Case Name: GEORGE E. HYATT, as Receiver, &c., Respondent, v. JACOB SWIVEL, Impleaded with JOSEPHINE LIBBY, THE NEW YORK CAFE CO. (Limited), Appellants
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1885-03-30
Citations: 20 Jones & S. 1
Docket Number: 
Parties: GEORGE E. HYATT, as Receiver, &c., Respondent, v. JACOB SWIVEL, Impleaded with JOSEPHINE LIBBY, THE NEW YORK CAFE CO. (Limited), Appellants.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 52
Pages: 1–8

Head Matter:
GEORGE E. HYATT, as Receiver, &c., Respondent, v. JACOB SWIVEL, Impleaded with JOSEPHINE LIBBY, THE NEW YORK CAFE CO. (Limited), Appellants.
Corporation—Certificate of stoclc—compelling issue of while one therefor is outstanding.—Summons — order for publication.-—• Evidence—affidavit talcen without state.—Judgment—order vacating—when apipealable.
When an action is brought against the transferrer and transferee of stock in a corporation, and also the corporation, to have the transfer adjudged void, and to have the corporation deliver to the plaintiff its certificate for a like amount of stock, and the transferee is not brought into court, so that the judgment in the action will be inoperative as against him, the court has no authority to render a judgment against the corporation adjudging it to issue to the plaintiff a new certificate, while the other remains outstanding.
An order for publication of summons, based on an affidavit in which the only fact alleged is, that the defendant against whom the publication is desired is a non-resident, and for that reason personal service within the state cannot be made, is void.
A certificate as to the official character and genuineness of signature of the officer taking an affidavit in another state, is insufficient to entitle the affidavit to be received as legal evidence of the facts therein stated, if it does not certify both that the officer was duly authorized to take affidavits in that state, and that the certifying officer is well acquainted with the handwriting of the officer taking the affidavit and believes the signature to the verification to be genuine. An affidavit of service of summons taken in another state, having attached to it such defective certificate of proof is no proof of service.
In case of judgment in action above indicated, entered ex parte on default of corporation defendant, adjudging it to issue a certificate to plaintiff, it is the power and duty of the court, on motion of such defendant, it being shown that the transferee had not been brought into court, to vacate it; and an order at special term, denying such motion, is appeal-able to the general term.
Before Sedgwick, Oh. J., Freedman and Ingraham, JJ.
Decided March 30, 1885.
Appeal by the defendant Swivel from a judgment entered after trial before a judge at special term without a jury. Also, appeal by the New York Café Co. (limited), from an order of the special term, refusing to resettle or modify the judgment entered in this action, and directing the said judgment to be entered nunc pro tunc, as of June 10, 1884.
The action was to declare fraudulent and void an assignment and transfer of one hundred and forty shares of the stock of the defendant, the New York Gafé Co. (limited), made by defendant Jacob Swivel, to defendant, Josephine Libby, and to require the defendant company to issue and deliver to plaintiff its certificates for a like amount of stock in the name of the defendant Jacob Swivel, plaintiff being a receiver in supplementary proceedings.
The complaint contained the following allegation : “ That no personal claim or judgment is made or prayed for herein against defendant, the New York Café Co. (limited), but it is made a defendant in order that a final judgment in favor of plaintiff may be made effectual by requiring said defendant to issue new certificates of stock to the plaintiff in the name of Jacob Swivel, and to enjoin said company pendente lite, from making or permitting any transfer upon its books of said stock so standing in the name of defendant, Josephine Libby, as aforesaid and prayed for relief as against the company, “ that said company be required to issue and deliver to plaintiff its certificates for a like amount of stock, in the name of said Jacob Swivel; that until the final judgment herein, the defendant, the New York Café Co. (limited), be enjoined and restrained from making or permitting any transfer on its books of said stock; that a receiver be appointed to take possession of same ; and for such other or further relief as may be just.”
The other facts appear in the opinion.
M. J. Dolphin, attorney, and De Witt O. Brown, of counsel for appellants, on the questions discussed by the court, argued
I. The affidavit for the order of publica-
tion is insufficient. It merely states that Mrs. Libby is a non-resident of the state of New York, and a resident of the state of Mississippi. It does not prove to the court, that she cannot be served here. So, too, the proof furnished of personal service without the state is fatally defective. There is the affidavit of Eosser, whose name is not given : “D. E. Eosser, being duly sw'orn,” and signed at the end, “D. E. Eosser.” It purports to be sworn to before John L. Gill, clerk of circuit, and ex officio notary public. T. E. McGuire certifies that he is the clerk of the chancery court and ex officio of the board of supervisors, and that John L. Gill was, at the time of signing said certificate, clerk of the circuit court, and ex officio notary public. But McGuire does not certify that he knows the handwriting of Gill; nor that, under the laws of Mississippi, Gill had any authority to administer oaths. Nor is the official character of McGuire vouched for in any manner.
II. The Café Company was made a defendant, but did not defend the action. The complaint served with the summons notified the company, “that no personal claim or judgment is made or prayed for herein against the defendant, The New York Cafe Company (limited), but it is made a defendant in order that a final judgment in favor of plaintiff may be made effectual by requiring said defendant to issue new certificates of stock to the plaintiff, &c.” By requiring the company to issue new certificates, “ how V’ The company is alleged to be a New York corporation, and it is a misdemeanor to issue a certificate representing existing, outstanding stock, except upon the surrender of the old certificates, and the defendant had the right to suppose, as it was advised by its counsel, that the court could only require it to issue a new certificate, according to law. To issue a new certificate, except upon the surrender of the old, was to increase its capital stock, which it could not do (Mich. Bk. v. N. Y. & N. H. R.R. Co., 13 N. Y. 599 ; Lathrop v. Kneeland, 46 Barb. 432). And if it did this, and the new certificate got into the hands of a bona fide holder, the company is liable (15). And yet the complaint informed the company that no personal claim was made, and no personal judgment would be taken. But the judgment entered makes the company hable tó redeem this over-issue from any bona fide holder of the certificate.
III. The argument urged, that the court acquired no jurisdiction of Mrs. Libby to render a judgment invalidating her title to the 140 shares, seems overwhelming when applied to the motion made by the company.
A. Walker Otis, attorney, and of counsel for respondent, on the questions discussed by the court, argued :—I, The court at special term has no power on motion to alter a judgment in a material part (Prentiss v. Machado, 2 Rob. 660 ; Stevens v. Veriane, 2 Lans. 90 ; McLean v. Stewart, 14 Hun, 472 ; Rockwell v. Carpenter, 25 Id. 529 ; Kelly v. McMahon, 19 Week. Dig. 223). ■
II. The defendant, the New York Café Co. (limited), having been regularly served with the summons and complaint, and having refused to answer, and thereby suffered default, is bound by the judgment, and cannot secure by motion what it should have obtained, if at all, by a trial (Bullard v. Sherwood, 85 N. Y. 253 ; Fleischman v. Stern, 90 Id. 110).
III. The motion made below was a motion to resettle, and the order denying the same is not appealable.

Opinion:
By the Court.—Ingraham, J.
The defendant, Swivel, alone answered, and the issues raised by that answer were tried at special term. The New York Café Co. did not answer.
An order was obtained directing the service of the summons by publication on the defendant Libby, she being a non-resident, and personal service of the summons was made on her under the provisions of that order in the state of Mississippi. The defendant Libby did not appear in the action.
The court below found that the assignment by the defendant Swivel to defendant Libby of the certificates for one hundred and forty shares of the capital stock of the defendant, Café Co., was fraudulent and void as to the plaintiff, and directed judgment that the said corporation issue and deliver to a receiver a certificate for the said one hundred and forty shares of the said stock. From this judgment defendant Swivel appealed.
An examination of the evidence shows that there was sufficient to sustain the findings of the court, and so far as the judgment affects the defendant Swivel, there was no error committed that would justify a reversal of the judgment.
It follows, therefore, that on the appeal of the defendant Swivel, the judgment appealed from must be affirmed, with costs.
Judgment was entered without notice to the defendant, Café Company, and without the direction of the court or the judge who tried the case. The judgment directed the said company to issue and deliver to a receiver appointed in this action, certificates for the one hundred and forty shares of the capital stock of the said corporation. The defendant, the Café Company, on affidavit, moved to resettle the judgment by requiring in effect that the surrender of the old certificates before the defendant corporation should be required to issue new certificates for said stock. The court, on hearing the motion, directed the same judgment to be entered nunc pro tunc as of June 10, 1884, and from this order the defendant, Café Company, appealed.
The stock in question had been transferred to the defendant Libby by Swivel, and stood in her name on the books of the corporation. That transfer was good as to all the world except creditors, but as to them it was voidable only on it appearing that it was in fraud of their rights. Swivel was the owner of the stock, and on his transfer of it to Libby, she became vested with an absolute title to the stock, subject to the right of the creditors to attack the transfer as fraudulent ; and her right to the stock could not be taken away except in an action in which she was a party and was before the court.
Until the delivery of the certificates of stock by her with a proper transfer or assignment, the company had no right to transfer the stock, represented by said certificates, or issue new certificates in their place except upon the judgment of a court of competent jurisdiction, in an action in which she was a party. In no way could she be divested of her ownership by the corporation (Kent v. Quicksilver Mining Co., 78 N. Y. 159).
Defendant Libby was a party to this action, and plaintiff attempted to serve her with a summons under an order directing the service of the summons by publication. The affidavit on which, this order directing the publication was granted, was not, however, sufficient to give the judge who granted it, jurisdiction.
The only fact alleged in the affidavit was that the defendant Libby was a non-resident, and for that reason personal service within the state of the summons on her could not be made.
The court of appeals, in the case of Carleton v. Carleton (85 N. Y. 313), held under section 135 of the Code of Procedure, that an affidavit that the-defendant was a nonresident of the state, without proof where the defendant actually was at the time, was not sufficient to give the court jurisdiction to make the order ; that some evidence must be shown from which the court could find that the defendant was not at the time within the state, and personal service of the.summons therein could not, with due diligence, be made, and that the mere fact of non-residence was not sufficient (See also Kennedy v. N. Y. Life Ins. Co., 32 Hun, 35 ; Greenbaum v. Dwyer, 66 How. 266, under § 439, Code Civ. Pro.).
But if the order had been valid, there was no legal evidence that the summons had been served on the defendant Libby under its provisions. Plaintiff presented what purported to be an affidavit signed by D. E. Rosser, and which purported to be subscribed and sworn to before John L. Gill, clerk of circuit and ex officio notary public, and to that was attached a certificate headed : "State of Mississippi, Bolavar County. I, T. R. McGuire, clerk of the chancery court in and for said county, and ex officio clerk of the board of supervisors in and for said county, do hereby certify that John L. Gill, whose signature is attached to the foregoing certificate, is and was at the time of the siging of the said certificate, clerk of the circuit court and ex officio notary public in and for said county, duly qualified to act as such."
Section 844 of the Code of Civil Procedure provides, that to entitle, an affidavit made out of the state, to be received in an action, it must be accompanied with a like certificate as to the official character of the officer taking the affidavit and the genuineness of his signature, as are required to entitle a deed acknowledged before him .to be recorded in this state.
The certificate required to entitle a deed acknowledged before him in this state is regulated by section 1 of chapter 557 of the laws of 1867. The certificate in question does not comply with the provisions of that section. It does not certify that the officer was duly authorized to take the affidavit, or to take and certify the acknowledgment of deeds to be recorded in that state. Nor does it certify that the clerk signing the certificate is well acquainted with the handwriting of such officer, and believes the signature to the verification of the affidavit to be genuine. The paper is, therefore, not an affidavit, and is no proof of the fact therein stated (Harris v. Durkee, 50 Super. Ct. 202).
It appearing that the order of publication was void, and that there was no proof of service on the defendant Libby, I am of opinion that no judgment should have been entered adjudging that the transfer of the stock of the Café Go. to defendant Libby was void, and directing the defendant, Café Go., to issue a new certificate therefor, and that so much of the order as directs the entry of the judgment nunc pro tunc, as of June 10, 1884, should be reversed, and the judgment vacated with costs and disbursements to the New York Café Go. (limited).
Sedgwick, Oh. J., and Freedman, J., concurred.