Columbia Cas. Co. v. Sodini

• Decision Date: 10 March 1945
• Docket Number: 36058.
• Citation: 156 P.2d 524,159 Kan. 478
• Parties: COLUMBIA CASUALTY CO. v. SODINI et al. (PRATT et al., Interveners).
• Court: Kansas Supreme Court

156 P.2d 524

159 Kan. 478

COLUMBIA CASUALTY CO. v. SODINI et al. (PRATT et al., Interveners).

No. 36058.

Supreme Court of Kansas

March 10, 1945

Rehearing Denied April 12, 1945.

Appeal from District Court, Reno County; F. B. Hettinger, Judge.

Action by Columbia Casualty Company against H. A. Sodini and others on a judgment, and for interlocutory relief to restrain the transfer and sale of certain stock which plaintiff sought to have subjected to the judgment, wherein Henry E. Pratt intervened as plaintiff asserting ownership of the stock in question and Rush McAllister intervened as defendant claiming ownership of certain of such stock. The trial court overruled plaintiff's demurrer to intervenor's petition and entered judgment against plaintiff and for intervenors, and plaintiff appeals.evidence sustaining case when so considered, demurrer must be overruled.

Syllabus by the Court.

1. In testing the sufficiency of evidence as against a demurrer the court shall consider all of the evidence attacked as true, shall construe it favorably to the party offering it shall disregard the unfavorable evidence, shall not weigh any differences and if so considered, there is any evidence to sustain such party's case, the demurrer should be overruled.

2. Under the stipulation made at the trial, as set forth in the opinion, the parties involved could rely upon the statutes and decisions of Illinois.

3. In Illinois, a pledge is a lien created by the delivery of personal property to another upon express or implied agreement the property shall be retained as security for a debt, and to create a pledge the pledgee must have possession and control of the property.

4. In Illinois a share of stock in a corporation may be the subject of a pledge.

5. In the absence of any statute to contrary effect, it will not be held that the sale in Illinois of stock pledged to the payment of a note made in Illinois was not valid because the stock was that of a corporation incorporated in Kansas.

6. In Illinois the rule is that a pledgee cannot purchase at his own sale of pledged personal property except upon agreement with the pledgor that he could do so.

7. Under the evidence there was nothing warranting any conclusion that the intervenor Pratt and the defendant Sodini were partners.

8. In the absence of a motion for a new trial, alleged errors occurring at the trial are not open to appellate review.

J. N Tincher, Clyde A. Raleigh, and J. N. Tincher, Jr., all of Hutchinson, and John Alan Appleman, of Urbana, Ill., for appellant.

Roy C. Davis, Warren H. White, Frank S. Hodge, Wm. H. Vernon, Jr., and Eugene A. White, all of Hutchinson, for appellee Henry E. Pratt.

THIELE, Justice.

The general nature of this action was to obtain a local judgment based on a judgment rendered by the United States District Court of Missouri, and for interlocutory relief. The plaintiff appeals from certain rulings hereafter mentioned growing out of the trial on an intervenor's petition.

In order that the various specifications of error may be understood and disposed of, it is necessary to make a general review of the pleadings filed and of some interlocutory orders made.

On August 27, 1940, plaintiff filed its petition alleging it had secured a judgment against the defendant, Sodini, in the United States District Court of Missouri and that execution had been issued thereon and returned unsatisfied; that defendant, the Chalmers Hotel Corporation, was a corporation organized about April 29, 1940, and according to its records Sodini held 998 shares of its stock and that a good part of Sodini's personal assets was in the corporation; that Sodini had moneys and credits in the hands of the defendant the American National Bank. Then follow allegations setting out the manner in which Sodini became indebted to the plaintiff and that Sodini had been concealing his assets, and that unless restraining orders were issued against Sodini, the Hotel Corporation and the Bank, any judgment obtained by plaintiff against Sodini would be worthless for the reason Sodini would have sold or converted the property and removed the same from the jurisdiction of the court.

On the same day the petition was filed, restraining orders were issued ex parte. Motions to set aside the several orders were filed, and while they seem to have been denied as such, the record as abstracted shows that under date of September 16, 1940, a temporary injunction was granted conditioned on a $10,000 bond being given within fifteen days. No such bond was ever given.

Later Sodini filed his answer and cross petition and plaintiff filed its reply. On January 13, 1941, plaintiff obtained a judgment against Sodini for the amount prayed for by it.

The matters of present importance grow out of pleadings filed by Henry E. Pratt, who was permitted to intervene, and by Rush McAllister, who was made a party defendant on motion of the plaintiff.

The pleading filed by Pratt on September 26, 1940, was called an intervening petition, and alleged Pratt resided in Peoria, Illinois, and that in April 1940, he was solicited by Sodini to assist Sodini in the purchase of the interest of one Dick Foil in and to the Chalmers Hotel property; that Sodini advised Pratt he was organizing a corporation which would take over the hotel property and operate it, and that as security for any sums advanced all of the capital stock certificates would be endorsed in blank and turned over to Pratt as collateral security, and that pursuant to such arrangement he advanced funds in the sum of $_____, notes received being in usual form of collateral notes; that default in the payment of the notes was made and they were foreclosed in accordance with their terms, and on September 23, 1940, in order to protect himself Pratt was obliged to purchase all of the capital stock of the Chalmers Hotel Corporation so pledged; that Pratt was the owner and holder of the stock which carried with it ownership of all the property of every kind and nature belonging to the hotel corporation.

On December, 17, 1940, plaintiff filed its answer to Pratt's intervening petition, containing a general denial, and an allegation that the extent of Pratt's relations with Sodini was conspiracy to assist Sodini in 'beating' his indebtedness and that there was nothing pleaded in the intervening petition which would entitle Pratt to the relief sought by him.

To complete the story, we note that the defendant McAllister filed an answer on February 6, 1941, which needs but short notice. He alleged that on October 1, 1940, he purchased from Pratt, 1,000 shares of the common stock of the hotel corporation and pursuant to his purchase contract he gave Pratt a note for the balance of the purchase price in the sum of $6,500, payable in installments at the rate of $200 per month and pledged as security 750 shares of the hotel corporation. Allegations about performance of the contract of purchase are not of present importance. McAllister prayed the court to protect his rights in and to the stock and assets of the hotel corporation and that he be decreed the owner, subject to the terms of his contract and notes with Pratt.

On July 2, 1941, the case came on for trial as between Pratt and plaintiff. Pratt offered evidence in support of his cross petition. At the conclusion the plaintiff demurred for the asserted reasons that the intervenor's claim to the property was under an unrecorded lien which was invalid against plaintiff who was a judgment creditor; that intervenor had actual knowledge of the existence of plaintiff's claim which resulted in judgment and the pledgee and interpleader had no right to buy in his own collateral; that there was no change in possession so that any third party would have any notice pledgee would be ahead of him; that the purchase by the intervenor of the pledged property was void; that the mortgage was absolutely void as to the third persons for the reason Sodini was permitted to remain in possession; and that the evidence disclosed there was virtually a partnership between Sodini and Pratt which would bar Pratt from any rights as against plaintiff as a judgment creditor.

The trial court took the matter under advisement, each party submitting several briefs, and not until about July 24, 1943, did the trial court indicate he was about to overrule the demurrer and render judgment. At that time plaintiff sought permission to file a supplemental answer and cross petition to Pratt's intervening petition. On July 25, 1943, the trial court overruled the demurrer and rendered judgment that plaintiff had no right, title, interest, lien or claim by reason of its judgment against Sodini or otherwise in and to any of the property or the capital stock of the hotel corporation, and that the property was owned by Pratt and McAllister in accordance with their agreements. On September 23, 1943, the trial court denied plaintiff's motion for permission to file the amended answer. No motion for a new trial was filed, and on the same day, September 23, 1943, plaintiff served notice of appeal from all orders, judgments and decrees, from the order overruling the demurrer, and from the order made September 23, 1943.

Plaintiff specifies error in nine particulars. The first specification is there was error in the ruling on the demurrer. The other specifications, in part, make some reference to the above ruling, but otherwise refer to trial errors.

Did the trial court err in its ruling on the demurrer? Under repealed decisions of this court, it has been held that in testing the sufficiency of evidence as against a demurrer, the court shall consider all of the evidence attacked as true, shall construe it favorably to the party offering it, shall disregard...