Summary
holding receivers are authorized to sue officers pursuant to R.C. 2735.04
Summary of this case from Clarkwestern Dietrich Bldg. Sys., LLC v. Certified Steel Stud Ass'nOpinion
No. 84-184
Decided October 24, 1984.
Prohibition — Receivers — R.C. 926.14 and R.C. Chapter 2735 in pari materia — Writ denied, when.
APPEAL from the Court of Appeals for Fayette County.
This is an appeal from the denial of a motion to vacate the dismissal of a complaint in prohibition by the court of appeals.
Appellants, James S. and Geneva M. Bobb, are the principal officers of the Queen City Grain Company. Appellee, Hon. Rollo M. Marchant, is a judge of the Court of Common Pleas of Fayette County, sitting by assignment from the probate division of that same court.
In 1982, the Queen City Grain Company was found to be insolvent. In May of that year, the director of the Ohio Department of Agriculture petitioned the Court of Common Pleas of Fayette County for the appointment of receivers for the company pursuant to R.C. 926.14(E). In June 1982, the court appointed the receivers.
The receivers proceeded to collect the company's assets. In so doing, they brought suit against the appellants personally to recover corporate assets that allegedly had been wrongfully converted to appellants' personal use. The receivers requested an accounting from the appellants and for other equitable relief. Final hearing on the receivers' action was set for May 3, 1983.
Prior to such final hearing, appellants petitioned the Court of Appeals for Fayette County for a writ of prohibition alleging appellee's lack of jurisdiction to try the case. Contemporaneously, appellants requested a stay of the trial scheduled for May 3. The motion for a stay of the proceedings was overruled by the court on May 2. The court then dismissed the complaint on July 26, 1983, on the ground that the May 3 hearing had taken place and the prohibition action was therefore moot.
In fact, the May 3 trial had not been held because on April 29, 1983, the Queen City Grain Company filed a petition in voluntary bankruptcy in the United States District Court for the Southern District of Ohio. Consequently, a stay of all proceedings resulted under Section 362, Title 11, U.S. Code. In August 1983, appellants filed a motion to vacate the dismissal entry of the court of appeals on the ground that since the May 3 hearing had not taken place, the prohibition action was not moot. The court of appeals denied the motion.
Messrs. Goodman Goodman, Mr. Stanley Goodman, Dennis Cartwright Co., L.P.A., and Mr. Max H. Dennis, for appellants.
Mr. James A. Kiger, prosecuting attorney, for appellee.
The court of appeals dismissed the complaint on the ground of mootness. It of course was not moot, because the hearing of May 3, 1983 was not held. Once this fact was brought to the attention of the court of appeals, it should have granted relief from its earlier dismissal pursuant to the "other reason" provision of Civ. R. 60(B)(5). "It is generally held that court errors and omissions are reasons justifying relief under the `other reason' clause." State, ex rel. Gyurcsik, v. Angelotta (1977), 50 Ohio St.2d 345, 347 [4 O.O.3d 482].
This brings us to the merit issue of whether the writ should be allowed.
"On an appeal as a matter of right from a judgment of the Court of Appeals in an action for an extraordinary writ, the Supreme Court will review the judgment as if the action had been originally filed in this court." State, ex rel. Taylor, v. Glasser (1977), 50 Ohio St.2d 165, 166-167 [4 O.O.3d 367].
Appellants do not contest the manner in which the receivers were appointed. They do, however, argue that the receivers are limited to those powers and duties prescribed in R.C. Chapter 926. Specifically, they disagree with appellee's assertion that R.C. Chapter 2735, dealing generally with the appointment, qualifications, and powers of receivers, is applicable to receivers appointed pursuant to R.C. 926.14(E). Appellants reason that since R.C. Chapter 926 fails to prescribe the powers and duties of receivers appointed pursuant to R.C. 926.14(E), the appellee acts without jurisdiction if he entertains an action by the receivers so appointed.
"The conditions which must exist to support the issuance of a writ of prohibition are: (1) The court or officer against whom it is sought must be about to exercise judicial or quasi-judicial power; (2) the exercise of such power must be unauthorized by law; and (3) it must appear that the refusal of the writ would result in injury for which there is no other adequate remedy in the ordinary course of the law." State, ex rel. McKee, v. Cooper (1974), 40 Ohio St.2d 65 [69 O.O.2d 396], paragraph one of the syllabus.
The first condition is satisfied, since the court is "about to exercise judicial * * * power." The second requirement is not satisfied, however, for the following reasons.
"Statutes relating to the same subject matter should be construed in pari materia, although they were enacted at different sessions of the General Assembly." Warner v. Ohio Edison Co. (1949), 152 Ohio St. 303 [40 O.O. 355], paragraph one of the syllabus. Likewise, "[t]he legislature is presumed to be cognizant of all prior sections of the Code." Tonsic v. Holub (1968), 13 Ohio App.2d 195, 197 [42 O.O.2d 341]. Since the legislature was aware of R.C. Chapter 2735, adopted in 1953, when it enacted R.C. Chapter 926 in 1968, and since the powers and duties of receivers were not specified in R.C. Chapter 926, it would seem reasonable that the legislature intended for receivers appointed under R.C. 926.14(E) to have the same general powers and duties as are outlined in R.C. Chapter 2735.
Indeed, R.C. 2735.01(E) provides for appointment of receivers "[w]hen a corporation * * * is insolvent, or is in imminent danger of insolvency * * *," as essentially does R.C. 926.14(E), the statute under which the receivers in the case sub judice were appointed. The conclusion that R.C. 926.14 and Chapter 2735 are in pari materia is inescapable.
Appellants' averment that the receivers in this case have no authority to sue the officers of Queen City Grain Company is laid to rest by R.C. 2735.04, which provides, inter alia, that "a receiver may bring and defend actions in his own name as receiver * * *." The jurisdiction of the court to hear such actions is clear from the language of R.C. 2735.05, which allows "the court appointing such receiver * * * upon reasonable notice, [to] require any person, or officer or director of a corporation * * * to attend and submit to an examination on oath as to its property, trade, dealings with others, accounts, and debts due or claimed from it, and as to all other matters concerning the property and estate of the * * * corporation for which such receiver has been appointed."
Since R.C. 926.14 and Chapter 2735 are in pari materia, it follows that the receivers are authorized to bring suit, and the appellee has jurisdiction to hear the matter.
In an effort to meet the third condition for a writ to issue, appellants allege they will suffer injury for which no other adequate remedy exists. They cite State, ex rel. Sowell, v. Lovinger (1983), 6 Ohio St.3d 21, for the proposition that appeal would not be an adequate remedy because appellee is sitting by assignment and his "power to preside" cannot "`be questioned in a collateral proceeding to which he is not a party.'" Id. at 23. Appellants' reliance on the Lovinger case is misplaced. In Lovinger, the pivotal issue was status, i.e., whether it was proper to appoint an acting judge to hear the case instead of a duly elected and qualified judge. That is not the question here. Appellants challenge only appellee's jurisdiction to hear the case — not his status. The fact that appellee sits by assignment in no way affects the jurisdiction of the court.
Previously, in similar cases, this court has held: "A court having general jurisdiction of the subject matter of an action has authority to determine its own jurisdiction on [the] issue raised, and a party challenging its jurisdiction has a remedy at law in appeal from an adverse holding of the court that it has such jurisdiction, and may not maintain a proceeding in prohibition to prevent the prosecution of such action." State, ex rel. Miller, v. Court (1949), 151 Ohio St. 397 [39 O.O. 232], paragraph three of the syllabus; State, ex rel. Henry, v. Britt (1981), 67 Ohio St.2d 71, 73-74 [21 O.O.3d 45].
Appellants are unable to satisfy two of the necessary conditions for issuance of a writ of prohibition, and, accordingly, the writ is hereby denied.
Writ denied.
CELEBREZZE, C.J., W. BROWN, SWEENEY, LOCHER, HOLMES, C. BROWN and J.P. CELEBREZZE, JJ., concur.