Equitable Securities Co. v. Johnson

• Decision Date: 02 April 1906
• Parties: EQUITABLE SECURITIES CO. v. JOHNSON et al.
• Court: Colorado Supreme Court

85 P. 840

36 Colo. 377

EQUITABLE SECURITIES CO. v. JOHNSON et al.

Supreme Court of Colorado

April 2, 1906

Error to District Court, Montrose County; Theron Stevens, Judge.

Action by the Equitable Securities Company against Anson B. Johnson and the Iron-Stone Ditch Company. Judgment for defendants. Plaintiff brings error. Reversed.

F. D. Catlin, for plaintiff in error.

A. R King and S. S. Sherman, for defendants in error.

GUNTER J.

This was an action to foreclose a lien upon certain ditch stock. It went off in favor of defendants upon a motion for judgment upon the pleadings. The answer consisted, in effect, of a denial of the material allegations of the complaint, and a plea of the statute of limitations. With the pleadings so framed the motion for judgment upon the pleadings presented two questions: The sufficiency of the facts stated in the complaint to constitute a cause of action; and the sufficiency of the plea of the statute of limitations. Such are the questions here. The following are the facts stated in the complaint: November 13, 1890, The Iron-Stone Ditch Company was a corporation organized under the laws of this state. Defendant Johnson owned six shares of its capital stock, which stood upon the books in his name. Upon that date Johnson, for a valuable consideration, gave his note to the Montrose Investment Company for $2,400 maturing November 1, 1895, and to secure the same gave a trust deed on certain real estate running to one Bonney as trustee. Upon the same day Johnson assigned his six shares of stock to Bonney, trustee, as further security for said note and in the writing evidencing this assignment expressly directed 'the secretary of the said Iron-Stone Ditch Company to make the necessary transfer on the books of the company in accordance with this agreement. In case of default in any of the provisions of said deed of trust, these shares shall become the property of the said the Montrose Investment Company. But till such default be declared, the rights and privileges belonging to stockholders shall belong to the assignor of these shares.' This written assignment was not made upon the certificates of stock held by Johnson, but by a separate instrument, nor were the certificates at any time surrendered to the Montrose Investment Company, or to Bonney, but remained in the hands of Johnson. This assignment was made with the knowledge and consent of the defendant company, and a request for a transfer of stock upon the books of the company, as provided in the writing evidencing the assignment, was made on the secretary of the company, and a memorandum of such assignment was duly entered on the books of the company by the secretary thereof. Further, the secretary certified on this written assignment that, as directed therein, 'I have this date made the necessary transfer of said shares of stock to the said Montrose Investment Company on the books of said company. In witness whereof, I have hereunto set may hand and affixed the seal of the company this 19th day of November, 1890. [Company Seal.] J. C. Brown, Secretary.'

November 17, 1890, the promissory note was assigned for value to the Equitable Mortgage Company, and on January 19, 1898, by such company to the plaintiff, the Equitable Securities Company, its present holder. The last mentioned company in March, 1899, foreclosed its trust deed on the land and applied the proceeds of sale upon said note. This, however, left an unpaid balance on said note amounting to several hundred dollars, and the present action was instituted in June, 1899, to foreclose the lien upon said ditch stock created by said assignment, and to obtain a personal judgment against Johnson for any balance unpaid after applying the proceeds of the sale of the ditch stock upon said note. In September 1894, defendant company, with full knowledge of the facts recited as to the assignment of the stock, and that the lien thereon so created still existed, caused an entry to be made on its books canceling said certificates held by Johnson, and reissued the certificates to Halley, the present holder. Defendant company contends: (1) That no sufficient entry of the assignment of Johnson's stock to plaintiff was made upon the books of defendant company; (2) that the failure of Johnson to deliver his stock to plaintiff was fatal to plaintiff's lien; (3) that the three...