Equity Jurisdiction, To reach and apply equitable assets. Corporation, Equitable attachment of shares.
In a suit in equity to reach and apply equitable assets in payment of an alleged debt to the plaintiff, under R. L. c. 159, § 3, cl. 7, as amended by St. 1902, c. 544, § 23, and St. 1910, c. 531, § 2, a breach of an executory contract of service by the principal defendant, the claim of damages for which has not been reduced to a judgment, is not a debt on which the suit can be founded, and a demurrer to the bill must be sustained.
Under St. 1910, c. 531, § 2, which gives jurisdiction in equity "to reach and apply shares or interests in corporations organized under the laws of this Commonwealth or of the United States, and located or having a general office in this Commonwealth, whether the plaintiff is a creditor or not, and whether the suit is founded upon a debt or not," a suit cannot be maintained to reach and apply a certificate of shares in a certain corporation in the possession of the principal defendant but standing in the name of another person, whose name is indorsed upon the back of the certificate, if the certificate contains a provision making it subject to a by-law by which shares in the corporation can be transferred only by offering them first to the directors of the corporation, who have the right to buy them at their book value, because the principal defendant has no ownership nor present interest in the shares represented by such a certificate.
PIERCE, J.
The allegation in the bill of an indisputable right in the plaintiff to have damages assessed by a jury against the defendant Stryker for a breach of an executory contract, because of the special finding of the jury in the action of tort that the contract was broken by the defendant, is but a conclusion of law and is not admitted by the demurrer. Should the right to damages be concluded by the finding, no debt was created thereby, nor could be until the wholly unliquidated damage arising from the breach of the executory contract was determined and the precise amount ascertained by the verdict of a jury and the entry of judgment thereon. Rice v. Stone, 1 Allen, 566, 570. H. G. Kilbourne Co. v. Standard Stamp Affixer Co. 216 Mass. 118.
The plaintiff is not a judgment creditor of the defendant, and holds no debt obligation of the defendant within the meaning of that word in R. L. c. 159, § 3, cl. 7, as amended by St. 1902, c. 544, § 23, and St. 1910, c. 531, § 2. H. G. Kilbourne Co. v. Standard Stamp Affixer Co. supra.
Because the claim of the plaintiff against the defendant for breach of an executory contract is not a debt, or a promise to pay a sum of money which can be ascertained by simple computation, or one which has been liquidated by judgment, the equity court, in which this bill is filed, has not jurisdiction to restrain the defendant from collecting his judgment against the plaintiff and the defendant Stone, pending the termination of this suit. Nor has it authority to determine that in equity the primary duty to pay the obligation of the judgment was on Stone; or that the plaintiff was secondarily liable and entitled to be indemnified by Stone if compelled to pay; or that the plaintiff without payment of the judgment debt should be subrogated to the right of the defendant against Stone and the amount due the defendant from Stone be set off against the sum found to be due the plaintiff from the defendant.
It is plain the court has not jurisdiction to entertain the bill under St. 1910, c. 531, § 2, which amends R. L. c. 159, § 3, cl. 7, by adding at the end thereof the following: "Also suits to reach and apply shares or interests in corporations organized under the laws of this Commonwealth or of the United States, and located or having a general office in this Commonwealth, whether the plaintiff is a creditor or not, and whether the suit is founded upon a debt or not," because at the filing of the bill the defendant had no present ownership in stock or shares of stock in the plaintiff corporation, or any present interest in that corporation. The possibility that the court, in the bill now pending to compel Stone to effect a transfer of stock in the plaintiff corporation, may order specific performance of the agreement of Stone to transfer the stock to the defendant, is neither an ownership of shares nor an interest in the corporation within the meaning of the statute.
It follows that the interlocutory decree sustaining the demurrer must be affirmed.
Decree accordingly.