82 Neb. 191 | Neb. | 1908
Lead Opinion
The plaintiff, claiming to be the owner of certain shares of the capital stock of the Farmers & Merchants Bank of Elm Creek, instituted this action in equity to confirm his title thereto, and to procure possession of the certificates representing the same, to enjoin a threatened sale of said stock upon an execution issued against his grantor, and to compel the bank to enter the transfer of said stock upon its books and issue to him a new certificate therefor. The sheriff, who held the execution, and the judgment creditor, Beecroft, and the bank,were made defendants. The sheriff filed an answer, alleging that he leyied upon the shares of stock as the property of Spencer, and he further alleged, as did Beecroft in a separate answer by
The general rule seems to be that, in the absence of a controlling statute, a purchaser for a valuable consideration is protected against subsequent attachment or execution against his grantor, although he failed to have his assignment recorded upon the books of the corporation. There is a vast difference between the decisions of the 'different courts, which is attributed in part to the various statutory provisions and the constructions placed thereon. But, where there is no express statutory provision, requiring that an assignment be entered upon the books of the company to effect a sale, it is held that the purchaser, in
- The supreme court of Minnesota in Lund v. Wheaton Roller Mill Co., 50 Minn. 36, held that a sale and transfer of corporate stock, although not entered on the books of the corporation, is effectual as between the parties, and takes precedence of a subsequent attachment in behalf of a creditor of the vendor. The statutes considered by the court in that case provided: “The transfer of shares is not valid, except as between the parties thereto, until it is regularly entered on the books of the company. * * * The stock of any such corporation shall be deemed personal property, and be- transferable only on the books of such corporation, in such form as the directors prescribe.” The reason for the decision was, as we understand it, that the provisions of the statutes were held as intended solely for the protection and benefit of the corporation, and do not incapacitate a shareholder from transferring his stock. Because of the fact that the bank whose capital stock is in controversy herein had the actual possession of the certificates of stock, a delivery thereof by Spencer to the plaintiff was impossible. The assignment made by him, of date September 14, 1906, in the absence of fraud, was sufficient to convey the stock to the plaintiff.
Defendants seek to invoke the rule of Hedrick v. Strauss, 42 Neb. 485, and Nebraska Moline Plow Co. v. Blackburn, 74 Neb. 246, which in the case last, cited is given as follows: “One is not a bona fide purchaser for value until he has actually paid the purchase price or become irrevocably bound for its payment.” It is true that in .the case at bar the plaintiff had not become irrevocably bound to the extent that he would have been required
Each party contends that the burden of proof is upon the other. There is no contention that there was any fraudulent intention on the part of the plaintiff, but that before he gave the note to Spencer’s mother he had notice of such facts as would put a man of ordinary prudence on inquiry. There is nothing in the record to indicate that an inquiry made by a prudent man would lead him to the conclusion that Spencer’s transfer of the stock in controversy Avas made fraudulently. It does not appear that the consideration was inadequate, nor that Spencer was insolvent. It does not appear that he owed any person other than Beecroft and his own mother. His property may be sufficient to meet all of his obligations. Plaintiff is not related to Spencer; but defendants contend that, as Spencer’s mother received the consideration for the shares of stock, the rule as to alleged fraudulent conveyances between relatives, casting the burden of proof upon the grantor, should be followed here. Spencer’s mother’s connection with this litigation is not directly involved. The real question to determine is where was the title to the shares of stock at the time of the levy. Had the transaction with Spencer’s mother never entered into this case, defendants could not then recover. It is apparent that defendants have no greater rights than they would had the promissory note never been given. In such case the plaintiff would be entitled to the fruits of his contract, unless defendants could establish that such transaction was fraudulent. The burden of proof was upon the defendants. They introduced no evidence to prove that the transfer
It is contended by the defendants that different causes of action are improperly joined in the petition, and that an injunction would not lie to restrain the sale of the stock. 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. 10 Cyc. 605. The officers of the defendant bank refuse to recognize plaintiff’s assignment, and apparently co-operate with Beecroft to defeat' the plaintiff’s title. Beecroft is a nonresident of the state. Plaintiff is entitled to have his stock preserved to him, and to prevent its incumbrance by execution sale. For these purposes he has no adequate remedy at law.
We recommend that the judgment of the district court be reversed and the cause remanded, with instructions to the lower court to enter a judgment for plaintiff consistent with this opinion.
By the Court: For the reasons given in the foregoing opinion, the judgment of the district court is reversed and this cause remanded, with instructions to the lower court to enter judgment for plaintiff consistent with the opinion.
Reversed.
The following opinion on motion for rehearing was filed December 5, 1908. Former judgment modified. Rehearing denied:
Rehearing
This cause is now before us upon an application for a rehearing, arid has been orally argued. The opinion is reported, ante, p. 191. In the body of the opinion it was
The principles of law announced in the case are not seriously assailed upon this application, but it is urged that there was sufficient evidence in the record to show the insolvency of Spencer. We have reexamined the record and find that there is some evidence tending" to show Spencer’s insolvency. The trial court evidently considered this evidence sufficient to warrant such a finding. We do not consider it necessary to discuss the sufficiency of the evidence to support, such a finding. In view of the fact that the trial court deemed the evidence sufficient, and the fact of the insolvency of Spencer, if proved, would materially affect the ultimate disposition of the case, we think the cause should be remanded generally, so that appellees may have an opportunity to introduce further evidence if they so desire.
We recommend that the opinion be modified.so as to' direct a reversal and remanding of the cause for further proceedings according to law, and that as so modified the opinion be adhered to.
By the Court: For the reasons given, the opinion is modified as above recommended, and as modified is adhered to, and the cause is reversed and remanded for further proceedings according to law.
Judgment accordingly.