Vogt, Admr. v. Rush D. Hiller Co.

| Ohio Ct. App. | Oct 20, 1932

This cause is before this court on error. Albert J. Vogt, as administrator, who was the defendant below, makes complaint herein of several errors, only two of which can be considered by this court.

We have before us the petition in error, the transcript of the docket and journal entries, the original pleadings, and a very abbreviated bill of exceptions. The facts gathered therefrom are as follows:

On February 13, 1931, the Rush D. Hiller Company commenced this action for the recovery of a funeral account. The cause came to trial on April 8, 1932. It was developed at the trial, when the secretary of the company testified, that "in March, of 1931, the Hiller Co. was adjudicated a bankrupt and a trustee was appointed in that proceeding," and that it "has no right, title or interest in this claim at the present time." The secretary further testifies that the claim was assigned to Reinhart, Hoffman, Weber, and another. Hoffman and Weber, as attorneys, here represent the Hiller Company. It is not disclosed whether the claim was assigned by the Hiller Company or by the trustee in bankruptcy. This is all of the evidence of the case embodied in the bill of exceptions.

It is claimed that the court erred in its charge to the jury and that the verdict of the jury is contrary to law. That part of the general charge objected to is as follows: "The court will instruct you that while it is developed in the case that after the filing of suit that the claim of the plaintiff was assigned to other parties, nevertheless that you will not consider that in your deliberations except as it may go, if you so find, to the question of the credibility of witnesses, because under the statutes of the State of Ohio, even though a claim is assigned after suit, the suit may go forward in the name of the original plaintiff, and that in and of itself will not affect your determination in the case."

It is proper that we should here state that neither the transcript of the docket and journal entries nor the papers on file show or disclose any revivor by motion of the party to be substituted, or by conditional order, or that a supplemental petition was filed.

The real and only question presented may be stated thus: Can an action be continued in the name of the original party plaintiff when it develops at trial that the plaintiff, between the time of commencement of the action and the date of trial, has been adjudicated a bankrupt and a trustee appointed, and an assignment of the claim made to a third party at some time during the period, when the third party has not been substituted as party plaintiff, or a conditional order made, or a supplemental petition filed?

Counsel for the defendant in error affirm the question, and advance as their authority Section 11261, General Code, and the case of Lowry v. Anderson, 57 Ohio St. 179, 48 N.E. 810. Our own search adds perhaps to the quantity of authority. We refer to the case of Cullen Vaughn Co. v. Bender Co., 122 Ohio St. 82" court="Ohio" date_filed="1930-03-05" href="https://app.midpage.ai/document/cullen--vaughn-co-v-bender-co-3782626?utm_source=webapp" opinion_id="3782626">122 Ohio St. 82, at pages 87 and 88, 170 N.E. 633" court="Ohio" date_filed="1930-03-05" href="https://app.midpage.ai/document/cullen--vaughn-co-v-bender-co-3782626?utm_source=webapp" opinion_id="3782626">170 N.E. 633, 68 A.L.R., 1332" court="Ohio" date_filed="1930-03-05" href="https://app.midpage.ai/document/cullen--vaughn-co-v-bender-co-3782626?utm_source=webapp" opinion_id="3782626">68 A.L.R., 1332. In the light of these two cases, we hesitate to answer the question before us in the negative.

The fifth proposition of the syllabus of the Cullen case reads: "The assignment by a plaintiff of his interest in a controversy made during the pendency of a suit to recover is not a defense to the action, but the cause may proceed in the name of such plaintiff."

The only part of the opinion that bears out this syllabus appears on pages 87 and 88 thereof, and is: "Another element was injected into the case during the course of the trial. It developed that, after the suit was begun the Cullen Vaughn Company assigned its rights to recovery to the receivers of the R.L. Dollings Company. It is therefore contended that the Cullen Vaughn Company is no longer the party in interest, and for that reason could not further maintain the action after such assignment. This position is untenable, and we need only refer to a former decision of this court, which, if sound, is controlling and decisive."

Then follows mention of the Lowry case and a recitation of its syllabus, which holds: "Upon the transfer by a plaintiff, during the pendency of an action, of all his interest therein, the action may proceed in the name of such plaintiff, or the court may allow the person to whom the transfer is made to be substituted; but such transfer is no defense to the action."

In the Lowry case the defendant answered, averring an assignment to a third party of the claim sued upon. The reply admitted the assignment. The Circuit Court sustained a demurrer to the reply, and rendered judgment for defendant. Of this action the Supreme Court disapproved, and held that the answer did not constitute a defense, and a demurrer thereto should have been sustained. The court then commented upon Section 5012, Revised Statutes, now Section 11261, General Code, and held in accordance with its syllabus, previously quoted.

If these were all of the causes in which the Supreme Court had spoken, we would no doubt feel duty bound to follow their precept. But that court has spoken otherwise. In further considering the query presented, we are keeping in mind the shade of doubt perhaps entertained by the court in the Cullen case, evidenced by the use of the words, "if sound."

In the case of Phoenix Insurance Co. v. Carnahan, 63 Ohio St. 258, 58 N.E. 805, the same court which passed upon the Lowrycase, with but one change in its personnel, reconsidered and distinguished the Lowry case. At page 268 the court said: "The case of Lowry v. Anderson, 57 Ohio St. 179, does not apply here. The point of that decision was that the transfer of interest, pending the suit, was no defense to the action, and that was the only point decided in the case. It was expressly stated in the opinion that the assignee might be substituted for the original plaintiff. The case does not touch the point which arises here, viz.: that the actions were not begun or prosecuted in the name of the real party in interest."

Pages 263 to 268 in the Carnahan case are most instructive. In that case at page 264 the court said: "Sometime after the actions were commenced, one of the partners died, and the death of this partner raises the question whether the actions should have been revived and should have proceeded in the name of the representative or successor of the firm, or whether, the death of the partner having been suggested to the court, the action properly proceeded to judgment under the order of the court, without change of caption or title."

In solving the question, the court further said at page 264:

"It may be conceded at once that the cause of action did not abate by the death of one of the partners, nevertheless his death dissolved the partnership firm, so that the action was in abeyance, and could not proceed until somebody who succeeded to the ownership of the chose in action had been substituted for the defunct partnership firm. * * *

"Revised Statutes, Section 5012, governs these cases * * *. This substitution may be made on motion of the successor in interest, or by a conditional order of revivor served on the opposite party, or by supplemental petition and process."

It is further concluded, at page 266: "Inasmuch as the surviving partner and the administrator of the deceased partner neglected, and persisted in the neglect, to provide for a proper substitution of parties, and as the court did not revive the action in the mode provided by law, and the persons to whom the interest of the firm had been transferred did not apply to be substituted, it follows that all of the proceedings subsequent to the death of T. Carnahan were erroneous."

In the case of Second National Bank v. American Bonding Co.,93 Ohio St. 362, 113 N.E. 221, the court approved of Insurance Co. v. Carnahan, supra; two of its members participated and concurred in the Cullen case, supra. Second National Bank v. Bonding Co. presents a situation where the Bonding Company sought by application to be and was substituted as party plaintiff in an action against a trustee under the principle of subrogation. The court, at page 369, notes Section 11241, General Code, which requires that "an action must be prosecuted in the name of the real party in interest." It then takes cognizance of Section 11261, General Code, and proceeds to remark: "When the suit was brought Healy, trustee, was the real party in interest. But the trust fund was fully paid to the beneficiary on April 30, 1902, and the estate finally settled and terminated. So that after April 30, 1902, the original plaintiff trustee could not`prosecute' or `continue' the suit because there was no such trustee. Legally the plaintiff trustee was dead."

The court then approves of the Carnahan case, and says, at page 371: "So in this case, the legal existence of the trustee having completely terminated, there was a disability of the original plaintiff.

"In Insurance Co. v. Carnahan, supra, there was no substitution, and this was held to be fatal because `the actions were not begun or "prosecuted" in the name of the real party in interest.' In this case there was a substitution * * *."

Now it seems to us that the holding of the court in InsuranceCo. v. Carnahan, supra, is sound. If it is not, Section 11241, General Code, is nullified. The word "prosecuted" means more than commenced. It commands, in fact, that an action shall not only be commenced but prosecuted — carried on to its conclusion by the real party in interest. As pointed out in this authority, which we choose to follow, one of three things must be done, neither one of which was done in this case. And we conclude by reason of such neglect that the proceeding from the time of the receipt of the secretary's testimony was erroneous and void.

Section 11261, General Code, provides that "an action shall not abate," and thereafter goes on to provide how it may be revived, as pointed out in Insurance Co. v.Carnahan, supra.

If this were not true, one might be compelled to defend an action, as in this case, and not know who his opponent was. He might have cross-demands that he could legally assert against his unknown opponent and of which he would be deprived. He might be compelled to litigate and pay the same claim twice, and be in no position to advantage himself of the defense of res judicata. And then the questions come: Against whom would the court have entered a judgment for costs if the verdict, as in this case, had resulted in favor of the defendant? Would it have been against the bankrupt Hiller Company? Would the trustee in bankruptcy be liable therefor? We think not. If the Hiller Company is right in its view, frauds might be easily perpetrated, and a number of wise statutory provisions nullified.

It seems to us that the Hiller Company, when it was declared a bankrupt and the trustee was appointed, to all intent and purpose in this suit became legally dead. It had no right to further prosecute this action, and its trustee or assignee could only thereafter prosecute the cause to its conclusion after revivor in one of the three ways provided by Sections 11401, 11402 and 11403, General Code.

It is our conclusion that the portion of the charge, in view of the facts appearing, was erroneous, and the verdict was contrary to law. The judgment thereon is reversed, and the cause remanded.

Judgment reversed and cause remanded.

LEMERT and MONTGOMERY, JJ., concur.