Harrington v. Connor

• Decision Date: 21 April 1897
• Docket Number: 7248
• Citation: 70 N.W. 911,51 Neb. 214
• Parties: E. M. HARRINGTON v. F. N. CONNOR, RECEIVER
• Court: Nebraska Supreme Court

70 N.W. 911

51 Neb. 214

E. M. HARRINGTON v. F. N. CONNOR, RECEIVER

No. 7248

Supreme Court of Nebraska

April 21, 1897

ERROR from the district court of Saline county. Tried below before HASTINGS, J. Affirmed.

AFFIRMED.

F. I Foss, for plaintiff in error.

Charles Offutt, contra.

OPINION

HARRISON, J.

On September 13, 1892, Theodore H. Miller, then receiver of the State Bank of Nebraska, at Crete, instituted this action against E. M. Harrington and George D. Stevens. The suit was based upon a promissory note in the principal sum of $ 5,000 with interest at the rate of ten per cent per annum from date, stated to have been executed by E. M. Harrington, of date May 21, 1892, payable one month after date, and to the order of George D. Stevens. It was pleaded in the petition that the bank was a corporation organized under the laws of this state, and that the note in suit had been, on a day of the month of its execution and delivery, indorsed by George D. Stevens, the payee thereof, and sold and delivered to the State Bank of Nebraska; that on September 9, 1892, Miller was appointed receiver of the bank. After this action was commenced Miller resigned and Frank H. Connor was appointed receiver of the bank. An attachment was procured against Stevens and service was made, as to him, by publication. Personal service of summons was had on Harrington, who filed an answer in the case, in which he stated as follows: "That the facts in relation to the making of said note are as follows: Prior to the making of said note the said George D. Stevens was the cashier of said bank, and so remained for some months thereafter, and until the said bank passed into the hands of said Miller, receiver; that at or about the time of the making of said note it was proposed and intended to reduce the capital stock of said bank from $ 75,000 to the sum of $ 50,000; that the said Stevens was in debt to said bank to the amount of $ 13,000, which was a greater amount than he was allowed by law to carry under the capital of $ 50,000; that for the purpose of apparently reducing his said indebtedness to an amount within the statutory limit he, the said George D. Stevens, being cashier as aforesaid, took up his note to the bank of $ 13,000, and in lieu thereof gave his own note for $ 8,000 and induced this defendant to make, execute, and deliver the note in suit to the said Stevens, for the sole and only purpose of enabling him to indorse the same to the bank in lieu of the remainder of the said $ 13,000 note; and the defendant alleges that he did so indorse said note to the said bank, and that there was and is no other and further consideration for the said note moved either from said Stevens or said bank to this defendant, or from said bank to said Stevens, and that this defendant received no consideration, nor did the bank give any consideration, for the same, or lose or part with anything of value therefor." The answer in which the foregoing appeared was filed of date October 17, 1892. On May 15, 1893, a second answer was filed for Harrington, in which it was alleged that on January 9, 1893 (some months after this suit was brought), the entire assets, including the note in suit, were, by the order and authority of this court, sold, assigned, and transferred to John R. Johnston, who since that time has been the owner of the note; that George D. Stevens, for several years prior to the time the note in suit was executed, had been and was cashier of the State Bank of Nebraska; that the defendant Harrington was and had been a clerk in the bank during a number of years; that the relations between him and Stevens were of a confidential and friendly nature, and that he executed the note at the request of, and for the accommodation of, Stevens, and without any consideration; that Stevens was the sole owner of the bank, all except five shares of the stock being in his name, and those five being nominally owned by his wife, but controlled and in reality owned by him; that of all these matters Johnston had full knowledge. To this a reply was filed, in which the transfer to Johnston, during the pendency of this suit, of the assets of the bank, including this note, was admitted as stated in the answer. It was also admitted that Stevens had been cashier of the bank as alleged in the answer, also that the defendant Harrington had been a clerk therein as pleaded, and each and every other allegation of the answer was denied. During the October, 1893, term of the district court in Saline county the cause was tried and the receiver was awarded a verdict and judgment for the amount claimed in the petition. The plaintiff in error seeks a reversal of the judgment.

One point argued is that after the sale and transfer of the note to John R. Johnston he became the real party in interest, and should have been made a plaintiff or substituted as party plaintiff. The transfer was during the pendency of the action, and in such cases the action may be continued or further prosecuted in the name of the...