Court Opinion

ID: 3849682
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:28:01.506561+00
Date Added: 2024-06-11T14:13:09.036013
License: Public Domain

Frederick J. Poth, in his lifetime, executed a deed of trust concerning shares of capital stock of F. A. Poth  Sons, Inc., for the benefit of persons therein mentioned, the trust to run for a period of twenty years, after which time the shares of stock included in the trust were to be transferred by the trustee to the parties entitled thereto. The trust expired April 30, 1924. Two hundred shares of this stock belonged to Mrs. Claire M. P. Gulick. In addition to the stock, the trustee, on January 26, 1922, issued a check to the order of Mrs. Gulick for $12,000, representing dividends on the shares belonging to her. This check unendorsed by her was delivered to her attorneys who retained it in their possession and claimed a lien on the fund it represented for services rendered.
On March 21, 1924, Mrs. Gulick was adjudged a bankrupt and plaintiff appointed trustee. In the meantime, *Page 558 
between June 23, 1922, and March 17, 1923, a number of attachments had issued against the stock; among these writs were two foreign attachments, one in favor of Harry T. Stoddart, trustee, and another in favor of Julius Garfinkle, trading as Julius Garfinkle  Company, who are appellants in the present proceedings. The trustee in bankruptcy filed the bill in these cases against the attaching creditors, joining, as parties defendant, the trustees under the trust deed above referred to and the attorneys for Claire M. P. Gulick, averring the attachments were not binding against the stock in the hands of the trustees under the trust deed, nor against the check in the hands of the attorneys, and asking an order to transfer and deliver both the stock and the check to plaintiff, subject to whatever lien the attorneys might have on the funds for services.
The answer of Garfinkle averred the attachment issued by him was not for the purpose of seizing specifically the two hundred shares of stock referred to, but to secure possession of the interest of Mrs. Gulick under the trust. Stoddart answered to the same effect and further submitted to the court the legal question whether the check was the subject of attachment. No testimony was taken, nor was there dispute as to the facts in the bill and answer, the questions being whether, under the averments, the stock and check were bound by the attachment proceedings.
The description of the garnishees in the writ by Garfinkle is "individually and as trustees of the estate of Frederick J. Poth, deceased." Although defendants acted in that capacity, they did not hold the stock as such trustees, but as trustees under a trust deed, an entirely distinct and separate transaction, in no manner having to do with the estate of Frederick J. Poth. Had the garnishees been described generally without statement of the employment in which they acted, it might well have been argued the property in their hands was bound regardless of the capacity in which held. A *Page 559 
person, however, may frequently have possession of property in different capacities, and if summoned as garnishee in a particular manner, he has notice that property held in that respect alone is bound. Such property solely is the subject-matter of the attachment and the creditor is without right to complain if his writ is limited to the property thus specifically designated: Smith's App., 108 Pa. 508. The particular stock here claimed was held by the trustees neither as individuals nor as trustees of the Poth estate, but as trustees under a deed of trust entirely distinct from that estate. The attachment of Garfinkle was accordingly insufficient to bind the stock.
The Stoddart attachment was similar in language to that used by Garfinkle, except that, following the designation of the garnishees as executors and trustees of the Poth estate, an added clause stated "and in any other capacity." Here was sufficient notice to the garnishees that the subject-matter of the attachment was any and all property held by them in any manner for the benefit of the judgment debtor. There is nevertheless a further difficulty in the way of permitting either of the attachments to cover the stock. Sections 22, 36 and 37 of the Act of June 16, 1836, P. L. 755, contemplated service of the corporation as garnishee when stock is seized under a writ of attachment. Inasmuch as the corporation has not been summoned, necessary parties are not before the court. Appellants seek to avoid this difficulty by pointing to the fact that their attachment was not against the stock, but against the interest of the debtor in the stock under the trust deed, and in support of this view refer to Moys v. Union Trust Co., 276 Pa. 58. In that case, however, the rights of the beneficiaries under the trust agreement were not merely to a delivery of the stock, but to receive a portion of the proceeds of the sale of the stock plus dividends, less proper charges, the decision being based on the fact that the right of the creditor was not an absolute right to the stock, but merely to an accounting *Page 560 
for her share of the property. We consequently held that any money found due defendant under the agreement would be a proper subject of attachment. Here it was the duty of the trustee to turn over the stock itself, and the dividend check was turned over without being cashed, accordingly no question arose as to an accounting for proceeds.
The Uniform Stock Transfer Act of May 5, 1911, P. L. 126, does not help appellants, as the provisions of that legislation apply only to certificates issued after the act became effective. However, if we treat the act as applicable to the case, section 13, provides, "No attachment or levy upon shares of stock for which a certificate is outstanding shall be valid until such certificate be actually seized by the officer making the attachment or levy, or be surrendered to the corporation which issued it, or its transfer by the holder be enjoined." Section 14 provides further, "A creditor whose debtor is the owner of a certificate shall be entitled to such aid from courts of appropriate jurisdiction by injunction and otherwise, in attaching such certificate, or in satisfying the claim by means thereof, as is allowed at law or in equity in regard to property which cannot readily be attached or levied upon by ordinary legal process."
In the present case the certificates of stock were not actually seized or surrendered to the corporation, nor was an injunction or other aid of the court requested in securing possession of them. Whether we view the proceedings under the old or the new law, the necessary procedure to make the attachment effective was not followed.
As to the $12,000 check, it was drawn by F. A. Poth  Sons, Inc., to the use of the executors of the Frederick A. Poth Estate, endorsed to Mrs. Gulick, and delivered to her attorneys. The fund it represented never came into the hands of either the executors or trustees, consequently it was not bound by the proceedings. The attachment against the attorneys as garnishees is also *Page 561 
without effect, as they are neither payees nor endorsers, but mere strangers to the check on which they claim a lien for services. The check is not payment but, if it were, it is not payable to them. Accordingly, there is nothing in their hands but a chose in action in favor of another on which they could not even sue and which is not attachable. An attachment must be against the debtor of defendant, and not against one who holds merely a chose in action, the evidence of the debt: Raiguel 
Co. v. McConnell, 25 Pa. 362, 363; Gilmore v. Carnahan, 81* Pa. 217, 220; Taylor v. Huey, 166 Pa. 518, 519.
The decree entered in each case is affirmed at costs of appellant.