Slemmons v. Thompson

• Decision Date: 28 November 1892
• Parties: SLEMMONS v. THOMPSON.
• Court: Oregon Supreme Court

31 P. 514

23 Or. 215

SLEMMONS v. THOMPSON.

Supreme Court of Oregon

November 28, 1892

Appeal from circuit court, Multnomah county; E.D. SHATTUCK, Judge.

Application by J.B. Slemmons for a writ of mandamus to compel the Clarnie Land & Improvement Company to transfer to him certain shares of its stock, which he had purchased. Writ denied, and plaintiff appeals. Reversed.

J.F. &amp E.B. Watson, for appellant.

Geo. H Durham and C.B. Bellinger, for respondent.

LORD C.J.

This is a proceeding by mandamus to compel the transfer of 75 shares of stock, and to allow an inspection of the records of the aforesaid corporation. The record discloses that an application was made by the plaintiff for a writ of mandamus against J.B. Thompson, as secretary of the Clarnie Land &amp Improvement Company, to compel him to transfer 75 shares of stock of said company to plaintiff on the books of the corporation, and also to allow his attorney to inspect them; that thereafter the defendants made their return to the alternative writ issued by the court, denying all the material allegations thereof, and setting up various defenses, and, among them, that the stock in question was owned by other persons than the plaintiff; that the pretended transfer to him was simulated, fictitious, and fraudulent and that he was not the owner thereof; that his claim was made at the instigation of one D.P. Thompson, for whom he held said stock, and solely for the purpose of embarrassing and interfering with the management of the affairs of the corporation; that plaintiff had instituted a suit in equity against the company, its president, and one C.K. Harbaugh, to establish his rights to the stock in controversy, and to participate and share in the profits and business of the corporation, and to fully adjudicate his pretended rights, etc., and that all the defendants have appeared, etc.; and that whatever rights, as owner of such stock, the plaintiff may have, can be fully and fairly adjudicated in such suit, which is now pending and undetermined in the equity department of this court. The plaintiff replied to the return, and the matter, being at issue, was tried, and judgment rendered for the defendant, dismissing the alternative writ. Thereupon the plaintiff asked and obtained leave to file an amended petition and writ. This amended alternative writ sets up that the stock of the company consists of 350 shares of the par value of $100, and that 75 of these shares are fully paid up, the remainder being unpaid in any part; that the plaintiff purchased these 75 shares in 1891 from Samuel T. Stephens, administrator of the estate of Thomas F. Stephens, deceased, who obtained the same by purchase and assignment at an execution sale; that the defendants have colluded and conspired together to depreciate the value of said 75 shares of paid- up stock, have executed a pretended deed of conveyance of all the property of said corporation in its name, of the value of $30,000 over and above all legal incumbrances thereon, to one C.K. Harbaugh, for a nominal consideration of $10, but with a secret agreement for the sale of said property by Harbaugh to the defendant Rathbun, and the payment of any excess over said incumbrances to said J.H. Rathbun for his own use and benefit, etc. With the exception of the alleged collusion for the purposes therein stated, and making Rathbun and the Clarnie Land & Improvement Company parties, the amended alternative writ is, in substance and effect, the same as the one previously referred to, and to which several defenses were set up, showing the conflicting rights to the stock in controversy. A demurrer was filed to this amended alternative writ by the defendants J.B. Thompson and J.H. Rathbun, which the court sustained, and dismissed the writ, giving judgment against the plaintiff and in favor of the defendants for their costs. It is from this judgment that the appeal is brought.

The record of the previous proceeding and the demurrer to the amended alternative writ and judgment thereon are presented as one consecutive record. We have set them out as briefly as we could without obscuring the facts. The previous proceeding is treated as a necessary part of the appeal to explain the action of the court in allowing the amended writ, and the object the plaintiff sought by it. This was to give the plaintiff an opportunity to add such additional allegations or facts as he might think would establish his right to relief by mandamus, notwithstanding the result of the previous proceeding or any matter arising out of it, which the trial court was understood to be invited to bear in mind when passing on the demurrer. In each instance the trial court dismissed the writ, for the reason that mandamus was not an appropriate remedy to try and determine the questions involved, basing its ruling on the decision of this court in the case of Durham v. Mining Co., 9 Or. 41 . That decision was based on two points: (1) That the purchaser of stock under an execution sale is not entitled to a writ of mandamus to compel its transfer on the books of the corporation when the ownership of such stock is in dispute; and (2) that, except under an execution sale, the purchaser of stock is not entitled to the writ to compel its transfer when there is an adequate remedy at law. In that case the general proposition that mandamus would not lie to compel the transfer of stock upon the books of a private corporation in cases where the stock in question has been sold at a private or voluntary sale was conceded; but it was maintained, for reasons that will presently appear, that a different rule prevailed where the stock in question has been the subject of a sale upon execution, notwithstanding the disputed ownership of it arising out of a private sale to other parties prior to the commencement of the action. Under the corporation laws of this state, then and now, the stock in all private corporations is to be deemed personal property, and subject to attachment, levy, and sale; and the corporation, in case of such sale, is required to make the necessary transfer thereof to the purchaser on the books of the company. Hill's Code, § 3229. By force of this section, backed by the case of Bailey v. Strohecker, 38 Ga. 260, decided under a similar statute, the plaintiff claimed that he was entitled to the writ to compel the transfer of the shares he had purchased. It is not doubted, if the plaintiff's right to the possession of such stock had been clear and unquestionable, requiring no litigation to settle it, that he would have been entitled to the writ to compel the transfer of the shares he purchased at the execution sale. It was the fact that the ownership of the shares was disputed--that other parties, not before the court, were admitted by the demurrer to be the owners of such shares prior to the commencement of the action--that influenced the court in the denial of the writ as not being adapted to investigate and determine disputed rights to property, but that its proper office was to command a duty to be performed where the legal right was clear, and not in dispute. As it had been previously held that the office of the writ, under the Code, was precisely the same as it was under the common law, ( Warner v. Myers, 4 Or. 75,) it necessarily resulted that it could not be used, even under an execution sale of stock, to compel its transfer on the books of the corporation to the purchaser, unless its right to it was clear, and not requiring litigation to settle it. The right given by statute to the purchaser of stock at an execution sale to have it transferred was not thought to invade this principle, or alter the nature or object of the writ. Hence, when it was admitted that the ownership of the shares was in dispute, and litigation would be required to settle it, necessarily, upon principle, mandamus would not lie, and so the court held in that case.

Turning now to the matter in hand, as the issue made by the return to the original alternative writ involved a litigation of the ownership of the shares in question, the ruling of the trial court was undoubtedly within the case of Durham v. Mining Co., supra, and the writ was properly dismissed; and, if the facts set up as a defense in the return to the first alternative writ shall be considered as present in the decision upon the demurrer to the amended alternative writ there can be no doubt that the writ was properly dismissed. Although the original proceedings are brought up as a part of this appeal, and apparently the decision of the trial court was made upon that theory, as is urged it must have been, under the circumstances, yet it is difficult to understand how...