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    Society Perun v. Cleveland. Society Perun v. Hay.

      Corporation de facto— Collateral inquiry — Effect upon prior acts of subsequent judgment in quo warranto — Effect of such judgment upon third parties — Whether retro-active — Evidence of de facto existence of corporation — Admissibility.
    1. Where an attempt is made, in good faith, to organize a private corporation by colorable proceedings, approved by the attorney-general and the secretary of state, the paper intended for the certificate of incorporation admitted to record in the office of the latter, duly certified by him as the certificate of incorporation of such body; where these steps are followed by uninterrupted' and unchallenged user for a number of years, and valuable rights and interests have been in good faith acquired, enjoyed and disposed of by such organization, acting as-a body corporate, it is a corporation de facto, and its corporate capacity can not be questioned in a private suit to which it is a party.
    2. Such an organization has capacity to acquire, hold, enjoy, incumber, and convey the legal title to real estate; and rights acquired or liabilities incurred by it and by parties dealing with it in good faith,-will not be divested or defeated by a subsequent judgment in quo warranto proceedings, excluding it from, the use of corporate franchises by reason of some defect or omission in the original steps taken to assume corporate powers.
    3. It is not competent for this court, in a quo warranto proceeding ousting an acting corporation of the franchise to be a body corporate, to consider or determine the rights or liabilities of third parties, who have acquired such rights or incurred such liabilities in their dealings with such acting corporation.
    4. In such a proceeding, when the court has adjudged that such body be excluded from the right to exercise the franchises of a corporation, it has exhausted its jurisdiction over the subject-matter of the controversy before it.
    5. A judgment of ouster against a pretended corporation by reason of defect in the form of the certificate of incorporation, is not retro-active in its effect upon rights acquired and liabilities incurred in the course of transactions in good faith with such acting corporation, prior to such ouster.
    6. On the trial of an action to which such an organization is a party, evidence of an attempted and colorable incorporation, followed by user in good faith for a number of years, is admissible (as against a party not estopped to deny its corporate existence), to prove it a corporation de facto, though offered after judgment of ouster.
    Error to the District Court of Cuyahoga county.
    On the 28th of January, 1874, the city of Cleveland conveyed to Perun (an incorporated school and library society), certain real estate situated in that city, and to secure the unpaid purchase-money therefor, Perun, on the same date, executed and delivered to the city its four promissory notes and a mortgage upon the premises conveyed.
    The .city neglected to file this mortgage for record until the 21st day of October, 1879. In February, 1874, certain persons attempted to organize a mutual benefit association under an act supplementary to an act to provide for the creation and regulation of incorporate companies passed May 1, 1852 (S. & C. Stat. 271), passed April 20, 1872 (69 Ohio L. 82), under the corporate name of Society Perun. Thereafter, in May, 1874, Perun delivered to Society Perun its deed purporting to convey to the latter the premises ■theretofore mortgaged to the city. From that time forward, and prior to the filing of the city’s mortgage for record, Society Perun, acting in its supposed corporate capacity, from time to time, executed and delivered deeds, mortgages, and executory contracts of sale, purporting to convey, incumber and sell parcels of these mortgaged premises to various parties, who were made defendants in the action below, and some of whom (including Amasa Stone, a mortgagee, and who had paid taxes upon the premises mortgaged to him), are cross-petitioners in error. Thereafter, in June 1880, in a proceeding in quo warranto, in this court, instituted by the Attorney-General, Society Perun was adjudged not to have become incorporated in. conformity to the laws of this state, but that its pretended incorporation was in violation thereof; and it,was accordingly ousted of all rights and franchises to be a corporation;
    These proceedings in quo warranto were had pending, and prior to the. final judgment in the action below, which was brought by the city to foreclose her mortgage, and also to foreclose her supposed vendor’s lien on the mortgaged premises, as against these subsequent grantees, mortgagees» and purchasers.
    The cause was appealed from the court of common pleas to the district court, wherein it was tried upon the issues, the court finding among other things, that, as to the city of Cleveland, Society Perun was not a corporation either in law or in fact, and that the conveyance to it by Perun was void as against the city; and that the mortgages and other liens and claims of all the defendants (except the lien of Amasa Stone for taxes, and the claims of certain defendants for improvements on the premises), were subsequent and inferior to the lien of the city, in whose favor the court adjudged the second lien, and subsequent only to the lien of Amasa Stone for taxes paid by him, but of equal rank and merit with the holders of liens for expenditures on account of improvements above mentioned.
    By the judgment in the quo Warranto proceeding it was by this court in form adjudged that the defendants (the pretended incorporators) ever since their pretended incorporation, had unlawfully and without authority exercised the fanchises of, and usurped the right to be,a body corporate; that the pretended organization of these defendants as a corporation was wholly void and of no effect, and vested in them no corporate rights, powers, privileges, or franchises of any description whatever.
    It was further in form adjudged that the defendants never had, nor had any of them, the authority or lawful right to be a body corporate or to exercise or hold any of the powers, rights and liberties, privileges, functions or franchises of a body corporate; but that they and each of them in the use and exercise of the same were and had ever been usurpers thereof. The sole ground upon which this judgment of ouster was rendered was that while the statute required that they should set forth in their certificate of incorporation (among other things) the manner of carrying on the business of the association, the attempted compliance with this requirement was in these words :
    “ Third. That the manner of carrying on the business of said association shall be such as may be from time to time prescribed by the by-laws of such association; provided that the same shall not be inconsistent with the laws of tho state of Ohio.”
    Upon the trial below the plaintiff gave in evidence, against the objection of defendants, the record of the quo warranto proceedings.
    The defendants offered in evidence the writing which was filed with the secretary of state as the certificate of incorporation of Society Perun.
    They also offered to prove that the pretended incorporators proceeded to comply strictly with the requirements of the statutes; that they elected trustees, prepared a certificate of incorporation stating explicitly the manner of carrying on the business; that this was forwarded to the secretary of state, who submitted it to the attorney-general for examination and approval; that the secretary of state returned this paper with another form of certificate which had been approved by the attorney-general and secretary of state, and which was the identical certificate actually filed with the secretary of state, and under the supposed authority, of which an organization was in good faith attempted, and that they proceeded in good faith to act and transact its business under the supposed authority of such incorporation.
    All this was excluded, and the defendants excepted. To reverse this judgment the present proceeding is prosecuted.
    The alleged errors chiefly relied upon are the exclusion of the evidence offered to prove an attempt, in good faith, to incorporate Society Perun ; the finding and holding of the court that Society Perun had never been in law or fact a corporation; that as against the city the deed from Perun was void; and adjudging the city’s lien to be prior to the rights and liens of Society Perun and its mortgagees, grantees, and purchasers.

      Willson $ Sykora, for plaintiff in error.
    The judgment of ouster in the quo warranto proceeding was rendered long after all the rights of the parties to these suits had become vested. It could not have a retroactive effect so as to defeat the vested rights of Society Perun and its grantees. Gaff v. Flesher, 33 Ohio St. 115 ; McCarthy v. Lavasche, 89 Ill. 270.
    The plaintiff in error is sued, served, and brought into court as a corporation, the averment being made in the original petition that Society Perun is a corporation. The city of Cleveland is therefore estopped to deny its existence as such. Buffalo & A. R. R. Co. v. Cary, 26 N. Y. 77; Mitchell v. Deeds, 49 Ill. 416.
    Notwithstanding the defect in the organization of Society Perun as a corporation, its acts and transactions, under color of its supposed powers, up to the time of the judgment of ouster, were valid. . It was a corporation de facto, and no advantage could be taken of the defect in its organization collaterally. Searsburgh Turnpike Co. v. Cutler, 6 Vt. 324; Bank of Manchester v. Allen, 11 Vt. 302; Grand Gulf Bank v. Archer, 8 S. & M. 151; Boone Corp., sec. 154; Bondell v. Fay, 32 Cal. 354; Dannebroge Gold

      Quartz Mining Co. v. Aliment, 26 Cal. 286; Ex parte Strang, 21 Ohio St. 610; Jones v. Dana, 24 Barb. 395.; Douglas County v. Bolles, 94 U. S. 104.
    It is only when the forfeiture is enforced and the charter vacated by competent authority, that the corporation and its legal capacity ceases. Darst v. Gale, 83 Ill. 136.
    The acts of an officer de facto, when questioned collaterally, are as binding as those of an officer de jure. To constitute an officer de facto of a legally existing office it is not necessary that he should derive his appointment from one competent to invest him with a good title to the office. It is sufficient if he derive his appointment from one having colorable authority to appoint.

      B. It. Beavis, for the executors of Amasa Stone, cross-petitioners in error.
    Society Perun did not owe either money or any legal or equitable duty to the city of Cleveland, and the city had no such legal interest as would qualify any complainant other than the state itself to complain of either the want of or abuse of corporate powers by Society Perun. Rowland v. Meader Furniture Co., 38 Ohio St. 269; Gaff v. Flesher, 33 Ohio St. 115; Presbt. Soc. v. Smithers, 12 Ohio St. 251; Hullman v. Honcomp, 5 Ohio St. 237; First Parish in Sudbury v. Stearns, 21 Pick. 148; Trustees of Vernon v. Hills, 6 Cow. 23; Railroad Co. v. Ellerman, 105 U. S. 173; Searsburgh Turn. Co. v. Cutler, 6 Vt. 324; Bank of Manchester v. Allen, 11 Vt. 302; Buffalo & A. R. Co. v. Cary, 26 N. Y. 77; Tarbell v. Page, 24 Ill. 46; Betts v. Betts, 4 Abb. N. Cas. 317; Savings Inst. v. Board of Education, 75 Mo. 408; Thompson v. Cander, 60 Ill. 247; C. L. & C. R. Co. v. D. & V. R. Co., 75 Ill. 113; Darst v. Gale, 83 Ill. 136.
    The judgment of ouster could not have a retroactive effect and affect prior acquired rights. Gaff v. Flesher, supra; Rowland v. Meader Furniture Co., supra.

    The district court erred in refusing to receive in evidence for any purpose the certificate of incorporation of Society Perun. Rev. Stats., sec. 3238; Osborn v. People, 103 Ill. 224; Mitchell v. Deeds, 49 Ill. 416.
    The only proper inquiry is limited to whether the corporation was such de facto. Hullman v. Honcomp, supra; Presbt. Soc. v. Smithers, supra; Gaff v. Flesher, supra; Rowland v. Meader Furniture, Co., supra; Ex parte Strang, 21 Ohio St. 610; Morawetz Corp., secs. 136, 139.
    The title to real estate derived through a corporation which thereby abuses its powers becomes indefeasable in the hands of its vendee. Walsh v. Barton, 24 Ohio St. 43; Darst v. Gale, supra.

    Where a corporation is incompetent by its charter to take title to real estate, a conveyance to it is not void, but only voidable, and the sovereign alone can object. National Bank v. Matthews, 98 U. S. 628.
    In ejectment by a corporation it is not proper to decide whether it was a violation of the charter to receive the conveyance. Shewalter v. Pirner, 55 Mo. 218; Goundie v. Northampton Water Co., 7 Pa. St. 233. The same rule applies in partition. Kelly v. People's Trans. Co., 3 Ore. 189.

      A. T. Brinsmade, and W. E. Sherwood, for the city of Cleveland.
    When the corporate existence of an association pretending to exist as a corporation is denied, that fact must be established by affirmative proof. A certified copy of the articles of incorporation made out in conformity with the statutory requirements, and filed with the secretary of state, is made prima facie evidence only of the existence of such corporation.
    The non-corporate existence of Society Perun was alleged and proved by the introduction of the judgment of ouster. The question, then, is not one as to the right .of collateral inquiry, but one as to whether the defendants below should have been permitted to make prima facie proof by the introduction of the pretended certificate of a corporate existence which the supreme court had previously declared did not exist and never had existed, and which showed on its face a fatal defect. The district court properly held that the judgment of this court in quo warranto was conclusive, and that Society Perun was not a corporation de jure.

    The city of Cleveland had the right of collateral inquiry. Railroad Co. v. Sullivant, 5 Ohio St. 276 Callender v. Railroad Co., 11 Ohio St. 516; Atkinson v. Railroad Co., 15 Ohio St. 21 ; Raccoon River Navigation Co. v. Nagle, 29 Ohio St. 238; Railroad Co. v. Stout, 26 Ohio St. 241-258; Bank v. Aikin, 18 Johns. 137 ; Field v. Cooks, 16 La. Ann. 153; Mining Co. v. Woodbury, 14 Cal. 424; Harris v. McGregor, 29 Cal. 124; Bigelow v. Gregory, 73 Ill. 197; Carey v. Railroad Co., 5 Iowa, 357; Paterson v. Arnold, 45 Pa. St. 414; O. & V. R. R. Co. v. Plumas Co., 37 Cal. 357-360.
    The cases cited by counsel in opposition are ones in which the corporations had been created by special acts, and none have relation to those created by general laws. The distinction as to the right of such inquiry in the two classes of cases is obvious. Ang. & Ames Corp., sec. 83; Fire Dept. v. Kip, 10 Wend. 266; Bigelow v. Gregory, supra; Mining Co. v. Herkimer, 46 Ind. 142; Insurance Co. v. Cram, 43 N. H. 636; McIntire v. Ditching Assn., 40 Ind. 104; Reed v. Street R. Co., 50 Ind. 342; Richmond Factory Assn. v. Clarke, 61 Me. 351; Boyle v. Mizner, 42 Mich. 332.
    Inasmuch as the city of Cleveland had no direct contract relation with Society Perun, and had not otherwise recognized its legal corporate existence, the city was entitled to dispute such existence. As to the city the society was not a corporation de facto. M. C. & L. M. R. R. Co. v. Stout, 26 Ohio St. 241.
    No case can be found where it is held that there is a corporation de facto against persons who have in no way recognized its existence as a corporation. User will not raise a corporation de facto as against one who has not taken any part in the acts of user, and this for the reason that user is not necessary to the creation of a corporation under general laws, especially under the law authorizing such a corporation as Society Perun attempted to become.

      If a corporation does not become so by virtue of compliance with the statute, it can not, as to those who have not dealt with it as such, become so by user, however long such user may continue. The notion of a de facto corporation is based on the doctrine of estoppel; when estoppel can not be invoked there can be no defacto corporation. Bank of Toledo v. International Bank, 21 N. Y. 542.
    There being no corporation, there was no legally existing grantee. 3 Wash. Real Prop. 565, 566; Jones v. Cincinnati Type Foundry, 14 Ind. 89; Russell v. Topping, 5 McLean, 202; Harriman v. Southam, 16 Ind. 190 ; Jackson v. Cory, 8 Johns. 388; Hornbeck v. Westbrook, 9 Johns. 74; Aug. & Ames Corp., sec. 152; Straus v. Ins. Co., 5 Ohio St. 64; Carey v. Railroad Co., supra; nor grantor. 3 Wash. Real Prop. 566, 567; 1 Wood Conv. 161-170; Miller v. Chittenden, 2 Iowa, 368; Hulick v. Scovil, 9 Ill. 191; Sloane v. McConahy, 4 Ohio, 157, 169, 170; Turnpike Co. v. Coy, 13 Ohio St. 84.

      1. R. Webster and W. J. Boardman, for other defendants in error, filed no briefs.
   Owen, J.

The defendants below, conceding that Society Perun had never been a corporation de jure, maintain that the court below should have permitted them to prove that such society was a de facto corporation ; that it attempted, in good faith, to become a body corporate; proceeded to act and transact business in good faith under the supposed authority of incorporation, and that its acts ought not to have been declared to be wholly void as against the city of Cleveland.

The judgment of ouster was an adjudication between the state and the society upon the right of the latter to exercise corporate franchises. For the purposes of such adjudication it was competent for this court to consider and determine what had been its status from its first attempt to incorporate. But it had no power to pass upon or determine the rights of parties not before it.

It was not competent for this court to determine in that proceeding that Society Pei’un had never been a corpora.tion de facto, or that its acts and business transactions, under the color of its supposed charter powers, were void. The authority of the court in that behalf was derived from sec. 6774 (Rev. Stats.), which provides: “When a defendant is found guilty of usurping, intruding into, or unlawfully holding or exercising an office, franchise, or privilege, judgment shall be rendered that such defendant be ousted and altogether excluded therefrom, and that the relator recover his costs.”

When the court had excluded the society from its franchises to be a corporation, it exhausted its jurisdiction over the subject-matter. It had no power to speak concerning whatever rights may have been acquired by the society as a corporation de facto, or by third parties in their transactions with it as an acting corporation.

It is conceded by the city that parties who had recognized the existence of the society by their transactions with it as a supposed corporation are estopped to deny its corporate existence. But it is maintained that the city, having engaged in no transactions with it, is free to challenge its existence as a corporation de facto as well as de jure. The argument is that: “No case can be found where it is held that there is a corporation de facto against persons who have in no way recognized its existence as a corporation,” and that: “ The notion of'a defacto corporation is based on the doctrine of estoppel; when estoppel can not be invoked there can be no de facto corporation.”

The theory that a defacto corporation has no real existence, that it.is a mere phantom, to be invoked only by that rule of estoppel which forbids a party who has dealt with a pretended corporation to deny its corporate existence, has no foundation, either in reason or authority. A de facto corporation is a reality. It has an actual and substantial legal’existence. It is, as the term implies, a corporation. '

“ It is a self-evident proposition that a contract can not be made with a corporation unless the corporation be in existence at the time. A real contract with an imaginary corporation is as impossible, in the nature of things, as a real' contract with an imaginary person. It is essential, therefore, in order to establish the existence of a contract with, a corporation, to show that the corporation was in existence, at least defacto, at the time the contract was made.” Morawetz Private Corporations, sec. 137.

It is bound by all such acts as it might rightfully perform as a corporation de jure. Where it has attempted in good faith to assume corporate powers; where its proceedings in that behalf are colorable, and are approved by those officers of the state who are authorized to act in that regard;, where it has honestly proceeded for a number of years, without interference from the state, to transact business as a corporation; has been reputed and dealt with as a duly incorporated body, and valuable rights and interests have been acquired and transferred by it, no substantial reason is suggested why its corporate existence, in a suit involving such transactions, should be subject to attack by auy other-party than the state, and then only when it is called upon in a direct proceeding for that purpose,- to show by what authority it assumes to be a corporation.

Proof was offered upon the trial below to show, (1) that the persons seeking to incorporate first filed with the secretary of state a certificate which fully complied with the requirements of the statutes, and free from the defect which finally proved fatal to its existence, but which was disapproved by the attorney-general; (2) That the certificate of incorporation which was finally filed with the secretary of state recited that, “ said association has been formed and organized for the mutual protection and relief of its members, and for the payment of stipulated sums of money to the families or heirs of the deceased members of said association; that the officers of said association have been duly chosen; that for the purpose of becoming a body corporate under an act passed by the general assembly of the state of ‘Ohio, entitled, an act supplementary to an act, entitled an act to provide for the creation and regulation of incorporated companies in the state of Ohio, passed May 1,1852, passed April 20,1872;” (3) That this certificate was approved by the secretary of state, and also by the attorney-general, as provided by the statutes (69 Ohio L. 150); (4) That it proceeded in good faith to transact business peculiar to corporations provided for by the act under which it attempted to incorporate.

All this was excluded, and the decision of the court below practically rested on the proof offered by the city, that Society Perun had been ousted of its franchises, which was evidently construed as determining that such society had from the first no corporate existence, either dejare or defacto, and consequently no capacity to receive or.impart any interest in or title to real estate except as against such parties as were by reason of their recognition of or deal-rings with it, estopped to deny its incorporate existence.

.. Did the court err? This fairly preseuts the controlling and very important question : Was it competent to show, as against a party who was not estopped to deny its eorporate existence, that Society Perun was, at the time of the transactions involved in controversy, a corporation de facto f'

In Attorney-General ex rel. Pettee v. Stevens, Saxton (N. J. Eq.) 369, the relator sought to enjoin the Camden and Amboy R. R. and Transportation Co. and others acting under its authority from erecting a bridge over a navigable stream. The claim was that the act authorizing the corporation had been perverted and'disregarded, and that there was no legal incorporation. The relators were in no manner estopped to attack the corporate existence of the respondent. The court held:

Where a set of men claiming to be a legally incorporated company under an act of the legislature, have done every thing necessary to constitute them a corporation, colorably at least, if not legally, and are exercising all the powers and functions of a corporation ; they are a corporation, defacto, if not dejare; and this court will not interfere, iu an incidental way, to declare all their proceedings void, and treat them as a body having no rights or powers.”

The chancellor, speaking for the court, said:

Here, then, is a set of men claiming to be a legally incorporate*! company under the act of the legislature, exercising all the powers and. functions of a corporation.. They are a corporation de facto, if not de jure. Every thing necessary to constitute them a corporation has been done, colorably at least, if not legally; and I do not feel at liberty, in this incidental way, to declare all their proceedings void, and treat them as a body having no rights or powers. It has been seen that the court will not do this where a corporation properly organized has plainly forfeited its privileges; and there is but little difference'in principle between the two cases. In both the corporation is actually in existence, but whether legally and rightfully so is the question. And it appears to me that if the court can take cognizance of the matter in this case, it must in all others where it can be brought up, not only directly, but incidentally.”

This case is approved and followed in National Docks R. Co. v. Central R. R. Co., 32 N. J. Eq. 755, which held: “ When a corporation existe de facto, the court of chancery can not, at the instance of private parties, restrain its operations upon the ground that its organization is not de jure. In such case the proper remedy is by quo warranto, or information in the nature thereof, instituted by the attorney-general.” The rule of estoppel found uo place in this case.

In S. & L. G. R. Co. v. S. & C. R. R. Co., 45 Cal. 680, it was held that: “If a corporation defacto is in the actual possession of a public highway, under a grant of a franchise to improve and collect tolls on the same, a mere trespasser can not justify his entry thereon on the ground that it was only a corporation defacto, and was not de jure entitled to the franchise.”

In Williams v. Kokomo B. & L. Ass’n., 89 Ind. 339, one Leach gave to an acting corporation'his mortgage on real estafe. Subsequent to the execution and recording of it, he executed another mortgage on the same land to Williamson. In a proceeding to foreclose the junior mortgage, ’Williamson maintained that the pretended corporation had no legal existence, by reason of defects and omissions in the proceedings to incorporate, and that the senior mortgage was void. He was in no manner estopped, by dealings with, or recognition of, the first mortgagee to deny its corporate existence. The court held that: “Ajunior mortgagee can not defeat a senior mortgage by showing that the corporation to which the senior mortgage was executed was defectively organized, if it be a corporation defacto.” Elliot, J., said : “Where persons assume to incorporate under the laws of the state, and in part comply with their requirements, assume corporate functions and transact business as a corporation, private persons can not collaterally question the right of such an association to a corporate existence, although there has not been a full compliance with the provisions of the statute. Baker v. Neff, 73 Ind. 68. This rule is not limited to cases where one by contract admits corporate existence, but is a rule of general application.” It is not easy to distinguish the principle of i this case from that of the case at bar.

In Pape v. Capitol Bank, 20 Kan. 440, Pape and wife gave their notes to “James M. Spencer or bearer,” and their mortgage on real estate to secure them. Spencer transferred the notes to the Capital Bank of Topeka, an acting corporation, with this indorsement: “ Pay the bearer, without recourse on me; James M. Spencer.” The mortgage was also transferred to the bank, which proceeded by suit to collect the notes and foreclose the mortgage. Pape and wife interposed the defense that the bank was not, and never had been, a body corporate, by reason, among others, of a defective organization. 'The bank had assumed corporate functions after an attempt, in good faith, to incorporate, and for a number of years was in the actual and notorious exercise of corporate franchises. Pape had transacted banking business with the plaintiff prior to the purchase of the notes and mortgage, but such business was wholly unconnected with the notes and mortgage in suit. His wife, however, had not in any manner recognized the existence of the hank as a corporate body, and the doctrine of estoppel was not invoked to aid the court in sustaining a judgment of foreclosure against Pape and wife. Brewer, J., says: “ The corporation is one de facto; and only the state can inquire, and that, in a direct proceeding, whether it be one dejare. . . . There must? in such cases, be a law under which the incorporation can be had; there must, also, be an attempt, in good faith, on the part of the corporators, to incorporate under such law; and when, after this, there has been for a series of years an actual, open, and notorious exercise, unchallenged by the state, of the powers of a corporation, one who is sued on a note held by such corporation will not be permitted to question the validity of the incorporation as a defense to the action. No mere matters of technical omission in the incorporation, no acts of forfeiture from misuser after the incorporation, are subjects of inquiry in such an action. This is not upon the ground of equitable estoppel but upon grounds of public policy. If the state, which alone can grant the authority to incorporate, remains silent during thempen and notorious assertion and exercise of corporate powers, an individual will not, unless there be some powerful equity on his side, be permitted to raise the inquiry.”

In Thompson v. Candor, 60 Ill. 244, Willetts, in February, 1858, deeded to “ Mercer Collegiate Institute,” a body pretending to be a corporation, the tract of land in controversy. He died in March, 1858. In 1868 his heirs quit-claimed their interest in the land to Thompson, who filed a bill in chancery for the cancellation of the deed from Willetts to the “Institute,” alleging, as one of the grounds of relief, that the named grantee was not legally incorporated — had no capacity to take the title, and that the deed was void. The court held:

“ Where parties endeavor to organize a corporation for educational purposes, under the general law, adopt a name, elect trustees, and organize by electing a president and officers, and the trustees had acted for years in managing the property, had leased and mortgaged it, and expended a large sum of money in its improvement, these acts constitute it a corporate body defacto, and the regularity of its organization can not be questioned collaterally. Such irregularity can only be questioned by quo warranto or scire facias.”

Thornton, J., says: “ In 1856 an attempt was made to organize a corporation under the general incorporation law. A corporate name was selected, trustees were appointed, and an organization effected by the election of a president and proper officers. The trustees thus appointed acted for years in the general management of the property, leased and mortgaged it, and expended a large amount of money.. Here then was a corporate body de facto, which had been engaged in an undertaking involving important interests. The regularity of its organization can not be questioned collaterally. Any alleged noncompliance with the law can only be inquired into by the writ of quo warranto or scire facias.”

There is no suggestion throughout the entire case of the rule of estoppel as an element affecting its disposition.

In Paper Works v. Willett, 1 Robertson (N. Y. Sup.), 131, it is held that formal defects in proceedings to organize a corporation are not available to defeat an action brought by a corporation for trespass in wrongfully taking property out of its possession.

See also, as illustrating the principle under discussion: Smith v. Sheeley, 12 Wall. 361; Grand Gulf Bank v. Archer, 8 S. & M. 151, 173; Dunning v. R. R. Co. 2 Carter (Ind.), 437; Dannebroge Mining Co. v. Allment, 26 Cal. 286; Searsburgh Turnpike Co. v. Cutler, 6 Vt. 315; Mitchell v. Deeds, 49 Ill. 416; Eliz. Academy v. Lindsey, 6 Ired. 476 ; Darst v. Gale, 83 Ill. 136; Rondell v. Fay, 32 Cal. 354; De Witt v. Hastings, 40 N. Y. (Superior Court) 463; Rice v. R. R. Co., 21 Ill. 93; Douglas County v. Bolles, 94 U. S. 104; The Banks v. Poitiaux, 3 Randolph (Va.),136; Goundie v. Northampton Water Co., 7 Pa. St. 233; Baker v. Backus, 32 Ill. 79; Tarbell v. Page, 24 Ill. 46; Thornburgh v. R. R. Co., 14 Ind. 499; Tar River Nav. Co. v. Neal, 3 Hawks, 520; Bear Camp River Co. v. Woodman, 2 Me. 404.

In Jones v. Dana, 24 Barb. 395, it was held that if a company has in form a charter authorizing it to act as a body corporate, and is in fact in the exercise of corporate powers at the time of taking a note from an individual, it is, as to him and all third persons, a corporation de facto, and the validity of its corporate existence can only be tested by proceedings on behalf of the people.'

In the case at bar, the certificate which was last filed by the society embraced a full statement of the objects of incorporation and indicated what the nature of its business must necessarily be, and was strongly suggestive of the manner in which it must necessarily be transacted; and while it is not our purpose to call in question the action of this court in the quo warranto proceedings, we have no hesitation in saying that if we were now called upon to determine whether the corporate life of Society Perun should be taken, the question, upon the facts offered in proof at the trial below, would not be free from doubt and difficulty. It is very clear that the proceedings to incorporate were colorable; and so far as this fact is a test of the existence of a corporation de facto, it is most amply established. That there was proof of user is manifest from the evidence which was .received without objection.

That the judgment of ouster did not and could not have a retroactive effect upon the rights of the society, and of parties who had dealt with it during its de facto existence, is suggested by the opinion of Wright, J., in Gaff v. Flesher, 33 Ohio St. 115.

The evidence which was offered and excluded would, if credited, have shown Society Perun capable of holding and transferring the legal title to the lands in controversy. Walsh v. Barton, 24 Ohio St. 43; Darst v. Gale, 83 Ill. 136 ; Shewalter v. Pirner, 55 Mo. 218; Nat. Bank v. Matthews, 98 U. S. 628 ; Goundie v. Northampton Water Co., 7 Penn. St. 233; Barrow v. Nashville Turn. Co., 9 Humph. 304; Kelly v. People’s Trans. Co., 3 Ore. 189; Bogardus v. Trinity Church, 4 Sandf. Ch. 758.

The public and all persons dealing with this society were justified in assuming that the certificate filed with the secretary of state, and by him admitted to record in his office, had been approved by him, and also by the attorney-general, as required by statute (69 Ohio L. 150), and that it so far conformed to all legal requirements that, as provided m section 2 of the act of incorporation (69 Ohio L. 83), “ a copy, duly certified by the secretary of state, under the great seal of the state of Ohio, shall be evidence of the existence of such association.”

It would seem that such approval, record, and certificate, followed by uninterrupted and unchallenged user for nearly six years, of all of which proof was tendered, would constitute a corporation cle facto, if such a body is, under any circumstances, entitled to legal recognition.

The highest considerations of public policy and fair dealing protest against treating such an organization as a nullity, and all of its transactions void.

The principle of the above cases is to be distinguished from a case where a mere corporation de facto attempts to assert the power of eminent domain by the appropriation of private property to public use. It has been held that the exercise of this right (which is but a delegation of the sovereign power of the state), depends upon the sufficiency and legal validity of the certificate of incorporation and public record of its organization. R. R. Co. v. Sullivant, 5 Ohio St. 276 ; Atkinson v. R. R. Co., 15 Ohio St. 21.

The case of Raccoon River Nav. Co. v. Eagle, 29 Ohio St. 288, is relied upon by the defendant in error. It was an action to recover upon a stock subscription. A plea of nul tiel corporation was interposed. The plaintiff claimed to be organized under an act to authorize the incorporation of companies “ for the purpose of improving any stream of water . . . declared navigable by any law of the state of Ohio.” On the trial the plaintiff offered in evidence a certificate by which it appeared that the company was formed for the purpose of improving, etc., Big Raccoon river. Unfortunately there was no navigable stream in Ohio by that name. No other testimony was offered. There was no proof of user. There wás no defect in the form of the proceedings to incorporate, but an attempt to organize and incorporate for a.purpose impossible of accomplishment. There was neither a de jure nor de facto corporation. Judgment was properly rendered for defendant.

In excluding proof of what was actually done looking to the incorporation of Society Perun, and of the subsequent acts of user, which was offered in evidence, there was error, for which the judgment in the first entitled case (as well as that in the same plaintiff against Hay et al., which was tried with it and involve the same general questions) are reversed. Numerous other questions are presented by the voluminous records in these cases, but as they all depend upon the one central and controlling question discussed above, and as the disposition here made of the cases must lead to a re-trial in the light of the principles indicated in this opinion, they are not separately considered.

Judgment reversed.


source: Caselaw Access Project

author: Atherton, J.

license: Public Domain

text:
    Olney v. Watts.

      Husband and wife — Alimony—Modification of former decree — Changed circumstances of parties — Re-marriage of divorced wife — Pleading— Exhibit attached to petition without averment.

    1. A party to a decree for alimony may, by an original petition and suit, obtain a modification of such former decree, upon proper allegations of the changed condition and circumstances of the parties.
    2. Such allegations must not relate to circumstances and facts that existed and were, or might have been, pleaded in the former action, but to new facts, thereafter transpiring, which are of such a character as to make the modification necessary to suit such altered condition of the parties.
    3. Where alimony had been granted, in installments, to a divorced wife, and she is afterward re-married to a man financially able to, and who does, in fact, support her, these facts would prima facie be a good cause for modifying the former decree so as to reduce the amount to be paid for her support to a nominal sum, or such sum as, in the changed condition of the defendant, the court might deem just and reasonable.
    4. A transcript of a former decree attached to a petition and marked “A,” can not be considered in construing such petition and will notin any sense supply the place of direct and positive averments of the facts relied on.
    Reserved in the District Court of Putnam county.
    A petition was filed in this case in the court of common pleas of Putnam county by plaintiff against defendant, alleging that on November 4, 1863, he was married to the défendant; that two children were born as issue of the marriage ; that in October, 1882, the plaintiff filed a petition against defendant praying for a divorce by reason of three years willful absence from him without just cause; and that at the November term, 1882, of the court, a decree of divorce was granted in his favor on the ground of willful absence, but ordering the plaintiff to pay defendant alimony as follows : $80 at date of decree; $440 December 1, 1882 ; $500 June 1, 1883 ; $500 December 1,1883, and $500 June 1, 1884.
    Plaintiff' alleged that he had paid said sums of $80 and $440, being all of the alimony that had become due under the decree up to the time the petition was filed. He further alleged that defendant brought no property to him at their marriage, nor during coverture, and added nothing at any time, excepting some articles of furniture, pictures, jewelry, and clothing, all of which defendant took away when she abandoned him. That no property was accumulated by the joint -labor of plaintiff and defendant. That under a former decree of the court for alimony, plaintiff had paid defendant $1,200; that when defendant abandoned plaintiff she took with her a piano and various other articles of personal property, all of which she still keeps and uses; that in said case no order was made as to the custody of the children, and that neither of the children are dependent on defendant for support.
    Plaintiff further alleges that since granting the decree of divorce, to wit, January 11, 1888, the defendant intermarried with Amerieus V. Watts, and is now living and cohabiting with him at Ottawa, Ohio; that Watts has ample means and property to afford and- give to the defendant such support and maintenance as she, in her condition in life, has been heretofore enjoying, either as the wife of plaintiff' or otherwise, and to a fuller, and, in fact, greater extent than is provided for her in and by the decree. That defendant knew of these facts and the pecuniary condition of Watts before she married him, and “that by reason of the facts, the defendant is no longer dependent on the said alimony for her support, and the object for which the same was granted, from the property of this plaintiff, has ceased by reason of the marriage aforesaid. And the defendant, with full knowledge of all the facts has voluntarily abandoned the same and all its provisions and benefits; and this plaintiff is absolved from the farther payment of any portion of the said alimony so as aforesaid allowed, and yet remaining unpaid.”
    The plaintiff'prayed for an injunction to restrain the collection of the remaining installments of alimony, and that on final hearing the unpaid installments be set aside or modified, as the court might think proper.
    In the body of the petition, after reciting the sums allowed and ordered to be paid as alimony by the former decree, this averment follows: “A certified copy of which decree is hereto attached, marked ‘A,’ ” and a certified copy is so attached to the petition. In the certified copy so attached is a clause reading as follows:
    “VI. It is further ordered by the court, by consent of the parties, that the above-mentioned payments shall be and are in full and complete release of all claims of the said defendant, and to the property, both real and personal, of the plaintiff, from this date. And the said defendant is to execute and deliver to the said plaintiff, a quit-claim deed releasing all the interest in the real estate of the plaintiff, or in default thereof that this decree operate as such release, except that the amount of this decree shall be and is hereby made a lien on all the real estate of the said plaintiff. And the former decree of this court as to alimony is vacated and set aside.”
    There are no averments in the body of the petition that this decree was rendered on the agreement of the parties, and no evidence thereof, except by reference to the exhibit, as appears of record.
    The defendant filed a general demurrer to the petition; the common pleas sustained the demurrer, and on appeal to .the district court the cause was reserved for decision here.

      Sheets § Ogan, for plaintiff'.
    The court of common pleas had continuing power over the decree for alimony independently of statute or a reservation of such power in the decree itself, and had authority to modify it to correspond with the changed circumstances of the parties. ■
    The precise question has not been determined in Ohio, but it was incidentally adverted to in Petersine v. Thomas, 28 Ohio St. 596. The language of the court in that case clearly implies that where a suit has been finally determined by the granting of a divorce and alimony, a new ■’action for alimony can be maintained when the reasons for ■such additional allowance did not exist and could not have been provided for at the rendition of such finaL judgment. And if an action for an increase of alimony could be maintained, the same principle would apply for a reduction.
    The law of «divorce and alimony, as administered in the ecclesiastical courts of England, in so far as it is consistent with the spirit and genius of our institutions, is the common or unwritten law of divorce and alimony of this country. Bish. Mar. & Div (5th ed.), secs. 48, 56, 57, 66, 68, 71, 74, 75, 76, and 77.
    The ecclesiastical law is a part or branch of the common law. In Reg. v. Millis, 10 Cl. & Fin. 534, 637, Lord Chief Justice Tindal uses the phrase: “ The common law of England* of which ■ the ecclesiastical law forms a part.” In Prudam v. Phillips, 1 Harg. L. T. 456, note, it is said it was “ resolved in great debate .that the ecclesiastical law is a part of the law of the land.” Bish. Mar. & Div. (5th ed.), secs. 56, 75.
    The law of divorce and alimony is the common or unwritten law on that subject with the statute engrafted upon it. McGee v. McGee, 10 Ga. 486.
    What then is the common law on the question now under' consideration ? The ecclesiastical courts, recognizing this continuing dependence and duty, always held that their power over the subject of alimony was continuing, and, at all times, upon material changes in the circumstances of the parties, taking place after the entry of the original decree, would, on application, revise the decree to suit the changed circumstances of the parties. Cox v. Cox, 3 Add. Ec. 276; s. c., 2 Eng. Eccl. 531; Otway v. Otway, 2 Phil. Eccl. 109; Rees v. Rees, 3 Phil. Eccl. 387; s. c., 1 Eng. Eccl. 418.
    And after the “ court for divorce and’matrimonial cases ” was created, and jurisdiction over the subject of divorce and alimony, together with power to decree divorce a vinculo was granted it, that court exercised the same continuing power over the subject of alimony. Saunders v. Saunders, 1 Swab. & Tr. 72; Fisher v. Fisher, 2 Swab. & Tr. 410, 413, 414; Sidney v. Sidney, 4 Swab. & Tr. 178, 180, 182.
    The court may from time to time, on any change in the circumstances of the parties, increase or reduce the sum allotted for alimony, either temporary or permanent, independently of statutory provision or a reservation of such power in the original decree. 2 Bish. Mar. & Div. (5th ed.), sec. 428; King v. King, 38 Ohio St. 370, 372; Fisher v. Fisher, 32 Iowa, 21; McGee v. McGee, supra; Wheeler v. Wheeler, 18 Ill. 40; Rogers v. Vines, 6 Ired. 293; Lockridge. v. Lockridge, 2 B. Mon. 258; Perkins v. Perkins, 10 Mich. 425; Bauman v. Bauman, 18 Ark. 329; Bacon v. Bacon, 43 Wis. 208.
    The court may modify its -own decrees with reference to the custody of children independently of statute or reservation of such power in the decree itself. Neil v. Neil, 38 Ohio St. 558; Hoffman v. Hoffman, 15 Ohio St. 427; Campbell v. Campbell, 37 Wis. 211; Davis v. Davis, 19 Ill. 343.
    It is contended by the defendant that the decree sought to be revised was not a decree for alimony, but a decree partitioning or dividing the estate of the plaintiff between the parties. But the decree specifically provided that the sum allotted was “ as and for her reasonable alimony.”
    The agreement of the parties' as to the amount of alimony can have no effect one way or the other from the fact that the husband and wife can make no binding agreement concerning alimony. 2 Bish. Mar. & Div. (5th ed.), secs. 235, 435. Such an agreement is no barrier to a reduction of the amount upon the remarriage of the divorced wife. Albee v. Wyman, 10 Gray, 222; 2 Bish. Mar. & Div. (5th ed.), sec; 722.
    The allowance of a gross sum, unless expressly stated so to be in the judgment, is not regarded as a division or partition of the property of the husband between the parties, but must be treated as alimony proper, and under the control of the court. Hopkins v. Hopkins, 40 Wis. 466.
    The marriage of the divorced wife is sufficient ground for revoking the alimony or reducing the amount. King v. King, supra; Usher v. Fisher, supra; Albee v. Wyman, supra; Bowman v. Worthington, 24 Ark. 522, 538; Stillman v. Stillman, 99 Ill. 196; s. c., 39 Am. Rep. 21; 2 Bish. Mar. & Div. (5th ed.), sec. 479.

      C. J. Swan, also for plaintiff.
    The continuing power of the court to modify its decree as to children is fully recognized in Ohio, Hoffman v. Hoffman, 15 Ohio St. 427; and that too without reference to the reservation of such power in the decree. Neil v. Neil, 38 Ohio St. 558. Iu this state, all divorces being a vinculo, the granting of alimony is an order made as of the time of the divorce and based upon the estimate of the then means of the husband; but in Cox v. Cox, 20 Ohio St. 439, the doctrine is clearly recognized as to the right of the court to take into consideration accessions to the property of the husband subsequent to the divorce, and increase the original amount.
    Courts hold and exercise such continuing power over their decrees for alimony as to prevent injustice, whether the law of divorce is statutory or otherwise; and it has been frequently held that subsequent marriage is a cause for modification of decrees for alimony. Lockridge v. Lockridge, 3 Dana, 28; s. c. 28 Am. Dec. 52; Worthington v. Worthington, supra; Wheeler v. Wheeler, 18 Ill. 39; McGee v. McGee, 10 Ga. 477; Perkins v. Perkins, 10 Mich. 426; Campbell v. Campbell, 37 Wis. 206; Bish. Mar. & Div. (5th ed.), secs. 429, 471-484.

      T. J. Lentzy, and T. E. § W. PL. Cunningham., for defendant, commented upon .cases cited by counsel for plaintiff.
    The decree for alimony in the court of common pleas is not now subject to revision by that court. Petersine v. Thomas, 28 Ohio St. 596. And see Cov. & C. B. Co. v. Sargent, 27 Ohio St. 233.
    When we compare the American alimony with the English, and the alimony in one of our states with that in another, we should look at the entire law, statutory and unwritten, of each state and country. 2 Bish. Mar. & Div., secs. 471, 472.
    The rule in the ecclesiastical courts of England does not apply, for there the separations are only from bed and board. The parties still remain husband and wife.

      In Forrest v. Forrest, 25 N. Y. 501, the court refused, upon a subsequent proceeding, to hear evidence upon alleged misconduct of the wife, holding that under the statutes of New York the question of the allotment of alimony must be referred to the facts as they stood at the time the divorce was' decreed. See 2 Bish. Mar. & Div. (5th ed.) 478.
    The statutes of New York and Ohio are subtsantially alike, except that in our statute the word “alimony” is used, while in New York it is not.
    The subsequent marriage of the wife is no reason for reduction of alimony. 2 Bish. Mar. & Div. (5th ed.), sec. 479; King v. King, 38 Ohio St. 370.
    It was held in Miller v. Clark, 23 Ind. 370, that arrears of alimony decreed by a court in favor of a divorced wife, under the statute of that state, may be collected after her death by her administrator. Speaking of the statute, the court say: “The allowance so authorized is named ‘alimony;’ but it is not the alimony of the common law, the right to which ceased to exist, or reverted to the husband on the death of the wife, resulting from the fact that the marriage relation continued to exist until her death. But it is alimony under, and the creature of, the statute, given upon an equitable settlement between the parties upon the dissolution of the marriage and of all the relations of husband and wife theretofore existing between them.”
    A still sti’onger case is Fischli v. Fischli, 1 Blackf. 360, cited with approval in Petersine v. Thomas, supra.

    In Wisconsin the power to revise judgments in respect to alimony is found in the direct provisions of the statute. Hopkins v. Hopkins, 40 Wis. 462. The same is true of Illinois, Stillman v. Stillman, 99 Ill. 196, where the right is expressly based upon the statute. The first authority cited in Perkins v. Perkins, 10 Mich. 426, referred to by counsel for plaintiff, is the statute of that state.
    When the court of common pleas caused the decree to be entered, its power over the case was at an end. The case was adjudicated upon the facts as they stood at the time of the decree. The divorced wife, by the decree, was invested with absolute title to the property named in the decree, and it could not be forfeited, even if she were guilty of a breach of morality since (of which she is not charged), much less by her subsequent marriage which was “lawful and honorable.” Bish. Mar„ & Div. (5th ed.), sec. 483; King v. King, supra.

      There is no provision of the statutes of this state by which a decree in favor of a divorced wife can he revised in any manner different from a decree in any other form df action; and now proceedings for divorce and alimony are merely civil actions.
   Atherton, J.

The question presented by this record is: Did the petition set forth a cause of action good as against a general demurrer ?

If the decree, as to the amount of alimony to be paid the defendant, was the result of an agreement of the parties, and simply confirmed by the court, and that appeared by the direct averments of the petition, we would not say that the court erred in sustaining the demurrer. .But this nowhere appears by direct averment. If the exhibit could be looked to, as a part of the petition, perhaps it does appear, but the exhibit is no part of the pleading and does not help it out. We are therefore compelled to lay out of view, what counsel on both sides seem to concede in argument, that we should consider on this demurrer; that is what appears in the exhibit attached to the petition, but not made a part of it. Crawford v. Satterfield, 27 Ohio St. 421.

The real contention touches the right and duty of the court in a case like this to review, modify, or vacate a former decree granting alimony payable in installments by an original suit or proceeding instituted for that purpose, when such power had not been reserved by the language and form of the former decree.

It has been determined by this court that a decree for alimony is not necessarily affected by the subsequent marriage of the wife; although such a marriage may in some cases have the effect of reducing the amount. King v. King, 88 Ohio St. 870.

“ By the general doctrine, and as practiced in the country whence our laws are derived, aside, it seems, from all consideration of the form of the decree, the court may, at any time, and from time to time, on any change in the circumstances of the parties, increase or reduce the sum allotted for alimony temporary or permanent. ... In this issue, as in all others, what is once adjudged is not to be retried. Yet as the allowance is a continuous support for the wife, changed facts may require an altered decree. As observed by Ur. Lushington, ‘ where there is a material alteration of circumstances, a change in the rate of alimony may be made. If the faculties are improved, the wife’s allowance ought to be increased; and if the husband is lapsus facultatibus the wife’s allowance ought to be reduced.’ ” 2 Bish. Mar. & Div., sec. 429 ; and see also secs. 430, 478, and 479.

It is also said, in section 484: “On the other hand, also, if she behaves herself, and does what is in the highest degree commendable by becoming a wife to a second husband, receiving her support from him, this further alimony may likewise be with propriety discontinued.”

Upon the same point see also Fisher v. Fisher, 32 Iowa, 20; McGee v. McGee, 10 Ga. 486; Wheeler v. Wheeler, 18 Ill. 40; Rogers v. Vines, 6 Ired. 293; Lockridge v. Lockridge, 2 B. Mon. 258. All of which maintain the doctrine of the authority of the court to modify or vacate the former decree as to alimony as the changed condition of the parties thereto may require.

Upon these authorities and others of like tenor, as well as upon principle, we think a cause of action for the review and modification of the decree is set forth, and that the court erred in sustaining the demurrer to the petition. If, however, it shall, in the further progress of the case, appear that the former decree, instead of being in the nature of alimony payable in installments for the support of the wife, was in the nature of a permanent division of the husband’s property, and that the parties fixed the same by their own agreement, and the action of the court in the premises was simply an affirmance of the agreement by consent, this, if alleged and proved, may furnish a complete defense. As to that we express no opinion now. We are of opinion that the demurrer should be overruled, and leave given the defendant to answer, and the case be remanded to the court of common pleas for trial.

Judgment accordingly.


author: Johnson, J.

text:
    Norton v. Norton.

      Attachment — How interest of stockholder in corporation reached by— When corporation attaching creditor — Effect of attachment where stock has been pledged — Poioer of court to order sale — Application of surplus and dividends — Priority of attachment liens.

    1. The interest of a stockholder in the property of a private corporation represented by certificates of shares registered in his name, may be reached by garnishee process served upon' the corporation.
    2. If the corporation is the attaching creditor, it may by such process served upon itself, reach such interest.
    3. Where, prior to the service of such process, the shareholder has pledged the certificates as security for a debt and has delivered them to the pledgee, with an absolute power of sale and transfer upon the books of the corporation, indorsed thereon, upon default of payment of the debt thereby secured, the attachment reaches only the surplus after payment of the debt to the pledgee.
    4. If, after this interest in the corporation has been thus attached, the pledgee does not exercise the power of sale and transfer vested in him, and the stock remains in the name of the pledgor on the books of the corporation, the court may, proper parties being before it, order the sale of the stock, ascertain such surplus, and order its application to the satisfaction of the judgment in attachment.
    5. Such an attachment has precedence over a later one when it is sought to reach this surplus, by garnishee process served upon the pledgee, who has never exercised the power of sale and transfer.
    6. Dividends made by the corporation and remaining in its hands after process in attachment has been served, follow the stock, and are subject to the same order of distribution.
    Error to the District Court of Cuyahoga county.
    This is a contest between two s.ets of attaching creditors of Charles E. Norton.
    The agreed statement of facts upon which the case was heard in the district court is as follows:

      “1. Prior to November 23, 1880, Charles E. Norton was the owner of ten shares of the capital stock of the Cleveland Provision Company, a corporation duly organized under the laws of Ohio, of the par value of $1,000 each, making $10,000 of paid up stock, and that said Charles E. Norton absconded and went to parts unknown, on or about November 15, 1880, and has ever since been and still is insolvent.
    “2. That on November 23, 1880, said Charles E. Norton was indebted to said Cleveland Provision Compauy in a sum exceeding $2,000. That on said 23d November said Cleveland Provision Company commenced suit against said Norton in the court of common pleas of Cuyahoga county to recover said indebtedness, and at the time of said commencement obtained, as provided by law, a writ of attachment against the property of said Norton, which was on the same day served by notice of garnishment on said Cleveland Provision Company. That afterwards such proceedings were had in said court that the said Provision Company recovered the judgment and obtained the order in the answer of said company set forth in this action.
    “ 3. That on said 23d November, 1880, and subsequent to the attachment of said Provision Company, the defendant, the Commercial National Bank of Cleveland, commenced its action in the circuit court of the United States for the Northern District of Ohio against said Charles E. Norton, and at the same time obtained a like writ of attachment, which was on the same day and subsequent to the service in the action of said Provision Company executed by serving upon said Provision Company notice of garnishment. That afterwards said bank obtained in said action the judgment and order in its answer set forth. That said bank on said 23d November, 1880, commenced two suits before E. W. Gloddard, a justice of the peace in and for the city of Cleveland, against said Charles E. Norton and others, for the sums stated in the answer of said bank, and at the same time duly obtained writs of attachment, which were duly served by notice of garnishment on said Provision Company, and that the judgments were rendered and orders made by said justice set forth in the answer of said bank.
    “4. That on January 20, 1881, the defendant, C. M. Stone, was the holder of nine of said certificates of stock, to wit: Numbers 12,13, 14, 15, 16, 17, 18, 19, and 20, as pledgee in the manner set forth in his answer; that said certificates were each pledged and delivered to the holders of the notes described in said answers at the respective dates thereof, and remained outstanding in the possession of such holders, or their successors in interest, until delivered to said Stone, prior to January 20,1881, in whose possession they have ever since remained, and that the answer of said Stone correctly sets forth the dates and amounts for which said certificates of stock were respectively pledged.
    “ 5. That certificate No. 11 was by said Norton, on June 4, 1879, pledged to secure the note described in the answer of Joseph Colwell, and that he and those under whom he holds have ever since been in the possession of said certificate No. 11, and that no part of said indebtedness to said Colwell and said Stone has ever at any time been paid, but remains outstanding in full force. That neither said Stone nor said Colwell, nor those under whom they claim title, have at any time attempted to sell or dispose of said certificates or either of them under the power or authority hereafter referred to.
    “ 6. A copy of the certificate held by said Colwell, with power to sell and transfer in blank, is hereto attached, marked A, and made part hereof, and it is agreed that each of the notes and certificates held by said Stone are in like form in every particular except the dates, numbers, and amounts, which are as stated in the answer of said Stone.
    “7. That the plaintiffs duly obtained the judgment set forth in the petition ; that at the commencement of said action, and on J anuary 20,1881, plaintiff’s testator, then in full life, sued out a writ of attachment, which was on the same day executed by serving notice of garnishment on said Stone and said Colwell as the holders of said certificates in manner aforesaid. That plaintiffs obtained the judgment in the petition set forth in said action so commenced with attachment as aforesaid, no part of which has been paid, nor has any part of the judgments in favor of said defendants been paid.
    “ 8. That since the commencement of said several actions by attachment dividends have been declared upon said stock by said Cleveland Provision Company to the amount of $2,100, or more, which are in the hands of said Provision Company and claimed by it to apply on its said judgment.
    “ 9. That the defendant, Thomas H. White, is the owner and holder of the mortgage and note described in his answer, and which mortgage is the first lien upon the lands therein described, and which is also the same land mentioned in the answer of the defendant, the Commercial National Bank, as attached by it at the commencement of its action.
    “ 10. That the plaintiffs, as executors, hold a mortgage upon the same property prior in time to any of said attachments to secure the identical indebtedness upon which their judgment was rendered, and, which is the second lien thereon. That said property is not sufficient to pay said liens, that an order of sale may be had upon the claims of said White, and that plaintiffs in. any event are only entitled to so much of the fund, arising from the sale of the stock as will pay the remainder of their judgment and costs.

      “ 11. It is also agreed, that if the case as to the respective rights of the parties growing out of their several attachments shall be by them or either of them, taken to the supreme court for final determination, that in such case said stock may be sold by said C. M. Stone and Joseph Colwell, respectively, at public or private sale, as each may think best, but not for less than par, and that each, after paying himself the amount found due to him with interest and the expenses of sale, and in this action pay the balanee to the clerk of this court, to be by him deposited with the Citizens’ Savings and Loan Association, to stand in the place of the stock, and to be applied as the case shall be finally determined, such sale to transfer title to the purchaser free of all claims by the parties to this proceeding who are thereafter to look to the fund so deposited in place of the stock.
    “ 12. That no transfer of said stock appears on the books of the Cleveland Provision Company, and that neither the Cleveland Provision Company, nor the Commercial National Bank had any notice or knowledge that said stock or any of it, had been pledged, or in any manner incumbered or disposed of by said C. E. Norton, the judgment debtor, before or at the time they commenced their attachment suit. (That C. E. Norton was, previous to his absconding as aforesaid, secretary of said Cleveland Provision Company.)
    “ 13. That the money with which said Stone purchased said claims was loaned to him for that purpose by plaintifl’s decedent in his life time, said decedent taking the note of said Stone therefor, and that the same is now held by the plaintiff.
    “ 14. The following were among the by-laws of the Cleveland Provision Company during all the time herein referred to:
    “ Sec. V. The secretary shall cause the usual record to be kept of all stock subscribed or transferred.
    “ Sec. XL It is mutually agreed by and between the stockholders of this company, jointly and severally, that in case any one of them shall desire to sell his stock, or any part of it, he shall give to the company the option of buying it on the best terms which he can obtain in good faith from a responsible purchaser.
    “ 15. That the Cleveland Provision Company have declared on the stock in controversy the following dividends,! which are still in the hands of the company and unpaid, to-wit: January 3, 1881, $500; July 1, 1881, $400; January 3, 1882, $400; July 5, 1882, $400; January 5,1883, $400.

      . “ This action is submitted to the court upon the aforesaid agreement of facts and the pleadings to determine the priority of the liens of the respective parties. There being no dispute as to amounts.”
    The following is a copy of the certificates with the indorsements thereon referred to as Exhibit A:
    “ state oe OHIO.
    No. 11. 1 Share.
    CLEVELAND PROVISION COMPANY.
    Capital Stock, $100,000. Shares $1000 each.
    This to certify, that Charles E. Norton is entitled to one share in the capital stock of the Cleveland Provision Company, transferable only on the books of said company, personally, or by attorney, on the surrender of this certificate.
    Cleveland, O., February 12th, a. d., 1876.
    Benjamin Rose,
    President.
    Charles C. Hill,
    Secretary.
    Countersigned. Geo. B. Christian,
    Treasurer-Registrar.”
    The following is indorsed on back of certificate :
    “For value received......hereby sell, transfer, and assign to...................................................................... shares of the stock within mentioned, and authorize...... to make the necessary transfer on the books of the company.
    Witness, .........hand and seal this........................... of..........................................................18....
    Chas. E. Norton.”
    Upon this state of facts the court found that the pledgees of the stock, Stone and Colwell, have the first liens respectively on said stock, and are to be first paid out of the dividends and proceeds when sold.

      These pledgees were ordered to sell the stock by them respectively held, and after payment of the amounts for which it was pledged and the costs, to apply the residue to the payment of the judgments in favor of the attaching creditors, who it was held obtained the first lien by service of garnishee process on the Provision Company, November 20,1880; and second, to judgment in favor of plain tiffs whose attachment was commenced January 20, 1881, and in which Stone and Colwell were served as garnishees.
    The dividends were distributed in the same order. To reverse this judgment is the object of the petition in error.

      ■Estep, Dickey ‡ Squire, for plaintiffs in error.
    Charles E. Norton was not the owner or holder of the stock in controversy, or any interest in the same, subject to attachment at the time of the service of notice upon the garnishee, the Cleveland Provision Company, or at any time since. If he had such an interest it was an interest in the proceeds of the sale of the stock in the hands of the pledgees. The stock was in their possession and under their control, rightfully transferred to them for a valuable consideration, and such interest could only be reached by service upon the pledgees.
    In order to create a lien by garnishment, two things are necessary: first, that the debtor is the owner of rights, interests, credits, or property subject to garnishment; and second, service upon the party having in his possession such property, rights, interests, or credits.
    The blank transfer upon the back of the certificates, signed by Charles E. Norton, with the separate power of sale executed by him and the transfer of possession therewith, were sufficient to pass the legal title to the stock. McNeil v. Tenth National Bank, 46 N. Y. 325; Holbrook v. New Jersey Zinc Co., 57 N. Y. 623; Farm. and Mer. Bank v. Wasson, 48 Iowa, 336 ; Broadway Bank v. McElrath, 13 N. J. Eq. 24; Fatman v. Loback, 1 Duer, 361.
    It is admitted that if the debt is not paid at maturity the holder may sell the stock and convey to his vendee both the legal and equitable' title. If so, he certainly has it or he could not convey it. When did he obtain it? It must be remembered that this stock is made personal property by statute. Revised Statutes, sec. 3255.
    If the title did not pass by the original transfer in writing and the delivery of the property to the pledgee, then the title to this property must pass by mere operation of law and without any act or further consent of the original holder to divest him thereof. As between the vendor and vendee the pledgee holds the legal title in trust until the debt secured thereby becomes due. If Charles E. Norton was a stockholder he was a stockholder who did not hold stock. Suppose the officer holding the writ of attachment" could have found the stock in controversy, could he have levied thereon ? The right of possession was in the pledgee as well as certain rights of property therein. What interest in the stock, as stock, as personal property, could the, officer sell?
    It was held in Smyth v. Anderson, 31 Ohio St. 144, that the levy of an attachment upon land, in an action against a devisee, will not defeat or prevent the execution of a power of sale, given by the testator to his executor, nor will such levy affect the title of the purchaser at the executor’s sale.
    If no lien in that case could be created upon the land and the interest of the devisee therein by attachment because of the outstanding power of sale, is it not clear that no lien could be obtained upon the stock in controversy or the interest of Charles E. Norton therein, by attachment, because of a like outstanding power of sale?
    If Charles E. Norton was not the owner of any interest in the stock subject to the attachment, service of garnishment upon the Cleveland Provision Company, the corporation that issued the stock, but did not hold or have the same under its control or in its possession, can create no lien thereon or upon the proceeds of the sale thereof.
    Was the service of garnishment against the corporation, upon a party having property “ in its possession,” belonging to the defendant, Charles E. Norton, within the meaning and proviso of the statute?
    It is claimed by the other side that this question is settled by National Bank v. L. S. & M. S. Ry. Co., 21 Ohio St. 221. We think not. In that ease it appeared that the stock was transferred in fraud of creditors, and as to the creditor who procured the attachment it was void, and was in all respects as if no such transfer had been made. But in the case at bar the transfer was bona fide, for a valuable consideration, and before any of the writs of attachment were issued.
    In the case of Westerman v. Westerman, 25 Ohio St. 500, it is said by Welch, J.: “As to creditors, a fraudulent sale of land is absolutely void. The creditor may levy his judgment upon the land and cause it to be sold for the satisfaction of his judgment, and the fraudulent sale will be held a nullity.” See also Clark v. Hubbard, 8 Ohio, 382; Revised Statutes, sec. 4196.
    In the case of Bradley v. Bauder, 36 Ohio St. 28, 35, in the opinion of the court by Boynton, J., it is said : “ The capital of a corporation, whatever invested in, and the individual shares of stock, are distinct species of property. Harrington v. Tennessee, 95 U. S. 679. The owner of a share of stock owns no part of the capital of the company. Watson v. Spratley, 10 Exch. 236.” If so, then how was the Cleveland Provision Company in possession of any property belonging to Charles E. Norton ?
    By fox-ce of Revised Statutes, sections 5538, 5545, and 5550, in order to ci’eate a lien upon specific property by garixishment, the possession by the garnishee of the property of the debtor must be such that “ the Coui’t may order the delivery of such propex’ty . . . into coux't,” and to bind credits the indebtedness must be due, and such that the coux’t may ox’der it paid into court. With what justice or propriety could the court order in this case, either the corporation served or the pledgees, to deliver this stock into court ? And there is no claim that there was any money due for which an order could be taken.

      Section 5547 of the Revised Statutes does not establish the right of the party to create a lien upon stock in a case like the present by serving the corporation as garnishee. It will be noticed that this section only provides the duty of the garnishee. No liability of a garnishee is created by it, and no duty except that of answer and disclosure. A corporation may be required to make known and disclose the condition of its stock register. The maker of a negotiable promissory note, not due, may be required to disclose the facts fully in regard to the same, yet it will hardly be claimed that a lien could be obtained by garnishment, upon the maker of negotiable promissory note, not due, that might thereafter be transferred for value, before maturity, to a bona fide purchaser.

      Banney &> Banney, for defendants in error.
    I. At common law stock could neither be levied on nor attached. Low. Trans. Stock, sec. 9; Drake Att., secs. 244, 259. It follows that the right and mode of attaching stock is purely matter of statute.
    Section 5524 o£ the Revised Statutes authorizes the attachment of “ the lands, tenements, goods, chattels, stocks, or interest in stocks, rights, credits, money, and effects of the defendant.”
    Section 5547, as to the answer of the garnishee, provides that he “ shall answer, under oath, all questions put to him touching the property of every description, and credits, of the defendant, in his possession or under his control, and he shall disclose truly the amount owing by him to the defendant, whether due or not, and in the case of a corporation any stock therein held by or for the benefit of the defendant, at or after the service of notice.”
    A non-resident stockholder in a corporation in this state has property in this state, and such stock is taken in attachment when a notice of garnishment is duly served upon the corporation. National Bank v. Lake S. and Mich. S. R. Co., 21 Ohio St. 221.

      The evidence of title to stock in a corporation is not to be confounded with the property. “ These need never be issued at all, as far as the validity of the stock is concerned. A subscriber to stock is bound without them. A transfer of stock is valid and complete, although no certificate is issued to the purchaser. The transferee is individually liable as stockholder in such a case. He has full power to vote and to receive dividends and a complete power to transfer.” Low. Trans. Stock, sec. 109, and see also sec. 143.
    The position of a pledgee of stock in a corporation was directly considered by this court in Henkle v. Salem, Manufacturing Co., 39 Ohio St. 547, where it was held that one who holds shares of stock merely as collateral security for a debt without a transfer to him on the books of the company, it neisher the legal nor equitable owner of such stock.
    Proceedings in attachment reach all interests. In some states only such an interest as can be taken into possession is liable to attachment or levy, but in Ohio the proceedings in attachment are wisely much wider. Carty v. Fenstemaker, 14 Ohio St. 461.
    The general authorities do not speak of the interest of the pledgor in stock as different from other pledges. 4 Kent’s Com. *138; Story Eq. Jur. 1030; Tyler Us. 557, 560 ; Don Passos Stock Brok. 659, 660.
    The pledgor, whether the transaction is such that the legal title passes or not, has the general property. Don Passos Stock Brok. 660, 670; Henkle v. Salem Manufacturing Co., supra; Whelan v. Kinsley, 26 Ohio St. 131.
    It is claimed that there was no interest in the stock left in C. E. Norton, because of the outstanding power of sale. This raises a naked technicality. The power has never been exercised, the stock having been sold only since and in pursuance of the order of the district court.
    The litigated cases as to title under pledges with powers of attorney in blank, generally turn on apparent authority and estoppel (Low. Trans. Stock, sec. 129 et seq), but no such questions are here. Everybody was before the court before there were any complications.
    The cases quoted and cited by counsel for plaintiffs in error, are none of them at all similar to that at bar, and the only possible use of them is to quote chance talk of judges on very different questions.
    II. Could the corporation garnishee itself?
    Section 5530 of the Revised Statutes provides that when a plaintiff', his agent, or attorney, makes oath in writing that “ any person or corporation ” has property of the defendant in his possession, process of garnishment shall issue, etc.
    These terms are very general, and to construe them as meaning “ any other person or corporation,” would do great injustice by excluding from the benefit of the attachment law, a creditor who held in his hands the property of his debtor.
    We cite in support of the proposition. Graighle v. Notnagle, 1 Pet. (C. C.) 245; Coble v. Nonemaker, 78 Pa. St. 501; Lyman v. Wood, 42 Vt. 113; Grayson v. Veeche, 12 Martin, 688; Boyd v. Bayless, 4 Humph. 386; Serg. Att. (2d ed.) 81.
   Johnson, J.

The Provision Company and the Commercial National Bank, claim to have acquired precedence by their actions commenced November 20, 1880, in which the stock of defendant, Charles E. Norton, was garnisheed by service of garnishee process on the Provision Company.

The plaintiffs in error' claim that as this stock was pledged prior to that time in the manner stated, Charles E. Norton had no such title or interest in the stock as could be attached by service of notice upon the corporation issuing the stock, and especially that the Provision Company could not garnishee itself; and, therefore, their service of garnishee process upon the pledgees of the stock in whose hands it was, with absolute power of sale on the 20th of January, 1881, gives to plaintiffs in error precedence.

In discussing this question, it must be borne in mind that the stock in controversy had not been sold or transferred, but only pledged.

The blank form on the back of each certificate signed by Charles E. Norton would indicate that he had sold the stock, the words being: Hereby sell, transfer and assign,” but the fact is, that this form was used to carry out a contract of pledge.

It authorizes the pledgee to sell upon non-payment of the debt secured thereby.

The delivery of certificate thus assigned in blank, was an authority to the holder of the note secured to sell for the purpose of paying the debt. It was intended by the parties as security merely, and not as a transfer of the ownership in the stock.

A distinguishing element of the case at bar is, that the authority of pledgees to sell had not been exercised at the time of final judgment in this case.

The 11th clause of the agreed statement of fact shows that Stone and Colwell were authorized to sell the shares in their hands respectively, and after paying themselves the amounts for which the shares were pledged, to pay the surplus into bank to stand in place of the stock as the court shall finally determine, “ such sale to transfer title to the purchaser free of all claims by the parties to this proceeding who are thereafter to look to the fund so deposited in the place of the stock.”

Upon this state of fact who owned this stock within the meaning of the attachment law, or rather, had Charles E. Norton on the 20th of November, 1880, such an ownership or interest in this stock as was liable to attachment ? If so, was it seized by notice to the corporation as garnishee ?

At common law stock in a corporation was not subject to levy or attachment. The share of stock was neither a chattel nor a chose in action.

By Rev. Stat., sec. 5524, “ The lands, tenements, goods, chattels, stocks, or interest in stocks, rights, credits, money, and effects of the defendant . . . not exempt by law,” may be attached.

Following the provisions as to service by taking the property attached or by service of the garnishee, is section 5547, as to answer of the garnishee, which provides that the garnishee “ shall answer, under oath, all questions put to him touching the property of every description, and credits, of the defendant, in his possession or under his control, and he shall disclose truly the amount owing by him to the defendant, whether due or not, and in the case of a corporation, any stock therein held by or for the benefit of the defendant, at or after the service of notice.”

It is now settled that a private corporation holds its corporate property in trust for the benefit of its stockholders; that by force of the statute relating to attachments, such stock of a debtor may be taken by notice of garnishment duly served on the corporation, and that the equitable interest of the debtor may be seized by such notice. The National Bank of New London v. L. S. & M. S. R. Co., 21 Ohio St., 221.

The exhaustive discussion of the provisions of our statute found in that case, leaves nothing to be said upon this point.

There the stock was transferred to a third person who claimed to be the owner who had acquired the legal title by transfer upon the books of the corporation. It was charged and proved by the attaching creditors, that such transfer was in fraud of defendant’s creditors.

The court says that the defendant was the equitable owner of the stock, and his interest therein was held by the company in trust for him, which was subject to garnishment.

In the case at bar, the legal title to the stock was in Charles E. Norton, no sale or transfer having ever been .made upon the books of the company. Norton was entitled to vote this stock, and to receive dividends thereon, and was the owner thereof, subject to the payment of the debt to the pledgees. The pledgees were not stockholders, nor individually liable as such, nor as between them in the corporation were they members. Henkle v. Salem Man. Co., 39 Ohio St. 547.

They had the option to perfect their security by having the same transferred to them upon the books of the company. This would have invested them with the legal title, but still as between them and the pledgor, he was the real owner until the power of sale had been exercised by the pledgees, and his interest which was subject to attachment was the value of the stock subject to the payment of the debt for which it was pledged.

Under the authority vested in the pledgees, they could have sold and transferred to a bona fide purchaser the absolute ownership and legal title.

Neither the attachment of November the 20th, by the Provision Company, nor that of January the 20th, by plaintiffs, could defeat the right of these pledgees.

They could have invested their vendees with the absolute ownership of the stock.

Such is the doctrine of Smyth v. Anderson, 31 Ohio St. 144, wherein it was held: “ The levy of an attachment, in an action against a divisee, will not defeat or prevent the execution of a power of sale, given by the testator to his executor, nor will such levy effect the title of a purchaser at the executor’s sale.”

As the power of sale vested in the pledgees was never exercised, and as it was agreed in this case that their interest in the pledge should be first paid, the question before us is, who is entitled to the surplus ?

Aside from any rights acquired by legal attachment, Chas. E. Norton was entitled to .the surplus. Whelan v. Kinsley, 26 Ohio St. 131; Henkle v. Salem Man. Co., 39 Ohio St. 547; Carty v. Fenstemaker, 14 Ohio St. 457. In this last case, which was that of a mortgagee of chattel property, the surplus was subject to attachment.

It was there said if the mortgagee gets possession by consent (in which case it is identical with a pledge), the right of the mortgagor to redeem or to the surplus is beyond dispute.

It is claimed, however, that as each certificate of stock had upon its back a blank bill of sale, with a blank power of attorney to transfer upon the books of the company, this was an absolute transfer of ownership of the stock to the pledgees not subject to attachment by service of garnishee process upon the corporation, and, therefore, the Provision Company and the bank acquired no preference by their attachment.

In support of this view, McNeil v. The Tenth National Bank, 46 N. Y. 325, is relied on. That caséis in authority simply for the doctrine that: “ "Where the owner of property confers upon another, an appai’ent title to, or power of disposition over it, he is estopped from asserting his title as against an innocent third party who has dealt with the apparent owner in reference thereto, without knowledge of the claims of the true owner. The rights of such third party do not depend upon the actual title or authority of the one with whom he dealt, but upon the act of the owner, which precludes him from disputing the title or authority he has apparently conferred.”

All that was held in that case was, that the owner of the stock by conferring upon a stock-broker complete authority to sell and transfer the certificate by indorsing thereon the form of assignment for value received, and an irrevocable power to make all necessary transfer, clothed the broker with apparent ownership which he could transfer to an innocent third pesson, so as to estop the transferrer from questioning the title of an innocent purchaser.

Had these pledgees exercised the power of sale conferred upon them aud sold the stock to such an innocent purchaser, it might be questioned whether service of process upon the corporation would have been effectual to create a lien in favor of the Provision Company. As that power never was exercised, and as these pledgees at the time of the attachments held the stock as an ordinary pledge, subject to attachment as decided in New London Bank v. L. S. & M. S. R. Co., supra, their attachment has precedence over that of plaintiffs’. At most, defendant’s attachment was subject to be defeated by the exercise of the power of sale to an innocent purchaser.

In Secor v. Witter, 39 Ohio St. 218, this court held that the payee of a negotiable note is subject to garnishment, and as against him and those claiming through him, with actual notice of the proceedings in attachment, the right of the plaintiff in attachment is paramount, but such right is liable to be defeated by one who becomes a bona fide purchaser before due of the negotiable instrument.

See also Kieffer v. Ehler, 18 Pa. St. 388; Day v. Zimmerman, 68 Pa. St. 72.

If we concede, therefore, that the power vested in the pledgees would have enabled them by sale and transfer to an innocent purchaser to have defeated the attachment of November 20th, yet, as it was not exercised, the lien of the attachment of that date has precedence.

2. Another question is made, that is, can a plaintiff in attachment garnishee himself? This is a question of statutory construction. By Revised Statutes, section 5530, any person or corporation is liable as garnishee upon due service of such.

This is.broad enough to include the plaintiff, whether a person or corporation.

No good reason can be assigned why an attaching creditor may not reach money or credits in his own hands by garnishee process, as well as any other creditor.

That he may do so is decided .in the following cases : Lyman v. Wood, 42 Vt. 113; Coble v. Nonemaker, 78 Pa. St. 501; see also Drake Att., sec. 543. The same doctrine is supported by numerous authorities cited in Drake.

The dividends made and not paid follow the stock, and are subject to like distribution.

Judgment affirmea.