Benedict v. T. L. V. Land & Cattle Company

• Decision Date: 06 November 1902
• Docket Number: 12,232
• Parties: B. LINCOLN BENEDICT, EXECUTOR, APPELLANT, v. T. L. V. LAND & CATTLE COMPANY ET AL., APPELLEES
• Court: Nebraska Supreme Court

92 N.W. 210

66 Neb. 236

B. LINCOLN BENEDICT, EXECUTOR, APPELLANT, v. T. L. V. LAND & CATTLE COMPANY ET AL., APPELLEES

No. 12,232

Supreme Court of Nebraska

November 6, 1902

APPEAL from the district court for Logan county. Action in the nature of a creditors' bill. Tried below before GRIMES J. Decree for defendants. Plaintiff appeals. Affirmed in part.

Judgment reversed in part and affirmed in part.

Hoagland & Hoagland, for appellant.

Wilcox & Halligan and James H. Woolley, contra.

OLDHAM C. BARNES and POUND, CC., concur.

OPINION

OLDHAM, C.

In the year 1886, the T. L. V. Land & Cattle Company (hereinafter called T. L. V. Company) was duly organized as a corporation under the laws of the state of New Jersey, and engaged in the business of buying and selling cattle in the state of Nebraska, with its principal office at Omaha, Nebraska. The company owned a large ranch containing 26 sections of land, situated in the counties of Logan and Custer, in the state of Nebraska. It also owned a large number of cattle, some horses and agricultural implements, all situated on the lands in Nebraska known as the "T. L. V. Ranch." James E. Riley, one of the defendants herein, gradually accumulated almost the entire stock of the T. L. V. Company, and was president and general manager of that company. In June, 1893, the T. L. V. Company was reorganized as a Nebraska corporation, under the name of the "Central Nebraska Land & Cattle Company" (hereinafter called Central Company); the stock of the T. L. V. Company being exchanged for stock in the latter company, and all the property of the T. L. V. Company being transferred to the Central Company. Prior to the reorganization of the T. L. V. Company, all the lands owned bye it were mortgaged to the Fidelity Title & Deposit Company, of Newark, New Jersey, to secure a bona-fide indebtedness of $ 25,000. The lands owned by the T. L. V. Company were conveyed by warranty deed to the Central Company, subject to the indebtedness of said company, and this deed was filed for record in the counties of Logan and Custer on the 10th day of June, 1893. The personal property was also conveyed by bill of sale, subject to the indebtedness of the T. L. V. Company, and this bill of sale was recorded in the miscellaneous records in said counties on the same day. The plaintiff in this action was a former stockholder in the T. L. V. Company, and had personal, as well as record, notice of all these transfers. On August 18, 1893, on application of plaintiff, defendant Keasby was appointed receiver of the T. L. V. Company, but he appears to have never taken charge of any of the property of said company, and in fact the record shows that this company had no property other than such as was conveyed to the Central Company.

In December, 1893, plaintiff instituted suit in the district court for Douglas county, Nebraska, against the T. L. V. Company to recover the sum of $ 13,500 on the indebtedness of said company to him then due. On January 3, 1894, plaintiff, on a proper application, caused an attachment to issue against the T. L. V. Company in aid of the suit then pending. Summons was served on defendant the T. L. V. Company, and the sheriff levied the attachment by serving notice of said attachment and garnishment on James E. Riley, as president of the Central Company, at Omaha, Nebr. In answer to this summons in garnishment, Riley, as president of the T. L. V. Company, alleged that he had in his possession, as president, all the lands formerly owned by the T. L. V. Company, situated in Logan and Custer counties, and also the live stock and farm machinery situated on the T. L. V. ranch, in said counties. The judge of the district court for Douglas county, on this answer being filed, issued an order to the Central Company to deliver all of the property described in the answer to the sheriff of Douglas county. About the 10th day of January, 1894, copies of this order in garnishment were filed in the miscellaneous records in both Logan and Custer counties. Nothing else appears to have ever been done in this attachment proceeding. No orders of attachment were ever issued to the sheriff of either Logan or Custer counties, and no levy was made other than the summons in garnishment above set out. Defendant Riley ignored the order of garnishment, and neither delivered the lands nor the live stock to the sheriff of Douglas county, but on the contrary he permitted the lands to remain where they were, and disposed of the cattle remaining on the ranch to the defendants Hake, Valentine and Carpenter, in a manner hereafter discussed. In December, 1894, plaintiff's claim was reduced to judgment, and proper transcripts of this judgment were filed in Logan and Custer counties. An execution was issued on said judgment and returned unsatisfied prior to the institution of the suit at bar.

October 12, 1897, a petition in the nature of a creditors' bill was filed by plaintiff, in which all the parties to this cause of action were made defendants. The petition is exceedingly lengthy, and sets out the organization and incorporation of the T. L. V. Company; the organization of the Cenetral Company; the transfers of property from the T. L. V. Company to the Central Company; the recording of the bills of sale and deeds to the real estate of said company; the mortgage on the lands to the Fidelity Title and Deposit Company; the procuring of the judgment in the district court for Douglas county; the attachment and garnishment proceedings in Douglas county; the levy and return of execution on plaintiff's judgment; the insolvency of each of the companies and of Riley; alleges a fraudulent conspiracy between defendant Riley and the defendants who purchased the property in question for the purpose of hindering, delaying and cheating plaintiff in the collection of his judgment; asks for a cancelation of the deed and bill of sale of the personal property from the T. L. V. Company to the Central Company, and that each of the defendants who purchased property from defendant Riley be required to account to the plaintiff for the value of the property so purchased. The petition also asks for an injunction to restrain defendants Tierney and Tierney Bros. from paying rent for the use and occupancy of the T. L. V. ranch. During the pendency of the suit, the plaintiff, Charles L. Benedict, departed this life, and the suit was revived in the name of his executor. Defendant Keasby, as receiver of the T. L. V. Company, entered his appearance in the action, but filed no answer, and no relief was asked against him. The T. L. V. Company filed no answer. Defendant Carpenter filed a demurrer to the plaintiff's petition, which was overruled, and he appeared no further in the action, and was subsequently defaulted. Each of the other defendants appeared, and filed their separate answers in the cause. Trial was had to the court; a decree was rendered declaring plaintiff's judgment a lien on all the lands and effects of the Central Company, and awarding him execution thereon. The petition was dismissed as to all the other defendants; and plaintiff appeals from said rulings to this court.

We will be compelled to examine the allegations against the various defendants separately. The first allegation against defendant Valentine, is as to the purchase of about 100 head of cattle. The evidence shows clearly and indisputably that these cattle were purchased and paid for in the ordinary course of business in the spring of 1893, and before any transfer of this property was made, and before any suit had been instituted by plaintiff, and, consequently, there can be no doubt that the finding of the trial court in favor of this defendant on this cause of action was fully warranted. Another allegation of the petition is with reference to the purchase of 580 head of cattle by defendants Hake, Valentine and Conway. The evidence shows clearly and indisputably that in February, 1894, these cattle were purchased for a valuable consideration from defendant Riley, managing officer of both the T. L. V. Company and of the Central Company, by these defendants. It also shows beyond dispute that they had no actual knowledge of any indebtedness of...