Case ID: colo-l-rep_2/html/0116-01.html
Source: Caselaw Access Project
Author: {"author": "Dickey, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

PEOPLE v. GOSS AND PHILLIPS MANUFACTURING COMPANY.
    
      (Supreme Court of Illinois,
    
    
      June 20, 1881.)
    
    1. Execution—Levy on Stock—Secretary—“Clerk.” The secretary oí a corporation is a “clerk,” within the meaning of a statute which directs that an execution shall be left with a “clerk” of a corporation to effect a levy upon the share of a judgment debtor.
    2. Ibid.—Attest—By Sheriff. The attestation of an execution may be made by the sheriff.
    Appeal from the judgment of the appellate Court for the first district, whereby a judgment of the Superior Court of Cook county was affirmed, denying a petition of Adams for a writ of mandamus, to compel the corporation to transfer to him upon its books certain shares of stock standing in the name of Church, and to issue new certificates for the same to Adams. The statute declares: “ The share or interest of a stockholder in any corporation may be taken on execution, and sold as hereinafter provided.” (Sec. 52, Chap. 77, Rev. Stat, 1874, p. 628.) By Sec. 53 it is said: “ The officer shall leave an attested copy of the execution with the clerk, treasurer, or cashier of the company, or, where there is no such officer, with any officer having the custody of the books and papers of the corporation, and the property shall be considered as seized on execution when the copy is so left, and shall be sold in like manner as goods and chattels.” It is provided by Sec. 55, that “the officer of the company who keeps a record or account of the shares” of the stockholders therein, upon the exhibiting.to him of the “execution,” shall be bound to give a certificate of the number of shares held by the judgment debtor. By Sec. 56 it is provided, that “within fifteen days after the sale, an attested copy of the execution and of the return thereon shall be left with the officer of the company whose duty it is to record transfers of shares, and the purchaser shall thereupon be entitled to a certificate or certificates of the shares bought by him, upon paying the fees therefor, and for recording the transfer.” In this case Adams recovered a judgment against Church in the Superior Court of Cook county, on January 15, 1877, for $494.02, and sued out an execution, which was delivered to the sheriff of Cook county on the 16th day of that month, and the sheriff, upon the 17th day of the same month, exhibited to Charles L. Jenks, the secretary of the Goss and Phillips Manufacturing Company, (a corporation under the laws of Illinois, whose principal office was in the county of Cook,) this execution against Church. Church had become a stockholder in that corporation in 1871, and received five stock certificates of that date, each for ten shares, and these shares were still standing on the books of the corporation in the name of Church, the judgment debtor named in the execution. At the same time when the sheriff exhibited this execution to the secretary of the corporation, he also delivered to him a copy of the execution, with a written indorsement thereon, as follows: “ To the Goss and Phillips Manufacturing Company: The within is a true copy of the execution and fee bill in my hands, under which I have seized the shares of stock of the within named defendant, George E. Church, in said company, and his interest therein.” This indorsement was not signed. Thereupon the secretary of the company, on demand of the sheriff, gave to him a certificate, signed by him as secretary of the company, stating “ there are on the books of our company fifty shares of stock standing in the name of George E. Church, as follows,” etc., giving the number of each of five stock certificates, being numbers 50, 54, 55, 56, and 57, respectively, each for ten shares of stock, and each dated May 8, 1871. The sheriff having received from the secretary this certificate representing fifty shares of stock standing on the books of the company in the name of Church, indorsed upon his execution that he had levied upon the same, and proceeded to advertise and sell the same as goods and chattels, and at the sale, Adams the creditor, became the purchaser. The sale was on February 3, 1877. Within fifteen days after this sale, Adams, the purchaser, (on February 5, 1877,) delivered to the secretary of the corporation, whose duty it was to record transfers of shares on the books of the company, a duly attested copy of the execution and of the return of the sheriff indorsed thereon, showing the facts as here stated, and demanded that these shares of stock should be transferred on the books of the company to him, and that a certificate or certificates be issued to him for the stock so bought by him. This was refused, and Adams thereupon brought his petition for a mandamus. In the progress of the cause it was made to appear, that of the certificates issued to Church in 1871, four had been assigned by Church to the Union National Bank, and one had been so assigned to Alfred Ray; that each of these assignments was made before the date of Adams’ judgment, and as collateral security for debts due from Church, and that neither of the debts was ever paid, and that the certificates were in the hands of the assignees before the judgment, and still so continued to be held; but no transfers of the stock had ever been made on the books of the company; nor does it appear that the corporation, or judgment creditor, or the sheriff, had any notice of such assignments until after Adams had demanded the transfer to him, and the issue of new certificates therefor.
   Dickey, J.,

in delivering the opinion of the Court, said:

It is objected to the validity of the sale by the sheriff, that (as is insisted) no valid levy was made by the sheriff. It is contended that the only valid levy provided for by this statute consists in a strict compliance with the provisions of Sec.3 3, and that there is a failure to show such compliance, in two respects. It is claimed that the secretary of the company was not the proper officer with whom to leave a copy of the execution. The statute names as such officer the “clerk, treasurer, or cashier’’ of the corporation. Where a clerk is mentioned as an officer of such a corporation, and not as a mere employee, we understand that term to mean that officer who usually has the custody of the books and records of the company. The secretary of such a corporation is but another name for the same officer. There is no substance in this objection.

Again, it is said that the copy of the execution left with the secretary was not “an attested copy.” It is even claimed, that to be an attested copy it was essential that the copy should have been verified by a certificate by the clerk of the Court from whose office it was issued, attested by the seal of the Court. The statute surely does not expressly require this, and we find no good reason for so holding. We cannot doubt that a sheriff or other officer, having in his hands legal process from a Court, may properly certify to the correctness of a copy thereof. Had the sheriff signed his name officially to the indorsement found on the back of the copy left, we cannot doubt that this would have been just such an attestation as is provided for in Sec. 53. As it is, it seems a substantial compliance with the statute. What is “an attested copy?” To attest means to'verify. The word attest is derived from the Latin words, testis, a witness, and ad, to, and strictly means to bear witness to. In the connection used in this statute, an attested copy is a copy officially verified to be such. The execution was addressed to the sheriff of Cook county. He alone was authorized by law to make a levy by that process. When, therefore, the sheriff delivered a copy of that process, having indorsed upon it the words, “The within is a true copy of the execution and fee bill in my hands, under which / have seized the shares of stock of the within named defendant,” etc., did he not officially verify the correctness of the copy as fully as if he had signed his name thereto? The very language of the indorsement identifies the maker thereof as certainly as if his name had been signed thereto. It says the process is “jin my hands,” and it is that “under which I have seized,” etc. Now, none other than the sheriff of Cook county could lawfully seize under that process in his hand^ Be this as it may, all this seems of no .moment, since the corporation has surrendered its custody of the stock which it held for Church, and consented to hold the same for the sheriff. Thus possession of the interest of Church in the property of the corporation, which the corporation held for Church, was changed by the act of the corporation, and became a possession in the corporation, for the sheriff as the instrument of the law, having power to sell the same. An actual levy of a fi. fa. by a sheriff upon goods consists in the taking such possession thereof as is practicable, in view of the nature and character of the property. When this is done, the officer, in contemplation of law, is in the actual possession. This statute seems to contemplate an actual levy or seizing of the interest of the debtor before sale, by the surrender to the sheriff by the corporation of a certificate representing that interest, and stating what that interest is. And the statute also provides for a constructive levy, which may precede such actual levy. The actual levy is accomplished by the officer when he has exhibited to the keeper of the stock books of the corporation his execution, and on demand, for the purpose of levy, has procured and received from the corporation, “a certificate of the number of shares or amount of interest held by the judgment debtor,” and has indorsed upon his execution a state-, ment that the shares named in the certificate are taken on the execution or levied by virtue of the execution. To avoid, however, any embarrassment which might arise from a transfer of the stock upon the books of the company after the presentation of the execution and before the delivery of the certificate mentioned in Sec. 55, it is provided in Sec. 53, that when the officer holding the execution has delivered to a proper officer of the corporation “an attested copy of the execution,” the property “shall be considered as seized on execution;” and this, although it has'not as yet been actually seized, as it must be before sale, by means of the provisions contained in Sec. 55; and thus a constructive levy may be accomplished before the actual seizure —before the sheriff comes into possession of the certificate mentioned in that section.

The property of a stockholder consists of his right to a share in the net assets of the corporation, proportionate to the number of shares to which he has title. He has not, personally, a right as such shareholder, to the custody or manual possession of any part of such assets. The corporation has the custody of the whole, and holds possession of his share for him. His title is evidenced by his stock certificates. This title can be passed from him to another only by a transfer thereof upon the stock books of the corporation. The corporation holds each share of each stockholder in whose name the stock stands on the books of the corporation. The possession of the corporation, as to the share of each stockholder, is, in one sense, the possession of the shareholder, and is the only possession which a shareholder can lawfully have, and is the only possession which any grantee of any shareholder can acquire; and such possession by a vendee of a shareholder can only be obtained by a transfer of the stock to him upon the books of the corporation. Until that transfer be made, the possession of the corporation is the possession of him in whose name the stock stands upon the books. The certificate of stock does not constitute property in the assets of the corporation, but is mere evidence of the title of him to whom it is issued; and as such, in one sense, it represents the property.

William T. for appellant.

S. M. Millard, for appellees.

Under this statute, when an officer, holding an execution against any one in whose name shares of stock stand on the books of the company, delivers to a proper officer of the corporation an attested copy of such execution, the property from the moment of such delivery is to be “considered as seized on execution,” and from that moment the corporation is to be “considered as” in possession for the sheriff, although the sheriff has not yet the possession of anything representing the property. When the sheriff has exhibited his execution, and on demand has received from the coporation, by virtue of his execution, a certificate of the shares standing in the name of the execution debtor, from that moment the possession of the corporation becomes, in fact, the possession of the sheriff, or rather a possession for the sheriff, in whom the title to the stock, by virtue of such actual levy, is, for the time, invested. The sheriff then has all the possession which the shareholder had before the levy. By giving the certificate provided for in Sec. 55, the corporation, in substance, agrees to hold possession for the sheriff; and when the sheriff has made sale, the purchaser has a right, by virtue of this statute, to demand, upon filing the papers mentioned in Sec. 56, that the corporation shall consent to hold possession for him, and that his title shall be made manifest by the necessary transfer upon the books, and by the issue of new stock certificates directly to him, for the shares sold to him by the sheriff. In our judgment, an actual, valid levy was accomplished when the sheriff got possession, by virtue of his execution, of the certificate of the shares standing in the name of Church, given to him by the secretary for the purpose of levy, and indorsed upon his execution that he had so levied. We think that Adams is entitled to the writ of mandamus sought in the petition. Judgment reversed, with instructions