Ingwersen v. Edgecombe

• Decision Date: 20 November 1894
• Citation: 60 N.W. 1032,42 Neb. 740
• Parties: INGWERSEN ET AL. v. EDGECOMBE ET AL.
• Court: Nebraska Supreme Court

42 Neb. 740

60 N.W. 1032

INGWERSEN ET AL.

v.EDGECOMBE ET AL.

Supreme Court of Nebraska.

Nov. 20, 1894.

Syllabus by the Court.

The relation of the directors and managing officers of an insolvent private corporation towards the property and assets thereof, is that of trustees for all of the creditors. Such officers cannot take advantage of their position to secure a preference for themselves, but are required to share ratably with other creditors.

Appeal from district court, Madison county; Allen, Judge.

Action by Ingwersen Bros. against the Farmers' & Drovers' Bank, F. O. Edgecombe, as receiver, and others, to foreclose a mortgage. Judgment for plaintiffs, and defendants appeal. Reversed.Robinson, Reed & Foster, for appellants.

Powers & Hays, for appellees.

POST, J.

On the 22d day of June, 1891, the Farmers' & Drovers' Bank of Battle Creek issued to John F. Teidgen a certificate of deposit in the usual form for $5,000, payable September 1, 1891, and bearing interest at 8 per cent. per annum. On the 9th day of July, following, said Teidgen, as vice president of said bank, for the purpose of securing the said certificate of deposit, executed a mortgage, whereby, in behalf of the bank, he conveyed to himself a lot in the village of Battle Creek, owned and occupied by said bank as a place of business, and in which B. Meyl, the cashier, also joined. On the 15th day of the same month, the said bank was by this court adjudged to be insolvent, and the defendant Edgecombe named as receiver to wind up its business, under the direction of the court. On the 11th day of March, 1892, this proceeding was commenced by the plaintiffs, assignees of Teidgen, in the district court of Madison county, to foreclose the mortgage above mentioned. A decree having been allowed by the district court in accordance with the prayer of the petition, the cause was removed into this court upon the appeal of the receiver.

The numerous propositions discussed by counsel in the briefs submitted are included in the one inquiry, viz. is the mortgage to Teidgen valid as against the receiver of the bank? It should in this connection be noted that the plaintiffs are not shown to be bona fide holders of the certificate of deposit, and do not in fact claim any equities superior to those of their assignor. In addition to the facts above stated, it is disclosed by the record that the bank had been insolvent for some considerable time immediately preceding the date shown by the certificate of deposit, and was at no time thereafter able to pay its creditors in full. The capital stock of the bank was during that time held by R. H. Maxwell, who was president, John F. Teidgen, vice president, Ben Meyl, cashier, and A. H. Hensel, said stockholders all being members of the board of directors thereof. The transactions which resulted in the execution of the mortgage are best understood from the testimony of the parties thereto. For instance, Teidgen, on his direct examination, testified for the plaintiffs as follows: “Q. State in full and in detail the circumstances under which you deposited the sum of $5,000 with said bank, and whether said bank ever gave you security for the payment of the same, and, if so, the character of said security, and whether the amount due on said certificate has ever been paid. A. At the time I deposited that money, Ben Meyl, the cashier, came to me at my house, while the president was not at home. The president was in Lincoln, Nebraska, and wanted me to advance the bank five thousand dollars. I didn't have the money, but drew a sight draft on Ingwersen Bros., and they paid it. The draft was for that sum. Ben Meyl, the cashier, told me that the bank wanted five thousand dollars for a couple of months. * * * During that time they agreed to give me a mortgage on the building for five thousand dollars, and have done it. It then ran on, and Ingwersen Bros. wanted their money, and I assigned the mortgage and certificate of deposit to them, and told them to foreclose whenever they pleased. The cashier wrote the mortgage, and I signed it as vice president, because the president was not there, he being in Lincoln, Nebraska. I don't know whether the cashier signed the mortgage or not. The mortgage covered the bank building. No part of the certificate of deposit has ever been paid to me. Q. State whether or not the cashier or other officers of the bank said...