Hanna, John

English

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Volume 39 Issue 2 Article 16 February 1933 Equity Receiverships in the Common Pleas Court of Franklin County, Ohio John Hanna Columbia University School of Law Follow this and additional works at: https://researchrepository.wvu.edu/wvlr  Part of the Bankruptcy Law Commons Recommended Citation John Hanna, Equity Receiverships in the Common Pleas Court of Franklin County, Ohio, 39 W. Va. L. Rev. (1933). Available at: https://researchrepository.wvu.edu/wvlr/vol39/iss2/16 This Book Review is brought to you for free and open access by the WVU College of Law at The Research Repository @ WVU. It has been accepted for inclusion in West Virginia Law Review by an authorized editor of The Research Repository @ WVU. For more information, please contact ian.harmon@mail.wvu.edu. BOOK REVIEWSEQUITY RECEIVERSHIPS IN THE COMON PLEAS COURT OFFRANKiN COUNTY, Omo. By Thomas Clifford Billig. Baltimore:The Johns Hopkins Press, 1932. Pp. xiii, 159.It is one of our current paradoxes that a popular orator canobtain applause from the same audience for denunciation of in-vestigating committees and an appeal for a planned society. Whenone considers the solid achievements of certain governmental in-vestigating groups and the immense contributions to knowledgemade by private legal and economic research, to say nothing ofwhat scientific research has accomplished, it is evident that facileflings at research in general are, for the most part, undeserved.That is not to say that research projects have not merited a con-siderable part of the criticism they have received. Disregardingas unworthy of attention innumerable questionnaires masquerad-ing as research, some major research projects, even where fruit-ful of results, have been marked by preliminary planlessness anda chaotic organization of the accumulated material that makestheir work unavailable except to the most patient scholars.The Johns flopkins studies, of which Professor Billig's Re-ceiverships in Franklin County, Ohio, is an example, nave set astandard which while happily not unique, at least entitles theJohns Hopkins projects to a place among the most useful and il-luminating current social studies. Johns Hopkins first surveyedexisting enterprises in research in order not to duplicate com-pleted studies or investigations in progress. Next it has takensufficient time and devoted sufficient talent to preliminary studiesin the projects undertaken to avoid, to a large extent, waste mo-tion at the beginning. This preliminary planning has involvedthe closest association with.local interests whose cooperation wasvaluable if not essential to the success of the study. Finally theJohns Hopkins studies have been entrusted to persons of skilland experience with a reputation for judicial qualities and can-dor. When these investigators have been equipped as JohnsHopkins has equipped them, with up-to-date mechanical devicessuch as tabulating machines as well as the best of technical as-sistance in statistics, one might well be optimistic about the con-tributions to be expected in the field covered by the research.Reliable information was sorely needed about the adminis-tration of state equity receiverships. Recent bankruptcy studiesunder the auspices of bar associations, governmental agencies,1Hanna: Equity Receiverships in the Common Pleas Court of Franklin CountyDisseminated by The Research Repository @ WVU, 1933BOOK REVIEWSand universities have given us information upon which we canpredicate some confident conclusions about bankruptcy. Trust-worthy data are also available about assignments for the benefitof creditors, the so-called friendly adjustments, as administeredunder the auspices of the Adjustment Bureaux, Inc., founded bythe National Association of Credit Men. What was needed toform a basis for comparative study of the various devices foradministering insolvent estates was a body of facts equally illum-inating about equity receiverships, both state and federal. SinceProfessor Billig had already contributed materially to public in-formation about friendly adjustment and bankruptcy, it was onlynatural that he should be placed in charge of a receivershipstudy.The study in question is primarily about receiverships inColumbus, Ohio. Ohio is one of the few jurisdictions where in-solvency administration is commonly a matter for the state equitycourts. Columbus too is still a community of the individualproprietor and the small corporation. This study, therefore, haslittle to do with re-organization of interstate corporations. Theinvestigation covered receiverships administered between January1, 1927 and December 31, 1928. This period was chosen partlybecause it was a time of normal business conditions and partlybecause most of the cases had been closed at the time the studywas made. A search was first made to locate receivership casesand subsequently the cases were studied in detail. The studycovered procedural history, equity elements including businessorganization and management, names and occupations of officersand a financial analysis. The cases were classified into five groups,viz., judgment creditor, simple contract creditor, mortgagee andmechanic's lienor, business association and miscellaneous. Theinformation obtained was partly statistical and partly of a moregeneral character.The report, after an introduction discussing the purposesand methods of the investigation, takes up in the first chapter re-ceiverships instituted by judgment creditors and divides these in-to two categories involving respectively immediate liquidation andoperation of the business, the subsequenit chapters dealing withreceiverships instituted by other sorts of creditors. With somevariation in the different chapters the report sets up facts relat-ing to the institution of the receivership, its functioning, the costof the administration, the degree of lawyer control and creditorcontrol and the condition of the receivers reports. General dis-2West Virginia Law Review, Vol. 39, Iss. 2 [1933], Art. 16https://researchrepository.wvu.edu/wvlr/vol39/iss2/16WEST VIRGINIA LAW QUARTERLYcussion and statistical information are supplemented by narra-tives of specific illustrative cases.There is nothing especially sensational in what ProfessorBillig discovered or what he thinks ought to be done about it.He found a certain nominal deference to the notion that a re-ceivership is ancillary in character but a considerable tendencyin practice to regard receivership as the actual emedy of thecreditor. There was no strict enforcement of the rule that a judg-ment was a condition precedent to the obtaining of a reciver foran individual debtor. Most of the debtors appeared to have con-sented readily to the receivership proceedings and in general itwas obvious that the receiverships were for the most part volun-tary in character. The receivership device was used instead ofbankruptcy although liquidation was expected in most receiver-ships because of the local feeling that bankruptcy machinery wasslow in operation and awkward in producing desired results. Theadministration of the receiverships including the assembling ofassets, filing of claims and sale of assets moved rapidly. Appoint-ment of appraisers was apparently influenced occasionally bypolitical reasons and other considerations of favoritism. Wherethe business was operated the receivers on the whole made a satis-factory record of profits rather than of losses. Administrationwas expensive, rarely costing less than 30% of the realized as-sets. Satisfactory local figures relating to the comparative ex-pease of bankruptcy administration are not available, but such asProfessor Billig quotes indicate that administration in bankruptcycosts somewhat less than administration by receivership in equity.Receivers' reports left much to be desired although the conditionof the records seemed to indicate carelessness and ineffectivesupervision rather than dishonesty. Lawyers rather than credit-ors controlled the smaller receiverships although in the larger re-ceiverships where business operation was essential, the operatingreceiver" was generally a layman.Professor Billig recommends that the Franklin County in-solvency business should be concentrated in a single tribunal,that insolvency proceedings should be instituted through volun-tary assignment, that the trustees and receivers should be author-ized organizations rather than individuals and especially ratherthan lawyers, and that the liquidator should be given broaderpowers to make unnecessary continuous judicial supervision.Comments upon Professor Billig's recommendations wouldrequire a discussion which would go beyond the limits of this re-3Hanna: Equity Receiverships in the Common Pleas Court of Franklin CountyDisseminated by The Research Repository @ WVU, 1933BOOK REVIEWSview. He is a little inclined to forget how serious it may be forlawyers who serve an inefficient system, which they have accepted,rather than created, and who depend upon it for livelihood, ifthe system is suddenly altered. The observation should perhapsbe made, also, that since bankruptcy administration in the federalcourts must continue in any event, the best chance for reform ininsolvency administration may be to concentrate such administra-tion so far as possible in the federal bankruptcy courts. Obvious-ly such a suggestion can obtain no considerable support untilfederal bankruptcy administration is simplified and strengthenedalong the lines of recent proposals by the officials of the Depart-ment of Justice and others. In other words, when one is con-sidering the relative merits of federal bankruptcy administrationand state or federal equity receiverships one must take into ac-count not what bankruptcy administration actually is, but whatit might become.Professor Billig and the Johns Hopkins Institute of Law de-serve the sincere congratulations of the legal profession and thepublic generally for this monograph.-JOHN HANNA.Columbia UniversitySchool of LawTHE STORY OF THE CONSTITUTION. By Howard B. Lee.Charlottesville, Virginia: The Michie Company, 1932. Pp. xii,292.This work was written for the purpose of making it easierfor anyone to renew his "faith in, and Loyalty to, the constitu-tional system of government." As the objective is commendable,the reader will forgive too frequent effusions against radicalism,as expressed by United States Senator Smith W. Brookhart andothers, and will follow instead its more scholarly pages whichfortunately make up much the greater part of the volume. Theauthor's conception of the constitutional system is perhaps bestexpressed in his agreement with John W. Davis that "The con-stitution [of the United States] has but two enemies, whetherforeign or domestic, which are in the least to be feared. Thefirst is ignorance - ignorance of its contents, ignorance of itsmeaning, and ignorance of the great things that have been donein its-name. The second is indifference -- the sort of indifference4West Virginia Law Review, Vol. 39, Iss. 2 [1933], Art. 16https://researchrepository.wvu.edu/wvlr/vol39/iss2/16

Equity Receiverships in the Common Pleas Court of Franklin County, Ohio

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Equity Receiverships in the Common Pleas Court of Franklin County, Ohio

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