Enslen v. Nathan

• Decision Date: 28 February 1903
• Citation: 34 So. 929,136 Ala. 412
• Parties: ENSLEN v. NATHAN ET AL.
• Court: Alabama Supreme Court

34 So. 929

136 Ala. 412

ENSLEN v. NATHAN ET AL.

Supreme Court of Alabama

February 28, 1903

Appeal from Circuit Court, Colbert County; Ed B. Almon, Judge.

Action by J. H. Nathan and another against the Consolidated Light Water & Power Company, in which Eugene F. Enslen was served as garnishee after judgment. From a judgment for plaintiffs and against the garnishee, he appeals. Affirmed.

Kirk Carmichael & Rather, for appellant.

Thos R. Roulhac, for appellees.

DOWDELL J.

This appeal is taken from the judgment of the court below, rendered in a hearing on a contest of the garnishee's answer. The facts are undisputed, and the trial was had by the court without the intervention of a jury. The issue was regularly made up, and the uncontradicted evidence showed: That the appellees were judgment creditors of the Consolidated Light, Water & Power Company, a corporation organized under the laws of Alabama, and upon which said judgment the garnishment was sued out. The defendant in garnishment (appellant here) was a subscriber to the capital stock of the judgment debtor corporation, in the sum of $57,500, the subscription being made with the privilege of discharging the same by a conveyance of certain specified properties when called for by the board of directors. That at the time the subscription to the capital stock was made, the garnishee, appellant, was the owner of the specific property with which he was privileged to discharge his said subscription, but that since said subscription he had disposed of all of it, and had not owned it for two or three years prior to this garnishment proceeding. That no call was made by the board of directors, and that the board of directors was composed of all of the subscribers to the capital stock.

The question raised calls in a measure for a construction of our statutes relating to garnishment proceedings against subscribers to the capital stock in a corporation organized under the laws of this state; the contention of the appellant being that judgment cannot be rendered against him until after a call by the board of directors of the debtor corporation. And in support of this contention he relied mainly on the case of Teague, Barnett & Co. v. Le Grand, 85 Ala. 493, 5 So. 287, 7 Am. St. Rep. 64. Much of what is said in argument, and authorities cited by counsel for appellant, would find ready application in a suit by the corporation against the subscriber, as to a right of action before compliance with the conditions of the subscription and as to a call by the board of directors. And the general rule that garnishment will not lie where an action of debt or indebitatus assumpsit by the debtor against the garnishee cannot be maintained is not denied. But the statute has, in very clear terms, made a change in this general rule in garnishment proceedings by a creditor of a corporation against the subscriber to capital stock in such corporation, as to his unpaid subscription. The case of Teague, Barnett & Co. v. Le Grand, supra, and like cases relied on by appellant, are based on a somewhat different state of facts from the present case, and a different state of the law from that which we now have, brought about by changes made in our statutes. The statute relating to garnishments against subscribers to the capital stock of corporations to subject the unpaid subscription, existing at the time of the decision in the case of Teague, Barnett & Co. v. Le Grand, supra, was substantially the same under the Codes of 1876 and 1886. It was section 3220 of the former, and section 2972 of the latter. In the latter, the statute was as follows: "A judgment creditor of a corporation having execution returned 'No property found,' may sue out a garnishment to reach and subject the unpaid subscription of any stockholder in such corporation, without giving bond or security." This was the substance of the law on that subject as contained in each of the Codes from that...