Ball v. Towle Mfg. Co.
| Decision Date | 16 December 1902 |
| Citation | 65 N.E. 1015,67 Ohio St. 306 |
| Parties | BALL et al. v. TOWLE MFG. CO. |
| Court | Ohio Supreme Court |
Error to circuit court, Cuyahoga county.
Proceeding by the Towle Manufacturing Company in aid of execution against W. C. Ball. The American Exchange National Bank and others were made parties. From the judgment, defendants bring error. Affirmed.
The facts of this case, so far as the same are necessary to a proper understanding of the questions here involved, are as follows: On April 18, 1898, the defendant in error, the Towle Manufacturing Company, began a proceeding in aid of execution against the plaintiff in error Webb C. Ball, and in that proceeding made the American Exchange National Bank a party defendant, alleging that said Webb C. Ball was the owner of 10 shares, of the par value of $1,000, of the capital stock of said bank. Subsequent to the service of process on said bank in said proceeding in aid of execution, to wit, on April 21, 1898, said Webb C. Ball transferred and delivered to one W. J. Crowell, by way of pledge, the certificate for said 10 shares of stock, to secure an indebtedness of $200 owing from said Ball to Crowell, and $1,000 in money then advanced by said Crowell to him. Said W. J. Crowell received said certificate in good faith, and without any actual knowledge on his part of the claim or equities of the Towle Manufacturing Company in or to said 10 shares of stock. The Towle Manufacturing Company in the present action seeks to enforce and foreclose the lien which it claims to have acquired upon said 10 shares of stock by reason of its proceeding in aid of execution, and asks that said stock may be ordered sold, and the proceeds of sale applied to the payment of its judgment claim against said Webb. C. Ball.
Syllabus by the Court
1. A corporation creditor may, by a proceeding in aid of execution, reach and subject to the satisfaction of his judgment shares of stock in a corporation which belong to his judgment debtor; and such shares of stock, for the purpose of such proceeding, are to be regarded as in the possession of the corporation in which such shares are held.
2. When such proceeding is instituted by a judgment creditor, and the notice authorized and provided for by section 5475, Rev. St is duly served upon the corporation in which the judgment debtor owns shares of stock, such stock is bound, and the judgment creditor acquires a lien thereon from the time of the service of such notice.
J. P. Dawley, for plaintiffs in error.
A. A Stearns, for defendant in error.
CREW J. (after stating the facts).
Chapter 2, tit. 1, div. 5, of the Revised Statutes of Ohio, provides when and how proceedings in aid of execution may be instituted, and points out the method of procedure. By section 5464 of said chapter it is provided that any money, goods, or effects of a judgment debtor in the possession of a corporation, or any interest which he may have in any chose in action, may be reached and subjected to the payment of the judgment against him by action, which action is known and designated as a proceeding in aid of execution. Section 5475 of the same chapter provides that in such proceeding a corporation having property of the judgment debtor in its possession may be ordered to appear and answer concerning said property, and that the service of said order upon the corporation to appear and answer shall bind the property of such judgment debtor in the possession or under the control of such corporation from the time of the service of such order. It appears in this case that on April 18, 1898, the defendant in error, the Towle Manufacturing Company, under favor of the provisions of this chapter, duly instituted proceedings in aid of execution against the plaintiff in error Webb C. Ball and the American National Bank, and in such proceeding on April 18th an order was duly made, issued, and served upon said Webb C. Ball and the American Exchange National Bank, and said American Exchange National Bank was, by said order, directed and required to appear before a referee duly appointed by the court, and answer concerning all property in its possession or under its control belonging to said defendant Webb C. Ball. Subsequently, and in obedience to said order, said bank, by its proper officer, appeared before said referee in said proceeding, and made its answer, and on April 27, 1898, said referee filed his report with the court, finding that said Webb C. Ball was the owner of 10 shares of the capital stock of the American Exchange Bank, and that said stock was of the value of $1,200. On June 27, 1898, the defendant in error, the Towle Manufacturing Company, commenced an action in the court of common pleas of Cuyahoga county, and in its petition alleged and claimed that by reason of said proceedings in aid of execution it had acquired a first and prior lien upon said 10 shares of the capital stock of the American Exchange National Bank, and asking that said 10 shares of stock be ordered sold, and the proceeds applied to the payment of its judgment claim against said Webb C. Ball. To this action the American Exchange National Bank, Webb C. Ball, and W. J. Crowell were made parties defendant. Said Webb. C. Ball and W. J. Crowell answered severally, but the bank filed no answer. On the trial of the cause in the court of common pleas that court found the issues in favor of the plaintiff, the Towle Manufacturing Company, that it had a valid, first lien upon said 10 shares of stock, and adjudged and decreed that, unless the amount found due plaintiff should be paid within five days from the date of said decree, said 10 shares of stock should be sold, and the proceeds applied: First, to the payment of the costs of said action and the costs of said proceeding in aid of execution; second, to the liquidation of plaintiff's said claim; and that the balance, if any, should be brought into court, to abide the further order of the court. From this finding and decree of the court of common pleas the defendant Webb C. Ball appealed to the circuit court. On the hearing of the cause in the circuit court that court found and decreed as follows:
‘ On December 3, 1900, this cause came on to be heard upon the petition of plaintiffs, the answer of the defendants Webb C. Ball and W. J. Crowell, the defendant the American Exchange National Bank being in default of answer or demurrer, although duly served with process, the court hearing the evidence and the argument of counsel, and on consideration thereof finds that the allegations of the petition are true; that there is due to the plaintiff from defendant Webb C. Ball the sum of $864.86, with interest from October 22, 1900, the first day of this term of court, upon the said judgment of the plaintiff as described in the petition, and the sum of $16.29 for costs incurred in the proceedings in aid of execution set out in said petition, and the costs of this action, which are taxed at $_____; that the said Webb C. Ball, on April 18, 1898, was, and still is, the owner of ten shares of the capital stock of the said American Exchange National Bank; that the said ten shares of stock were issued...
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