Farmers' & Merchants' Nat. Bank of Galva v. Mosher

• Decision Date: 04 December 1901
• Citation: 88 N.W. 552,63 Neb. 130
• Court: Nebraska Supreme Court
• Parties: FARMERS' & MERCHANTS' NAT. BANK OF GALVA, ILL., v. MOSHER ET AL.

63 Neb. 130

88 N.W. 552

FARMERS' & MERCHANTS' NAT. BANK OF GALVA, ILL.,

v.MOSHER ET AL.

Supreme Court of Nebraska.

Dec. 4, 1901.

Syllabus by the Court.

1. In the absence of a mutual fraudulent intent, the law does not interfere with the right of a person, be he solvent or insolvent, to make such disposition of his property, based upon a valid consideration, as his judgment dictates.

2. An insolvent debtor has the right to employ attorneys to defend his estate and himself, and to transfer his property in payment of such contemplated services, provided it is done in good faith, and the property transferred does not exceed a reasonable fee for the service, which might be reasonably anticipated.

3. The vendee or pledgee of shares of stock in a corporation is entitled to all dividends which are declared on the stock after the sale or pledge, regardless whether the transfer has been made upon the books of the corporation.

4. Under our statute, prior to the adoption of section 485a of the Code of Civil Procedure of 1899, a corporation may properly be made a garnishee, where the only property sought to be attached is the capital stock of the corporation owned by the defendant.

5. The real, and not the apparent, interest of a stockholder in the property of the corporation, represented by shares of stock registered in his name, may be reached by garnishee process served on the corporation.

6. The real actual rights and interests of a stockholder will be reached by the garnishment upon the corporation, without regard to the apparent interest of the owner.

7. Evidence examined, and held to sustain the finding and decree.

8. Where no motion for a new trial has been filed in the lower court, and it is sought to review the judgment on error proceedings, this court will look into the record to ascertain if the pleadings state a cause of action or defense, and support the judgment or decree rendered, but this court will not go back of the verdict rendered by the jury or the findings of fact made by the trial court to review anything done or proceedings had.

Commissioners' opinion. Department No. 1. Appeal from district court, Lancaster county; Holmes, Judge.

Action by the Farmers' & Merchants' National Bank of Galva, Ill., against Charles W. Mosher and others. Judgment for certain defendants, and plaintiff and certain defendants appeal. Affirmed.Rickets & Wilson, Burr & Burr, S. B. Pound, Roscoe Pound, John H. Ames, and E. F. Pettis, for appellants.

Cobb & Harvey and John H. Ames, for appellant Capital Nat. Bank of Lincoln.

Chas. O. Whedon and Chas. E. Magoon, for appellees Mosher and others.

Lambertson & Hall, for appellee estate of Henry Mansfield.

DAY, C.

This suit is a creditors' bill brought by the Farmers' & Merchants' National Bank of Galva, Ill., in the district court of Lancaster county, against Charles W. Mosher and Richard C. Outcalt and some 29 other defendants, referred to hereinafter by name, as occasion requires. Its object is to set aside certain conveyances of real and personal property claimed to have been made by Mosher and Outcalt in fraud of their creditors, and also to subject certain stocks alleged to be owned by them, in various corporations, to the payment of plaintiff's judgment. A number of the defendants named in the bill filed answers and cross petitions setting up their respective claims to priority upon the property sought to be reached, and praying for general equitable relief. From a finding and judgment adverse to the claims of plaintiff, and also to defendants the Dixon National Bank, the People's National Bank, and the La Salle National Bank, the plaintiff and the defendants above named have brought the case to this court by appeal, and the defendant Kent K. Hayden, receiver, has brought the case to this court on error. The facts which form the basis of the claims of the respective parties will sufficiently appear in the further consideration of the case. On January 27, 1893, the plaintiff herein commenced an action in the district court of Lancaster county against the defendants Mosher and Outcalt, and procured the issuance of an attachment, which was levied upon certain lands, hereinafter referred to, and also on said day caused notices in garnishment to be served upon the Farmers' & Merchants' Insurance Company, the Western Manufacturing Company, the Lincoln Gas Company, and others not necessary to be mentioned. On June 25, 1894, the plaintiff recovered a judgment in said attachment suit against Mosher and Outcalt for the sum of $5,430.50, upon which execution was issued, and returned wholly unsatisfied. On January 6, 1893, the defendants the Dixon National Bank and the People's National Bank each brought an action in the district court of Lancaster county against Charles W. Mosher, and procured attachments to be issued and notices in garnishment served on said day upon the Lincoln Gas Company, the Farmers' & Merchants' Insurance Company, and the Western Manufacturing Company and others. On June 14, 1894, the Dixon National Bank and the People's National Bank recovered judgments in their respective actions against said Mosher, the former for the sum of $10,805, and the latter for $10,818.60. On January 28, 1893, the La Salle National Bank brought an action in the district court of Lancaster county, and on the same day caused attachment and garnishment to be issued and served upon the Western Manufacturing Company, the Lincoln Gas & Electric Light Company, the Farmers' & Merchants' Insurance Company, and others. On January 15, 1894, the La Salle National Bank recovered a judgment in said attachment suit against Mosher for $5,478.16.

It is conceded that the attachment and garnishment levied by the Dixon National Bank and the People's National Bank is prior to the attachment and garnishment of the plaintiff, and that the attachment and garnishment of the plaintiff is prior to that of the La Salle National Bank. It appeared from the answers of the several garnishees in each of the foregoing suits that the books of the several corporations disclosed that Mosher was at the time of the serving of the notice of garnishment the owner of 500 shares of stock in the Western Manufacturing Company, 250 shares of stock in the Farmers' & Merchants' Insurance Company, and 2,580 shares of stock in the Lincoln Gas Company. The attachments in each of the foregoing suits were confirmed, and an order of sale issued of the attached property. Pursuant to this order, the sheriff offered for sale 500 shares of Western Manufacturing Company stock, 250 shares of the Farmers' & Merchants' Insurance Company and all profits and dividends thereon, 2,580 shares of the Lincoln Gas Company, known as “new issue,” and 250 shares of the Lincoln Gas Company, known as “old issue.” At this sale, held August 1, 1894, the stock in the Lincoln Gas Company was sold to W. O. Bell for $2,000. The 500 shares of stock in the Western Manufacturing Company were sold to the Dixon National Bank and the People's National Bank for $100, and 250 shares of stock in the Farmers' & Merchants' Insurance Company were sold to the Dixon National Bank for $100.

The Farmers' & Merchants' National Bank insists there are three funds out of which it is entitled to be paid the amount of its judgment. These will be considered in the order of their presentations in the briefs:

First, it is contended that 350 shares of stock of the Lincoln Gas Company transferred by Mosher on January 22, 1893, to C. O. Whedon and C. E. Magoon should be applied in payment of its judgment. The gist of this contention is that the consideration for the transfer, being largely for services to be performed in the future, is void as to existing creditors. The facts out of which the controversy between the plaintiff and Whedon and Magoon arises are as follows: On the day prior to the suspension of the Capital National Bank of Lincoln, on January 23, 1893, C. W. Mosher, who was president of said bank, employed Whedon and Magoon as attorneys to defend him and his interests in all matters wherein the services of attorneys were required, and also that they should act as attorneys for Louise P. Mosher, the wife of said C. W. Mosher, in such litigation as she should be or become involved in. At the time of said employment, as payment in full for services theretofore rendered, and for services to be performed in the future under the employment then entered upon, Mosher sold, transferred, and delivered to Whedon 200 shares of the capital stock of the Lincoln Gas Company, and to Magoon 150 shares. At the time of the delivery of these shares of stock they stood in the name of Mosher upon the books of the company. The defendants Whedon and Magoon, pursuant to said employment, rendered services as attorneys to said Mosher, during all the time which has elapsed since the employment, appeared for him in at least 120 civil cases in the state and federal courts, and also defended him in a number of criminal actions. The proof is clear that the services performed under the employment were fairly and reasonably worth the amount paid by Mosher. The plaintiff practically concedes that fraudulent intent did not exist in this transaction, as a matter of fact, but contends that this transfer is one which the law makes fraudulent. A very able and exhaustive brief has been filed by plaintiff in support of this contention, but, viewed in the light of our statutory enactments and the decisions of our own court, we think the position untenable. Section 20 of chapter 32 of the Compiled Statutes of 1899 provides as follows: “The question of fraudulent intent in all cases arising under the provisions of this chapter shall be deemed a question of fact and not of law, and no conveyance or charge shall be adjudged fraudulent as against creditors or purchasers, solely on the ground that it was not founded on a valuable consideration.” In Saddlery Co. v. Schott, 59 Neb. 20, 80 N. W. 47, it is...