Austin v. Norfolk Nat. Bank

• Decision Date: 21 October 1896
• Citation: 68 N.W. 628,49 Neb. 412
• Parties: AUSTIN v. TECUMSEH NAT. BANK.
• Court: Nebraska Supreme Court

49 Neb. 412

68 N.W. 628

AUSTIN

v.TECUMSEH NAT. BANK.

Supreme Court of Nebraska.

Oct. 21, 1896.

Syllabus by the Court.

1. In order to render a newly-organized corporation liable at common law for the debts of an established corporation or firm to whose business and property it has succeeded, it should, in the absence of a special agreement, affirmatively appear from the pleadings and proofs that the transaction in question is fraudulent as to creditors of the old corporation, or that the circumstances attending the creation of the new and its succession to the business and property of the old corporation are of such character as to warrant the finding that it is a mere continuation of the former.

2. Petition examined, and held not to state a cause of action against the defendant, as successor of the Bank of R. & H., a corporation, either at common law or under the provisions of the national banking act.

Error to district court, Johnson county; Bush, Judge.

Action by A. B. Austin against the Tecumseh National Bank. Judgment for defendant, and plaintiff brings error. Affirmed.T. Appelget and J. Hall Hitchcock, for plaintiff in error.

J. H. Ames, C. Gillespie, and S. P. Davidson, for defendant in error.

POST, C. J.

This was an action in the district court for Johnson county against the Tecumseh National Bank, to recover the amount of a certificate of deposit for $300, issued by the firm of Russell & Holmes, doing business as bankers in said county. The allegations of the petition below are that the plaintiff therein (who is also plaintiff in error), on the 7th day of November, 1888, deposited with the said firm the sum of $300, and received the certificate of deposit above described; that on the 1st day of June, 1889, the firm of Russell & Holmes went into liquidation, and closed its business, and thereafter the Bank of Russell & Holmes, a corporation, organized pursuant to the laws of this state, engaged in the business of banking, as the successor of said firm; that the corporation aforesaid was a mere continuation of the firm of Russell & Holmes, and, as such, succeeded to its business and assets, of every character, and assumed its liabilities. The statements therein which it is claimed connect the defendant in error with the indebtedness of Russell & Holmes, as co-partners, and the Bank of Russell & Holmes, a corporation, are the following: “Plaintiff further alleges that afterwards, to wit, on or about the 13th day of April, 1890, the Bank of Russell & Holmes went into liquidation, and closed its said business, and ceased its organization as said Bank of Russell & Holmes; and thereupon, afterwards, to wit, on or about the 14th day of April, 1890, the defendant was duly organized and created a banking corporation, under and by virtue of the various banking laws enacted by the congress of the United States, known and designated as the ‘National Banking Act,’ and is at the present time carrying on a general banking business in the city of Tecumseh, under the name and style of the Tecumseh National Bank, as successor to the Bank of Russell & Holmes. Plaintiff further alleges that this defendant, so organized and created a banking corporation as aforesaid, came into possession of, and received, as successor to the Bank of Russell & Holmes, the property, assets, emoluments, business, and good will of the said Russell & Holmes, and also the said sum of $300, deposited by this plaintiff as aforesaid; and this defendant thereupon became liable to the plaintiff for said deposit so received, with interest. Plaintiff further alleges that the business of this defendant was and is done and carried on in the same building and the same room previously occupied by the Bank of Russell & Holmes for the transaction of its business, and that all the owners and officers of the Bank of Russell & Holmes became stockholders of this defendant upon its creation, and, as such, managed and controlled its business, whereby defendant assumed this indebtedness, and became liable therefor. Plaintiff further alleges that the Bank of Russell & Holmes is wholly insolvent, and that it has no money or other property with which to pay those who had formerly made deposits with them and with Russell & Holmes.” The defendant, for answer, admits that it is a national bank, engaged in business as such in the city of Tecumseh, as charged, and denies the other allegations of the petition. A...