Kerr Hardware Co. v. Cherrington

In the court of common pleas the Kerr Hardware Company filed its petition against H.W. Cherrington, assignee for the benefit of creditors of the Swanson Hardware Company, in which it alleged that the defendant was the duly appointed and acting assignee for the benefit of creditors of the Swanson Hardware Company; that such assignee filed in the probate court of Gallia county an application asking authority to sell at public auction the property of the Swanson Hardware Company, consisting of a stock of fixtures and hardware, and that an order of sale issue therefor; that thereafter an order of public sale was issued by the probate court to said assignee ordering and directing him to sell said personal property at public auction to the highest bidder for cash at the time of sale; that the assignee, in pursuance of the order of sale, gave notice of the sale according to law and attended the sale and offered the property for sale at public auction; that the plaintiff bid for said property $2,250, and, this being the highest and best bid offered or made for the same, the defendant then and there sold and struck off the property to plaintiff, and thereupon declared the property sold to the plaintiff, as the highest and best bidder and the purchaser thereof, and said sale was thereupon closed; that thereafter the plaintiff tendered the defendant the sum of $2,250, the purchase price of the property, and requested that the defendant deliver the property to the plaintiff, which the defendant then and there and ever since has refused to do. The plaintiff says that the defendant thereafter notified the plaintiff that he intended to again offer said property for sale at public auction, and has caused notice of the time and place of such proposed sale to be published, and will, unless restrained by an order of court, cause said property to be advertised and sold; that if said property is again offered for sale it will operate to cast a cloud upon the plaintiff's title to the property and will tend to keep plaintiff out of possession and will prevent it from marketing the same, to its great and irreparable injury, for which it has no adequate remedy at law. A demurrer to this petition was sustained by the court of common pleas, and judgment rendered thereon against the plaintiff. The plaintiff brings this proceeding to reverse, claiming that the court of common pleas erred in sustaining the demurrer and rendering judgment against it.

Whether or not error has been committed depends upon a construction of the statutes with reference to the duties of an assignee for the benefit of creditors. The probate court has exclusive jurisdiction over an assignee for the benefit of creditors of an insolvent debtor. Section 10492, General Code, provides:

"The probate court shall have exclusive jurisdiction: * * *

"To qualify assignees and appoint and qualify trustees and commissioners of insolvent debtors, control their conduct and settle their accounts."

John V. Farwell Co. v. Findlay Dry Goods Co., 11 C.C., 100, 5 C.D., 303, holds: "Where an insolvent or failing debtor makes a general assignment of all the debtor's property to an assignee, in trust, for the use and benefit of all the creditors of the insolvent, and the deed of assignment is filed in the probate court of the proper county, and the assignee has qualified and is proceeding to administer the trust, the probate court acquires exclusive jurisdiction of the subject-matter of the assignment, and has full power to hear and determine all questions properly arising."

The petition discloses that the assignee subjected himself to the jurisdiction of the probate court, and that he sought and obtained an order of sale of the personal property in question. While he advertised the property for sale and offered it at public auction the petition does not disclose that the sale was reported to the probate court, or that the probate court confirmed the same. Section 11121, General Code, provides for the return and confirmation of sales of real estate and personal property and specifically says that the court, "if satisfied that the sale has been legally made," shall confirm the same. The assignee being under the control of the probate court, there could be no sale of the property in question until the assignee's action had been reported to and confirmed by the court.

Jurisdiction is defined as the power to hear and determine a cause. A court having attempted to set in motion the machinery of the law has jurisdiction over the subject-matter.

"An examination of the assignment law from the time of its first enactment in 1859 to the present, with a single exception, shows a constant enlargement of the powers of the probate court, and a seeming intention to confer ample jurisdiction to do everything necessary to render complete justice to all interested parties." 3 Ohio Jurisprudence, 387.

"The provisions of the Insolvent Debtors' Act regulating assignments for the benefit of creditors show clearly that the legislature intended to vest in the probate court full and complete jurisdiction over the whole subject of assignments of this character. The rule is that in every case of an assignment which on its face is a general assignment by an insolvent or failing debtor of all his property to an assignee in trust for the use and benefit of all of the creditors of the debtor, and the deed of assignment is filed in the proper probate court and the trust being administered and carried into effect in that court for the benefit of all the creditors, in accordance with the provisions of law, the probate court is possessed of exclusive jurisdiction, and is clothed with full power and right to hear and determine all questions properly arising. The probate court having obtained jurisdiction of an assignment for the benefit of creditors is obviously vested with full and exclusive jurisdiction of all matters arising in the administration of the estate. It is clothed with jurisdiction to determine all questions, legal and equitable, that are incidental and necessary to enforce a proper and just administration of an assignment for the benefit of creditors. * * * That the jurisdiction thus acquired is exclusive of that of all other courts, has been based on the rule, that where a court of competent jurisdiction has acquired possession of the subject-matter of the litigation, and the right of the party to prosecute his action has once attached, the right of the court to retain the case, and of the party to prosecute it, cannot be defeated by the institution of proceedings in another court, although of concurrent and co-ordinate jurisdiction." 3 Ohio Jurisprudence, 388.

The above quotations from Ohio Jurisprudence are amply supported by the authorities therein cited.

The probate court having obtained jurisdiction over the assignee and of the subject-matter of the sale, we are of the opinion that the plaintiff acquired no right or title by reason of his bidding on the personal property in question, as there was no confirmation of the sale, and the whole subject-matter was still under the control of the probate court. The probate court had exclusive jurisdiction, and the petition fails to show that the common pleas court had jurisdiction to entertain the case and therefore is not sufficient.

There was no error committed by the trial court in sustaining the demurrer to the petition, and the judgment is affirmed.

Judgment affirmed.

MIDDLETON, P.J., and MAUCK, J., concur.