First National Bank of Omaha v. Goodman
| Decision Date | 09 June 1898 |
| Docket Number | 8636 |
| Citation | 75 N.W. 846,55 Neb. 409 |
| Parties | FIRST NATIONAL BANK OF OMAHA, APPELLEE, v. EMMA GOODMAN, APPELLANT. [*] |
| Court | Nebraska Supreme Court |
APPEAL from the district court of Douglas county. Heard below before KEYSOR, J. Affirmed.
AFFIRMED.
Isaac Adams and George W. Doane, for appellant.
J. M Woolworth and Congdon & Parish, contra.
Charles F. Goodman entered into business in Omaha in 1868 as a druggist. The business prospered and was extended until it embraced a wholesale drug store. In 1887 the wholesale store was sold and the retail business was continued. For some years prior to the events creating this controversy it was conducted by a corporation known as the Goodman Drug Company Mr. Goodman owning all the stock except a few shares which were held by members of his family. Mr. Goodman also became interested in the Omaha Brick & Terra Cotta Company and the Grandview Brick Company, corporations whose business is indicated by their titles, and quite largely in real estate. Except for a period prior to 1883 Mr. Goodman conducted his banking business with the First National Bank, and seems to have been practically all the time a large borrower on behalf of himself and the corporations in which he was interested. The debt was represented by divers notes, made from time to time, and at their maturity paid or renewed, apparently at Mr. Goodman's volition. In 1887 the debt amounted to $ 47,500. Early in that year, from the proceeds of the sale of the wholesale store, it was entirely paid. Before the close of 1887 Mr. Goodman began to borrow again, and the indebtedness gradually increased until 1890, when it was almost $ 63,000. It was subsequently reduced to $ 39,000, but grew again until it reached, in 1892, $ 45,000. The foregoing facts are important in showing that, instead of occasional single loans, paid at maturity, Mr. Goodman's debts to the bank arose out of a constant series of transactions, the amount fluctuating, but the distinct affairs merging in a continuous course of dealing, understood by both parties in that light. The debt in 1892 was made up of several notes--individual notes of Goodman, notes of the drug company with Goodman as joint maker, and notes of the brick company to Goodman and another and by them indorsed to the bank. The only security then held by the bank was Goodman's stock in the drug company, which had been pledged as a general cover. In 1892 Mr. Kountze, the president of the bank, asked Mr. Goodman to reduce his indebtedness or secure it. Mr. Goodman informed Mr. Kountze that he held much unincumbered land, and also life insurance policies to the amount of $ 45,000; that when the bank should desire it he would mortgage the land and assign the policies. Thereupon the bank continued its policy of renewing his notes. In December, 1892, one of the notes maturing, Mr Kountze again requested security. Mr. Goodman said he did not wish to give it at that time, but repeated his promise to give it upon demand, and renewals were again granted. Mr. Goodman was then endeavoring to obtain a loan on his real estate which would enable him to discharge his existing debts. February 20, 1893, a note again maturing, a demand was made for the promised securities, and Mr. Goodman promised to bring to the bank a memorandum of his land, his certificates of stock in the brick company, and the policies of insurance. Certain notes then maturing or past due were then renewed. At this interview Mr. Goodman asked what the bank would do as to renewing paper if security were given, and Mr. Kountze answered that the bank would carry the paper along as it had been doing, renewing for periods of sixty or ninety days, as long as the securities were satisfactory and the condition of the bank and general financial conditions should allow. Mr. Goodman then said that he might need further moneys, and Mr. Kountze said that in case of emergency the bank would aid him. Soon after this, and prior to March 1, Mr. Goodman brought in the instruments, and it was then discovered that Mrs. Goodman was the beneficiary of every policy. The bank took steps to ascertain how in that condition the assignments could be perfected, and found that policies to the amount of $ 13,000 were in companies which permitted no assignments. Forms of assignments of the remaining policies were prepared according to the requirements of the companies issuing them. March 1 a loan of $ 2,000 was made by discount of a note of the brick company, and Mr. Kountze then drew up, at Mr. Goodman's request, an instrument which the latter signed, reciting a pledge of the life insurance policies, and directing the bank, in the event of its applying their proceeds to his debt, to deliver the stocks pledged, after satisfying the debt, to Mrs. Goodman. This instrument contained the following by way of recital: "The money arising from said policies when collected shall apply on any indebtedness of C. F. Goodman or the Goodman Drug Company to said bank." Mr. Kountze about this time drew up a mortgage of the land listed by Mr. Goodman, conditioned in broad terms to secure existing and future indebtedness and renewals. On the morning of March 8 Mrs. Goodman went to Mr. Goodman's place of business and was there met by Mr. Gates, the assistant cashier of the bank, and by Mr. Bexton, its collection clerk, who was also a notary public, Mr. Gates bearing with him the mortgage and the assignments of the policies. Without any inquiry or conversation with reference to the nature of the contract Mrs. Goodman then signed the assignments and signed and acknowledged the mortgage, and Mr. Gates took them back to the bank, where they were retained. Subsequently all the notes, except one, were extended by the payment and receipt of interest in advance, such payments being indorsed on the notes. Later in 1893 other notes were made. One of these was secured by mortgage on land in Lancaster county, conditioned also as a continuing security for all indebtedness, Mrs. Goodman joining in its execution. Part of the proceeds of these later notes went to the payment of Mr. Goodman's individual overdrafts, part to the payment of taxes, chiefly on the mortgaged land, and the remainder was indorsed as payments on some of the old notes. On a date not disclosed by the printed abstract on which the case is submitted, but stated to be January 4, 1895, the bank brought this suit to foreclose the mortgages and subject the stocks to the payment of the debt. The petition alleged the pledge of the policies, but asked no relief as to them. Mrs. Goodman was made a party apparently solely to bar dower in the land. January 11, 1895, Mr. Goodman died. Mrs. Goodman was made executrix of his will. The bank collected the life insurance, applied it to the notes then held by it, and presented, proved, and caused to be allowed its claim against the estate for the amount of the debt, less the proceeds of the policies. In the probate proceedings no objection was interposed by Mrs. Goodman to such application. She, however, began suit at law to recover the proceeds of the policies, but afterwards dismissed that suit without prejudice. In the meantime the bank, by supplemental petition in this case, had set up the death of Goodman, its collection of the life insurance and its application to the debt, and asked to have its right to so apply it adjudicated. Mrs. Goodman by her answer set up in effect three defenses: want of consideration, undue influence, and discharge of the securities by extending the time of payment of the notes. The court found generally for the plaintiff, and found specially, also for the plaintiff, as to the defenses of undue influence and want of consideration. It is contended that the general finding was insufficient to cover the issues as to discharge, but we think otherwise. The decree directed that the land be first sold, then the stocks; set aside the application made of the insurance, and directed that it be held by the bank at interest at the rate the notes bore, and applied if necessary to the debt...
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