Norton v. Norton

• Citation: 3 N.E. 348,43 Ohio St. 509
• Parties: NORTON v. NORTON.
• Decision Date: 17 November 1885
• Court: Ohio Supreme Court

43 Ohio St. 509

3 N.E. 348

NORTON

v.NORTON.

Supreme Court of Ohio.

Filed November 17, 1885.

Error to district court, Cuyahoga county.

This is a contest between two sets of attaching creditors of Charles E. Norton. The agreed statement of facts, upon which the case was heard in the district court, is as follows:

‘(1) Prior to November 23, 1880, Charles E. Norton was the owner of ten shares of the capital stock of the Cleveland Provision Company, a corporation duly organized under the laws of Ohio, of the par value of $1,000 each, making $10,000 of paid-up stock, and that said Charles E. Norton absconded and went to parts unknown on or about November 15, 1880, and has ever since been and still is insolvent.

‘(2) That on November 23, 1880, said Charles E. Norton was indebted to said Cleveland Provision Company in a sum exceeding $2,000; that on said November 23d, said Cleveland Provision Company commenced suit against said Norton in the court of common pleas of Cuyahoga county to recover said indebtedness, and, at the time of said commencement, obtained, as provided by law, a writ of attachment against the property of said Norton, which was on the same day served by notice of garnishment on said Cleveland Provision Company; that afterwards such proceedings were had in said court that the said provision company recovered the judgment and obtained the order in the answer of said company set forth in this action.

‘(3) That on said November 23, 1880, and subsequent to the attachment of said provision company, the defendant the Commercial National Bank of Cleveland commenced its action in the circuit court of the United States for the Northern district of Ohio against said Charles E. Norton, and at the same time obtained a like writ of attachment, which was on the same day, and subsequent to the service in the action of said provision company, executed by serving upon said provision company notice of garnishment; that afterwards said bank obtained in said action the judgment and order in its answer set forth; that said bank on said November 23, 1880, commenced two suits before E. W. Goddard, a justice of the peace in and for the city of Cleveland, against said Charles E. Norton and others, for the sums stated in the answer of said bank, and at the same time duly obtained writs of attachment, which were duly served by notice of garnishment on said provision company, and that the judgments were rendered and orders made by said justice set forth in the answer of said bank.

‘(4) That on January 20, 1881, the defendant C. M. Stone was the holder of nine of said certificates of stock, to-wit, numbers 12, 13, 14, 15, 16, 17, 18, 19, and 20, as pledgee, in the manner set forth in his answer; that said certificates were each pledged and delivered to the holders of the notes described in said answers at the respective dates thereof, and remained outstanding in the possession of such holders, or their successors in interest, until delivered to said Stone, prior to January 20, 1881, in whose possession they have ever since remained; and that the answer of said Stone correctly sets forth the dates and amounts for which said certificates of stock were respectively pledged.

‘(5) That certificate No. 11 was by said Norton, on June 4, 1879, pledged to secure the note described in the answer of Joseph Colwell, and that he and those under whom he holds have ever since been in the possession of said certificate No. 11, and that no part of said indebtedness to said Colwell and said Stone has ever at any time been paid, but remains outstanding in full force; that neither said Stone nor said Colwell, nor those under whom they claim title, have at any time attempted to sell or dispose of said certificates, or either of them, under the power of authority hereafter referred to.

‘(6) A copy of the certificate held by said Colwell, with power to sell and transfer in blank, is hereto attached, marked ‘A,’ and made part hereof, and it is agreed that each of the notes and certificates held by said Stone are in like form in every particular, except the dates, numbers, and amounts, which are as stated in the answer of said Stone.

‘(7) That the plaintiffs duly obtained the judgment set forth in the petition; that at the commencement of said action, and on January 20, 1881, plaintiff's testator, then in full life, sued out a writ of attachment, which was on the same day executed by serving notice of garnishment on said Stone and said Colwell, as the holders of said certificates in manner aforesaid; that plaintiffs obtained the judgment in the petition set forth in said action, so commenced with attachment as aforesaid, no part of which has been paid, nor has any part of the judgments in favor of said defendants been paid.

‘(8) That since the commencement of said several actions by attachment, dividends have been declared upon said stock by said Cleveland Provision Company to the amount of $2,100 or more, which are in the hands of said provision company, and claimed by it to apply on its said judgment.

‘(9) That the defendant Thomas H. White is the owner and holder of the mortgage and note described in his answer, and which mortgage is the first lien upon the lands therein described, and which is also the same land mentioned in the answer of the defendant the Commercial National Bank as attached by it at the commencement of its action.

‘(10) That the plaintiffs, as executors, hold a mortgage upon the same property, prior in time to any of said attachments, to secure the identical indebtedness upon which their judgment was rendered, and which is the second lien thereon; that said property is not sufficient to pay said liens; that an order of sale may be had upon the claims of said White; and that plaintiffs, in any event, are only entitled to so much of the fund arising from the sale of the stock as will pay the remainder of their judgment and costs.

‘(11) It is also agreed that if the case as to the respective rights of the parties, growing out of their several attachments, shall be by them, or either of them, taken to the supreme court for final determination, that in such case said stock may be sold by said C. M. Stone and Joseph Colwell, respectively, at public or private sale, as each may think best, but not for less than par, and that each, after paying himself the amount found due him, with interest and the expenses of sale and in this action, pay the balance to the clerk of this court, to be by him deposited with the Citizens' Savings & Loan Association, to stand in the place of the stock, and to be applied as the case shall be finally determined; such sale to transfer title to the purchaser free of all claims by the parties to this proceeding, who are thereafter to look to the fund so deposited in place of the stock.

‘(12) That no transfer of said stock appears on the books of the Cleveland Provision Company, and that neither the Cleveland Provision Company nor the Commercial National Bank had any notice or knowledge that said stock, or any of it, had been pledged or in any manner incumbered or disposed of by said C. E. Norton, the judgment debtor, before or at the time they commenced their attachment suit; (that C. E. Norton was, previous to his absconding as aforesaid, secretary of said Cleveland Provision Company.)

‘(13) That the money with which said Stone purchased said claims was loaned to him for that purpose by plaintiff's decedent, in his life-time, said decedent taking the note of said Stone therefor, and that the same is now held by the plaintiff.

‘(14) The following were among the by-laws of the Cleveland Provision Company during all the time herein referred to: ‘Sec. 5. The secretary shall cause the usual record to be kept of all stock subscribed or transferred.’‘Sec. 11. It is mutually agreed by and between the stockholders of this company, jointly and severally, that in case any one of them shall desire to sell his stock, or any part of it, he shall give to the company the option of buying it on the best terms which he can obtain in good faith from a responsible purchaser.’

‘(15) That the Cleveland Provision Company have declared on the stock in controversy the following dividends, which are still in the hands of the company and unpaid, to-wit: January 3, 1881, $500; July 1, 1881, $400; January 3, 1882, $400; July 5, 1882, $400; January 5, 1883, $400.

‘This action is submitted to the court upon the aforesaid agreement of facts and the pleadings, to determine the priority of the liens of the respective parties; there being no dispute as to amounts.’

The following is a copy of the certificates, with the indorsements thereon, referred to as Exhibit A:

‘STATE OF OHIO.

‘No. 11.

1 Share.

‘ Cleveland Provision Company.

‘Capital Stock, $100,000.

Shares, $1,000 each.

‘This is to certify that Charles E. Norton is entitled to one share in the capital stock of the Cleveland Provision Company, transferable only on the books of the said company, personally or by attorney, on the surrender of this certificate.

‘ Cleveland O., February 12th, A. D. 1876.

‘CHARLES C. HILL, Secretary.

BENJAMIN ROSE, President.

‘Countersigned: GEO. B. CHRISTIAN, Treasurer-Registrar.’

The following is indorsed on back of certificate:

‘For value received, * * * hereby sell, transfer, and assign to * * * shares of the stock within...