Harris Inv. Co. v. Hood

• Decision Date: 31 March 1936
• Citation: 123 Fla. 598,167 So. 25
• Court: Florida Supreme Court
• Parties: HARRIS INV. CO. et al. HOOD, Commissioner of Banks for North Carolina v. HOOD, Commissioner of Banks for North Carolina. HOOD, Commissioner of Banks for North Carolina v. HARRIS.

167 So. 25

123 Fla. 598

HARRIS INV. CO. et al. HOOD, Commissioner of Banks for North Carolina v. HOOD, Commissioner of Banks for North Carolina. HOOD, Commissioner of Banks for North Carolina v. HARRIS.

Florida Supreme Court

March 31, 1936

Action by Gurney P. Hood, as Commissioner of Banks for North Carolina, against the Harris Investment Company, Wallace L Harris, and another. From a part of an order denying motion to dismiss the bill of complaint, the Harris Investment Company and John E. Harris appeal, and, from part of an order quashing the service by publication attempted to be had on second named defendant, plaintiff cross-appeals.

Affirmed and remanded.

DAVIS J., dissenting in part. Appeal from Circuit Court, Duval County; DeWitt T. Gray, judge.

COUNSEL

A. L Brogden and Blount & Jones, all of Jacksonville, for appellants.

Axtell & Rinehart and R. R. Axtell, all of Jacksonville, for appellee.

OPINION

BUFORD Justice.

Gurney P. Hood, as commissioner of banks for the state of North Carolina, exhibited his bill of complaint in the circuit court of Duval county, Fla., against Harris Investment Company, a corporation organized under the laws of Florida, John E. Harris, individually and as incorporator of, and as a stockholder in, Harris Investment Company, and Wallace L. Harris individually and as an incorporator of, and as a stockholder in, Harris Investment Company, and John E. Harris, Jr., individually and as an incorporator of, and as a stockholder in, Harris Investment Company.

The allegation of the bill of complaint showed that the North Carolina Bank & Trust Company was a bank organized under the laws of North Carolina and doing business in that state as a banking institution prior to March 3, 1933; that on that date it was closed under the general Proclamation of the President during the term known as the banking holiday (No. 2039, 12 U.S.C.A. § 95 note), and that, when that was ended, the bank was not permitted to reopen, but continued to operate under restrictions until May 21, 1933, when the complainant, under the laws of North Carolina, took possession of the bank, and thereafter, complying with the laws of North Carolina, filed in the office of the clerk of the superior court of Guilford county, N. C., notice of possession of the bank; that thereafter, on June 22, 1933, complainant, in his official capacity, levied an assessment against each and every of the stockholders of said bank equal to the stock liability of each stockholder in said bank, computing the liability on the par value of the stock which was held; that a copy of the levy was, in accordance with the laws of North Carolina, docketed in the office of the clerk of the superior court for Guilford county, N. C., as a judgment against each of said stockholders; that Harris Investment Company, as the apparent owner of 404 shares of said bank stock, was assessed for the sum of $4,040, and judgment was entered thereon under the laws of North Carolina against the said Harris Investment Company for said sum and costs on the said 22nd day of June, 1933. And it is alleged that said assessment or judgment bears interest from July 3, 1933, at the rate of six per cent. per annum.

It is further alleged that:

'The Harris Investment Company was incorporated under the laws of the State of Florida on the 1st day of July, A. D. 1930; that its incorporators and the amount of stock subscribed by each are as follows, to-wit:

John E. Harris, Jr. ..... ten (10) shares

Wallace L. Harris ..... ten (10) shares

Tyndall W. Harris ..... ten (10) shares

'That the said corporation's officers are as follows, to-wit: John E. Harris, President; Wallace L. Harris, Vice-President; and that prior to his death on or about the 1st day of December, A. D. 1932, Tyndall W. Harris was the Secretary and Treasurer; that the total amount of the authorized capital stock of the said corporation is Five Thousand and No/100 ($5,000.00) Dollars.

'IX. Your orator further alleges that on the 3rd day of April, A. D. 1931, the said John E. Harris, the then owner of One Hundred Thirty-five (135) shares of the said Bank stock, transferred to the Harris Investment Company the said One Hundred Thirty-Five (135) shares of Bank stock, said transfer being evidenced on the stock records of said Bank by Certificate No. 2907.

'X. That on the said 3rd day of April, A. D. 1931, the said Wallace L. Harris, the then owner of One Hundred Thirty-five (135) shares of the said Bank stock, transferred to the Harris Investment Company the said One Hundred Thirty-five (135) shares of bank stock, said transfer being evidenced on the stock records of said Bank by Certificate No. 2906.

'XI. That on the said 3rd day of April, A. D. 1931, the said Tyndall W. Harris, the then owner of One Hundred Thirty-four (134) shares of the said Bank stock, transferred to the Harris Investment Company the said One Hundred Thirty-four (134) shares of Bank stock, said transfer being evidenced on the stock records of said Bank by Certificate No. 2905.

'XII. Your orator further alleges that the authorized capital stock of the said Harris Investment Company was only Five Thousand and No/100 ($5,000.00) dollars, which said amount if fully paid in, which your orator does not believe to be the case, would be barely enough to cover the par value of the said Four Hundred Four (404) shares of Bank stock, said Four Hundred Four (404) shares being the combined holdings of said Bank stock by the defendants herein, John E. Harris, Wallace L. Harris and the late Tyndall W. Harris.

'Your orator is informed and believes and alleges upon information and belief, that the said Harris Investment Company never conducted any business; that the said company was owned and controlled by the defendants, John E. Harris, Wallace L. Harris and, prior to his death, Tyndall W. Harris; that the defendant, the Harris Investment Company, has no other assets than the said Four Hundred Four (404) shares of said Bank stock; that there was no consideration existing for the transfer of the said Four Hundred Four (404) shares.

'From the foregoing facts, your orator further alleges that the defendant, the Harris Investment Company, was merely a fictitious corporation, or a mere screen organized and/or used for the illegal purpose of concealing the identity of the true, equitable and beneficial owners of said Bank stock standing in its name, and for the propose of enabling said true, equitable and beneficial owners to avoid the liability of any assessment which might be made against the stock of said Bank. That any benefits that have or would have accrued to the said Harris Investment Company, by reason of its apparent ownership of said Four Hundred Four (404) shares of Bank stock, have or would have been received by the said John E. Harris, Wallace E. Harris and the late Tyndall W. Harris.

'XIII. That the defendant, John E. Harris, Jr., one of the incorporators of and an apparent stockholder in the said Harris Investment Company, had knowledge of the aforesaid facts set forth in Paragraph XII hereof, and as such incorporator of and stockholder in said Harris Investment Company, is indebted to your orator accordingly.

'XIV. By reason of the foregoing facts, John E. Harris, individually and as an incorporator of and as a stockholder in the Harris Investment Company, and as the true, equitable and beneficial owner of One Hundred Thirty-five (135) shares of said Bank stock, is indebted to your orator in the sum of Thirteen Hundred Fifty and No/100 ($1,350.00) Dollars, with interest thereon at the rate of six (6%) per cent per annum from the 3rd day of July, A. D. 1933.

'XV. By reason of the foregoing facts, Wallace L. Harris individually and as an incorporator of and as a stockholder in the Harris Investment Company, and as the true, equitable and beneficial owner of One Hundred Thirty-five (135) shares of the said Bank stock, is indebted to your orator in the sum of Thirteen Hundred Fifty and No/100 ($1,350.00) Dollars, with interest thereon at the rate of six (6%) per cent per annum from the 3rd day of July, A. D. 1933.'

Personal service was had on Harris Investment Company and on John E. Harris and on John E. Harris, Jr.; it being shown that John E. Harris and John E. Harris, Jr., are one and the same person. Service by publication was attempted to be had on Wallace L. Harris. Special appearance was filed in behalf of Wallace L. Harris, as follows:

'Comes now the defendant, Wallace L. Harris, by his undersigned solicitors, and appears solely exclusively and specially in this cause for the sole and only purpose of testing the jurisdiction of this said Court over the person of the defendant Wallace L. Harris, by virtue or by reason of the order of service by publication heretofore entered herein and the service of process purported to have been had upon this defendant, Wallace L. Harris, pursuant to such order of service by publication, and for no other purpose whatsoever.'

Motion ot quash the service by publication was also filed on the following grounds:

'1. Because it affirmatively appears from the allegations and prayers of the bill of complaint in this cause that the plaintiff in said cause seeks exclusively an in personam judgment and/or decree against this defendant.

'2. Because this court cannot, pursuant to an order of service by publication, acquire jurisdiction of the person of this defendant for the purpose of rendering an in personam judgment or decree.

'3. Because no service of process has been had upon this defendant in the manner prescribed by law so as to confer upon this Court jurisdiction of the person of this defendant.'

The prayer for relief against Wallace L. Harris is as follows 'That Wallace L. Harris...