Larsen v. First Bank

• Decision Date: 20 May 1994
• Docket Number: No. S-92-1010,S-92-1010
• Citation: 515 N.W.2d 804,245 Neb. 950
• Parties: , 23 UCC Rep.Serv.2d 1219 Edward W. LARSEN et al., Appellees, v. FIRST BANK, formerly known as First Westside Bank, a Nebraska Banking Corporation, Appellant.
• Court: Nebraska Supreme Court

Page 804

515 N.W.2d 804

245 Neb. 950, 23 UCC Rep.Serv.2d 1219

Edward W. LARSEN et al., Appellees, v. FIRST BANK, formerly known as First Westside Bank, a Nebraska Banking Corporation, Appellant.

No. S-92-1010.

Supreme Court of Nebraska.

May 20, 1994.

Syllabus by the Court

1. Demurrer: Plea in Abatement. Although Neb.Rev.Stat. § 25-806 (Reissue 1989) permits a defendant to demur when it appears on the face of a petition that there is another action pending between the same parties for the same cause, the statute does not preclude the filing of a common-law plea in abatement to bring to the attention of the court some fact or circumstance which is not disclosed on the face of the record, but which will defeat the particular action without absolutely and forever precluding or excluding a right of recovery in the plaintiff.

2. Plea in Abatement. While a plea in abatement prevents unnecessary or vexatious litigation and thereby furthers the theory of civil procedure by avoiding multiple suits, it is nonetheless considered dilatory and technical and as a rule is not favored by the courts; it will therefore generally not be sustained unless the party interposing it clearly shows that he or she is within its purpose.

3. Plea in Abatement. In order to prevail on a plea in abatement, the cases must be the same, in the sense that the same rights are asserted and the same relief is sought which is founded on the same facts and on the same essential basis; in addition, the parties must be the same or such as represent the same interest.

4. Records: Appeal and Error. It is incumbent upon the appellant to present a record which supports the errors assigned; absent such a record, the decision of the lower court will generally be affirmed.

5. Summary Judgment: Appeal and Error. In appellate review of a summary judgment, the court views the evidence in a light most favorable to the party against whom the judgment is granted and gives such party the benefit of all reasonable inferences deducible from the evidence. Summary judgment is to be granted only when the pleadings, depositions, admissions, stipulations, and affidavits in the record disclose that there is no genuine issue as to any material fact or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law.

6. Contracts: Appeal and Error. The construction of a contract is a matter of law, in connection with which an appellate court has an obligation to reach an independent, correct conclusion irrespective of the determinations made by the court below.

7. Pleadings. In order to require a reply, a defendant alleging an affirmative defense must do so with factual specificity, rather than in conclusory legal terms.

8. Contracts: Consideration. Sufficient consideration for a promise exists if there is any benefit to the promisor or any detriment to the promisee; the benefit rendered need not be to the party contracting, but may be to anyone else at the contracting party's procurement or request.

9. Contracts: Intent. If it appears by express stipulation or by reasonable intendment that the rights and interests of unnamed parties were contemplated and provision was being made for them, those not named as parties to a contract are third-party beneficiaries of it.

10. Uniform Commercial Code: Negotiable Instruments. A promissory note which is not a negotiable instrument may nonetheless be an instrument within the purview of article 9 of the Uniform Commercial Code.

11. Uniform Commercial Code: Security Interests. The only way one can perfect a security interest in an instrument is by taking possession of the document. Neb.U.C.C. § 9-304(1) (Reissue 1992).

12. Directed Verdict: Appeal and Error. In reviewing the action of a trial court, an appellate court must treat a motion for directed verdict as an admission of the truth of all competent evidence submitted on behalf of the party against whom the motion is directed; such being the case, the party against whom the motion is directed is entitled to have every controverted fact resolved in its favor and to have the benefit of every inference which can reasonably be deduced from the evidence. In order to sustain a motion for directed verdict, the court resolves the controversy as a matter of law and may do so only when the facts are such that reasonable minds can draw but one conclusion from the evidence.

13. Breach of Contract: Damages. In a breach of contract case, the ultimate objective of a damages award is to put the injured party in the same position the injured party would have occupied if the contract had been performed, that is, to make the injured party whole.

Ruth Anne Evans, Omaha, for appellant.

Raymond R. Aranza, of Marks & Clare, Omaha, for appellees.

HASTINGS, C.J., and BOSLAUGH, CAPORALE, FAHRNBRUCH, LANPHIER, and WRIGHT, JJ.

CAPORALE, Justice.

I. STATEMENT OF CASE

This is the second appearance of this matter in this court, the first having resulted in a dismissal for the lack of a final order, as reported in Larsen v. Ralston Bank, 236 Neb. 880, 464 N.W.2d 329 (1991) (Larsen I ). Herein, the plaintiffs-appellees, Edward W. Larsen, Carmelita A. Larsen, Candice Marie Larsen Ishii, Dennis E. Larsen, and Linda Marie Larsen, allege that the defendant-appellant, First Bank, formerly known as First Westside Bank, converted a certain note in which the aforenamed Larsens had a security interest by breaching an agreement to protect said interest. The district court granted the Larsens a partial summary judgment, holding First Bank liable, and subsequently sustained the Larsens' motion for a directed verdict made at the close of all the evidence at the trial on the issue of damages. First Bank appealed to the Nebraska Court of Appeals, assigning as errors, in summary, the district court's (1) failing to sustain its plea in abatement, (2) granting the Larsens a summary judgment on the issue of liability, and (3) directing a verdict in favor of the Larsens in the sum of $34,900.19. In order to regulate the caseloads of the appellate courts, we, on our own motion, removed the case to this court and now affirm the judgment of the district court.

II. FACTS

There are two facets to the relevant facts in this matter, (1) the transactional aspects and (2) those dealing with procedural matters.

1. TRANSACTIONAL ASPECTS

The Larsens held 50 percent of the common stock in Roger L. Hass, Inc., a dissolved Nebraska corporation, in which the other 50 percent of the stock was held by Roger Hass. In 1982, the Hass corporation sold substantially all of its assets to Financial Service Company, which, in addition to paying $50,000 in cash, executed a promissory note payable to the order of the Hass corporation in the sum of $159,052.50. The note incorporated the provisions of an agreement between Financial Service and Roger Hass and recited that said agreement provided for the cancellation and satisfaction of the note without payment, should certain events come to pass.

Although the Larsens, as owners of half of the Hass corporation's stock, were entitled to half of the $50,000, Roger Hass kept it all. He later, on August 16, 1982, assigned "all [his] right, title, and interest" in the Financial Service note to First Bank as security for an unrelated personal loan.

On January 10, 1983, Roger Hass executed three promissory notes payable to the Larsens in the amounts of $25,000, $13,564, and $5,481.51. The $25,000 note represented the Larsens' share of the cash Financial Service had paid toward the purchase of the assets of the Hass corporation. The other two notes were related to amounts Roger Hass owed the Larsens on other dealings.

In order to secure his notes to the Larsens, Roger Hass, in April 1983, executed in their favor a junior assignment of his 50-percent "beneficial interest" in the proceeds from the Financial Service promissory note "subject to a previous pledge dated August 16, 1982, by [the Hass corporation] to [First Bank]." Also executed was an agreement entitled "Junior Pledge Agreement for Security," which recites that it was entered into by "the Common SHAREHOLDERS OF [the Hass corporation] and [First Bank]." The document bears First Bank's signature and was signed twice by Roger Hass, once in his individual capacity and once as the president of the Hass corporation. The signature "Edward Larsen" appears in only one place under the word "ATTEST" and over the word "Secretary." However, a certificate executed by a notary public recites that "Edward W. Larsen," secretary of the Hass corporation, acknowledged that the instrument constituted the "voluntary act and deed" of the corporation and of "Edward W. Larsen, as an individual."

After reciting Roger Hass' obligations to the Larsens, the existence of his notes to the Larsens, and the respective interests of the Larsens and Roger Hass in the Hass corporation prior to the sale of its assets, the junior pledge agreement recognizes the Larsens' second lien on Roger Hass' 50-percent interest in the proceeds of the Financial Service note which was specifically made junior to Roger Hass' pledge to First Bank. It further declares it to be the intention and understanding of the parties that all the proceeds received from Financial Service be distributed pro rata to the shareholders pursuant to their respective percentages of stock ownership. First Bank agreed that as a condition precedent to the effectiveness of the pledge given by the Hass corporation on August 16, 1982, the Larsens' 50-percent interest would not be encumbered or set off against any prior debts it was owed by the Hass corporation or Roger Hass personally and that it would not jeopardize the second lien the Larsens held on Roger Hass' beneficial interest in the note.

Although the record does not contain any assignment to First Bank of the Hass corporation's interest in the Financial Service note, both the junior...