
    The National Bank of New London v. The Lake Shore and Michigan Southern Railway Company.
    1. In an action for the recovery of money, jurisdiction of the defendant may be acquired by service by publication, when the action is brought against a non-resident of the State having property in this State sought to bo taken by process of attachment. Code, sec. 70.
    2. A private corporation holds its corporate property in trust for the benefit of its stockholders. Hence a non-resident stockholder in a corporation in this State has property in this State, within the meaning of section 70 of the code.
    
      3. By force of our statute (Code, sections 194, 200, 205, 214, 218 and 219), such stock is taken in attachment when a notice of garnishment is duly served upon the corporation.
    4. The jurisdiction of the court in such a case is complete when such property has been so attached, and cannot be ousted by the subsequent answer of the garnishee denying any knowledge of such property, or by denying that the defendant in attachment is a stockholder therein.
    5. For the purpose of ascertaining its jurisdistion in such a case, it is competent for the court to hear testimony; and having found the fact in favor of its jurisdiction, its final judgment and order in the case are not void.
    6. The plaintiff was the equitable owner of forty shares of the capital stock of the defendant. Certificates of stock for those shares were outstanding in the name and possession of a third person who claimed to be the absoluta owner thereof. The books of the company showed the certificates to be in the name of such third person. The plaintiff, without returning the certificates, made demand of the defendant for the transfer and delivery to it of the stock, and, upon the defendant’s refusal to do so, brought its action against the defendant for the value of the stock, making the holder of the certificates a party defendant. Held, that upon such a state of facts the plaintiff was not entitled to a judgment for the value of the stock.
    Motion for leave to file a petition in error to reverse the the judgment of the district court of Cuyahoga county, reversing the judgment of the court of common pleas.
    On the 20th of December, 1867, the plaintiff in error commenced a civil action for the recovery of money, in the court of common pleas of Cuyahoga county, against Oliver R. Butler and Frederick Jewett, non-residents of the State of Ohio, and, at the same time, upon a proper showing, procured an order of attachment to issue against the goods and effects of the defendants, with notice of garnishment to the defendant in error, a corporation then existing in the State of Ohio, under the name of the Cleveland, Painesviile and Ashtabula Railroad Company, for the purpose of attaching in its hands forty shares of its capital stock, alleged to be the property of the defendant Oliver R. Butler.
    On the 24th day of the month the summons was duly returned by the sheriff, endorsed “not found,” as to eachiof the defendants, and on the same day the order of attachment was returned endorsed : “ On the 20th day of December, 1867, at 5 o’clock 27 minutes p. m. of said day, I served this writ by delivering a true and certified copy thereof, and a notice to appear and answer as garnishee in the within entitled cause, in the court of common pleas for said county, as by law provided, to Amasa Stone, jr., president of the within named Cleveland, Painesviile and Ashtabula Railroad Company. The within named defendants not found in my county, nor any property belonging to them whereon to attach by virtue of this writ.”
    On the 26th of the same month an affidavit, in due form, was filed for service by publication, upon the ground that defendants were non-residents of the State, and had in this State property and debts owing to them sought to be taken by attachment in the action.
    On the 81st of the same month the defendant in error, by George B. Ely, its treasurer, made answer as garnishee, as follows : “ The said railroad company, for answer to the garnishee process and notice issued against it, says that there is not, and was not at the date of the service upon it of process and notice in this case, any money owing from it to the defendants, or either of them; nor have they, or either of them, any stock in said Cleveland, Painesville and Ashtabula Railroad Company, as appears on the books of said company, or as known to it; nor has said company any property or credits of either of said defendants in its possession or under its control. It further says, that on the 3d day of May, 1867, the said Oliver R. Butler transferred, as appears from the books of the company, to Mary J. Butler, twenty-three shares of said stock, and has held none since that date of which the company has any knowledge.”
    At the February term, 1869, of the common pleas, proof of service upon the defendants by publication for six consecutive weeks from and after the 27th day of December, 1867, was duly made, and at the same term judgment by default, and upon proof of the claim, Avas rendered against the defendants in the action for $1,331.66 and costs ; and at the same time an order Avas made by the court for the sale of forty shares of the capital stock of said railroad company, as property attached in the hands of the defendant in error, and belonging to the said Oliver R. Butler.
    Jurisdiction of the persons of the defendants in the action was not acquired by the court otherwise than as above stated.
    On the 27th of April, 1869, the sheriff, under an order of the court, in due and proper form, sold to the plaintiff in the action forty shares of the capital stock of the Cleveland, Painesville and Ashtabula Railroad Company, as the property of said Oliver R. Butler, seized under the proceedings in attachment.
    Afterwards, on the 13th day of May, 1869, the plaintiff requested and demanded of the railroad company the transfer and delivery to it of the forty shares of its capital stock so purchased, but the railroad company refused aud neglected to comply with such inquest and demand.
    Thereupon the plaintiff in error, on the 9th of June, 1869, commenced its action against the defendant in error, in the court of common pleas of Cuyahoga county, to recover the value of said forty shares of stock, claiming, in addition to the facts above stated, that, at the time of the service of garnishee process on the defendant, the said Oliver R. Butler was in fact the owner of said stock; that the transfer thereof by him to Mary J. Butler, who was his wife, was without consideration, and was made with intent to defraud the plaintiff; that the stock was in fact and in law seized and held by the attachment; that, by Virtue of said proceedings and sale, the stock became and was the property of the plaintiff, and that the defendant wrongfully refused to transfer and deliver the same to the plaintiff when so requested.
    The defendant, by its answer, denied the validity of the judgment against Butler and Jewett, and of the order of sale ; denied that the court had jurisdiction to render aud make the same; denied that the court had jurisdiction of the persons of the defendants in that action; denied that the stock was seized' or held by the attachment; denied that Oliver R. Butler was the owner thereof at the time of the service of notice in attachment, or that he had fraudulently transferred the same to Mary J. Butler, or that the transfer was without consideration; denied that the defendant held the same for the benefit of any one but Mary J. Butler; denied that any interest had passed to the plaintiff by the sale under the order of court, and denied that the defendant had any right or authority to transfer the same to the plaintiff, or that it had wrongfully refused to do so.
    It appears, also, from the record, that one Sylvanus D. Lewis was made a defendant in the action, who answered the petition by a general denial, and set up, by way of defence, that he was the owner of the stock, under a purchase from Mary J. Butler, made on the 22d day of ^December, 1868, for a full consideration, and without any notice or knowledge of the proceedings in attachment, and that the certificates of the stock had been duly assigned to him.
    The plaintiff, by reply, denied the new matter in the answer of Lewis, and averred that he also was a fraudulent holder of said certificates, and had paid no consideration therefor, &c.
    Upon the issues thus made the case was finally submitted to a jury, at the February term, 1871, of said court, and a verdict was rendered for the plaintiff for $2,353.20.
    The defendant thereupon moved to set aside the verdict and for a new trial, because of divers errors upon the record, and errors intervening at the trial, and because the verdict was contrary to law and the evidence.
    The motion was overruled, and judgment entered on the verdict, and the defendant excepted, and took a hill of exceptions containing all the testimony, the charge of the court, and exceptions to sundry opinions and rulings of the court during the progress of the case.
    On the 6th of July, 1871, the defendant below filed its petition in error in the district court of Cuyahoga county, to reverse the judgment of the court of common pleas for divers errors therein assigned, and afterwards, at the September term, 1871, of the district court, the judgment of the court of common pleas was reversed.
    This motion is now made for leave to file a petition in error to reverse the judgment of the district court, upon the ground that the district erred in reversing the judgment of the court of common pleas.
    
      Kelley & Griswold and 8. Starkweather for the motion:
    The record does not show that no property was attached. The court found, in substance, that this stock was the property of the defendant in that proceeding, and ordered the sale of it.
    But it is not necessary that there should have been anything actually attached — manually siezed by the officer — to give the court jurisdiction in the attachment proceeding. If the garnishee had in its hands property belonging to the defendant in attachment, it was substantially attached, and the court acquired jurisdiction, although the garnishee did not disclose the fact that it had such property in its hands. Code, secs. 198, 200, 205, 214, 226.
    Section 214 of the code shows that the capital stock of the company could be attached by garnishee process.
    This section and other provisions of the laws of Ohio show that stocks in corporations are held to be assets, subject to execution and attachment as other property.
    
      J. Mason contra.
    1. The stock was not attached. This is shown by the return — no property found.
    2. It was not attached by the garnishee process. It is not the office of that notice to attach or bind property. It is only given because the property cannot be come at. Code, sec. 205.
    Section 214 of the code, makes it the duty of the garnishee to “appear and answer all questions,” &c.; and, in case of a corporation, it shall testify to “ any stock therein held by or for the benefit of the defendant át or after the service of notice.”
    In the present case the corporation knew of none about which it could testify ; in fact it had none — none was held in it by the defendant, and none for the benefit of the defendant. If the company had answered that this stock was held for the benefit of the defendant, it would have answered falsely, even if the transfer to Mrs. Butler had been made for a fraudulent purpose. Even if this stock was held by Mrs. Butler in fraud of the rights of her husband’s creditors, yet the company in no sense held it as property, money or credits in its hands as due from it. The company does not in fact sustain that relation even to its acknowledged stockholders. The property it holds belongs to itself not to its stockholders. The share is a right to its net earnings, when divided ; but the company is not the debtor of the stockholder in any sense, except for the dividend when declared. Ang. & Ames on Corp. sec. 557.
    
      Under section 205 of the code, no foundation for a claim against the company can arise; nor could it under that section even if Oliver R. Butler owned the stock'in his own name. The company would not be liable to Butler himself for either money, property or credits, except when a dividend was due.
    Section 214 affords the only foundation for attempting to charge the company. But it did not know of any stock held by or for the benefit of the defendant Butler. It had none. If the stock in the name of his wife was in fact his, if the company did not know it, will it be said that the company shall stand liable for it to the plaintiff in attachment ?
    If the company did not make proper answer, the remedy of the plaintiff in attachment is obvious under sec. 218.
    Stocks or interest in stocks can be subjected in no other way than by being attached in fact.
    
    I refer the court to recognized principles applicable to the question laid down in Drake on Attachment. Secs. 221, 223, 226, 461, 462, 471, 524, 528, 541, 548.
    As the garnishee in the attachment proceeding could not “stand liable” for this stock, and as it was not in fact attached, it follows that no property did and no property could come within the grasp of process to give the court jurisdiction.
    3. If the plaintiff below had in fact any rights to this stock, the railway company was not bound to issue to it a certificate for the stock. Its remedy, if any, was in equity to compel the company to admit it as the owner of the stock.
    But it is certainly clear that under the principle in section 524 of Drake, this railway company was not liable to a judgment for the value of this stock by reason of its refusal to issue a certificate to the bank when the rights of Mary J. Butler, who held its certificate, had in no sense been adjudicated upon. The judgment should have been for the defendant.
   McIlvaine, J.

The question iti this case to which the arguments have been chiefly directed is, had the court of common pleas of Cuyahoga county jurisdiction to render judgment against Oliver R. Butler in the action against him and another, and to make an order therein for the sale of attached property, under which the plaintiff claims to have acquired title to the forty shares of railroad stock, for the value of which the action was brought against the defendant in error ?

Jurisdiction of the defendant Butler was obtained, if at all, by service by publication, authorized by section 70 of the code, upon the ground that the defendant was a non-resident of the State, and has property in this State, which was taken by virtue of the garnishee process served upon the railway company.

Section 70 of the code provides that service may be made upon the defendant by publication, in an action brought against a non-resident of the State having property in the State sought to be taken by any of the provisional remedies, or to be appropriated in any way.

We shall assume, for the purpose of this action, that it is within the power of the legislature to prescribe the manner in which service may be made in actions instituted in the courts of the State, in which property situate within the State is in any way involved, or may be appropriated.

It will be observed, that service by publication is authorized by the 3d clause of the 70th section of the code, upon the concurrence of three conditions, 1st. The non-residence of the defendant; 2d. That he is the owner of property within this State; and 3d. That such property is sought to be taken by a provisional remedy, &c.

The non-residence of Butler, at the commencement of the suit against him, is not disputed. But it is contended, 1st. That he was not the owner of any stock in the railroad company at the time ; and 2d. That no property was in fact taken under the-proceeding in attachment.

As to the first proposition we will only say, at this place, that, in the action against him the court upon inquiry found that he was the owner ; and in the case now under review, upon a direct issue joined, the jury found, and, we think, upon sufficient evidence, that he was the beneficial owner at the time, and that his transfer of the stock was in fraud of his creditors.

Then, as to the second proposition, being the owner of the stock, he had an interest in the corporate property of the defendant in error, which was a proper subject for attachment, and Avas held by the garnishee process. Under our statute a corporation may properly be made a garnishee in a case where the only property sought to be attached is capital stock of the company, owned by the defendant or held for his benefit. And such garnishee, from the time of service of notice upon it, becomes liable to account to the attaching creditor for such stock and its proceeds, if he finally succeed in the action.

Section 194 of the code, provides that stocks and interest in stocks may be attached. Section 200 provides that a corporation may be made garnishee. Section 205 provides that the garnishee shall stand liable to the plaintiff for all property in his hands from the time of notice. And section 214 provides that the garnishee, if a corporation, shall, in its ansAver, disclose truly any stools therein held by or for the benefit of the defendant at or after the time of service.

We take it, therefore, that it Avas the intention of the legislature that any stock in the corporation, owned by the defendant, or held for his benefit at the time of the notice or afterwards, should be bound by the attachment. And that too, whether the officers of the corporation making the ansAver might or might not have knowledge that the defendant Avas the owner thereof. If this be so, it folloAVS that the answer of the garnishee denying any knowledge of such ownership is not conclusive upon the question of such jurisdictional fact. Nor can such answer deprive the attaching creditor of his right, under the statute, to make service by publication. That right depends upon the existence of the fact of the defendant’s ownership, and not upon the garnishee’s knowledge of it. And jurisdiction once obtained can no more be ousted by the answer of the garnishee, than it can be acquired by the answer when the defendant is not the owner of any property in the State.

It is true, that a corporation does not own the shares of the capital stock, nor has it any control over it, except as to the manner of transferring its legal title ; but the point I desire to make is this, that, by force of the statute, shares of stock in a corporation in this State, belonging in law or in equity to a non-resident debtor, may be as effectively attached by making the corporation a garnishee, as if the stock were in its possession and under its control.

That the answer of the garnishee denying the defendant’s ownership of any of its stock, or denying its knowledge of such ownership, is not conclusive as to the fact, is manifest from the provisions of the 218th section of the code, which provides for an action in favor of the plaintiff in attachment against the garnishee, if the disclosures in the answer are not satisfactory to the plaintiff. And that an unsatisfactory answer from the garnishee is not conclusive upon the question of jurisdiction in the original case, is clearly inferable from the provisions of section 219, which provides that judgment shall not be rendered against the garnishee in an action against him for failing to make disclosures in his answer satisfactory to the plaiutifF, until the action against the defendant in attachment is determined, and if determined in favor of the defendant in attachment the action against the garnishee shall be dismissed.

We think the provisions of these sections are not limited to cases where jurisdiction of the defendant is otherwise obtained, but apply to cases where the jurisdiction depends upon the existence of property in the hands of the garnishee liable to be taken by the garnishee process.

The question under consideration being as to the jurisdiction of the court, and not as to the regularity of its proceedings, it is important, it appears to me, to keep distinctly in mind the fact that this action was in personam, — an action for the recovery of money, and not a proceeding in rem merely. It matters not, therefore, whether the property taken by the garnishee process came into the custody of the officer or not. The only important and control ing question is whether the case was one in which service upon the defendant by publication was authorised by statute.

That the publication was duly made, and upon the showing and in the manner prescribed, is not controverted ; and that notice of garnishment was duly served upon the corporation is not denied.

In the attachment proceeding against Butler, it was claimed by the plaintiff that he was the owner of the stock, and that claim was verified by affidavit. The garnishee in his answer denied that the defendant owned any stock to its knowledge. Afterwards, upon the trial of the cause, the court heard testimony and found that he was the owner, although it stood in the name of his wife. The record does not disclose the testimony that was offered, but we are of opinion that it was competent for the court to inquire into this jurisdictional fact, and having found it in favor of the jurisdiction, the subsequent judgment and order rvere not void.

Notwithstanding the views above expressed, the court is unanimously of opinion that this motion ought to be overruled, for the reason that the plaintiff in error was not entitled, in the court of common pleas, to the judgment that was rendered in its favor. Admitting all that can be claimed for the plaintiff, upon the petition and from the testimony set out in the record, no case was made for a judgment against the defendant in error for the value of the stock.

The plaintiff's case was this : It was the equitable owner of forty shares of the capital stock of the defendant — a railroad corporation. Certificates for this stock wefe outstanding in the name and possession of another party claiming title. The defendant refused to acknowledge the plaintiff as a member or stockholder. The plaintiff demanded of the defendant to transfer and deliver to it the forty shares of which it was the equitable owner. The defendant refused to comply with the demand. Action for the value of the stock and judgment accordingly. .

In order to clearly understand the rights of these parties, the nature of the relation between them must be considered.

The defendant was a railroad corporation whose corporate property consisted of a railway and other valuable interests. This corporate property was held by the company in trust for the benefit of its stockholders. The plaintiff was an equitable stockholder,.and, as such, had a resulting beneficial interest in the corporate property, and was entitled to all the rights and privileges of a corporator. The defendant had no power of control over the stock of the plaintiff, except as to the mode and manner of transferring the legal title. The legal title, or, in other words, the certificates of the plaintiff’s stock, the primary evidence of its ownership, was in the name and possession of another'party vvho claimed to be the absolute owner thereof. The books of the company coincided with the evidence of the certificates, and made a prima facie case against the claim of the plaintiff. Now, can it be, that because the defendant refused to assume the peril of deciding between the contending claimants, by issuing other certificates fot the same stock to the plaintiff upon demand, that it thereby became a wrongdoer and converted the plaintiff’s stock to its own use, and rendered itself liable to respond in the full value of the stock to the claimant who could establish his right in a court of law ? The mere statement of the proposition refutes it.

It may be, that the case, as here stated for the plaintiff, shows a good cause of action, but the relief obtained has no. correspondence with the injury sustained. It does not appear that the plaintiff has been deprived of any right or privilege belonging to it as a stockholder, but simply that the defendant has refused to acknowledge it to be a stockholder, and to furnish it with evidence of membership.

The remedy for this wrong lies in another direction.

Motion overruled.

Welch, C. J., and White, Day and West, JJ., con eurred.  