Opinion
Decided November 8, 1926.
Receivers — Petition for appointment treated as affidavit of facts, when — Grounds for appointing receiver — Section 11894, General Code — Preservation of property upon abandonment — Default in contract transferring business to trustee for creditors.
1. Where petition for appointment of receiver is sworn to as true, it is treated as an affidavit of facts.
2. Where debtor contracted with creditors to transfer business to others and gave creditors right to demand full payment of accounts on default of weekly payments, petition alleging that contract and business were abandoned and that property would be dissipated is sufficient to justify appointment of receiver to conserve property, under Section 11894, paragraph 1, General Code, though contract created no lien.
ERROR: Court of Appeals for Hamilton county.
Mr. Simeon M. Johnson, for plaintiff in error.
Messrs. Cohen, Mack Hurtig, for defendants in error.
This proceeding in error was brought to reverse and set aside the appointment of a receiver, made by the court of common pleas in the action therein pending.
The petition sought a recovery of money, and ancillary relief by the appointment of a receiver to take charge of and conserve certain property. In substance, the petition alleged that on August 26, 1925, plaintiff in error, Samuel Levinson, doing business as Wyandotte Cigar Company, was indebted to defendant in error Jaskulek Co. in the sum of $2,494.69, for merchandise sold and delivered; that at above time Levinson desired to transfer the business to Gus Jacobs and Wm. F. Sanning, parties defendant, and a written contract was entered into between Levinson, Jacobs and Sanning, and acquiesced in by the plaintiff Jaskulek Co. and other creditors, whereby the business was transferred to Jacobs and Sanning, under the agreement that Jacobs and Sanning were to pay H.C. Bolsinger, as trustee for the creditors of Levinson, the sum of $76.85 per week, until all of the debts of said business were paid in full; and that in default of four weekly payments the creditors were entitled to demand full payment of their accounts and Levinson was not to be relieved of any of the debts.
Certain payments were made to Bolsinger, as trustee, and then followed a default for more than four weeks.
The petition further recites that Jacobs and Sanning have abandoned the business, and that the assets will be dissipated and diminished unless taken charge of by a receiver.
No answer or defense was filed in the action.
On motion of the plaintiff, a receiver was appointed to take charge of the property and business. Defendant, Levinson, objected to the appointment of a receiver, and prosecutes error to this court, claiming there was no authority for the appointment under the facts and the law.
The matter was presented primarily to this court on a motion to stay the order appointing the receiver, but the consideration of this question goes to the power of the court, under the allegations of the petition and the facts shown, to make the appointment it did.
The petition is sworn to positively as true, and is therefore an affidavit of the facts.
The plaintiff in error urges that defendants in error Jaskulek et al. were simply contract creditors; that a simple contract creditor, without lien or title to the property, has no right under the law to interfere with the debtor's possession by the appointment of a receiver, and plaintiff in error cites authorities to the effect that this is a general rule. Conceding this to be the general rule, it has no application to the instant case. The facts, as stated in the petition, show the defendants in error to have some interest in the contract of sale of the property. Out of the operation of the business they were to receive so much per week. The trustee was appointed to receive these payments on behalf of the creditors. The contract provided that in default of these payments for four weeks, the creditors could demand payment in full of their accounts from Levinson.
It is true there was no stipulation as to what should become of the property, on default, and it is further true that there was no lien created by the contract. But the further allegations that the parties had abandoned the contract, abandoned the business, and that the property would be dissipated are certainly sufficient facts to justify the court in appointing a receiver to conserve the same, under favor of Section 11894, paragraph 1 of the General Code of Ohio, which is as follows:
"In an action by a vendor to vacate a fraudulent purchase of property, or by a creditor to subject property or a fund to his claim, or between partners or others jointly owning or interested in any property or fund, on the application of the plaintiff, or of a party whose right to or interest in the property or fund, or the proceeds thereof, is probable, and when it is shown that the property or fund is in danger of being lost, removed or materially injured."
The facts being sufficient to authorize the court to make the appointment as it did, the motion to stay the proceedings will be overruled and the judgment of the court of common pleas will be affirmed.
Judgment affirmed.
BUCHWALTER, P.J., and CUSHING, J., concur.