273 N.W. 502 | Neb. | 1937
This is a proceeding in the nature of a creditor’s bill. Plaintiff, Victor Danbom, had secured three judgments in the district courts of Iowa against defendant Alfred Danbom, and instituted this proceeding in the district court for Douglas county, Nebraska, against Alfred Danbom, the judgment debtor, Ancy Danbom, his wife, and Nebraska-Iowa Packing Company to recover judgment against Alfred Danbom on the Iowa judgment, and further asking that an alleged fraudulent transfer of 384 shares of the common stock in the Nebraska-Iowa Packing Company by Alfred Danbom to Ancy Danbom, his wife, be set aside, and for the sale of said stock to satisfy the judgments of the plaintiff. Defendants Alfred Danbom and Ancy Danbom are both nonresidents of Nebraska, being residents of the state of Iowa. The Nebraska-Iowa Packing Company is a Nebraska corporation with its principal place of doing business in Omaha, Douglas county, Nebraska, and the stock of said corporation alleged to have been fraudulently transferred by Alfred Danbom to Ancy Danbom, as well as ten shares of the preferred stock of said corporation, were levied on under attachment and garnishment proceedings, as provided by sections 20-1519, 20-1520, and 20-1026, Comp. St. 1929. An answer was filed on the part of the Nebraska-Iowa Packing Company, the garnishee. The only service had upon the defendants Alfred Danbom and Ancy Danbom was by publication, and neither of these defendants appeared or answered in the case. While the Nebraska-Iowa Packing Company was made a party defendant, there is no claim made in the petition that there was any participation by that company in the alleged fraudulent transaction between the defendants Alfred Danbom and Ancy Danbom; the only allegations in the petition with reference to the Nebraska-Iowa Packing Company, defendant, are hereinafter set out.
On these findings a decree was entered that the transfer of the 384 shares of the common stock in the Nebraska-Iowa Packing Company from Alfred to Ancy Danbom be, and is, set aside and held for naught, and the ownership of said shares adjudged to be in Alfred Danbom, subject to the lien and claim of the plaintiff in the sum of $20,439.28, plus the costs of this action; and the sheriff of Douglas county is ordered to offer said 384 shares of common stock in said company and the 10.35 shares of preferred stock in said company for sale in satisfaction of plaintiff’s judgment as upon execution; and the defendant Nebraska-Iowa Packing Company is “directed to issue a certificate of stock for said 384 shares of common stock and 10.35 shares of preferred stock of said company to the purchaser thereof at the sheriff’s sale; and that the defendant Nebraska-Iowa Packing Company, upon issue of the above stock certificates to the purchaser, at the sheriff’s sale, be relieved of all liability for costs herein. No motion for new trial was filed, but from this judgment and decree the defendant Nebraska-Iowa Packing Company has appealed.
The brief of appellant assigns six “errors relied on for reversal.” The first error assigned is to the ruling.of the court in sustaining a motion to strike a paragraph of appellant’s amended answer, where it was alleged that the transfer from Alfred Danbom to Ancy Danbom, his wife, was for a valuable consideration. The paragraph stricken was not in response to any issue tendered by the petition as against the answering defendant. The answering defendant packing company’s only interest was that of a garnishee. All the allegations of the petition are personal as against the defendants Danbom, and relate only to them, with the exception of the last sentence of paragraph VII, which reads: “That the said Nebraska-Iowa Packing Co. is a Nebraska corporation with its principal place of doing business in Omaha, Douglas county, Nebraska, and
The second and third assignments of error are to rulings of the court during the progress of the trial on objections to questions propounded witnesses, and an offer of proof. No motion for a new trial was filed. In an equity case, if appellant desires a review of alleged erroneous rulings of the trial court as to the reception of evidence, it is necessary that the district court’s attention must have been called to the same by a motion for a new trial. Pitman v.
Fourth, error is assigned that the court erred in holding that the default of the defendants Alfred and Ancy Danbom, upon whom no personal service was had, was an adjudication of all issues except as to whether the records of Nebraska-Iowa Packing Company showed stock outstanding in the names of Alfred and Ancy Danbom. Counsel has not directed our attention to the place in the record where such a holding may be found, and from an examination of the record we fail to find such a holding. The bill of exceptions shows evidence offered by plaintiff in support of his petition. While the plaintiff’s counsel objected to the offer of evidence by the packing company to controvert the allegations made against the defendants Danbom, the court stated: “The defendant Nebraska-Iowa Packing Company may present its evidence and I will withhold in abeyance this ruling.” The evidence was received. The journal entry of the decree recites that the trial was had upon the pleadings and “upon the evidence.” However, it is not material upon what the findings and decree of the trial court may have been made, if they are supported by facts disclosed by the record. A number of authorities from other jurisdictions are cited by appellant in support of the proposition that: “Where service is by publication only, the fact that the defendants enter no appearance is not sufficient admission of the allegations of the plaintiff’s petition to authorize a decree in accordance therewith; but the plaintiff’s cause of action must be proved before the plaintiff is entitled to a judgment.” The authorities cited are not controlling on the proposition presented. Under our statute (Comp. St. 1929, sec. 20-842) and by the decisions of this court, the contention of the appellant that plaintiff was not entitled to a decree by default as against the defendants Danbom is effectually foreclosed. In Weir v. Woodruff, 107 Neb. 585, 186 N. W. 988, an' action to quiet title,
“We are urged to adopt the general equity rule laid down in 16 Cyc. 495; it being argued that the case of Slater v. Shirving, supra, was a law action, while this is a suit in equity. The answer to this argument is that distinctions between actions at law and suits in equity have been abolished. Rev. St. 1913, sec. 7560 (Comp. St. 1929, sec. 20-101).
“It being essential to the orderly administration of justice that the rules of procedure be fixed and. stable, we adhere to the rule heretofore established and hold that it was error for the court to refuse to enter judgment in favor of plaintiffs upon their petition.”
Section 20-1308, Comp. St. 1929, cited by appellant, is not' controlling under the situation , here presented. That section applies to situations where it is necessary to make proof in cases coming within the exceptions stated in section 20-842, Comp. St. 1929, on allegations of value and amount of damage. On default of the defendants Alfred Danbom and Ancy Danbom, the plaintiff was entitled to have the allegations of his petition, so far as they were personal to said defendants, taken as true, and to have a default judgment entered against them.
Assignments five and six will be considered together. Number five assigns error in the entry of judgment in
“Stock in corporations owned by the judgment debtor, or the defendant in attachment proceedings, may be levied upon under executions or writs of attachment, and the mode of levy shall be as follows.” Comp. St. 1929, sec. 20-1519.
“Stock in a corporation shall be levied upon by notifying in writing the president, vice-president, secretary, cashier, or other managing agent at the usual place of business of said corporation, that the stock has been levied upon under the writ held by the officer.” Comp. St. 1929, sec. 20-1520.
And section 20-1026, Comp. St. 1929, provides that the garnishee “shall appear and answer, under oath * * * and shall disclose truly * * * in case of a corporation, any stock therein held by or for the benefit of the defendant, at or after the service of notice.” While the record in this court is not clear as to the procedure taken in the attachment and garnishment proceedings, it is not urged by appellant that there was any irregularity therein; but it is contended that the court was without authority to make the orders complained of by this last assignment. The packing company does not have the stock certificates evidencing the stock involved in its possession, nor is it shown that such certificates are within this state.
Section 2, art. I of the by-laws of the packing company,
In opinion in Farmers & Merchants Nat. Bank v. Mosher, 68 Neb. 724, 100 N. W. 133, it is said: “A stockholder’s interest in a corporation and in all of its property and rights is represented by his stock. There can be no question that the levy upon the stock by the garnishment of the corporation pursuant, to the statute will impound the whole interest of the stockholder in the property and rights of the corporation, and that the right to receive dividends goes with the stock.” Thus, plaintiff in this case, by the service of notice of the attachment and garnishment on the packing company, acquired a lien, as of the date of such service, upon all of the interest of the stockholder then in the possession or under the control of the garnishee, packing company. The by-laws do not attempt to, and could not, place the stock without the jurisdiction of the court. The object of having transfers of stock recorded
“It cannot be successfully contended but that the assignee of the shares of stock of a corporation is entitled to maintain an action in equity to require an obstinate corporation to enter his assignment upon the books of the corporation and issue to him a new certificate representing the same.” Everitt v. Farmers & Merchants Bank, 82 Neb. 191, 117 N. W. 401.
In Ball v. Towle Mfg. Co., 67 Ohio St. 306, 65 N. E. 1015, 93 Am. St. Rep. 682, the facts were quite analogous to the case at bar. The certificates of stock in that case were not in the possession or under the direct control of the corporation. The court states:
“There is a marked and obvious distinction between the stock of a corporation and the certificate representing such stock. The certificate of shares of stock in a corporation is not the stock itself, but is a mere evidence of the stockholder’s interest in the corporate property of the corporation which issues said certificate. Cook on Stock and Stockholders, section 485. In the absence of statutory or charter requirements no certificate of stock is necessary to attest the rights of the shareholder in the corporation, and such certificate when issued to the owner of shares of stock is merely an evidence or acknowledgment of the owner’s interest in the property of the corporation, but is not the property itself. In law a corporation is the trustee of the corporate property and holds the same for the benefit of the stockholders; and so long as such corporation continues to have a legal existence and to carry on the business for which it was created it alone is the proper custodian, and has possession of the corporate property. In Cook on Stock and Stockholders, section 480, the author says: Tt hás been held that if a stockholder whose stock has already
It is not essential to the validity of the execution sale of shares of stock in a corporation that the sheriff have manual possession of the certificate at the time of the sale, or that he should deliver it to the purchaser. West Coast Safety Faucet Co. v. Wulff, 133 Cal. 315, 65 Pac. 622; 85 Am. St. Rep. 171.
The plaintiff having by the attachment and garnishment proceedings acquired a lien on all stock of the NebraskaIówa Packing Company involved in this case, and such stock having been impounded by those proceedings, it was the duty of the court, on entering judgment and decree herein against the principal defendants Danbom, to make á decree for the enforcement of such lien by the sale of such stock as upon execution, to satisfy the plaintiff’s judgment. Where by-laws of the corporation provide that transfers of stock shall be made upon the books of the company, and for the issuance of a new certificate, and that the old certificates shall be surrendered, the duty of
Finding no prejudicial error in the proceedings of the trial court, the judgment is
Affirmed.