Beyer v. Continental Trust Co.

63 Mo. App. 521, 1895 Mo. App. LEXIS 232
CourtMissouri Court of Appeals
DecidedNovember 18, 1895
StatusPublished
Cited by8 cases

This text of 63 Mo. App. 521 (Beyer v. Continental Trust Co.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beyer v. Continental Trust Co., 63 Mo. App. 521, 1895 Mo. App. LEXIS 232 (Mo. Ct. App. 1895).

Opinion

Smith, P. J.

This is an action somewhat in the nature of a creditor’s bill. Briefly analyzed, the allegations of the petition are:

First. That the Continental Trust Company, a Missouri corporation, became insolvent on April 1, 1890, and thereafter remained so. Second. That at and since April 1, 1890, defendant L. V. Harkness owned $5,000 of its capital stock. Third. That since April 1, 1890, said Harkness has received $1,200 dividends on his capital stock. Fowrth. That between March 25, 1890, and November 5, 1892, said corporation became indebted to the plaintiff in the sum of $2,118.51, which sum was due plaintiff on said last day. Fifth. That on November 5, 1892, said corporation made an assignment for the benefit of its creditors, and that plaintiff’s demand has been presented to the [525]*525assignee and allowed, and a dividend of three per cent has been paid on it by the assignee, bnt that no more will be realized. Sixth. That defendant Harkness is a nonresident and can not be served with process in this state and that he owns certain real estate in this state (describing it). Seventh. That plaintiff can not, because of defendant’s nonresidence and the nature of his demand, procure either a personal judgment against defendant, or a judgment by attachment process, or otherwise at law, and is without remedy at law. Eighth. Prays for judgment against defendant L. Y. Harkness for $1,200, and that his said real estate be adjudged to be sold to satisfy the same.

On filing the petition an order was made, directed to the defendant Harkness, notifying him of the commencement of the suit, and stating the object and general nature of the petition to be to recover a judgment against him for $1,200, and to have said real estate charged with the payment thereof. Proof of the publication of the order was made, when defendant Harkness appeared specially in the cause and moved the court to quash the proceedings, on the ground that same were irregular, illegal, and void. The court sustained the motion, whereupon plaintiff has appealed to this court.

All the authorities are agreed that a dividend paid by an insolvent corporation to a stockholder, as against a creditor at that time, is merely a gift as against said creditor, and is, in law, fraudulent and void. Herman v. Britton, 88 Mo. 549; Gill v. Bales, 72 Mo. 424; Williams v. Boice, 38 N. J. Eq. 364; s. c., 6 Am. & Eng. Corp. Cases, 361; Bartlett v. Drew, 57 N. Y. 587; Hastings v. Drew, 76 N. Y. 9. And all persons receiving a gift from an insolvent corporation are held to account to judgment creditors for such gifts, and the [526]*526proper remedy is by an action in the nature of a credit- or’s bill by a judgment creditor. Roan v. Winn, 93 Mo. 503. And it has been several times ruled by the appellate courts of this state that an attachment can issue only on a legal demand and not on an equitable claim. Bachman v. Lewis, 27 Mo. App. 81; Beach v. Baldwin, 14 Mo. 597; Lackland v. Garesche, 56 Mo. 267.

The plaintiff contends that he has the right to reach the money in the hands of the defendant, as a .part of the assets of the trust company applicable to the payment of its debts, and its creditors have a lien thereon and the right of priority %of payment over its stockholders. But the lien of the creditors of an insolvent corporation upon its assets in the hands of others, is a purely equitable lien and can only be enforced in an equitable proceeding. McLean v. Eastman, 21 Hun, 312. It is conceded that upon such mere equitable claim no attachment can issue. And it is, in effect, conceded by the allegations in the petition that the defendant Harkness acquired a valid title to the money paid him as a dividend, by the trust company, as against it and its assignee. Bartlett v. Drew, 57 N. Y. 587; Von v. Grant, 16 Mass. 7.

Turning to the allegations of the petition, it is seen that no connection is there traced between dividends and the real estate. It is not alleged that the dividends were used by the defendant Harkness in the purchase of the real estate. But the plaintiff contends that the proceeding can be upheld under a provision of the statute, section 2022, Revised Statutes, which provides that, “in all actions at law, or in equity, which have for their immediate object the enforcement or establishment of any lawful right, claim, or demand to- or against any real or personal property within the jurisdiction of the court,” etc.

[527]*527The prayer of the petition.is for judgment against defendant for the amount of the dividends received by him of the trust company and for a decree that the defendant’s lands be sold as upon execution and the proceeds thereof applied to the satisfaction of the judgment. The first part of the' decree prayed for is no more than a judgment in personam, and could not be effective in the absence of actual notice — that is, notice ■by summons. The general rule is that where a decree •or judgment creates a personal duty or obligation, or declares a personal charge, the proceedings are ineffective unless there be actual notice. Pennoyer v. Neff, 95 U. S. 714.

This brings us to the consideration of the decisive question in the case, which is that of jurisdiction of the res — the property. Jurisdiction of the res is said to be obtained by a seizure under process of the court, whereby it is held to abide such order as the court may make concerning it. So, while the general rule in regard to jurisdiction in rem. requires the actual seizure and possession of the res by the officer of the court, such jurisdiction may be acquired by acts which are of equivalent, import and which stand for and represent the dominion of the court over the thing, and, in effect, subject it to the control of the court. Among this latter class is the levy of a writ of attachment, or seizure of real estate, which, being incapable of removal and lying within the territorial jurisdiction of the court, is, for all practical purposes, brought under the jurisdiction of the court, by the officer of the court •levying the writ and return of that fact into court. So the writ of garnishment or attachment, or other form of service on a party holding a fund which becomes-■the subject of litigation, brings that fund into court, though the money remain in the actual custody of one not an officer of the court. An action commenced in [528]*528partition of real estate, foreclosure of a mortgage, or enforcement of a lien, and the like, so far as they affect the property in the state, are substantially proceedings-in rem.

There are cases, not partaking of the nature of' proceedings in rem, where the judgment is to have-effect on personal rights, as in divorce suits, or in proceedings to compel conveyances, or other personal acts, in which the legislature has properly made the jurisdiction to depend on the publication of notice, or on the bringing the suit to the notice of the party in some other mode, when he is not in the territorial jurisdiction. Cooper v. Reynolds, 10 Wall. 308; Boswell v. Otis, 9 How. (U. S.) 336; Pennoyer v. Neff, supra; Hawes on Jurisdiction, sec. 233.

The case in hand does not fall within any of these categories.

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Cite This Page — Counsel Stack

Bluebook (online)
63 Mo. App. 521, 1895 Mo. App. LEXIS 232, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beyer-v-continental-trust-co-moctapp-1895.