Walker v. Joseph Dixon Crucible Co.

• Decision Date: 10 December 1890
• Citation: 20 A. 885,47 N.J.E. 342
• Parties: WALKER v. JOSEPH DIXON CRUCIBLE CO.
• Court: New Jersey Court of Chancery

20 A. 885

47 N.J.E. 342

WALKER

v. JOSEPH DIXON CRUCIBLE CO.

Court of Chancery of New Jersey.

Dec. 10, 1890.

(Syllabus by the Court.)

On petition by receiver for direction to sell stock.

Joseph D. Bedle, for petitioner. John Linn, for Jane H. Cleveland. Otto Croase, for Frances H. D. Tillman.

McGILL, Ch. The petitioner, Edward F. C. Young, was appointed receiver of the Joseph Dixon Crucible Company, an insolvent corporation, in January, 1881. At that time, Orestes Cleveland, who had been president of the company, was indebted to it in a large amount. To secure the payment of this indebtedness, on the 28th of February, A. D. 1881, he confessed a judgment in favor of the receiver for $55,117.49, and $5 costs, and, about the same time, delivered to the receiver five certificates of stock of the insolvent company,—one for 200 shares, belonging to himself; and four for stock aggregating 330 shares, belonging to his wife, Jane H. Cleveland. Upon the backs of each of the stock certificates belonging to Mrs. Cleveland was a power of attorney, in blank, to sell and transfer the stock, signed by her, and witnessed by her husband. The receiver Insists that when Mrs. Cleveland's stock was delivered to him it was assigned absolutely, to the end that he might thereafter sell it and apply the proceeds of sale towards the payment of his judgment against Mr. Cleveland, and he now applies to this court for direction in such sale.

On the part of Mrs. Cleveland it is contended that the stock was assigned to the receiver merely as collateral security for the payment of his judgment against Mr. Cleveland, and that Mrs. Cleveland assented to such assignment without realizing its character and effect; that no consideration was given by the receiver for the assignment; that the receiver has not disposed of the stock, and no equities have intervened which necessitate or justify his retention of it; and also that the assignment was unlawful, because, being a married woman, Mrs. Cleveland could not become surety for the payment of a debt of another person. Contention between Mrs. Cleveland and the receiver as to the character of the assignment, whether absolute or by way of security, arose in September, 1872, when Mrs. Cleveland gave notice to the receiver and the officers of the crucible company that she was a stockholder, and forbade the transfer of any stock then standing in her name. Almost immediately after that notice, the receiver caused the disputed stock to be transferred on the books of the company from Mrs. Cleveland to himself, and, since then, both he and Mrs. Cleveland have tenaciously clung to their respective insistments as to the character of the assignment, but the validity of the assignment, at least as collateral security for Mr. Cleveland's debt, has never been denied until now. On the contrary, it has been repeatedly recognized by Mrs. Cleveland with marked deliberation. In January, 1883, in order to secure the payment of a promissory note made by her and her husband to John F. Ward, she, by writing, signed and sealed in the presence of her own couns...