Kleckner v. Turk

• Decision Date: 22 May 1895
• Docket Number: 6230
• Citation: Kleckner v. Turk, 45 Neb. 176, 63 N.W. 469 (Neb. 1895)
• Parties: EMMA KLECKNER v. W. W. TURK ET AL
• Court: Nebraska Supreme Court

63 N.W. 469

45 Neb. 176

EMMA KLECKNER v. W. W. TURK ET AL

No. 6230

Supreme Court of Nebraska

May 22, 1895

ERROR from the district court of Richardson county. Tried below before BABCOCK, J.

AFFIRMED.

Frank Martin and C. Gillespie, for plaintiff in error:

Failure to publish the notice required by sections 130 and 131 chapter 16, Compiled Statutes, is a fatal defect; without such notice there can be no valid incorporation; it is a condition precedent to the creation of a valid corporation. (Heinig v. Adams & Westlake Mfg. Co., 81 Ky. 300; Kaiser v. Lawrence Savings Bank, 56 Iowa 104; Clegg v. Hamilton, 15 N.W. [Ia.], 865; Eisfeld v. Kenworth, 50 Iowa 389; Bigelow v. Gregory, 73 Ill. 200; Heuer v. Carmichael, 47 N.W. [Ia.] 1034; 1 Beach, Private Corporations, sec. 12; Abbott v Omaha Smelting Co., 4 Neb. 423; White v. Blum, 4 Neb. 560; Cook, Corporations [2d ed.], sec. 234.)

The articles of incorporation are fatally defective in failing to state the "highest amount of indebtedness or liability to which the corporation shall, at any one time, be subject, which must in no case exceed two-thirds of the capital stock." (Compiled Statutes, ch. 16, sec. 128; Heuer v. Carmichael, 47 N.W. [Ia.], 1034; Cook, Corporations [2d ed.], sec. 234.)

Plaintiff should have been allowed to amend her petition at the trial. The amendments asked were in furtherance of justice. Section 144 of the Code has broadened out the right of amendment so far, even after judgment, that the denial of the right to plaintiff is alone sufficient to reverse the judgment. (Hale v. Wigton, 20 Neb. 83; Berrer v. Moorhead, 22 Neb. 687; Brown v. Rogers, 20 Neb. 547; Ward v. Palin, 30 Neb. 376; Roberts v. Taylor, 19 Neb. 184; Burlington & M. R. R. Co. v. Crockett, 17 Neb. 570; Catron v. Shepherd, 8 Neb. 308; Keim v. Avery, 7 Neb. 54.)

In a district where there are two judges their respective rulings should tend to support each other's previous rulings in cases tried. In this case Judge Bush had overruled the demurrer to plaintiff's petition. At the trial Judge Babcock directed the jury that the pleadings, evidence, and the law would not sustain a verdict in plaintiff's favor. This is a practice that cannot be tolerated. A ruling made by one of the judges of the district must be respected by the other, otherwise confusion and uncertainty will be the result. (Marvin v. Weider, 31 Neb. 774.)

The plaintiff seeking to collect her debt from the defendants as individuals is not estopped to deny the incorporation of the bank. (Cook, Stockholders [2d ed.] secs. 234, 283, 637; Abbott v. Omaha Smelting Co., 4 Neb. 416; Garnett v. Richardson, 35 Ark. 144; Ferris v. Thaw, 72 Mo. 446; Hurt v. Salisbury, 55 Mo. 310; 1 Beach, Private Corporations, sec. 16; Bigelow v. Gregory, 73 Ill. 197; Indianapolis Mining Co. v. Herkimer, 46 Ind. 142.)

The repealing act of 1891, repealing sections 136 and 139, chapter 16, is unconstitutional and void. Under our law an ordinary repeal of the sections would have in no manner affected the plaintiff's rights. (Compiled Statutes, ch. 88, sec. 2.) The act was broader than its title, which did not comprehend the retroactive effect which the law was designed to have. It is obnoxious to the provisions of section 11, article 3, of the constitution. (City of Tecumseh v. Phillips, 5 Neb. 305; Messenger v. State, 25 Neb. 674; State v. Lancaster County, 6 Neb. 474; Holmburg v. Hauck, 16 Neb. 337; Touzalin v. City of Omaha, 25 Neb. 817; White v. City of Lincoln, 5 Neb. 516.)

The repealing act is unconstitutional for the further reason that it seeks to impair the validity of the contract entered into between plaintiff and defendants, of which the law in force became a part, and that it seeks to destroy the vested right of plaintiff to recover her money from any of the defendants. (Constitution, U.S. sec. 10, art. 1; Constitution, Neb. sec. 16, art. 1.) The liability sought to be enforced by plaintiff was not a penalty, and could not be taken away. (Doolittle v. Marsh, 11 Neb. 243; Howell v. Roberts, 29 Neb. 483; Coy v. Jones, 30 Neb. 798.)

E. W. Thomas, R. S. Malony, J. H. Broady, Webster, Rose & Fisherdick, and W. E. Stewart, contra:

The Farmers & Merchants Bank of Humboldt was a de facto corporation whose legal right to exist could not be questioned, except by the sovereign authority. (Cory v. Lee, 8 So. Rep. [Ala.], 694; Snider's Sons Co. v. Troy, 4 Am. R. & Corp. Cas. [Ala.], 25; Lincoln Building Association v. Graham, 7 Neb. 173; Abbott v. Omaha Smelting Co., 4 Neb. 420; Porter v. Sherman County Banking Co., 36 Neb. 271; 1 Beach, Private Corporations, secs. 13, 14; Merchants Bank v. Stone, 38 Mich. 779.)

The liability sought to be enforced is not contractual, but one imposed by statute and penal in its nature. (Fay v. Noble, 7 Cush. [Mass.], 188; First Nat. Bank v. Almy, 117 Mass. 476; Stout v. Zulick, 48 N.J.L. 599; Planters & Merchants Bank v. Padgett, 69 Ga. 164; Gartside Coal Co. v. Maxwell, 22 F. 197; Stokes v. Findlay, 4 McCrary [U. S. C. C.], 205; Whitney v. Wyman, 101 U.S. 392; Taylor, Corporations, 148; White v. Blum, 4 Neb. 563.)

Rights and remedies given by statute are lost by unconditional repeal of the statute, (Bennet v. Hargus, 1 Neb. 423; Johnson v. Hahn, 4 Neb. 146; Sedgwick, Construction of Statutory & Constitutional Law, 100; Gregory v. German Bank of Denver, 3 Col., 332; Sayles v. Brown, 40 F. 8; Breitung v. Lindauer, 37 Mich. 230; Cooley, Constitutional Limitations [4th ed.], 152.

G. W. Cornell, also for appellees:

The repealing statute is valid. The saving clause is not of itself a separate subject, but incidental to the matter repealed. The title need not set out the particulars of the amendment. It is sufficient that the subject is fairly expressed in the title. (State v. Ream, 16 Neb. 681; Bonorden v. Kriz, 13 Neb. 121; Miller v. Hurford, 13 Neb. 17; People v. Mahaney, 13 Mich. 494; People v. McCallum, 1 Neb. 194; State v. Babcock, 23 Neb. 128.)

Isham Reavis, also for appellees.

OPINION

HARRISON, J.

The plaintiff commenced this action to recover of the defendants the sum of $ 6,052.53 and interest alleged to have accrued thereon. The petition states in substance: "The said plaintiff complains of said defendants, and for cause states that at the date of the written instruments or obligatures hereinafter copied and set forth, and for several years just immediately preceding said dates and for some time thereafter, as hereinafter stated, the said defendants were associated together and doing, operating, and conducting a general banking business in the city of Humboldt, in said Richardson county, state of Nebraska, under the name and style of the Farmers & Merchants Bank of Humboldt, Nebraska, with said defendant Robert C. Lambertson, as the cashier of said bank, authorized for and in behalf of said defendants to receive deposits of money into said bank and issue drafts or bills of exchange and certificates of deposits therefor."

What is denominated the first cause of action is an allegation of a deposit by plaintiff in the bank of $ 6,445, December 7, 1888, and the issuance to her by the cashier thereof of a certificate evidencing such deposit, it being, as is shown by the copy in the petition, what is generally known as a "time certificate," and payable in one year after date. There are three credits or payments pleaded, which are stated to have been received since the assignment of the bank. The second cause of action is predicated upon the purchase of a draft by plaintiff of the defendants through the cashier of the bank, in the sum of $ 200, drawn on the National Bank of Kansas City, and which, it is alleged was duly presented and not paid for want of funds belonging to the bank issuing it to meet it. Certain payments are stated to have been received and credited upon the draft, derived from the assets of the Humboldt bank since the assignment. It is further pleaded:

"4. The said defendants claim that their said bank was a duly incorporated bank under the laws of the state of Nebraska, under the name and style of the Farmers & Merchants Bank of Humboldt, Nebraska; that it was so organized and incorporated on or about the 1st day of July, A. D. 1879. The said corporation or bank of said defendants operated and conducted said bank as above from about the 10th day of July, 1879, to about the 29th day of June, 1889, when said corporation made an assignment, as an insolvent institution or corporation under the general assignment laws of the state of Nebraska, to the sheriff of said county.

"5. The said plaintiff alleges that from the organization of said banking corporation of said defendants, on or about July 10, A. D. 1879, to the said assignment, on or about June 29, A. D. 1889, the said defendants were stockholders and members of said corporation, and are still so related and connected with the affairs of said assigned bank.

"6. The said plaintiff further alleges that at the time when said plaintiff deposited her said moneys in said bank, and at the times and dates when said indebtedness was contracted and said certificate of deposit or promissory note was delivered to said plaintiff as above stated, and when said draft or bill of exchange was made and delivered to this plaintiff as above stated, and for a long time before and ever since then, the said corporation or banking institution of defendants was insolvent."

Here follows a general allegation of the failure of defendants and their banking corporation "to comply with the laws of Nebraska regulating such corporations, and that by reason of such failure the defendants were rendered individually liable for debts contracted by the corporation, and also allegations of failures in particular, viz.: To publish notice of the organization of the banking...