertised and sold as upon execution at law.” Default having been made in the payment of said sum, on March 27th, 1905, an order of sale was duly issued' to said sheriff, commanding him to appraise, advertise and sell the premises described in, and covered by, said mortgage. Pursuant to said order said premises were appraised at $1,-119,510, and after being duly advertised for more than thirty days, the same were, on May 1st, 1905, sold by said sheriff at public auction, and were bid off and purchased by T. Edward Hambleton, Frank S. PTambleton, S. L. Mooney and W. C. Mooney, for the sum of $871,000, they being then the owners and holders of all the outstanding bonds secured by said mortgage. The terms of sale as provided in said mortgage, and as stated in the sheriff’s advertisement of sale, were: “Cash or bonds of The International Coal Company at par and accrued interest, sufficient to cover the purchase price, and sufficient cash to cover expenses and costs of sale.” No money was actually paid by the purchasers to the sheriff, except a sum sufficient to cover the expenses and costs of sale, but the purchase price of said premises was paid by them, by turning over and surrendering to the sheriff bonds of The International Coal Company sufficient to cover the purchase price. Subsequently said sale so made was duly confirmed, and a deed was executed and delivered to the purchasers. The sheriff, when he returned the order of sale, included and taxed in his cost bill, as and for his poundage on the amount of said sale, the sum of eight thousand seven hundred and ten dollars. On May 3d, 1905, T. Edward Hambleton, Frank S. Hambleton, S. L. Mooney and C. W. Mooney, the purchasers of said premises, and The Mercantile Trust and Deposit Company, plaintiff in said foreclosure suit, joined in a motion to the court of common'pleas asking said court to retax the costs of said sheriff, and to strike from the cost bill as returned by him the item of $8,710 charged by him as poundage. This motion was overruled by the court, and an order was made requiring the payment to A. M. Major, sheriff, of said sum of $8,710 as and for his poundage. On error, this order and judgment of the court of common pleas was reversed by the circuit court and the cause was remanded to said court of common pleas with instructions to sustain the motion to retax costs by striking from said cost bill said item of poundage amounting to $8,710, and to wholly disallow the same. To reverse this judgment of the circuit court, A. M. Major, sheriff, brings the present proceeding in error.
    
      Mr. Newell K. Kennon, for plaintiff in error.
    
      Messrs. Mallory, Jeffers &'Sears and Messrs. Driggs, Heinlein & Armstrong, for defendants in error.
   Crew, J.

As appears from the above statement of facts, the sole question presented in this case is whether or not the plaintiff in error, A. M. Major, is entitled to charge and collect poundage upon the amount of a sheriff’s sale of real estate made by him under an order of sale in a mortgage foreclosure suit, commenced and prosecuted by the defendant in error, The Mercantile Trust and Deposit Company, as Trustee, for the benefit and protection of the holders of certain bonds issued by the International Coal Company and secured by said mortgage, the property so sold having been purchased and bid in at said sheriff’s sale by the bondholders themselves, and having been paid for by them, — as authorized by the provisions of the mortgage and the terms of sale, — by their surrendering to the sheriff for cancellation, bonds of the International Coal Company in an amount sufficient to cover the purchase price, together with a sufficient amount in cash to cover the expenses and costs of sale. Whether upon these facts, and under such circumstances, plaintiff in error is entitled to the poundage claimed by him, must be determined by the provisions of Section 1230, Revised Statutes. This section, so far as its provisions are pertinent to the present inquiry, reads as follows: “The fees and compensation of sheriffs shall be as follows: * * * poundage on all moneys actually made, and paid to the sheriff on execution, decree or sale of real estate (except on writs for the sale of real estate in partition) one and.a half per centum on the first thousand dollars, and one per centum on all sums over one thousand dollars; but when such real estate is bid off and purchased by a party entitled to a part of the proceeds, the sheriff shall not be entitled to any poundage except on the amount over and above the claims of such party.” The language of the provisions above quoted would seem to us to be too plain to require either comment or construction. Obviously, it was the plain purpose and intent of the legislature to thereby provide, that upon sales of real estate, poundage should be allowed’ to the sheriff, only upon moneys actually made and paid to him,-and that in no case should poundage be allowed to, or charged by the sheriff, when the real estate sold by him is bid off and purchased by a party entitled to a part of the proceeds, except on the amount over and above the claim of such party. Language more direct and certain, by which to express such purpose, could hardly have been employed, and unless the provisions of this section are to receive this interpretation, they are entirely without meaning or effect. In the present case no money,— except an amount sufficient to cover the' expenses and costs of sale,— was actually made or paid to the sheriff, nor could the sheriff have lawfully demanded or required of the purchasers that they pay over to him, in money, $871,000, the amount of their bid. Furthermore, in this case the purchasers, T. Edward Hambleton, Frank S. Hambleton, S. L. Mooney and W. C. Moonejq were, as owners and holders of all the outstanding bonds of The International Coal Company, entitled to the whole of the proceeds arising from the sale of said real estate, such real estate having been bid off by them for an amount less, by $4,886.10, than the sum required to satisfy their claim. So that, neither of the conditions essential, under Section 1230, Revised Statutes, to the right of the sheriff to charge and receive poundage on a sale of real estate by him made, existed in this case; whereas, to entitle him to such poundage it was necessary that both should exist. The view is suggested in argument by counsel for plaintiff in error, that the word “party” as used in Section 1230, Revised Statutes, is employed and used strictly in its legal and technical sense, and it is said that: “It seems clear from an examination of the history of this legislation providing for the poundage of a sheriff making a sale, that the legislature intended that the sheriff should not be entitled to his poundage in such cases, only where the purchaser was a party to the action and proceedings in which the decree was taken' and the order of sale made,” Such, however, is not the language of the section, and to import into this statute by construction any. such meaning as that, is to ignore the purpose of this legislation as well as the reason for the rule that withholds from the sheriff poundage in all cases where the purchaser is entitled to the proceeds of sale, and consequently not required to pay or hand over to the sheriff any part of the purchase price, except it be an amount sufficient to cover the costs and expenses of the sale. The law does not require a vain or unreasonable thing. And what could be more unreasonable and absurd than to require and exact of a purchaser at a sheriff’s sale of real estate (whether he be nominally a party to the suit or not), who is himself entitled to the whole of the proceeds arising from such sale, that he actually pay over and deliver to the sheriff, in money, the amount for which he bid off the property only to have the same immediately returned to him in payment of his claim and lien, to satisfy which the property was sold. Again, to give to the provisions of Section 1230, in the present case, the effect claimed for them by counsel for plaintiff in error, would be to disregard the purpose for which poundage is allowed and given, namely: as a compensation to the sheriff for the risk incurred in handling and disbursing money actually received by him in his official capacity. Where no money is' received and no risk incurred, no compensation by way of poundage is earned, and under the provisions of Section 1230, .Revised Statutes, none can be'allowed or charged. We are of opinion that the circuit court properly held and adjudged in the present case that the sheriff was not entitled to charge and -receive poundage on the amount of the sale by him made, and the judgment of said circuit court must therefore be affirmed. The authorities from other states, cited by counsel for plaintiff in error, are not in conflict with the conclusion reached by us in this case, for in none of the cases cited was the decision of the court made under a statute containing limitations upon the right of a sheriff to charge and receive poundage, such as are found in Section 1230 of the Revised Statutes of Ohio.

J%idgment Affirmed.

Shauck, C. J., Price, Summers, Spear and Davis, JJ., concur.