Stern v. Cols. Mutl. Life Ins. Co.

On February 2, 1931, the Columbus Mutual Life Insurance Company recovered a judgment against Louis Stern and others in the sum of $38,492.57. On February 25, 1931, an execution was issued, and on the same day it was returned by the sheriff nulla bona. On the same day the judgment creditor filed an affidavit for an order in aid of execution. Service was had in the proceedings made in aid of execution, and on March 18 the court considered a motion by the defendants to vacate the order, which was overruled. On March 24 the court overruled a motion by the defendants to set aside the return of the sheriff dated February 25. To the order of the trial court in refusing to vacate the proceedings, and the further order of the court in overruling the motion to set aside the sheriff's return, error is prosecuted to this court.

Both parties here agree that for the purpose of this case the orders complained of are such final orders as will support a petition in error.

The bill of exceptions discloses that the defendants' counsel read to the court a professional statement which the court took as testimony in support of the defendant's motions. This statement was to the effect that the judgment had been obtained on a note in the amount above indicated; that there was a real estate mortgage securing the note; that this mortgage was a first lien on said real estate in the city of Cleveland; that the security was of greater value than the amount sufficient to pay the judgment, and that no attempt had been made to realize on said judgment by levying on the real estate above described, or upon any other property of the defendants, and that the defendants had other real estate in Cuyahoga county; that the sheriff made no effort to find property upon which to levy although the defendants notified the sheriff that there was property upon which a levy might be made. Counsel further stated that a fair market value of the mortgaged premises was at least sixty thousand dollars.

The plaintiffs in error insist that in proceedings in aid of execution it is the right of the judgment debtor to avoid such proceedings by showing that there is property upon which a levy may be made notwithstanding the sheriff's execution and return ofnulla bona. In support thereof he cites Lee v. Harback, 2 W.L.M., 527, 2 Dec. Rep., 361, and State Bank of Ohio v. Oliver, 1 Dis., 159, 12 Dec. Rep., 548. Those cases, however, do not go to proceedings in aid of execution, but to proceedings in the nature of a creditor's bill. The two are quite different in nature and effect. Akron Chapter No. 300, A.I.U., v. Read, 24 Ohio App. 192, 157 N.E. 315.

Proceedings in the nature of a creditor's bill to reach assets are provided for by Section 11760, General Code. This is but a statutory provision for an old equitable action. It contemplates the filing of a new petition in an independent action. Like other equitable proceedings, it could only be resorted to by a judgment creditor when there was no adequate remedy at law. The test of jurisdiction under it is whether a judgment debtor has personal or real property subject to levy or execution sufficient to satisfy the judgment. If he has, the action does not lie.

We have no such case in the case at bar. This is not a new action, but a supplementary proceeding in an action at law that has already ended in a final judgment. It is brought under favor of Section 11768, General Code. In a proceeding under this section the test is not whether the judgment debtor has property subject to levy; it is whether an execution has been returned unsatisfied. If the execution has been returned unsatisfied in whole or in part, the sole requirement of the statute has been met.

A practically identical statute was under consideration inSperling v. Levy, 10 Abb. Prac., (N.Y.), 426, at page 427, where the court, in speaking of an execution returned under circumstances such as exist in the present case, said: "And whether the act was performed at the request of the plaintiff, or whether it was done within the time permitted him by law to make his return, is, I think, entirely immaterial; it is sufficient upon supplementary proceedings, under the section of the Code referred to, that an execution has been returned unsatisfied, as, upon that fact being shown to exist, the law declares that the judgment-creditor is entitled to an order requiring the debtor to appear and be examined. It does not say that the order shall not be granted when the return has been procured upon the request of the creditor, nor does it require the execution to remain any specified time in the hands of the sheriff, before a return can be made upon which such proceedings may be instituted; it simply requires as a condition precedent to the granting of the order, that the execution shall have been returned unsatisfied in whole or in part."

This is not only a reasonable interpretation of the statute, but the only one that renders the statute effective. If proceedings in aid of execution could not be resorted to so long as there was other property upon which to levy, and that property was mistakenly thought to be sufficient to satisfy a creditor's judgment, the necessary delay that would result in levying on and selling such property might enable the judgment debtor to so conceal or dispose of personal property that when such personal property was needed to satisfy any deficiency in the judgment the personal property would be beyond the creditor's reach.

The proceeding is admittedly a summary one available whenever an execution is returned wholly or partly unsatisfied. Indeed, where the facts warrant he may cause the judgment debtor to be apprehended and held for examination without having an execution returned or even issued. Section 11770, General Code.

The judgment is affirmed, and the cause remanded for further proceedings.

Judgment affirmed and cause remanded.

MIDDLETON and FARR, JJ., concur.

MAUCK and MIDDLETON, JJ., of the Fourth Appellate District, and FARR, J., of the Seventh Appellate District, sitting by designation in the Eighth Appellate District.