Court Opinion

ID: 3591346
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:39:57.537216+00
Date Added: 2024-06-11T07:42:10.040847
License: Public Domain

The defendant is a corporation organized and doing business in the state of New Jersey, and having no place of business in this state. The summons was personally served upon it and it has appeared in the action. It deposited and pledged with the Produce Exchange Trust Company, a domestic corporation, certificates of 3,220 shares of stock in the New Jersey and Pennsylvania Telephone Company, a corporation organized and doing business in New Jersey, as collateral security for the payment of a loan by that *Page 201 
company to it. The sheriff made the alleged levy under subdivision 3 of section 649 of the Code, by serving a copy of the warrant with the proper notice upon the Produce Exchange Trust Company.
The Appellate Division has certified the following question:
Whether, where the certificates of stock of a foreign corporation belonging to a non-resident of the state are in possession of a resident of this state as pledgee, the interest of the owner and pledgor can be levied upon under a warrant of attachment against such owner, made by service of a notice on the pledgee in the manner prescribed by subdivision 3 of section 649 of the Code.
The certificates of stock of a foreign corporation are capable of manual delivery, and when the person to whom they have been issued indorses upon them an assignment in blank pursuant to the rules of the corporation and the laws of the country of its domicile, they may be transferred by such delivery, and then the property or rights of property of which they are the evidence may be transferred.
If the record had shown that these certificates were thus indorsed, then the question certified could be answered in the affirmative upon the authority of Warner v. Fourth NationalBank (115 N.Y. 251). That was the case of a levy upon the pledgor's interest in certain promissory notes, pledged by a non-resident to a resident pledgee as collateral to a loan. The levy was not upon the notes themselves, and thus the sheriff was not required to take possession of them, but upon the pledgor's intangible right to redeem the notes, or to receive from the pledgee the surplus in his hands after satisfying his lien upon them, and thus the levy was properly made — in the same manner as in the case before us — under subdivision 3 of section 649 of the Code, by leaving a certified copy of the warrant, and a notice showing the property attached, with the resident pledgee. The non-resident's thing in action would be against a resident and enforcible here, and thus within our jurisdiction, and, therefore, the subject of levy under the attachment. *Page 202 
But the difficulty is, the record does not state that the pledgor's assignment is properly indorsed in blank upon the certificates; it may not be indorsed at all. We cannot assume something from nothing, affirmative acts without evidence of them; the pledgee may hold the pledgor's promise to assign. The pledgor has appeared in the action, but as it is a non-resident, without domicile, office or existence within the state, that fact adds nothing to the leviable quality of the subject-matter.
If the resident pledgee should sell the certificates and realize a surplus, the surplus would be within our jurisdiction. But the question certified does not present that situation. Nothing can be rightfully realized under this levy unless the sheriff can sell either the shares of capital stock, of which the certificates are the evidence, or such intangible rights respecting the same and proceeding therefrom as will ultimately result in compulsorily transferring the title to the stock itself to his vendee.
It has been settled by abundant decisions in this and other jurisdictions that the certificates of shares in the capital stock of a foreign corporation are mere evidences of the owner's rights in such stock, and are not the stock itself, and although the certificates may be within this state, the stock itself is not, but is held and owned by the corporation in the foreign state, and, therefore, is incapable of seizure or levy under attachment here, and that although the right to shares thereof may be held by the owner wherever he may make the right available, still that right finds its value and quality as property in the right to require the corporation at its domicile to discharge the obligations which it has assumed and for which it holds the capital stock and assets. The sheriff can levy upon nothing which he cannot actually seize within his jurisdiction, or so constructively seize as to enable him by a sale thereof to give such title to his vendee as the debtor himself held; that is, such as will, in the case before us, give to the vendee the same right of recourse to the foreign corporation as the debtor had. (Plimpton v. Bigelow, 93 N.Y. 592; Christmas *Page 203 
v. Biddle, 13 Penn. St. 223; Winslow v. Fletcher,53 Conn. 396; Tweedy v. Bogart, 56 Conn. 419; Ireland v. GlobeMilling, etc., Co., 19 R.I. 180; Armour Bros. Banking Co. v.Smith, 20 S.W. Rep. 690; Smith v. Downey, 34 N.E. Rep. [Ind.] 823; Young v. S.T. Iron Co., 2 S.W. Rep. [Tenn.] 202;Pinney v. Nevills, 86 Fed. Rep. 97; Cook on Stock, Stockholders  Corporation Law, paragraph 485, See Matter ofBronson, 150 N.Y. 1; Matter of Whiting, ib. 27.)
It is true that our law, notably section 4 of the Statutory Construction Law, in effect declares stock certificates property, and so they are wherever we are able to enforce our law, namely, within this state. As to the stock and interests therein of domestic corporations they cannot exist, except under and subject to our laws, and, therefore, our jurisdiction is complete over them.
But we cannot enforce our law in a foreign state as to the stock of its corporations, and the interests therein of its holders, and we cannot, therefore, give title to it otherwise than by our jurisdiction over its owners. An attachment is directed against property and not against persons, and whatever control the court may exercise over all persons, resident or non-resident, who are brought within its jurisdiction, such control is not attachment process against vendible property, or interests in or through it.
It is suggested in the opinion below that the sheriff can make the sale, and the vendee can take his purchase for what it is worth. The sheriff did not attach the paper certificates, for he did not take them into his actual custody; he, therefore, cannot sell them as paper or manuscripts. Whatever he sells is intangible. He can make and deliver a certificate of sale (Code, section 647), but his vendee, or at least the ultimate vendee, must repair to New Jersey to recover what he supposes he has bought. Our courts cannot give him possession. The New Jersey court could give full faith and credit to our judicial proceedings by adjudging that our sheriff levied upon nothing outside of his jurisdiction, and, therefore, his certificate of sale does not give the right to possession of anything *Page 204 
in New Jersey. We should not expose purchasers at our judicial sales to such hazards.
The question certified should be answered in the negative, and the order appealed from reversed, with costs.
PARKER, Ch. J., HAIGHT, CULLEN and WERNER, JJ., concur, with GRAY, J., for affirmance; O'BRIEN, J., concurs with LANDON, J., for reversal.
Order affirmed.