United States & Canada Land Co. v. Sullivan
| Decision Date | 16 December 1910 |
| Docket Number | 16,820 - (122) |
| Citation | 128 N.W. 1112,113 Minn. 27 |
| Parties | UNITED STATES & CANADA LAND COMPANY v. THOMAS F. SULLIVAN and Another |
| Court | Minnesota Supreme Court |
Action in the district court for Hennepin county to foreclose an alleged lien upon fifty shares of capital stock for $6,825 and for $640, by a sale of the stock. Among other matters the complaint alleged that on or about June 5, 1906, defendant Sullivan purchased from one John Schwager and Alvin Schwager ninety-one shares of the capital stock of plaintiff corporation, and paid therefor the sum of $2,275 from the moneys of the corporation then in his hands; that on or about July 5, 1906, Sullivan sold the stock to James O'Laughlin for $9,100, and realized by this transaction a profit of $6,825; that Sullivan has never accounted to plaintiff for this sum; that on May 1, 1906, he conducted a party of land seekers to the Peace river region in Canada and without authority paid the railroad fare and other expenses out of the funds of plaintiff then in his hands, amounting to $640. Defendant Sullivan was not served and defendant Belcher demurred to the complaint. From an order, Holt, J. overruling the demurrer, defendant Belcher appealed. Affirmed.
Iden on stock of corporation.
Section 2863, R.L. 1905, providing that stock shall not be transferred upon the books of a corporation while any indebtedness of the record holder thereof to the corporation remains unpaid, held to create a lien upon the stock in favor of the corporation.
Revision of statutes -- effect of change of wording.
A change in the language or phraseology of statutes in a general revision thereof does not necessarily indicate an intention on the part of the legislature to depart from or to modify, in point of substance, the previously existing law.
Revision of statutes
Such change of language is ordinarily to be ascribed to a purpose to condense and simplify the new statute.
Foreclosure of lien on stock.
The lien created by section 2863, R.L. 1905, may be foreclosed in equity.
William B. Anderson, Harris Richardson and Harold C. Kerr, for appellant.
William H. Hallam, for respondent.
The short facts in this case, as appear from the allegations of the complaint, are as follows: Plaintiff is corporation duly created and existing under the laws of the state. Defendant Sullivan was for a time the treasurer and a member of its board of directors, and the owner and holder of fifty shares of its capital stock. He is indebted to the corporation in an amount exceeding $6,000, which he has refused or neglects to pay. The corporation brought this action to recover the amount so due, and prays that it recover the same, and that the judgment therefor be declared a first lien upon Sullivan's stock, and that the stock be sold under the directions of the court, or sufficient thereof to satisfy its claim. The complaint also alleges that defendant Belcher claims some interest in or to the Sullivan stock, which claim it alleges is subsequent and inferior to the asserted lien of the corporation. Defendant Belcher interposed a general demurrer to the complaint, which sets forth in greater detail the facts stated, and appealed from an order overruling the same.
Counsel for defendant present in support of the demurrer two questions: (1) Has a corporation, under the provisions of section 2863, R.L. 1905, a lien upon the stock issued by it as security for the payment of any indebtedness due it from the record owner? (2) If it has such a lien, may it be foreclosed in equity, or is it a mere right on the part of the corporation to refuse to transfer a sale thereof upon its books, and analogous to the right of possession and detention incident to the ordinary common-law lien upon personal property? We answer both questions adversely to the contention of defendant.
1. The statute controlling the question (section 2863, R.L. 1905) provides: "Stock shall not be transferred upon the books of the corporation while any instalment thereon remains delinquent, nor while any indebtedness of the record holder thereof to the corporation remains unpaid." It is the contention of defendant that this does not create a lien in favor of the corporation, but only vests it with authority to refuse a transfer of stock until any existing indebtedness to it is discharged.
Prior to the revision of 1905, the statutes (section 2799, G.S. 1894) gave the corporation, in express terms, a lien upon stock issued by it as security for any indebtedness of the record holder, and provided for its foreclosure by a sale thereof after notice given in the manner there prescribed. By the revision the express provisions for a lien and the foreclosure were dropped, and the revised statute adopted in the language above quoted. For the purpose of comparison we set out the former statute. "The stock of any such corporation shall be deemed personal property and be transferable only on the books of such corporation in such form as the directors prescribe, and such corporation shall at all times have a lien upon the stock or property of its members invested therein for all the debts due from them to such corporation, which may be enforced by advertisement and sale in the manner provided for selling delinquent stock."
Counsel contends that this change in the language of the statute indicates clearly an intention on the part of the legislature to modify the law and to take away the previously existing rights. There is force to the contention; but a comparison of the revised act with statutes of other states embodying similar language, where the claim of lien has been sustained together with the views of the revision commission to the effect that no change in the law was intended, reference to which may be had for the purposes of interpretation, leads to the conclusion that it was not the intention of the legislature to make so radical a change in the law. In their report to the legislature the commission in reference to the statutes upon the subject of corporations said (p. 24): "In all cases our purpose has been, without attempting to change the law in...
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