Lerenman v. Ohio German Fire Insurance

11 Ohio N.P. (n.s.) 58

• Court: Licking County Court of Common Pleas
• Decided: January 15, 1910
• Status: Published

Opinion

Seward, J.

(.orally).

This case is submitted to the court on a motion to quash the service of summons. The Ohio German Fire Insurance Company is a corporation organized in Ohio. It went into the hands of trustees by proceedings in quo warranto, brought in Lucas county, at Toledo, some time ago, and the trustees are made parties defendant, together with the company. A motion is made to quash the service of summons upon the trustees because the court has no jurisdiction of the trustees, they being located in Lucas county.

Section 6781 provides that the court may appoint trustees and that the trustees shall have power to settle the affairs of the company. That is the provision of the section, substantially. The substance is that the court shall appoint trustees.

Section 6782 gives power to the trustees to ■ take possession of the property and assets of the company, with authority to bring suit, and attaches a liability of the trustees to the creditors and stockholders.

These two sections of the statute were amended by the Legislature on March 12,- 1909, and that amendment is found in Volume 100 of the year boob annual laws, at page 102. I read from Section 6882:

“If, in the'judgment of such trustee or trustees, any claim or claims so filed with them are for any reason not valid claims against the estate of such corporation, such trustee or trustees shall notify the claimant or claimants that their respective claims are rejected by written notice by registered mail, directed to their last known address. Such claimants at any time within ninety days from the mailing of such notice of rejection shall have the right without leave of court to sue such trustee or trustees for the recovery of such claim or claims in any court of competent jurisdiction in the county in which such corporation has or had its last principal place of business. [That would be in Lucas county.] And should such suit finally terminate in favor of such claimant, the judgment therein obtained by him shall be entitled to share with other claims against said corporation.”

. Now, this amendment certainly gives the right to the creditors of this company to bring their suit against the trustees. As I construe the statutes, there was no right to bring suit against the trustees prior to this enactment of March 12, 1909. There was a provision for bringing a suit against the corporation, and service of summons upon the trustees or receivers; but never before was there a provision, as I can find, where the creditors had any right to pursue the trustees and ask a judgment against them. Section 5681 provides:

“Any such dissolved corporation [that is, after the dissolution of the corporation] may be sued by its corporate name, for or upon any cause of action accrued, or which, but for the dissolution, would have accrued against it, in the same manner, and with the like effect, as if it were not dissolved; and all process by which an action is instituted against such corporation may be served by the sheriff, or other proper officer, by delivering to any one of the assignees, trustees, or receivers, or persons having charge of its assets, a copy thereof, or by leaving such copy at the residence of any such assignee, trustee, receiver or person.”

So that an action might be brought against a dissolved corporation, and service had upon the receiver or trustee, and thus bring the dissolved corporation into court to answer to the cause of action set up in the petition, but there was no provision, before the enactment of March 12, 1909, for bringing a suit against the trustees. The trustee is only now required to answer for funds that might be in his hands.

It is claimed that Section 5023 fixes the venue. It does if the defendant is an insurance company. Not by reason of the cause of action, but by reason of the character of the defendant. The statute so says:

“But if such corporation is an insurance company, the action may be brought in the county wherein the cause of action, or some part thereof, arose.”

That is, the reason does not grow out of the action itself, but out of the fact that the defendant is an insurance company. But, that does not' help us any in the matter we are considering now. The question is as to the service upon these trustees, and the right to make them answer in this ease.

It is claimed that this legislation — the act of March 12, 1909 —is retroactive, and, therefore, in conflict with the Constitution. But the legislation affects the remedy, and not the right, if it affects it at all. Jurisdiction as to right to hear and, determine a controversy is acquired by bringing the parties and the subject-matter before the court. The county in which the action is to be brought, as well as the mode of acquiring jurisdiction by' notice, is regulated by statute, and subject to change by the Legislature at any time. This is held in the 1 N. P. R., —, a well-considered case by Judge Pugh, who was formerly on the bench in Franklin county; and 31 O. S., 384, and other cases.

So that the court thinks the motion to quash the service of summons on these trustees is well taken, and it will be sustained.

By Mr. Stasel: ■ Of course, this court decides that the trustees are not proper parties defendant. Now, that is a proper determination of a motion of this character. The service upon them as trustees is. service upon the Ohio German Insurance Co., and, to that extent, of course, the service should not be quashed. Under the statute, service upon the trustees is service upon the corporation.

The Court: If you are not seeking any remedy against the trustees, I think your contention is right.

By Mr. Stasel: There isn’t any judgment asked against them. They are made parties merely because they are trustees, but I do not think you will find any prayer for judgment against them.

The Court: Why are they made parties?

By Mr. Stasel: Simply to define the service of process upon the corporation; simply to get jurisdiction over the defendant corporation.

The Court: If there is no' relief sought here against the trustees, the service would be good as against the corporation, because you have a right to maintain the action against a defunct corporation. The court will look at the case with a view of determining whether you ask for any relief against the trustees. There is no question about your right to bring a defunct corporation into court and litigate the matter, because the statute so provides. If you ask for any relief against the trustees, I think the holding of the court is right. I did not see .why they should be made parties personally, unless you did ask relief against them.

(And afterwards a journal entry was placed upon the journal leaving the service of summons stand as against the company.)