Nicrosi v. Irvine

• Decision Date: 01 May 1894
• Parties: NICROSI v. IRVINE.
• Court: Alabama Supreme Court

15 So. 429

102 Ala. 648

NICROSI v. IRVINE.

Supreme Court of Alabama

May 1, 1894

Appeal from circuit court, Montgomery county; John R. Tyson, Judge.

Garnishment by John B. Nicrosi against W. M. Irvine on a judgment against the Calera Land Company. From a judgment for the garnishee plaintiff appeals. Affirmed.

Thos H. Watts, for appellant.

Brickell Semple & Gunter, for appellee.

McCLELLAN J.

Nicrosi having a judgment against the Calera Land Company, sued out process of garnishment against W. M. Irvine, alleging that said Irvine was indebted to the defendant in judgment. To put the case in the light most favorable to the plaintiff, the answer of the garnishee disclosed the following facts: Irvine and others, on August 1, 1885, entered into a contract among themselves to jointly buy certain lands, with a view to the organization of a land corporation for the purpose of establishing and building a town on said lands through the sale of lots therein by the corporation to third persons, etc. It was agreed between Irvine and his said associates that each of them should subscribe for the stock of said corporation, to the extent of five times the amount each had contributed towards the purchase of the land, and should pay in full for such stock by a conveyance of the land to the proposed corporation at a price five times the amount paid for it by them. This agreement was in all respects executed and carried out. The land was purchased. The corporation was organized. Each of the purchasers of the land subscribed for shares in the capital stock equal, at their face or par value, to five times the sum contributed by each to the purchase of the land, and each and all of these subscriptions were, nominally, fully paid by a conveyance of the land to the corporation at a valuation equaling the face value of the stock, and five times greater than the price paid for the land; and each of said parties had issued to him, and received, the shares thus subscribed for, fully paid, in the manner stated, according to the terms of said agreement, and also fully paid as between the subscribers and the corporation, so far as they and the corporation were capable of effecting such a result. Irvine contributed $500 to the purchase of the land. He accordingly subscribed for 25 shares of the capital stock, of the par value of $100 per share, or $2,500. He, with the others associated with him, paid his subscription by uniting with them in the conveyance of the land to the corporation. He has never paid, nor been called on by the corporation to pay, anything further for this stock. The land, at the time of the subscription to and issuance of these shares of stock, was worth only the price paid for it by Irvine and associates. That was its value when it was conveyed to the corporation, and, it may be conceded, has been its value ever since that time. So that, in point of fact, Irvine paid only $500, or property worth only $500, for $2,500 in the capital stock of the corporation. The corporation thus formed, and whose stock Irvine thus subscribed for and received, in the sum of $2,500, in consideration or on payment of $500, only, was the Calera Land Company, the defendant in the judgment upon which this garnishment is pending. On the theory that these facts showed that Irvine, the garnishee, was indebted to the defendant corporation, for unpaid subscription to its capital, in a sum equal to the difference between the money paid, or the value of the property delivered by him on his subscription, and the amount of the stock subscribed by, issued to, and received by him, and upon the further theory that this was a demand of the defendant against the garnishee which could be subjected in this proceeding, the plaintiff moved for judgment against the garnishee on his answer. The court denied the motion, declined to enter judgment, and discharged the garnishee. The present appeal presents this action of the trial court for review.

It is thoroughly well established law that in the absence of fraud on the part of the debtor, or fraudulent collusion between him and the garnishee, only such money demands can be subjected by process of garnishment to the satisfaction of the plaintiff's judgment as the defendant in judgment could, in his own name and right, recover in an action of debt or indebitatus assumpsit. 1 Brick. Dig. p. 175, §§ 313, 314; 3 Brick. Dig. pp. 524, 525, §§ 6, 7, 8, 9; Bank v. Miller, 77 Ala. 168; Teague v. Le Grand, 85 Ala. 493, 5 So. 287; Archer v. Bank, 88 Ala. 249, 7 So. 53; Craft v. Summersell, 93 Ala. 430, 9 So. 593. The only exception to this rule is that referred to above as resting on the fraud and collusion of the defendant and garnishee. Fraud, within the meaning of this exception, is that conduct on the part of a judgment debtor which is actuated by an intent, actual or...