Morton v. Grafflin
| Decision Date | 15 March 1888 |
| Citation | 13 A. 341,68 Md. 545 |
| Parties | MORTON v. GRAFFLIN. |
| Court | Maryland Court of Appeals |
Appeal from circuit court of Baltimore city.
Bill in equity, brought by Joseph L. Morton against John C. Grafflin asking for the appointment of a receiver of property in defendant's hands as garnishee in an action at law. Demurrer to bill was sustained, and complainant appeals.
Wm. S. Bryan, Jr., and Geo. R. Gaither Jr., for appellant.
Frank Gosnell, for appellee.
This is an appeal from an order of the circuit court of Baltimore city sustaining a demurrer to the appellant's bill in equity, and the decree afterwards dismissing the bill. The appellant, who is a resident of the city and state of New York, charges that a certain Walter E. Lawton is indebted to him in the sum of $57,129.70; that Lawton, prior to March 15, 1887, was a resident of Spuytin Duyvil, of the state of New York, and is now at some place to the plaintiff unknown, but is not a resident of the state of Maryland, nor within the jurisdiction of Maryland courts. The bill further charges that the plaintiff has sued out of the superior court of Baltimore city a writ of attachment against Lawton, as a non-resident of Maryland, for the debt alleged to be due him, and has caused it to be laid in the hands of John C. Grafflin (the appellee) as garnishee "of all the property, assets, and money belonging to Walter E. Lawton;" and avers that the garnishee has in his hands certain property belonging to the said Walter E. Lawton, as follows, to-wit: "Upwards of four thousand shares of the capital stock of the Navassa Phosphate Company, and upwards of six hundred shares of the Rasin Fertilizer Company, together with other of the capital stock of other corporations, and other personal property;" which personal property the plaintiff avers and charges that John C. Grafflin (the appellee) claims to hold as security for an original debt on bond for $150,000, which, with interest accrued, he claims now to amount to over $160,000. The plaintiff further charges that the bond of Lawton to Grafflin was executed on the 5th of July, 1884, and was made payable three years after date, with interest from date; and that, on the same day, a mortgage on certain real estate in Bergen county, N. J., was executed, and delivered to Grafflin, to secure the aforesaid debt; and that this mortgage to Grafflin was not recorded in the office of the clerk of the county of Bergen, in the state of New Jersey, until the 18th of March, 1887, but that Grafflin claims this mortgage to be a valid and subsisting lien on the property it mortgages; and that his claim is wholly unsatisfied. The bill then charges that the land embraced in the mortgage is more than sufficient to pay "the amount, if any, that may be due under the said mortgage, and all costs incurred in foreclosing the said mortgage." The bill also states that Lawton has disposed of the equity of redemption in the New Jersey property so mortgaged to Grafflin, and that he has received no security for his debt beyond the promissory notes mentioned in the attachment proceedings, and that there is no other property he could have levied upon under the attachment. It then prays (1) for injunction restraining the garnishee from disposing of any of the assets in his hands; (2) for a receiver to take possession of the assets and property in Grafflin's hands, and to hold the same, subject to the order of the court; and (3) that Grafflin be required to bring into court the shares of the stock of the several corporations which he has in his hands, and other property, that the same may be held by the court until Grafflin shall have proven what balance is due him, if any, or that he may be ordered by the court to foreclose his mortgage in New Jersey, or elect to release the other securities held by him; and that the securities attached may be held until such mortgage proceedings are had, and account of his debt and balance due him is taken, or until he makes the election asked for; and (4) for such other and further relief in equity "as the case may require." Order of publication is prayed against Walter E. Lawton, and subp na for John C. Grafflin. An order to show cause was issued against Grafflin, who appeared, and demurred to the bill. The demurrer is to the whole bill, and for grounds of demurrer the appellee insists that such case is not made by the bill as entitles the plaintiff to the relief sought, and that he has complete remedy at law.
It is hardly necessary, at this day, to cite authority for the statement that only facts well pleaded are admitted by the demurrer. Miller v. Marble Co., 52 Md. 643. As this was a bill for injunction and receiver, it was imperatively necessary that the written documents upon which the relief was prayed should have accompanied the bill or a proper excuse be made for their nonproduction. No copy of the New Jersey mortgage was filed with the bill, and no evidence of the plaintiff's demand against Lawton. It is incidentally stated that there are promissory notes for the indebtedness which are filed in the attachment proceedings; but the attachment proceedings (nor copies of them) are not made part of the bill, nor are the proceedings so referred to as to make them part of the bill. Reliance in this particular is placed on the act of 1884, c. 23, as applicable to Baltimore city cases. This act relieves from the necessity of producing a transcript of the record of any other Baltimore city court in evidence, and allows the production of the docket and record books as evidence, and gives them the same effect, as evidence, as transcripts under seal. As evidence such records are undoubtedly admissible; but in a bill for injunction, such charges should be made as showed an effectual levy to have been made, and, at least, the proceedings should have been so referred to as to make them a part of the bill, and enable them to be easily found. While these defects would justify refusal of preliminary injunction, they, and the want of other parties, could be cured by amendment, and if, when amended in these particulars, a proper case would have been made for the intervention of a court of equity, it would have been proper to retain the bill, and allow the amendments to be made.
The theory of the appellant is that by his attachment, and levy thereunder, he has acquired a lien on the stocks of his debtor in the hands of the garnishee, subject to the garnishee's prior lien, which is set out, but that he cannot make his lien available without the aid of a court of equity. He claims that the principle established in Harris v. Alcock, 10 Gill & J 226, applies. He relies on section 11, art. 67, Code, which says: "Any kind of property or credits of the defendant in the plaintiff's own hands, or in the hands of any one else, may be attached,"--in connection with the act of 1868, c. 471, § 198, which will be considered presently. Section 199 of act 1868 directs how such attachment shall be executed, and requires the sheriff to leave with the president, or other chief officer, of the corporation, or leave at their place of business, a statement, in writing, of this levy on the stock of the defendant, and the purpose for which it is made; and the officer making the service is required to return a copy of such notice with his writ. Upon such notice the corporation is required, upon demand of the sheriff, to furnish him with the number of the shares and amount of stock standing in the defendant's name on the books of the corporation; and the refusal of the corporation to comply is made punishable. The corporations being the debtors for the stock standing in stockholders' names, the law provides for their notification; they are in fact intended to be parties defendant. So far as this bill discloses, none of these legal requirements were complied with; nor are the corporations made defendants, as was necessary if the court acquired any jurisdiction, by virtue of the attachment, to condemn the stock by its judgment, and thereby render it liable to sale. And, if the attaching court did not get jurisdiction to render judgment, the chancery court would have none on the subject. If the levy was made in accordance with the provisions of the statute, and the corporations were notified, then these defects in the allegations of the bill, and the want of proper and necessary parties, could be cured by amendment, if the law allows pledged stock, as this is, to be the subject of attachment. Section 198 of the act of 1868, c. 471, makes the interest of a defendant in the capital stock of a corporation the subject of execution or attachment only when the writ issues by way of execution on a judgment or decree; but it was contended by appellant's counsel that section 11, art. 67, Code, is broad enough to embrace an attachment upon original process, such as this is. Whether such would be a proper construction of the law is immaterial, as the act of 1886, c. 287, repealing, amending, and enacting, in new form, section 198, expressly includes "proceedings by attachment on original process." This act of 1886 was not alluded to in the argument or in the briefs of counsel, but was overlooked, and attention has been called to it since. As its provisions must exercise a controlling effect upon this decision, we quote the proviso which has been added after including attachments on original process with judgments and decrees: "Provided, that all executions and attachments levied or laid upon the shares or interest of any defendant in the capital, joint stock, or debts of a corporation, standing on its books in his name, shall only affect the interest which such defendant had in such capital, joint stock, or debts at the time of levying such execution or attachment, and...
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