Ottumwa Screen Co. v. Stodghill

• Decision Date: 23 October 1897
• Parties: THE OTTUMWA SCREEN COMPANY, et al., Appellants, v. THOMAS STODGHILL, Sheriff, et al
• Court: Iowa Supreme Court

72 N.W. 669

103 Iowa 437

THE OTTUMWA SCREEN COMPANY, et al., Appellants, v. THOMAS STODGHILL, Sheriff, et al

Supreme Court of Iowa, Des Moines

October 23, 1897

Appeal from Wapello District Court.--HON. F. W. EICHELBERGER, Judge.

THIS is an action in equity to restrain the defendant sheriff from selling certain shares of stock. The lower court found for the plaintiffs as to ten shares of the stock, and perpetually enjoined their sale. As to the other shares in controversy the finding was for the defendants, and as to them the temporary injunction was dissolved, and a special execution ordered to issue for their sale. It was further decreed that plaintiffs pay two-thirds of the costs, and the defendants pay one-third. The plaintiffs except and appeal.

Affirmed.

W. S Coen for appellants.

Morris & Lowenberg for appellees.

OPINION

KINNE, C. J.

I.

It appears from the record that one Antrobus owned certificates of stock in the plaintiff company embracing eleven shares and that the same were assigned in writing to one Thayer, and were by him deposited with the secretary of the company; that the Ottumwa Screen & Construction Company held a certificate for five shares of stock in plaintiff company, which, when issued, was, by the holder, deposited with plaintiff company, under an oral assignment, as collateral security for two notes which had been signed by the Ottumwa Screen & Construction Company, E. B. Jones, and J. H. Antrobus. Other certificates are referred to in the record. As, however, the court found in plaintiff's favor as to them, they need no further consideration. Fair, Williams & Co., having a judgment in their favor as plaintiffs, and against the Ottumwa Screen & Construction Company as defendants, caused an execution to issue thereon, and a levy thereunder to be made by the sheriff upon the shares of stock before mentioned. Plaintiffs claim that before the sheriff made the levy he had actual notice that the stock had been transferred as before stated. As to this the evidence is conflicting, though we think it preponderates in favor of plaintiffs' contention. No entry had been made of the transfer of said shares on the books of the company prior to the completion of said levy. It appears that when the shares were transferred they were deposited with the secretary of plaintiff company, where they had remained until levied upon; that, where the assignment was in writing, it was attached to the certificate, and in case of oral transfer the company were also notified of it. Each of the certificates of stock contained this provision: "Transferrable only on the books of said company, in person or by attorney, on surrender of this certificate."

Plaintiffs claim that the transfers were made in substantial conformity to the statute, and that they were as effectual as if entered upon the books of the company. It is also said that, as the officer making the levy had actual notice of the transfer before said levy, the object of the statute was accomplished, and the creditor acquired no lien thereon superior to plaintiffs' lien. On the other hand it is insisted that the statute provides that, except as between the parties, a transfer of shares not entered on the books of the company is invalid. The statute reads: "The transfer of shares is not valid, except as between the parties thereto, until it is regularly entered on the books of the company, so as to show the name of the person by and to whom transferred, the numbers or other designation of the shares and the date of the transfer. * * * The books of the company must be so kept as to show intelligibly the original stockholders, their respective interests, the amount paid on their shares, and all transfers thereof. * * *" Code 1873, section 1078. The question before us is: Will a transfer made in any other way than that provided in the statute be effectual to transfer the shares as against a creditor of the transferror who has actual notice of such transfer? While this court has held that a transfer of shares not entered on the books of the company will not be valid as against an attaching creditor who has no actual notice of such transfer, the effect of actual notice in case it exists, has not been determined. Lumber Co. v. Batavian Bank, 71 Iowa 270, 32 N.W. 336. In that case, in discussing the...