State Ex Rel. Milton Banking Co. v. Merrell

The Milton Banking Company of Wellston, Ohio, as relator, seeks a writ of mandamus to compel affirmative action on the part of two officials of the state of Ohio, viz., the Highway Director and the State Auditor. From the Highway Director is sought a voucher upon which the State Auditor shall be required to issue a warrant on the State Treasurer for the unencumbered sum of $4998, representing the balance due one Calvin B. Gilmore for constructing a bridge in Gallia county, Ohio, under a contract with the state of Ohio. Relator in its petition alleges that it is the assignee of such claim and that the consideration therefor is the amount of $5058.25 advanced to Gilmore toward the cost of constructing such bridge. The written assignment which is the foundation of relator's action was made on October 8, 1932, addressed to "Department of Highways," Columbus, Ohio, and naming "Ed. T. Evans of The Milton Banking Company, Wellston, Ohio," as assignee. It was delivered to the State Highway Director on October 10, 1932.

On April 27, 1933, Gilmore filed a petition in bankruptcy listing among his assets the claim of $4998 against the state of Ohio. Later he was adjudged a bankrupt.

Among the pleadings in this case is the amended separate answer of E. Paul Evans, Trustee in Bankruptcy of Calvin B. Gilmore, in which he makes claim to such $4998 for the benefit of certain creditors of Gilmore who performed work or furnished materials in the construction of such bridge, and whose combined demands total the sum of $12,548.79. The realization on their claims depends upon participation in the amount owed Gilmore by the state of Ohio, as it is alleged in the answer that the surety on the bond given by Gilmore to insure performance of the bridge contract is insolvent. The trustee's answer then sets out that Gilmore had on deposit with the relator bank the sum of $1242.60, which it has appropriated in reduction of his indebtedness, and that relator has received in further reduction of the indebtedness the sum of $605, being the proceeds from the sale of certain personal property on which it held a chattel mortgage. This answer contains the further allegation that the relator holds as additional security for Gilmore's indebtedness two real estate mortgages in the total face amount of $5000, executed and delivered to it by Gilmore in August, 1932.

In reply, the relator says that these two real estate mortgages were given solely to secure a separate and distinct obligation of Gilmore.

The answer of the State Highway Director admits the contract with Gilmore, that the sum of $4998 is still due thereon, but that payment is being withheld on account of the controversy surrounding it, and asks the direction of this court in the premises.

Answers have also been filed by the Superior Cement Corporation and the Ben-Tom Supply Company, each of which furnished material going into the bridge constructed by Gilmore. The former alleges that the assignment given by Gilmore, of which relator wishes to take advantage, was intended merely as collateral security for an obligation owing by Gilmore to the relator bank, that the funds now in the hands of the state of Ohio are far in excess of the amount presently due relator from Gilmore, that by reason of the bankruptcy proceedings and the action taken therein the United States District Court has exclusive jurisdiction over the distribution of such fund, and that the rights of all parties thereto should be determined in the bankruptcy proceedings.

The Ben-Tom Supply Company alleges relator's violation of an agreement between relator and Gilmore's surety on the bridge contract, assented to by Gilmore, stipulating that the money received by Gilmore under the bridge contract should be deposited in the relator bank under the joint control of the surety and the bank, and be paid out only upon the signature of the surety; that the bank paid out in excess of $1200 without the surety's signature, whereby such amount was diverted from the materialmen who furnished material going into the bridge construction, and that the claim of the Ben-Tom Supply Company to the fund held by the state of Ohio is therefore superior to that of relator.

This case has been considered upon the pleadings, depositions and the stipulations as to facts contained in the depositions. Conflicting claims are aggressively asserted, and we are of opinion that relator has not established a clear legal right to the extraordinary remedy of mandamus, which he must do to prevail. In this proceeding the state of Ohio is no more than a stakeholder of the fund in controversy. State, ex rel. Nixon, v. Merrell, Dir. of Highways, 126 Ohio St. 239, 185 N.E. 56.

Likewise, we are of the opinion that relator is not entitled to the relief asked, because of the spirited challenge of other persons who are vitally concerned, and who will probably be precluded from participation in the fund if the writ is allowed. State, ex rel. McKey, Trustee, v. Cooper, Aud.,99 Ohio St. 258, 124 N.E. 192; State, ex rel. Universal RealtyCo., v. Brown, Secy. of State, 113 Ohio St. 698,150 N.E. 755; State, ex rel. Nixon, v. Merrell, Dir. of Highways,127 Ohio St. 72, 186 N.E. 806. The writ will therefore be denied.

Writ denied.

WEYGANDT, C.J., STEPHENSON, WILLIAMS, MATTHIAS, DAY and ZIMMERMAN, JJ., concur.

JONES, J., not participating.