First Nat. Bank of Chadron v. McKinney

• Citation: 66 N.W. 280,47 Neb. 149
• Parties: FIRST NAT. BANK OF CHADRON v. MCKINNEY ET AL.
• Decision Date: 18 February 1896
• Court: Nebraska Supreme Court

47 Neb. 149

66 N.W. 280

FIRST NAT. BANK OF CHADRON

v.MCKINNEY ET AL.

Supreme Court of Nebraska.

Feb. 18, 1896.

Syllabus by the Court.

1. Proof of false statements knowingly made by the purchaser of goods, whereby he is shown to be possessed of a large amount of property over and above his liabilities, is admissible under an allegation that, being insolvent, he knowingly concealed his insolvency from the vendor.

2. A vendor who is induced to part with possession of property through the fraud of the purchasers had his election to rescind the contract and reclaim the property sold, or to ratify the sale and pursue his ordinary remedy by an action on the contract.

3. But such remedies are not concurrent, and by electing to pursue one, with a knowledge of the facts, he waives his right to the other.

Error to district court, Dawes county; Rinkaid, Judge.

Replevin by Albert McKinney and others against the First National Bank of Chadron and others. There was a judgment for plaintiffs, and the bank brings error. Reversed.Albert W. Crites, for plaintiff in error.

Spargur & Fisher and Bartlett, Baldrige & De Bord, for defendants in error.

POST, C. J.

This cause was before us at the January, 1893, term, at which time it was held that the petition below stated a cause of action against the defendant therein (the plaintiff in error), for the recovery of merchandise sold to one Charles F. Yates; the plaintiffs below having elected to rescind the contract of sale on account of the fraud of said Yates, through whom the defendant claims by virtue of a chattel mortgage. McKinney v. Bank, 36 Neb. 629, 54 N. W. 963. Since then a second trial has been had in the district court for Dawes county, resulting in a verdict for the plaintiffs therein, in accordance with the peremptory instruction of the court. A motion for a new trial having been overruled, judgment was entered upon the verdict, which has been removed into this court for review, by means of the petition in error of the unsuccessful party.

The first proposition to which we will give attention is that there is a fatal variance between the allegations of the plaintiffs below and the proofs. But that argument is without force. The charge of the petition is that Yates, being insolvent at the time of the purchase of the goods, concealed his insolvency from the plaintiffs, whereas the evidence received over the objection of the defendants tended strongly to prove false representationsby him (Yates) respecting his financial standing, whereby he was shown to be possessed of a large amount of property over and above his liabilities. The false statements proved certainly tend to sustain the allegations that Yates concealed his insolvency at the time of purchase of the goods in controversy, and were therefore rightly received in evidence.

It is contended that the peremptory instruction was unwarranted by the evidence, there being no proof of Yates' insolvency when he purchased the goods which are the subject of this controversy. But in that view we are unable to concur. On the contrary, we have no doubt, from a careful examination of the record, that Yates was at the time in question, within his own knowledge, hopelessly insolvent. According to the record offered in evidence, and which is made a part of the bill of exceptions, the defendants in...