Simmons v. Hill
| Decision Date | 20 December 1888 |
| Citation | 10 S.W. 61,96 Mo. 679 |
| Parties | Simmons, Administrator, v. Hill, Appellant |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon. E. B. Adams Judge.
Reversed.
Britton A. Hill pro se.
(1) The levy and sale of the stock of Langton and of Chambers, on the execution of Hill & Collins against Peter Curran, was null and void and passed no interest in the stock to the purchasers. Binmore on Sheriffs, secs. 102, 111, 112. (2) An execution against Peter Curran in 1877, cannot be levied upon bank stock duly registered on the stock-book of the bank in the names of Langton and of Chambers for six years, then past. Ib. sec. 112. (3) No levy can be made upon bank stock once owned by a pledgeor, who has transferred and assigned it absolutely to a pledgee, on the books of the bank, to secure the payment of a debt to become due and which was due and unpaid at the time of the issue of the execution. Carroll v. Bank, 8 Mo.App. 249. (4) The owners of the stock after the ninth of August, 1871, were Langton for fifty shares and Chambers for fifty shares, and they were the only persons liable to the creditors of the bank as stockholders of the Curran stock from August, 1871, down to the thirteenth of July, 1877, when they fraudulently attempted to transfer their stockholders' liability over to B. A. Hill and R E. Collins after the bank had failed and closed its doors. Thompson on Liab. of Stock., secs. 177, 178. (5) A transfer of stock in a bankrupt company to a party who has not accepted the stock, has no effect on the title, and does not make the transferee liable to creditors unless he accepts the transfer. Webster v. Upton, 91 U.S. 71, 72.
Martin Laughlin & Kern also for appellant.
H. I. D'Arcy and J. P. Maginn for respondent.
(1) It was not necessary to move against Hill & Collins jointly. Bray's Adm'r. v. Seligman, 75 Mo. 41. (2) Hill, by the purchase at sheriff's sale, was placed in Curran's shoes, in respect to the stock. Curran was utterly divested of his property in the stock. R. S. secs. 2363-64, 2391; Foster v. Potter, 37 Mo. 526; Bank v. Richards, 6 Mo.App. 440. (3) Hill, as the registered owner of the shares, must pay the amount due thereon to the bank's creditors. Thompson on Stockholders, sec. 177, et seq.; Upton v. Burnham, 3 Biss. 520; Hawley v. Upton, 102 U.S. 314; Webster v. Upton, 1 Otto, 65, 71; Johnson v. Laflin, 6 C. L. J. 129; Cook on Stockholders, sec. 384 and cases cited; Kellogg v. Stillwell, 75 Ill. 68; Johnson v. Underhill, 52 N.Y. 203; White, Ex'r, v. Salisbury, 33 Mo. 153; Erskine v. Lowenstein, 11 Mo.App. 595. (4) There was no lien on the stock under article 4 of its articles of incorporation, the bank having taken a specific transfer to its trustees in pledge, to secure the money loaned to Curran, but if there was, Hill cannot complain of its waiver by the bank in his favor. Besides, Chambers and Langton were not indebted to the bank. Helm v. Swiggett, 12 Ind. 194; Cook on Stockholders, secs. 528, 529. (5) Such provisions are solely for the protection of the corporation, and in no manner affect the validity of transfers between the parties thereto. Bank v. Goodfellow, 9 Mo. 150; Chouteau v. Harris, 20 Mo. 382; Moore v. Bank, 52 Mo. 377-379; Kahn v. Bank, 70 Mo. 262; Bank v. Richards, 74 Mo. 77; Johnson v. Laflin, 103 U.S. 800; Carroll v. Bank, 8 Mo.App. 249, 252. (6) Hill is estopped to deny his title to the stock. "He cannot assert his title if there is a profit, and deny it if there is a loss." Fisher v. Seligman, 75 Mo. 13, 14; Griswold v. Seligman, 72 Mo. 110. (7) If Hill had never been registered as owner of the stock he would nevertheless be liable to creditors, as the equitable owner thereof. Hill v. Newichawanick Co., 48 How. Pr. 427; McNeill v. Bank, 46 N.Y. 325; Leitch v. Wells, 48 N.Y. 592; Cook, Stockholders, sec. 4 and cases cited, note 4; Anderson v. Warehouse Co., 111 U.S. 484, 485; Wheeler v. Faurot, 37 Ohio St. 26; Storer v. Flack, 30 N.Y. 64; Henkle v. Mfg. Co., 39 Ohio St. 553; Cook on Stockholders, sec. 264 and cases cited; Cutting v. Damerel, 88 N.Y. 410; Isham v. Buckingham, 49 N.Y. 216; Strange v. Railroad, 53 Tex. 162; Warehouse Co. v. Badger, 67 N.Y. 294; Laing v. Burley, 101 Ill. 591; Brown v. Hitchcock, 36 Ohio St. 667; Whitney v. Butler, 118 U.S. 655; In re South Mountain Co. 7 Sawyer, 32.
OPINION
On the seventh of April, 1881, plaintiff's intestate obtained a judgment in the circuit court of St. Louis against the Butchers' & Drovers' Bank for the sum of $ 10,880, and an execution issued thereon on the twenty-fifth of that month was returned nulla bona on the sixth of June, 1881. At the April term, 1883, of said court the plaintiff moved for an execution against the defendant as a stockholder in said bank; the motion was resisted and on the hearing, was sustained and an execution ordered against the defendant in the sum of five thousand dollars, and from this order the defendant appeals.
The facts in the case as they appeared in evidence are substantially as follows: On the seventh day of December, 1870, Peter Curran, being then the owner of one hundred shares of the capital stock of said bank, of the par value of ten thousand dollars, fifty per cent of which was unpaid, borrowed from the bank the sum of two thousand dollars, for which he executed his note payable in ninety days, bearing ten per cent. interest, and at the same time, transferred, on the books of the bank, fifty shares of his stock to P. S. Langton. On the eighth of May, 1871, Curran borrowed the further sum of $ 3,964.50, for which he executed two notes, bearing same rate of interest, and, at the same time, transferred to B. M. Chambers, the remaining fifty shares of his stock. Chambers was the president and Langton was the cashier of the bank. According to the testimony of Chambers, by an oral agreement, the stock was to be held by him and Langton as collateral security for these loans.
On the twenty-seventh of April, 1877, while the stock thus stood in the name of Langton and Chambers, Hill & Collins, a firm of which the defendant was a partner, obtained judgment against Curran for twenty-five hundred dollars, and caused execution to be issued thereon. The officer holding the execution repaired to the bank, and demanded a statement of the amount of stock held by Peter Curran, and the cashier thereupon gave him the following certificate: And the sheriff endorsed the following return on the execution: "Executed this writ in St. Louis county on the seventh of May, 1877, by levying upon one hundred shares of stock in the Butchers' & Drovers' Bank, as the property of Peter Curran, the defendant, and I delivered a copy of this writ to B. M. Chambers, president of said bank, with my endorsement of said levy thereon, stating to him that I did levy on and take such rights and shares to satisfy this writ."
On the same day, the sheriff advertised for sale on the nineteenth of May, 1877, the interest of Curran in said one hundred shares of stock to satisfy said execution, and at the sale, it was struck off to Hill & Collins for one thousand dollars, which amount, after deducting costs, was credited on the execution, and as to the remainder the writ was returned nulla bona, on the fourth of June, 1877, with this additional return: "I delivered a copy of this writ, together with the advertisement, a copy of which is hereto attached, to P. S. Langton, cashier of the Butchers' & Drovers' Bank, with my return of levy and sale of one hundred shares of stock above mentioned and offered to transfer said stock to the purchasers, but was assured the defendant had none to transfer." Curran had never paid anything on his notes, and at the time of this sale, they were long over-due, and amounted, principal and interest, to more than nine thousand dollars.
On the twelfth of July, 1877, Hill & Collins brought suit against the bank for five thousand dollars damages for refusing to permit a transfer of Curran's stock upon the books of the bank. On the thirteenth, the writ was served on Chambers, the president, and on the same day, he and Langton transferred the one hundred shares of stock in their name to Hill & Collins on the books of the bank without their knowledge or consent. On the same day, the bank closed in an insolvent condition and ceased to do business. At the time of the transfer from Curran to Chambers and Langton, the stock of the bank was worth in the market probably seventy to eighty cents on the dollar of paid-up stock. At the time of the levy of Hill & Collins there was no demand for it, and when transferred to them by Chambers and Langton was worth nothing.
On the second of October, 1877, the bank filed an answer in the suit of Hill & Collins, and on the twenty-eighth of January, 1878 an amended answer, in which, after denying the allegations of the petition and that Curran was the owner of any stock in the bank except as thereinafter stated, then proceeded to set out the transfer of the stock by Curran to Chambers and Langton to be held by them as collateral security for the payment of the notes before mentioned with interest, averring that said notes and interest remain due and unpaid, and setting up the provision in the charter of the bank, prohibiting a transfer except on its books, and after all debts due by the shareholder had been paid, but saying nothing about the transfer by Chambers and Langton to Hill & Collins on the thirteenth of July preceding. On the trial, on the evidence in support of the answer, Hill & Collins took a non-suit. They were by the answers in this case, for the first time, informed that Curran had...
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