McKeen v. A. T. Bowen & Company
| Decision Date | 29 October 1914 |
| Docket Number | 21,710 |
| Parties | McKeen v. A. T. Bowen & Company et al |
| Court | Indiana Supreme Court |
From Madison Circuit Court, H. Clarence Austill, Judge.
Action by A. T. Bowen & Company against The Muncie Gas Light and Fuel Company and others. From the judgment rendered, the defendant, William Riley McKeen, appeals.
Affirmed.
John G Williams, for appellant.
William C. Smith, Byron W. Langdon, Boyd & Julian and Chipman & Hendee, for appellees.
Suit to recover on a promissory note for $ 10,000, dated April 5 1906, payable to A. T. Bowen & Company plaintiffs, purporting to have been executed by The Muncie Gas Light and Fuel Company and endorsed by Charles E. Ruger, Robert H. Adams, W R. McKeen, Charles A. Meeker, J. F. Marks, N.W. Box and Hiram Kerlin. The original defendants were The Muncie Gas Light and Fuel Company, Ruger as receiver of The Muncie Gas Light and Fuel Company, and the above mentioned endorsers except Kerlin, who had died, and whose executor was made a party defendant. Before the issues were closed Marks and Meeker died and the administrators of their estates were made defendants, and after trial, but before finding, upon the suggestion of the death of Robert H. Adams, the administrator of his estate was substituted as defendant. Before trial the case was dismissed as to Ruger, as receiver of The Muncie Gas Light and Fuel Company.
As the result of numerous pleadings the issues that were formed and tried were as follows: (a) As between the plaintiffs and the defendants there were general denials of all of the allegations of the complaint, answers of no consideration for the note sued on, and a denial under oath by The Muncie Gas Light and Fuel Company of its execution; (b) issues of suretyship arising upon the cross-complaint of McKeen setting up that he was surety for all his codefendants; (c) issues of suretyship presented by the cross-complaint of Kerlin, executor, setting up that his decedent, Hiram Kerlin, was surety for all the other endorsers on the note, and that McKeen had agreed to pay the note in suit; (d) issues of suretyship arising upon the several cross-complaints against McKeen, of Marks' administrator, Meeker's administrator, Box, and Adams, wherein it was claimed by each of those parties that McKeen should be adjudged principal because, for a valuable consideration, he had agreed to pay the note sued on, and, in behalf of Marks' administrator, that McKeen should be adjudged principal because he had agreed with Marks to protect him against liability for loss on account of his endorsement of the note sued on. The case was tried by the court, without a jury, and the issues were decided in favor of the plaintiffs against all of the defendants, and against McKeen on the cross-complaints of his several codefendants, and in favor of Kerlin, executor, on his cross-complaint. Judgment was rendered in favor of the plaintiffs against all the defendants, and it was adjudged that execution should be levied against the property of the defendants in the following order: first, Wm. R. McKeen; second, The Muncie Gas Light and Fuel Company; third, the remaining defendants other than Kerlin's executor; fourth, Kerlin's executor.
McKeen's motion for a new trial was overruled, and he alone appealed. The only error assigned is the ruling on said motion, which was grounded on the insufficiency, in law and fact, of the support of the decision by the evidence. No question is presented in relation to the form of the judgment against the personal representatives, and no cross errors are assigned.
In 1902, The Muncie Natural Gas Company, a corporation, was engaged in furnishing natural gas to the citizens of Muncie, and its capital stock was owned by Theodore F. Rose and Abbot H. Johnson. The Muncie Gas Company was a corporation theretofore engaged in furnishing artificial gas in the same city. The Wabash Oil and Gas Company, a corporation, owned oil and gas leases in Delaware County and supplied natural gas to the manufacturing plant of Ball Brothers at Muncie, and Charles A. Meeker, Jacob F. Marks, Nicholas W. Box, and Fred Murdock, of Lafayette, and Hiram Kerlin, of Delphi, were directors of said company, and were liable for its indebtedness, in the sum of $ 20,000. Meeker was vice president of the company, and was a corporation promoter. Robert H. Adams was an insurance agent residing in Indianapolis. William R. McKeen was a member of the private banking house of McKeen & Co., at Terre Haute. N.W. Harris & Co. were bond brokers with offices in Chicago, Boston and New York.
The Wabash Oil and Gas Company was endeavoring to raise $ 20,000 by sale or pledge of its bonds, and employed Adams, on a commission contract, in such effort. Adams consulted McKeen about the matter and was referred to N.W. Harris & Company but that firm refused to handle a bond sale for so small an amount. It was then reported that the plant of the Muncie Natural Gas Company could be purchased for about $ 500,000 cash, that of the Wabash Oil and Gas Company for $ 100,000, and that of the Muncie Gas Company for $ 10,000. Adams, Meeker and N.W. Harris & Co. thereupon formed a plan to organize a new company, with a capital of $ 1,000,000 divided in 4,000 shares of the preferred stock and 6,000 shares of common, with shares of each of the par value of $ 100. It was not the purpose to pay in any of the capital, but it was intended that the properties of the three existing corporations should be acquired by the new one, and part payment for the purchase should be made by the sale of mortgage bonds of the new company, in the sum of $ 250,000, which N.W. Harris & Co. agreed to take at 92 cents on the dollar. When it came to closing the deal, it was found that $ 540,000 must be paid for the property of the Muncie Natural Gas Company on the following terms: $ 50,000 cash, $ 200,000 in about 30 days, $ 100,000 in about three months, and $ 190,000 in about five months; also, that no transfer would be made until $ 250,000 should have been paid. Thereupon the directors of the Wabash company agreed to accept for the property of that company $ 20,000 in cash, $ 30,000 in three notes of $ 10,000 each, maturing in six months, and 1,200 shares of common stock in the new company, and also agreed to raise $ 50,000 for the new company to make its cash payment to the Muncie Natural Gas Company. Accordingly two notes for $ 25,000 each, dated January 17, 1903, were signed by Adams, payable to Meeker and were endorsed by the directors of the Wabash company. These notes were discounted by McKeen & Co. January 20, 1903. Afterwards, on January 22, 1903, a contract was executed by which the Muncie Natural Gas Company agreed to transfer all its property to Adams and Meeker, on the terms heretofore stated, and the $ 50,000 realized from the discount of the notes was paid on the execution of the contract. On January 26, 1903, the new company was incorporated under the name of The Muncie Gas Light and Fuel Company. Meeker...
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