Kiel Wooden Ware Co. v. Raeder

• Decision Date: 09 March 1943
• Citation: 242 Wis. 62,7 N.W.2d 414
• Parties: KIEL WOODEN WARE CO. v. RAEDER (STATE BANK OF KIEL, Garnishee).
• Court: Wisconsin Supreme Court

242 Wis. 62

7 N.W.2d 414

KIEL WOODEN WARE CO.

v.RAEDER (STATE BANK OF KIEL, Garnishee).

Supreme Court of Wisconsin.

Jan. 12, 1943.

Rehearing Denied March 9, 1943.

This is an appeal from a judgment of the Circuit Court for Manitowoc County; Henry A. Detling, Judge.

Reversed.

This is a garnishment action commenced on September 16, 1938, by Kiel Wooden Ware Co., plaintiff, against the State Bank of Kiel, garnishee defendant, and Ernst F. Raeder as trustee of the bankrupt estate of J. B. Laun, as principal defendant. On May 29, 1942, judgment was entered dismissing the garnishment proceedings. Plaintiff appeals. The material facts will be stated in the opinion.

Nohl, Petrie & Blume and Lewis A. Stocking, all of Milwaukee (Earl L. Meixner and Hougen, Brady & Murphy, all of Manitowoc, of counsel), for appellant.

Arthur J. Wyseman, of Manitowoc, for respondent.

WICKHEM, Justice.

This is an attempt by a creditor of J. B. Laun to garnishee Laun's interest in a certificate of corporate stock pledged to the garnishee defendant as collateral for a loan of J. B. Laun. The certificate in question calls for one hundred shares of stock of the J. B. Laun Company. Laun duly endorsed the certificate to the State Bank of Kiel as collateral for a note of $17,500. The note gave the bank power to sell the stock at private or public sale upon any default without advertisement or notice, apply the proceeds to any liability of Laun to the bank, and return the surplus to Laun. It appears from the affidavit that liquidation of security other than the stock in question would probably reduce the note to approximately $3,000, and that the value of the shares evidenced by the certificate is more than enough to satisfy this balance. Plaintiff reduced his principal claim to judgment on June 6, 1940, in the amount of Seven Thousand, Sixty-three and 40/100 ($7,063.40) Dollars. He had theretofore on March 23, 1940, entered judgment for costs against defendant in the sum of One Hundred Seventeen ($117) Dollars arising out of an appeal to the Supreme Court reported in Kiel Wooden Ware Company v. Laun, 233 Wis. 559, 290 N.W. 214, 126 A.L.R. 1305.

It is contended that under O. L. Packard Machinery Co. v. Laev, 100 Wis. 644, 76 N.W. 596, plaintiff must fail because certificates of stock are not subject to garnishment. While this point is ably briefed on both sides, we do not deem it necessary to examine it. This is a case where a creditor of pledgor, after the insolvency of the latter, attempts by garnishment to reach the pledgor's contingent interest in whatever surplus may exist after the sale of capital stock deposited as collateral with the garnishee defendant to secure the pledgor's note, and the application of the proceeds to the note. The garnishment follows the default of pledgor and comes at a time when the garnishee defendant's only effective remedy is the sale of the stock and the application of the proceeds to the amount due from the pledgor. What plaintiff seeks is to reach the right, title and interest of the pledgor in whatever surplus may remain after sale of the stock, and the payment of the pledgor's debt. In this situation, it appears to us to make no difference whether share certificates or capital stock is subject to garnishmentor not, and upon the various contentions made in respect of this point, we make no determination. The surplus,...