Opinion
Decided December 1, 1930.
Execution — Partner's undivided interest in firm's tangible property subject to seizure — Purchaser entitled to notice of motion to vacate execution sale — Order vacating execution safe, without notice to purchaser, void — Purchaser may prosecute error proceedings from order setting sale aside.
1. Partner's undivided interest in tangible property of firm may be seized on execution by separate creditor of one of partners.
2. Where purchaser at execution sale had paid price which creditor applied on judgment, subsequent order setting aside sale without notice to, or knowledge by, purchaser, held nullity.
3. Purchaser at execution sale may prosecute error to court's action in setting aside sale.
APPEAL: Court of Appeals for Fulton county.
Messrs. F.S. J.M. Ham, for plaintiff.
Messrs. Tracy, Chapman Welles, for defendants.
The controversy in this case grows out of a levy by the marshal of the municipal court of the city of Toledo, on the undivided interest of a partner in partnership property consisting of three automobile trucks and a trailer.
Roy H. Burry and one Harvey Sentle were partners owning the vehicles involved, and using them for the purposes of trucking. Having some misunderstanding in the business, an action was brought by one of them against the other to enjoin him from interfering with the company by whom they were employed to do trucking, and from obtaining a cancellation of the contract. On the same day that action was brought, a creditor of Roy H. Burry obtained a judgment against him on a cognovit note in the municipal court in Toledo in the amount of $726.54, and had an execution immediately issued and levied upon the interest of Burry in the vehicles. A sale on execution was duly advertised, and on the day of sale the only bidder was the plaintiff in this action, Roscoe V. Sullins; the interest of Burry in the property being struck off to him for the amount of $500. This amount was immediately paid by Sullins, and was paid by the municipal court to the creditor to apply on his judgment.
Motion was made in the municipal court to set aside the sale, and notice of this motion was given to the parties to the action, but no notice was given to the purchaser at the sale on execution, nor did he have actual knowledge thereof. On the hearing of the motion in the municipal court that court granted the same and set aside the sale, notwithstanding the amount for which the property had been sold had been paid by the purchaser and received by the creditor and applied upon the amount of the judgment. After the municipal court had made the order setting aside the sale on execution, an order was entered in that court, on the motion of Burry, making Roscoe V. Sullins, the purchaser, a party in the action and ordering that he be served with a copy of the journal entry setting aside the sale, and ordering, also, that he return the property which he had purchased at the execution sale. In other words, Sullins was, by this notice, not given any opportunity to sustain his purchase, but was informed that he had already been defeated by the judgment of the court and should return the property he had purchased and paid for.
In the meantime, Sullins claims to have purchased from Burry's partner the other undivided one-half of the partnership property, consisting of the vehicles involved in the sale in the municipal court. The property being in Fulton county, the purchaser, Sullins, commenced the present action to enjoin Burry and the marshal of the municipal court from taking possession and interfering with plaintiff's title to the property.
There can be no doubt that the undivided interest of a partner in tangible property of the firm may be seized upon execution by a separate creditor of one of the partners. Nixon Chatfield v. Nash Atkison, 12 Ohio St. 647, 80 Am. Dec., 390. While the interest acquired under such levy and sale might not be of great value, depending upon the condition of the partnership business and the amount of its property and indebtedness, yet that interest is one which will be protected by the law, and it can only be taken from the purchaser by appropriate proceedings known to the law. The patent and fatal defect in the proceedings in the municipal court is that the sale on execution was adjudged by the court to be set aside without any notice or knowledge upon the part of the purchaser on execution. It would seem fundamental that the rights which a purchaser acquires by the purchase and the payment of the price could not be taken from him without giving him an opportunity to be heard, and the line of authorities so holding seems to be nearly unbroken. We call attention to a note discussing the rights of a purchaser at a judicial sale found in Ann. Cas., 1914D, 758. See, also, 16 Ruling Case Law, 113, Section 81; 23 Corpus Juris, 684, Section 678. In the latter section we find the following language: "The court can not entertain a motion to set aside a sale under execution if notice is not given to all the parties interested, unless such notice is waived by appearance, or by failure to object at the proper time."
And it is further said, in the same section, that notice must be given to the purchaser at the sale, since the vacation of the sale would deprive him of the benefits of his purchase.
We have no doubt, as contended by counsel for defendants, and as held by this court in Wheeler v. Lorenz, 21 Ohio App. 218, 153 N.E. 195, that the purchaser at an execution sale is entitled to prosecute error to the action of the court in setting aside a sale, but, where the sale has been set aside without notice to the purchaser, the order is, as to him, a nullity, and of no binding effect.
The order issued by the municipal court, which is claimed to justify the marshal and Burry in taking possession of the property, could give no authority to do so, and the plaintiff in this action is entitled to an injunction preventing the defendants from interfering with his possession and title.
We do not pass upon the terms of the order made by the municipal court in attempting to set aside the sale; the entire order being a nullity.
For the reasons given a decree will be rendered for the plaintiff enjoining the defendants from interfering with the plaintiff's title and possession under the void order issued by the municipal court for the three trucks and trailer described in the petition.
This decision will not, of course, prevent the municipal court from taking such further action as may be justified, after due notice to all interested parties and an opportunity for them to be heard.
Decree for plaintiff.
WILLIAMS and LLOYD, JJ., concur.