Summary
noting that in an action to set aside a fraudulent transfer and subject assets in the hands of a third person to payment of a debt, the debtor as well as the third person are necessary parties to the action
Summary of this case from In re StoreyOpinion
Decided April 1, 1935.
Error proceedings — Debtor of plaintiff and defendant made party defendant in replevin action — Debtor necessary party to error proceedings, when.
Where upon motion of defendant, in a replevin action for an automobile, a debtor of both the plaintiff and defendant is made a party defendant in order to determine the issue of fraudulent transfer of title to the automobile by a chattel mortgage given by the debtor to plaintiff while insolvent, allegedly in fraud of creditors, the defendant praying on cross-petition that the mortgage be declared void and the property be administered for the benefit of creditors, which allegations are placed in issue by the plaintiff and the debtor, the debtor is a necessary party to error proceedings instituted by the defendant from a judgment declaring the plaintiff to be the owner and entitled to the immediate possession of the automobile.
ERROR: Court of Appeals for Hamilton county.
ON MOTION to dismiss.
Mr. Leonard Shor, for plaintiff in error.
Mr. Walter K. Sibbald, for the First National Bank, as Executor of Estate of W.E. Hutton, deceased.
W.E. Hutton instituted an action in replevin against I.L. Shor. In his petition and affidavit Hutton alleged that he was the owner of a certain automobile which the defendant Shor detained from him. On motion of defendant Shor one Leonius V. Bunton was made a party defendant, whereupon Shor filed an answer denying the allegations of the petition, and filed a cross-petition against Bunton and the plaintiff alleging that plaintiff claimed title under a chattel mortgage given by Bunton to plaintiff; that the chattel mortgage was a transfer while insolvent to defraud the creditors of Bunton, that he, Shor, was a judgment creditor of Bunton, and he prayed that the mortgage be declared void and that the property be administered for the benefit of Bunton's creditors. Hutton and Bunton, by reply and answer, placed the allegations of the cross-petition in issue.
The cause of action set forth in the cross-petition was one to subject assets in the hands of a third person, assets which could not be reached by execution. It was a creditor's bill, and, of course, the debtor as well as the third person were necessary parties to that action.
The case came on for trial before the court and a jury. On the issue, the jury returned a verdict finding that the plaintiff was the owner of and entitled to the immediate possession of the automobile, that the defendant Shor unlawfully detained the same, and then fixed its value at $175, and the damage for the detention at $100.
The court overruled the motion for a new trial, and the defendant Shor having retained possession of the automobile, on the plaintiff's election judgment was rendered in his favor for $275.
In the instructions to the jury the issue raised by the cross-petition and the defendant Bunton's answer thereto was submitted to the jury for its determination, but no mention of Bunton's name was made either in the verdict or the judgment. It should here be said that the defendant Bunton in his answer admitted everything claimed by the plaintiff and denied all the allegations made by the defendant Shor inconsistent therewith. He asked no relief.
From this judgment, the defendant Shor filed these proceedings seeking a reversal of the judgment. He named W.E. Hutton as defendant in error, but did not join Bunton.
The case comes before the court now upon the motion of the executor of W.E. Hutton, who died after the judgment was rendered, to dismiss on the ground that Bunton was a necessary party to any proceeding in error to review this judgment.
We are of opinion that this motion must be granted. In 2 Ohio Jurisprudence, 193, it is said:
"Substantial parties to the controversy below whose rights are affected by the judgment are necessary parties to error proceedings. It is error to reverse or modify a judgment without having before the court the parties affected by such reversal or modification."
There is no doubt that to give the court jurisdiction to review a judgment all necessary parties must be before the court. The task is in the application of the rule to the particular facts, and not in the ascertainment of the rule.
In this case, in the trial court, Bunton was not a necessary party to the issue raised in the replevin action. The issue in the replevin action could have been disposed of without his presence. But on the defendant's motion he was made a party defendant in order that if the issue of fraudulent transfer raised by him was decided in Shor's favor he could obtain the relief of having the property administered for the benefit of Bunton's creditors. However, there was but one issue — indivisible in character — raised by the pleadings. If that issue had been decided in his, defendant's, favor the plaintiff would have failed in his replevin action and the defendant Shor would have succeeded on his cross-petition. The jury found that issue in favor of the plaintiff, and the court rendered judgment thereon. That rendered it impossible for the defendant Shor to succeed on his cross-petition. It disposed of that issue adversely to him.
Now the defendant Bunton had executed the chattel mortgage. He was the debtor of both the plaintiff and the defendant Shor. He saw fit to transfer this property to the plaintiff, and by his pleading showed that he desired the integrity of the transfer to be preserved, and it has been by the judgment rendered. The judgment could not be reversed or modified without impairing or jeopardizing the validity of Bunton's transfer and affecting his liability to his creditors. This, it seems to us, discloses that he would be affected by the judgment that might be rendered.
In disposing of the motion we have examined, among others, the following authorities which we believe support the conclusion reached: Young v. Meyers, Jr., Exr., 124 Ohio St. 448, 179 N.E. 358; Tod v. Stambaugh, 37 Ohio St. 469; Greenlee v. New York Life Ins. Co., 123 Ohio St. 599, 176 N.E. 456.
For these reasons the motion to dismiss is sustained.
Motion to dismiss sustained.
ROSS, P.J., and HAMILTON, J., concur.