Creighton v. Keith

• Decision Date: 03 March 1897
• Citation: 70 N.W. 406,50 Neb. 810
• Parties: CREIGHTON ET AL. v. KEITH ET AL.
• Court: Nebraska Supreme Court

50 Neb. 810

70 N.W. 406

CREIGHTON ET AL.

v.KEITH ET AL.

Supreme Court of Nebraska.

March 3, 1897.

Syllabus by the Court.

1. While a supersedeas bond is not essential to obtain a review of a decree in an equity cause, such bond is indispensable to a stay of the enforcement of such decree pending the review.

2. A judgment or decree in full force is binding upon the parties thereto, and their privies, as to the issues adjudicated.

Appeal from district court, Lincoln county; Holcomb, Judge.

Action by John D. Creighton and others against Merrill C. Keith and others. Judgment for plaintiffs, and defendant Foley appeals. Reversed.E. J. Hainer and T. Fulton Gantt, for appellant.

E. C. Calkins, J. B. Strode, and Geo. E. French, for appellees.

NORVAL, J.

In July, 1888, William M. Holtry and several others formed a corporation known as the North Platte Milling & Elevator Company, having its principal place of business at North Platte, and the purposes of its organization being, among others, the buying, selling, and storing of grain, and the manufacture of mill products. The articles of corporation contained this provision: “The capital stock of the company shall be seventy-five thousand (75,000) dollars, divided into shares of one hundred (100) dollars each, forty per cent. of which shall be paid in on or before the 10th day of July, 1888, and the residue when called for as provided in the by-laws of the company: provided, that no assessment on capital stock shall be made unless there are dividends due and unpaid on capital stock sufficient to meet such assessment, and no assessment shall be made unless authorized by a vote af three-fourths of the capital stock.” Forty per cent. of the amount of the entire capital stock subscribed was paid down, but no other or further payments thereon have been made. After the corporation commenced business, it became indebted to John C. Creighton and others, plaintiffs herein, and to secure which it executed mortgages upon its real estate, which were foreclosed on June 15, 1891. The property was sold under decree, and deficiency judgments were rendered against the corporation, upon which executions were issued and returned wholly unsatisfied. Thereupon this suit was instituted against the original stockholders and their assignees, Thaddeus W. Foley and others, claiming that the defendants were indebted to the corporation for 60 per cent. of the amount of stock subscribed, and praying a decree that the defendants be required to satisfy plaintiffs' judgments. From a decree for plaintiffs the defendant Foley alone appeals.

The petition, for cause of action against Foley, alleges that on the 24th day of February, 1890, he purchased of his co-defendant Holtry 200 shares of the capital stock of the corporation, at which time only 40 per cent. of the amount of said stock had been paid, and that Foley assumed and agreed to pay the remaining 60 per cent. thereof. To this charge in the petition, Foley, in his answer, avers that Holtry, by fraudulent and false representations, did sell, convey, and transfer to Foley the amount of stock as stated in the petition; alleges that said sale was void; and pleads a decree of the district court of Lincoln court, rendered December 29, 1891, which vacated, set aside, and annulled said transfer of stock, in an action wherein said Foley was plaintiff and said Holtry was defendant. For reply to this portion of the answer, plaintiffs allege that they were not parties to the suit wherein said decree (which is set out in full in the answer) was rendered, and “that said decree has not become final, but that the case wherein the same was rendered is now pending on appeal in the supreme court of the state of Nebraska.” A demurrer to this portion of the reply was overruled.

But one of the numerous questions argued in the briefs of counsel will be noticed, and that is whether the said decree in the case of Foley v. Holtry is a bar to this action. It fully appears from the pleadings herein that in said suit, and prior to the bringing of this action, Foley obtained a decree against Holtry, adjudging that the former, by the false representations of the latter, was induced to purchase said shares of stock, and that the court rescinded the transfer on that ground. For a report of the decision of this court affirming said decree, see Foley v. Holtry, 43 Neb. 133, 61 N. W. 120. If the decree of rescission was in force at the time of the trial in the court below, and it is binding upon plaintiffs, it is a complete defense to this action, since, in contemplation of law, Foley was not a stockholder in the corporation, and therefore not liable for its debts. Section 675 of the Code of Civil Procedure authorizes appeals from the district to the supreme court from final orders and decrees in all actions in equity, if effected within six months from the rendition thereof. Section 677 declares that: “No appeal in any case in equity now pending and undetermined, or which shall hereafter be brought, shall operate as a supersedeas, unless the applicant, or applicants, shall within twenty days next after the rendition of such judgment, or decree, or the making of such final order, execute to the adverse party a bond with one or more sureties as follows,” etc. The giving of a supersedeas bond is not essential to the prosecution of an appeal in an equity cause, but is indispensable to a stay of proceedings pending a review in the appellate court. Such is the plain meaning and effect of the section above quoted, and this court has so held. McAusland v. Pundt, 1 Neb. 211;Parker v. Courtnay, 28 Neb. 605, 44 N. W. 863;State v. Ramsey (Neb.) 69 N. W. 758. In the second case, in construing section 677, it was said: “It is evident that where no supersedeas bond is filed the decree remains in full force, and that when a third party purchases property at a judicial sale, or in reliance upon the decree then in force, his rights cannot be divested by a subsequent reversal of the decree.” See Elliott, App. Proc....