Iron City Sa v. Bank

• Decision Date: 16 June 1932
• Citation: 164 S.E. 520
• Parties: IRON CITY SAV. BANK . v. ISAACSEN et al.
• Court: Virginia Supreme Court

164 S.E. 520

IRON CITY SAV. BANK .

v.ISAACSEN et al.

Supreme Court of Appeals of Virginia.

June 16, 1932.

[COPYRIGHT MATERIAL OMITTED]

Appeal from Circuit Court of City of Norfolk.

Suit by the Iron City Savings Bank against Henry Isaacsen and others. From a decree dismissing the bill, the complainants appeal.

Affirmed.

Argued before CAMPBELL, C. J, and EPES, HUDGINS, GREGORY, and CHINN, JJ.

W. M. Phipps and James G. Martin, both of Norfolk, for appellants.

W. L. Parker, Jas. E. Heath, and Wm. G. Maupin, all of Norfolk, for appellee.

EPES, J.

On June 21, 1930, the Iron City Savings Bank, a corporation chartered under the laws of the state of Ohio, instituted its suit in chancery in the circuit court of the city of Norfolk against Henri Isaacson and others.

The bill alleges that Henri Isaacsen owes the complainant a debt which is evidenced by his negotiable note for $13,000, dated May 15, 1924, payable on demand to the Iron City Savings Bank, at its office in Ironton, Ohio. The collection of this alleged debt is the main object of the suit; but as ancillary to the accomplishment of its main object, the bill contains the following allegations and prayers:

While so indebted, on or about April 30, 1929, Henri Isaacsen gave to his wife, Irma Isaacsen, 139 shares of the common stock of Southeast Lumber Export Company, Inc., and "did sign and endorse on the backs of said certificates of stock an order directing the transfer of the certificates of stock on the books of the Southeast Lumber Export Company, Incorporated, to the said Irma Isaacsen, " which stock has been transferred on the books of the corporation to Irma Isaacsen, or Mrs. Henri Isaacsen, and now stands thereon in her name. The gift, assignment, and transfer of this stock to Irma Isaacsen is void as to the c6mplainant, because it was made without consideration, and for the purpose of hindering, delaying, and defrauding complainant as a creditor of Henri Isaacsen.

Henri Isaacsen and Irma Isaacsen are nonresidents of Virginia and are residents of the state of New York. Henri Isaacsen has estates or debts owing to him in the city of Norfolk, Va., and has "assigned or disposed of, or is about to assign or dispose of, his estate, or a material part thereof, with intent to hinder, delay and defraud his creditors."

The bill further alleges that "the gift, conveyance, assignment and transfer" of this stock to Irma Isaacson was made in the city of Norfolk, Va., and that "the principal office of the Southeast Lumber Export Company, Incorporated, is located in the city of Norfolk, Virginia, and the records and books (thereof) are kept and maintained in the said city." But the bill does not allege (and there is no evidence tending to show) that it is a corporation created under the laws of Virginia, or that the certificates of stock issued by it for the 139 shares here involved are within the state of Virginia.

The bill contains the following specific prayers: (1) It is prayed that Henri Isaacsen, Irma Isaacsen, the Southeast Lumber Export Company, Inc., and Elmer S. Anderson, its president, and Virginia National Bank of Norfolk be made parties defendant, and that the last three mentioned be required to answer under oath what effects, property, and assets of Henri Isaacsen each of them has in his (or its) possession or under his (or its) control. (2) It prays that all the estate of Henri Isaac-sen in Virginia "including choses in action * * * and other intangible personal property, claims or equities, " particularly such as is in the possession of or under the control of the Southeast Lumber Export Company, Inc., or Elmer S. Anderson, be attached and subjected to the payment of complainant's debt. (3) It prays that the assignment and transfer of said 139 shares of stock to Irma Isaacsen by Henri Isaacsen be set aside as void as to complainant, and that the stock be ordered to be sold as the property of Henri Isaacsen for the satisfaction of complainant's debt. (4) It prays "that the said Southeast Lumber Export Company, Incorporated, (and) Elmer S. Anderson, each and both be restrained from assigning, setting over or transferring the said 139 shares of stock * * » carried on the books of the Southeast Lumber Export Company, Incorporated, in the name of Irma Isaacsen or Mrs. Henri Isaacsen." There is no specific prayer for a personal decree against Henri Isaacsen for the amount of the debt alleged to be due by him to the complainant; but the bill contains a prayer for general relief.

A subpœna was issued on June 21, 1930, requiring the sergeant of the city of Norfolk to summon defendants to answer the bill. The subpoena was duly served in person on Henri Isaacsen and Elmer S. Anderson. No return was made as to Irma Isaacsen. The return as to service on the Virginia National Bank is not material to any question raised upon this appeal. The return as to service upon Southeast Lumber Export Company, Inc., reads as follows:

"Executed * * * by delivering a copy of the within to Elmer S. Anderson, Pres. Southeast Lumber Export Co., a corporation, in the city of Norfolk, wherein he resides and wherein the said corporation is doing business." The point is made that inasmuch as this corporation is not a Virginia corporation this return is defective; but in the view which we take of the case we deem it unnecessary to consider the question here raised.

On the same day an attachment was issued against "Henri Isaacsen and Irma Isaacsen, principal defendants, " and Southeast Lumber Export Company, Inc., Elmer S. Anderson, and Virginia National Bank of Norfolk, co-defendants. It directed the sergeant of the city of Norfolk to attach so much of the effects of Henri Isaacsen as will be sufficient to satisfy the demand of the plaintiff, to wit, $11,500, and to summon all the defendants and codefendants to "answer said petition or state the grounds of defense thereto."

The only returns made under this attachment were the returns showing service thereof on the defendants. These returns' are in the same language as the returns on the subpoena above mentioned, except that there is a return as to Irma Isaacsen showing that she was "not found." There is nothing in these returns or in the evidence which even tends to show that the certificates for the 130 shares of stock here involved were in the possession of either the corporation or Elmer S. Anderson, or that they, or either of them, had any control over the certificates, or the stock, the ownership of which is evidenced thereby.

An order of publication was duly entered and published as to Irma Isaacsen requiring her to appear and answer the bill filed by the complainant.

None of the defendants appeared except the Virginia National Bank, which answered and said that it had $15.58 to the credit of Henri Isaacsen.

No depositions were taken or other evidence introduced. On October 15, 1930, the cause came on to be heard on the bill and proceedings above mentioned; and the court entered a decree in which it adjudged, ordered, and decreed as follows: (1) That Henri Isaacsen is indebted to the complainant on said notes in the sum of $11,500 with interest thereon at 7 per cent. from December 31, 1927; and (2) that Virginia National Bank pay to complainant the sum of $15.58, which Henri Isaacsen has on deposit with the bank, to be credited "on the judgment herein entered against Henri Isaacsen"; and (3) that the Southeast Lumber Export Company, Inc., is required, within fifteen days, to answer "what money or effects it has in its possession belonging to Henri Isaacsen and the present record owner of the said shares of stock above mentioned." The decree concludes thus: "It appearing to the court that there are other interests to be determined in this suit, this cause is continued on the docket until further order of this court."

Later, during the same term of the court, on November 6, 1930, Henri Isaacsen appeared and moved the court to set aside the decree of October 15, and permit him to file his plea and answer. In support of this motion he filed the affidavits of Elmer S. Anderson, president of Southeast Lumber Export Com pany, Inc., and of his counsel, W. L. Parker. The complainant objected to the granting of this motion on the ground that the ninety days allowed to a defendant under section 6122¹ to file his answer or other defenses to a bill in chancery had long since expired, the bill had been taken for confessed as to Henri Isaacsen, and final decree entered; and that he had shown no good cause why he should then be permitted to file his answer or any other defense.

The affidavit of Elmer S. Anderson sets forth that Southeast Lumber Export Company, Inc., is a New York corporation, which has a place of business in Norfolk, Va.; that Henri Isaacsen is an officer of that corporation; and that at the time he was served with process in this suit he was in Norfolk for the sole purpose of testifying in a suit of Gallie Friend against that corporation.

The gist of the affidavit of W. L. Parker is this: When Henri Isaacsen was served with process in this suit he employed him (W. L Parker) to represent him in this suit; but he was very busy with other matters and overlooked filing an answer and other defense for his client in this cause within the ninety days allowed by section 6122. Henri Isaacsen has a complete defense on the merits to the various causes of action alleged against him in the bill; and if he should be permitted to file his answer and to set up his other defenses in this cause they would be as follows:

"He would demur to the bill on the ground that it is apparent that this court has no jurisdiction over the subject matter because of the fact that some of the parties whose presence in this suit is absolutely necessaryin order to give a court of equity jurisdiction are non-residents and cannot be personally served in this State.

"Coming to the merits of the case, this defendant would deny liability on the note mentioned in said ...