Saxton v. Seiberling

48 Ohio St. (N.S.) 554
Ohio Supreme Court·Decided November 17, 1891·Published

Opinion

Minshall, J.

The plaintiffs, as creditors of the assign- or, an insolvent corporation, brought suit in the court of common pleas on behalf of themselves and the other creditors, against the purchaser at the sale of the assignee, to set aside the conveyance of certain real estate thereunder, on the ground of a fraudulent combination between the purchaser and a third person, to prevent competition at the sale. The suit was commenced on November 25, 1882, the conveyance having been made on July 7, 1880. The cause having been heard and determined in the common pleas, was appealed to the district court, then in existence, and was afterwards transferred to the circuit court, where, on leave of the court, November 1, 1886, the plaintiffs filed a “ second amended petition.” The defendant, Seiberling, demurred to this petition on the ground that it does not state facts sufficient to constitute a cause of action. The court sustained the demurrer and dismissed the action. The petition, as amended, states in substance the following facts :

That The J. F. Seiberling Company was a corporation duly Organized under the laws of Ohio ; and engaged in the manufacture of reapers and mowers. That on the 10th of September, 1875, it made an assignment, under, the statute, of all its property for the benefit of its creditors. That in the execution of the trust the assignee offered at public sale, under proper direction of the probate court, certain real estate of the value of about $90,000. That just prior to the sale, the defendant Seiberling entered into an agreement with one A. C. Beldon, who contemplated purchasing the property at the sale, and who would have bid at least $30,000 for the same, by the terms of which he, Seiberling, agreed to loan Beldon the sum of $2,000 for one year, without interest, and convey to him 17 acres of land, if he would refrain from bidding at the sale. The petition further shows that Beldon'kept his agreement — Seiberling bidding off the [558]*558property for the sum of $25,150, he being the only bidder therefor, with the exception of a nominal bid made by Beldon, at the instance of Seiberling. The petition further stated that on ascertaining the fraud so perpetrated on the ereditors of the company, the assignee was informed of the fact, and requested to bring an action to set aside the sale, and relieve the insolvent estate from the loss and damage consequent upon the fraud. That the assignee refused to bring the action, and that thereupon the plaintiffs, creditors of the company, brought the action below therefor, making the assignee a party defendant. They alleged in their petition that they “ are willing and now offer to pay into court, such sum as the court may find said defendant entitled to, as a condition of setting said sale and conveyance aside.” They then prayed the court to set aside the sale and to restore the creditors to all things lost by reason thereof; and that the court order a re-sale, making such “ order concerning the distribution of the proceeds as should be equitable and just; ” and, further, if it should be held by the court that the plaintiffs were not entitled to the relief prayed for, then that an account might be taken of the amount of loss to them and the other creditors, sustained by reason of the fraud on the part of Seiberling, and that he “ be directed to pay over such sum, with interest from the time of said fraudulent sale, to the assignee, or some other suitable party appointed by the court for the purpose.”

• The error assigned is that the court erred in sustaining the demurrer to the petition as amended.

1. The first point made on the demurrer is that the court had no jurisdiction. It might be a sufficient answer to this to say that a demurrer to the sufficiency of the petition does not raise the question of the jurisdiction of the court. It virtually admits it, by submitting the sufficiency of the pleading to the judgment of the court. Want of jurisdiction is a specific ground of demurrer and should be assigned. § 5062, Revised Statutes. Nevertheless, there can be no question upon the point. The court of common pleas is a court of general jurisdiction. It embraces all matters at law [559]*559and in equity that are not denied to it. The setting aside of a conveyance, that, for any reason, has been wrongfully obtained, is one of the most common instances in which the court of common pleas interferes to grant relief as a court of equity. The claim that the case is within the exclusive jurisdiction of the probate court, simply because it ordered the deed made upon the confirmation of a sale ordered by it, cannot be admitted. When the deed, made in pursuance of its order, had been executed and delivered, its power over the subject of the sale was at an end; and it had no power whatever to set it aside, in any proceeding, by a decree of its own. The probate court is a court of liihited jurisdiction; it can exercise just such powers as are conferred on it by statute and the constitution of the state, but the setting aside, of a deed of conveyance is not one of the powers so conferred. Spoors v. Coen, 44 Ohio St. 497.

2. The second point is, that no one but the assignee can maintain the action. This is but another form of urging the want of capacity to sue; and, like the former objection, might be disposed of by saying, it is not embraced by the demurrer of the defendant. Want of capacity to sue is a special ground of demurrer, and to be raised in that way, should be specially assigned. We do not overlook the decision in Buckingham v. Buckingham, 36 Ohio St. 68, 78, where it is said: “To warrant a recoveiy on the petition, it must show a cause of action in the plaintiff. If the petition fails to show such cause of action, the objection is not waived by a failure to demur, or to make the objection by answer.” The right of action is one thing, and capacity to maintain it, is another. The right may be in one, or a class of persons, and the capacity to maintain it in another. This is so as to all wards and cestuis que trustent, generally. The cause of action is in the beneficiaries, but the capacity to maintain it is in the trustee; and when want of capacity is relied on by the defendant as an objection to the maintenance of the action by the plaintiff, it should be made by demurrer or answer, and when taken by demurrer it should be specially assigned. § 5062, Revised Statutes. In Buckingham v. Buckingham, the court [560]*560found and held that there was no cause of action in the plaintiff. The value of the services, for which he sued, had passed to the assignee in bankruptcy, for the benefit of his creditors; so that the plaintiff had neither the right of action in himself nor capacity to maintain it. But we think that if it were properly raised, it is not well taken. The plaintiffs as creditors have a direct interest in the matter. They are the beneficiaries of the trust created by the assignment. And, therefore, as, by the averments of the petition they are quite numerous, and the trustee refuses to bring the action, they, upon well recognized principles of procedure, may bring it for themselves and the other creditors, making the trustee a party defendant, as has been done. Dewey v. Meyer, 72 N. Y. 70, 78, and authorities cited.

3. The next objection is, that the plaintiffs have not tendered to the defendant the purchase price paid for the property. It is undoubtedly true that before a deed can be set aside for fraud on the part of the purchaser, he should be restored to his former condition.

Free access — add to your briefcase to read the full text and ask questions with AI

Saxton v. Seiberling, 48 Ohio St. (N.S.) 554 (Ohio 1891).

48 Ohio St. (N.S.) 554 (Saxton v. Seiberling) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Dewey v. . Moyer
72 N.Y. 70 (New York Court of Appeals, 1878)
O'Dell v. Burnham
21 N.W. 635 (Wisconsin Supreme Court, 1884)