Myrtle School District No. 8, a Public Corporation v. Bischof
| Decision Date | 25 September 1934 |
| Docket Number | 6246 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of McIntosh County Hutchinson, J. From a judgment in a garnishment action and from an order denying their motion for judgment notwithstanding the verdict or for a new trial, the garnishees Shubeck and Ottenbacher, appeal.
Affirmed.
Jacobsen & Murray and Franz Shubeck, for appellants.
Max A. Wishek and J. A. Heder, for respondent.
This is an appeal by the garnishees Shubeck and Ottenbacher, from a judgment adjudging certain corporate stock in their possession to be the property of the defendants, and from an order denying their motion for judgment notwithstanding the verdict or in the alternative for a new trial.
The plaintiff sued to recover upon a depositary bond whereon the defendants were sureties. It garnisheed the McIntosh County Farmers Press, a corporation, Franz Shubeck, and Andrew Ottenbacher. The garnishees Shubeck and Ottenbacher answered, denying liability, but alleging that they had in their possession certain corporate stock which had been delivered to them by the defendants Bischof and Ruemmele as security for certain indebtedness owed by the latter to the garnishees. Plaintiff took issue on these answers. In the main action the defendants defaulted. At the time the garnishment actions were brought to trial, a conference was had between the court and counsel for the plaintiff, the defendants, and the garnishees. At that time it was agreed that the defendants had defaulted and that there was no question as to the amount and validity of the claim of the plaintiff as against the defendants. The court thereupon stated he would order judgment for that amount. Owing, however, to the illness of one of the attorneys for the defendants, no further steps were then taken in that behalf. After this conference between the court and counsel, the garnishment action proceeded to trial to a jury. Counsel for the garnishees offered no objection and made no point that judgment had not been entered in the main action.
The plaintiff's theory was that the shares of stock held by the garnishees in fact belonged to the defendants, to whom they were issued; that the alleged pledges were after-thoughts and spurious, made in bad faith for the purpose of retaining control of the corporation which issued the stock. On the other hand, the garnishees contended that the transactions through which they had obtained possession of the stock, were entered into in good faith; that the indebtedness was real; and that the pledges made to them were bona fide. On the issues as thus made the case was tried. Plaintiff sought to establish his case by cross-examination of the garnishees. He called them for cross-examination under the statute. No other witnesses were called by him. The garnishees were also examined in their own behalf. Their testimony was to the effect that the defendants, Bischof and Ruemmele, owned 109 shares of stock in the McIntosh County Farmers Press. Fifty-nine shares of the stock were pledged by Ruemmele to Shubeck as security for an indebtedness of $ 2,500, represented by two notes for $ 1,000 each, and an account of $ 500 for legal services performed. Fifty shares of the stock were pledged by written pledge to Ottenbacher by Bischof as security for a debt of $ 550 for money loaned, and an account for goods, wares and merchandise. The testimony of these witnesses was vague and unsatisfactory. They were uncertain in their statements and contradicted themselves in some respects.
The shares on which Shubeck claimed a lien by pledge were never transferred to his name on the books of the corporation but at all times stood in the name of Ruemmele. The shares on which Ottenbacher claimed a lien by pledge were, subsequently to the service of the garnishment summons upon him, transferred to his name on the books of the corporation.
At the close of the whole case the garnishees moved for a directed verdict on the ground that the evidence was insufficient to warrant a verdict for the plaintiff. The plaintiff resisted this motion and it was denied. The case was...
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