On Petitions for Rehearing
A reading of the petitions for rehearing, and the briefs filed in support thereof, brings the Court to the view that while certain questions, assumed to be decided in our decision filed herein on June- 5, 1951, should be reserved until a hearing and decision thereof by the Circuit Court of Ohio County, on the remand heretofore ordered, that purpose can be effected without the delay attendant upon the granting of a rehearing and reargument of the questions raised in advance of a hearing thereon in the court below. Therefore, each of the petitions for rehearing filed' herein, as well as each of the motions of Harry W. Allers and others, also filed, is denied; but an order will be entered which will recognize, as a part of our decision herein, certain modifications of our original opinion in-respect to the questions which we now think should be' reserved for future decision by the circuit court on remand, and by this Court should the case again be presented to us.
*56These cases have been twice before this Court. The first opinion in the cases, prepared by Judge Lovins, was filed on February 14, 1950. In that opinion certain fundamental questions were decided, based upon the record as it then stood, and in which the only parties involved were Elk Horn and stockholders, on the one side, and Koontz on the other. Certain, sales of certificates theretofore made to Koontz were set aside, in so far as they operated to the prejudice of Elk Horn. The case was remanded to the Circuit Court of Ohio County for the entry of a proper decree. Following this action, certain creditors of C. W. Watson, other than Elk Horn, filed petitions in these causes in said Circuit Court, claiming certain, rights in respect to all of said certificates so sold to Koontz, by reason of their status as common creditors of C. W. Watson. These petitions were permitted to be filed, and the persons affected thereby, and made parties thereto, including Koontz and Elk Horn, appeared to the petitions and interposed demurrers raising questions of law in respect to their right to file said petitions, which questions were not passed upon by the trial court. On the contrary, without passing upon any of these questions, the trial court entered a final decree ordering the sale of all of the certificates purchased by Koontz, and giving Elk Horn a first lien on the proceeds of such sale, to the extent necessary to pay its debt in full. From that decree the appeal now before the Court resulted.
A strange situation exists. For the first time all the original parties to this litigation are in agreement upon two points; one, that this Court, in its opinion filed June 5, 1951, has departed fundamentally from the decision of February 14, 1950; and second, that Elk Horn is entitled to preference in the payment of the proceeds of any sale of the 38,000 certificates not covered by any collateral agreement; but as to which Elk Horn was a common creditor of C. W. Watson. This Court is not conscious of having departed, in its decision of June 5, 1951, from the fundamentals of the first decision in the case. In that first decision it held that the sales were void only in so far as *57they prejudiced the rights of Elk Horn. That fundamental ruling has not been departed from in any way; but the injection into the case of the new element of creditors, other than Elk Horn, appearing in the case, and being permitted to file petitions setting up claims against the certificates purchased by Koontz, and the appearance thereto by Koontz and Elk Horn, certainly requires this Court, and should have prompted the lower court, to take some notice of the fact that these creditors were allegedly in existence, and to hold that they are entitled to their day in court. When our decision is studied, it will be found that we have done nothing more than require, as a preliminary to any final disposal of the 38,000 certificates, that the claims of these common creditors, other than Elk Horn, be passed upon. We have never, at any time, recognized the validity of these claims, or even, recognized that they are such claims as can be asserted against the 98,000 certificates involved in this litigation, or any of them; and we have plainly indicated that the validity of these claims, as against such certificates, may depend upon whether or not a state of facts is established which would show some relationship between Koontz and the estate of Watson, or its creditors, as would bar Koontz from becoming a purchaser. We have only gone to the extent of holding that these creditors are entitled to an opportunity to present such facts and circumstances as they possess, and to have their day in court. We have not believed it proper to permit a decree to be entered disposing of the certificates, against which the claim of these common creditors is made, before the determination of who is entitled to share in the benefit of any distribution from the sale or other disposition of such certificates.
The holding that the common creditors who filed their petitions in the court below, claiming a right to share in the proceeds from the sale or other distribution of said certificates, was necessarily confined to the 38,000 shares of certificates not covered by any collateral agreement, because we had held that Koontz was entitled to redeem the 60,000 certificates, so far as Elk Horn was concerned, *58upon payment of the indebtedness secured by the collateral agreements under which said certificates were disposed of. We took the position that upon the death of Watson, all said certificates became a part of the Watson estate, subject to existing collateral agreements, and subject to claims of its creditors, and that the status of his creditors could not be changed after his death, and no preference created as between creditors of the same class. We adhere to that view, notwithstanding the fact that a creditor may lose his rights by failure to file a claim within the time prescribed by statute. We, therefore, used certain language in the opinion, which indicated that if and when the common creditors of C. W. Watson should be able to establish a claim against any of the certificates, they would be entitled to share ratably with other common creditors in the 38,000 certificates. The question was not raised in the court below or in this Court, but it is now asserted that the fact that 28,000 certificates, of the total 38,000 involved, were acquired by Koontz, at a sale made by a Probate Court of the State of Ohio, and that only creditors who filed their claims in that State are ■entitled to participate in the sale or other disposition of said certificates. In other words, that Elk Horn, who was ■the only creditor who filed claims against the Watson ■estate in the State of Ohio, is entitled to the full proceeds of the sale of 28,000 certificates. We will not, at this time, pass upon this contention; but we are impressed with the view that it is of such importance as to deserve the consideration of the Circuit Court of Ohio County on remand, and that we should not permit our opinion, at this time, ■to foreclose consideration by that court, or by this Court, ■of a future determination of that question. We do this for two reasons. First, we are not, at this time, fully advised of the force and effect to be given in this proceeding to the Ohio sale. We give full faith and credit, of course, to the sale made in Ohio, in so far as it passed legal title to Koontz of the certificates involved, and this we have always done. The other reason for reserving the question is that it is a question of priority as between Elk Horn, •admittedly a common creditor of Watson, as to said 38,000 *59■certificates, and the other creditors who are now asserting their claims, but who have as yet not established such ■claims as against said.certificates. Logically, the question to be determined first is whether common creditors of Watson, other than Elk Horn, are in position to assert any ■claim against any .of the certificates purchased by Koontz. If it be held that they are not in position to assert such ■claim, by reason of the sale to Koontz, and our holdings ■on the effect of such sales, then no question of priority will be raised. That question can only arise when it is •established, if it ever is, that these common creditors, ■other than Elk Horn, are entitled to participate, to any degree whatever, in any of the certificates involved.
Being of the opinion that all questions of priority as to the 38,000 shares, as between the common creditors of C. W. Watson, other than Elk Horn, who may be able to ■establish their claims, should be reserved, and that the same should be treated as one proper to be considered by the Circuit Court of Ohio County on remand, any language in our original opinion which might be construed as foreclosing that question is hereby withdrawn, and to that extent our original opinion is modified and corrected. We are constrained to handle the case in this fashion because the granting of a rehearing would have no other effect than to permit us to modify our opinion to this effect; and the action we take will serve to avoid the delay the granting of a rehearing would entail.