Henry Coe v. Armour Fertilizer Works

• Decision Date: 03 May 1915
• Docket Number: No. 140,140
• Citation: 59 L.Ed. 1027,237 U.S. 413,35 S.Ct. 625
• Parties: HENRY L. COE, Plff. in Err., v. ARMOUR FERTILIZER WORKS
• Court: U.S. Supreme Court

237 U.S. 413

35 S.Ct. 625

59 L.Ed. 1027

HENRY L. COE, Plff. in Err.,

v ARMOUR FERTILIZER WORKS.

No. 140.

Submitted January 20, 1915.

Decided May 3, 1915.

[Syllabus from pages 413-415 intentionally omitted] Mr. W. A. Carter for plaintiff in error.

Mr. O. K. Reaves for defendant in error.

[Argument of Counsels from page 415 intentionally omitted] Mr. Justice Pitney delivered the opinion of the court:

The Armour Fertilizer Works, having recovered in the circuit court for Manatee county, Florida, a judgment for about $3,000 against the Parrish Vegetable & Fruit Company, a corporation, sued out a writ of execution against the goods and lands of that company, and placed it in the hands of the sheriff, who returned that he was unable to find any property of the judgment debtor whereon to levy. Thereupon, puruant to § 2677 Gen. Stat. (Fla.) 1906, as amended by act of 1909, chap. 5892, the Fertilizer Works sued out an execution against the goods and lands of the plaintiff in error, Henry L. Coe, as a stockholder of the Vegetable Company. This writ set forth the recovery of the judgment by the Fertilizer Works against the company, mentioning the date, the amount, and the court in which it was recovered, the issuing of execution against that company and the return thereon, and commanded that there be made of the property of Coe, as one of the stockholders of the Company, 'an amount equal to the amount remaining unpaid upon the subscription of the said Henry L. Coe to the stock of said corporation.' A formal levy was made upon a parcel of land, the property of Coe, but there was no interference with his possession, nor had any step been taken towards selling the land, when Coe filed in the circuit court a petition to quash the execution as issued illegally, alleging that it had been issued without notice to him, and amounted to the taking of his property without due process of law, and that the statute permitting it was void under the Constitution of Florida, and was also repugnant to the 'due process' and 'equal protection' clauses of the 14th Amendment. The circuit court entered judgment in the following words: 'The execution is quashed, but not on the ground of unconstitutionality of the statute. The statute is constitutional, but the execution cannot issue until some preliminary steps are taken.' The Fertilizer Works removed the cause by writ of error to the supreme court of Florida, and that court reversed the judgment (63 Fla. 64, 58 So. 231), holding that the statute required no preliminary step to be taken before an execution might be issued against a stockholder, and that there was no general law or rule requiring previous notice to him. The court further said:

'A stockholder of a corporation becomes such charged with knowledge that under the statute, upon the return of nulla bona upon an execution issued against the corporation, an execution may be issued against him for the unpaid subscription to the stock he holds. . . . The statute above quoted [§ 2678, Gen. Stat. 1906, set forth below] affords the means by which the officer holding the execution may obtain definite information as to the stockholders and the unpaid subscriptions on the stock. If the person against whom the execution is issued is not in fact a holder of stock upon which there is unpaid subscription, or if the amount of the execution is in excess of the unpaid subscription, the stockholder may have appropriate relief under the statute providing for the testing of the legality of executions. See §§ 1624 and 1625, Gen. Stat. of 1906.'

The case went back to the circuit court with a mandate 'that such further proceedings be had in said cause as, according to right, justice, the judgment of said supreme court, and the laws of the state of Florida, ought to be had.' It was again brought on for hearing before the circuit court, when, without further pleadings or evidence on either side, judgment was rendered denying the motion to quash. Upon Coe's writ of error, the supreme court affirmed this judgment, for reasons expressed as follows:

'Coe does not claim that he was [not] in fact a stockholder, nor that there remains no balance due upon his stock, nor seek to interpose any of the defenses pointed out as open to him upon the former hearing, but stands boldly on his attack upon the constitutionality of the act, and by a proceeding unknown to our practice. There does not appear to have been any forcible seizure of any property of the said Coe, other than the formal levy upon realty, which does not interfere with the owner's possession. The statute presents many difficulties that may arise as to others not similarly situated, and may as such be beyond the power of the legislature; but the party now before this court has not brought himself within the class who may justly complain, and the judgment as to him, upon the authority of our former holding, is therefore affirmed.'

The present writ of error was then sued out.

Defendant in error moves to dismiss, upon the ground that, according to the local practice, the opinion delivered by the supreme court upon the first writ of error decided the question involved and became the law of the case, so that plaintiff in error, having failed to take a writ of error upon that judgment, was thereafter concluded by it. But, as appears from what has been stated, the first decision did not conclude the litigation; it called for further proceedings in the circuit court; and not until the judgment rendered by that court on the going down of the mandate had been affirmed upon the second writ of error did there exist a final judgment in the court of last resort of the state, such as might be brought under the review of this court by virtue of § 237, Judicial Code, act of March 3, 1911, 36 Stat. at L. 1156, chap. 231, Comp. Stat. 1913, § 1214. Besides, the contention that, by the local practice, the Federal question was not open for discussion or consideration upon the second writ of error is conclusively disposed of by the fact that the supreme court did, on that occasion, again consider it, with the result that the state law and the authority exercised under it were upheld as valid and not repugnant to the Constitution of the United States, and the immunity especially set up and claimed by plaintiff in error under that Constitution was overruled. North Carolina R. Co. v. Zachary, 232 U. S. 248, 257, 58 L. ed. 591, 595, 34 Sup. Ct. Rep. 305, Ann. Cas. 1914C, 159, and cases cited. The statement in the second opinion, that the attack of plaintiff in error upon the constitutionality of the act was 'by a proceeding unknown to our practice,' does not, we take it, mean that the court did not necessarily pass upon the constitutional question. We are not sure we clearly comprehend the meaning of the expression quoted, in view of the effect attributed to §§ 1624 and 1625 in this case and in earlier decisions cited below. It would seem plain that any course of procedure having for its object the taking of property to satisfy an alleged legal obligation, and which yet accorded no hearing to a respectful protest invoking on reasonable grounds a prohibition found in the supreme law of the land, could itself hardly be termed 'due process of law.' The constitutional guaranty is not to be thus evaded, and we cannot believe there was any purpose to evade it in this case. Upon the whole, the right of review in this court is clear, and the motion to dismiss the writ of error must be denied.

The Florida statutes upon which the controversy turns are set forth in the margin.¹ That we may not misapprehend the construction placed upon them by the state court of last resort, or the ground of its opinion that they afforded due process of law to plaintiff in error it will be well to briefly review their history. Sections 2677 and 2678 trace their origin to §§ 22 and 23 of an act of 1868 (Laws, p. 123, chap. 1639), which followed the model of § 36 of the companies clause consolidation act 1845 (8 & 9 Vict. chap. 16), except that they permitted execution against the stockholder to an extent 'equal in amount to the amount of stock by him owned, together with any amount unpaid thereon.' There was a proviso, as in the English act, that no such execution should issue except upon an order of the court, 'made upon motion in open court after good and sufficient notice in writing to the person upon whom execution is desired.' These sections were repealed in 1874 (Laws, p. 95, chap. 2016), and reenacted in 1879, with insignificant verbal modifications (Laws, p. 118, chap. 3165, §§ 9 and 10). By an act of 1887 (Laws, p. 96, chap. 3729), the liability of stockholders to the creditors of the corporation was limited to 'so much as may remain unpaid upon his or her subscription.' In the Revision of 1892 this limitation of the liability was engrafted upon the act of 1868, as re-enacted in 1879, and at the same time the provision for notice to the stockholder prior to the issuing of the execution was omitted. The result appeared as §§ 2152 and 2153 of that Revision, found as §§ 2677 and 2678 in the General Statutes of 1906. The amendment of 1909 was apparently passed for the purpose of bringing the phraseology of the section into conformity with the judicial construction, as declared in Knight & W. Co. v. Tampa Sand Line Brick Co. 55 Fla. 728, 743, 744, 46 So. 285.

Meanwhile, and from an early period, the laws of Florida have contained provisions for testing the legality of any writ of execution upon application of the defendant, made after its issue. Sections 1624 and 1625, Gen. Stat. 1906, referred to in the opinion of the supreme court above quoted, originated in acts of 1834 (Laws, p. 13, chap. 742), and of 1844 (Laws, p. 54, § 6), concerning which the court has repeatedly held that they provide separate, consistent, and independent remedies; the one by proceeding before the sheriff, the other before the court or a judge in vacation; and that...