Court Opinion

ID: 3505912
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:16:09.340387+00
Date Added: 2024-06-11T14:16:49.483110
License: Public Domain

My concurrence in the result is much limited. I think the garnishee was a bit too summary in judging for itself the legal breadth of the affidavit of garnishment. It seems to me that the inquiry should have gone far enough to disclose whether the garnishee had "in his hands or under his control" (2 Mason Minn. St. 1927, § 9356) any property belonging to the defendant. If the disclosure had been that defendant had or was entitled to stock the certificates for which were unissued or, if issued, remained in the garnishee's possession or control, the garnishment could have been sustained under the rule of First Nat. B.  T. Co. v. Malerich, 193 Minn. 626,259 N.W. 546.
I disagree with the conclusion that shares of stock in a corporation can be impounded by garnishment of the company when the certificates are issued and in the hands of the original holder or some assignee thereof. It is of no avail to draw refined and purely academic distinction between the stock and the certificates, between the former as the actual property and the latter as the evidence thereof. As a practical matter, it is another of the many cases where the property is of no value without the tangible, assuring, and transferable evidence thereof. That is recognized by plain implication, if not expressed, in all of our cases. Even in the Malerich case it was deemed necessary to have the certificates issued and put in the hands of the sheriff to abide the result of the action against the defendant. That course had our approval.
In short, the property is so far integrated with the evidence of it, "title to a chattel is [so much] merged in a document" (Restatement, Conflict of Laws, § 99), that for purposes of garnishment there can be no possession or control over the property without *Page 514 
possession or control of the certificate. Stock certificates are subject to levy and attachment. Trover lies for their conversion. They may be the subject of escheat. But could an escheat of corporate stock be declared without jurisdictionin rem over the certificates? I doubt it. Surely, under the rule of First Trust Co. v. Matheson, 187 Minn. 468, 246 N.W. 1,87 A.L.R. 478, we would have no jurisdiction in rem over corporate stock without such jurisdiction of the certificates. Yet, to hold that the garnishee corporation is subject to garnishment in respect to outstanding stock, even though it does not have the certificates and the court has no jurisdiction of them in rem, is to hold that, notwithstanding, such jurisdiction will be exercised to the extent of impounding the stock. That there may be jurisdiction in personam of the holder does not cure the lack of possession or control in the garnishee, which the statute demands to make property subject to garnishment.
To me it is obvious that where the stock certificates have been issued and are in the possession or control of others, it is a violation of our statute to subject the corporation to garnishment in respect thereto. I just cannot see that it has that possession or control of the stock which, under our statute, is a condition precedent to garnishment. We have never so held. In other states, with similar statutes, garnishment does not lie. Pease v. Chicago Crayon Co. 235 Ill. 391,85 N.E. 619, 18 L.R.A.(N.S.) 1158, 14 Ann. Cas. 263.
With a statute such as ours, imposing so clearly and mandatorily the condition of possession or control, it is idle to discuss the generalizations of text writers or decisions based upon more elastic statutes.
MR. JUSTICE LORING took no part in the consideration or decision of this case. *Page 515