Michigan Trust Company v. City of Red Cloud
| Decision Date | 03 May 1906 |
| Docket Number | 14,474 |
| Parties | MICHIGAN TRUST COMPANY, EXECUTOR, APPELLANT, v. CITY OF RED CLOUD ET AL., APPELLEES |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Webster county: ED L. ADAMS JUDGE. Affirmed.
AFFIRMED.
Tibbets Morey & Fuller, for appellant.
Bernard McNeny, J. R. Mercer and John O. Yeiser, contra.
It is not our purpose to enter into an extended statement of the facts and circumstances involved in this controversy. They are detailed at length in former opinions of this court. Michigan Trust Co. v. City of Red Cloud, 3 Neb. (Unof.) 722; 69 Neb. 585, 96 N.W. 140. Briefly stated, in 1893, the Farmers & Merchants Banking Company, located at Red Cloud, closed its doors, and for the purpose of liquidating its indebtedness entered into an agreement with the creditors for one year's time with which to meet their demands. Certificates of indebtedness were issued, payment of which was guaranteed by certain of the officers and stockholders other than John W. Moon. The persons who thus pledged their personal credit conveyed in trust real estate owned by them to secure payment. John W. Moon, who owned $ 10,000 of the stock of the bank, resided in the state of Michigan. He owned real estate in Red Cloud, and, joining with his wife, conveyed this real estate in trust as further security for the payment of the bank's indebtedness. C. W. Kaley was named as trustee, the trust deeds were placed in the hands of Charles Weiner to be delivered to Kaley, who refused to accept the trust, Weiner removed from Red Cloud, and the deeds fell into the possession of Isidore Freymark. By the terms of the trust the property of the bank was to be first sold, and the proceeds applied to the payment of the debts of the bank; second, the property of those officers and stockholders other than Moon, and lastly, if a deficiency existed, Moon's property was to be sold and the proceeds, not exceeding the sum of $ 10,000, applied to the satisfaction of the debts of the bank. The City of Red Cloud was a creditor, a portion of its claim has never been paid, the unpaid balance was reduced to judgment against the bank in January, 1898, execution was issued thereon and returned unsatisfied for want of property upon which to levy. Thereupon Moon commenced an action in the district court against Isidore Freymark for the surrender and cancelation of the deed. The City of Red Cloud intervened in that action for the purpose of resisting the surrender and cancelation of the deed and having the trust property sold and applied to the satisfaction of its judgment. At the same time it instituted an independent action seeking the same relief. In the meantime Moon died, and the Michigan Trust Company, as executor of his estate, was substituted as a party to the action. The two cases were consolidated, and all of the issues involved are presented in the consolidated action. A former decree was reversed in this court, and before the second trial, agreeably to the suggestion in our opinion, 69 Neb. 585, additional parties were brought into the case, viz., those claiming to own the title to real estate formerly owned by the bank, and those representing the trust property conveyed by the officers and stockholders of the bank other than Moon. The second trial has resulted in a decree favorable to the city of Red Cloud, and the Michigan Trust Company, as executor of Moon's estate, and Robert and Mary Damerell, who claim title to the trust property conveyed by Moon, appeal.
The decree involves property formerly owned by the bank and the trust property conveyed by the officers and stockholders including Moon, and, following the terms of the contract, directs that the property involved shall be sold in the following order: First, the property of the bank; second, the trust property conveyed by the officers and stockholders of the bank other than Moon; and lastly, if a deficiency remain, the trust property conveyed by Moon, and the proceeds applied to satisfy the demand of the city of Red Cloud. The questions involved in the appeal of the trust company are a misjoinder of causes of action, a defect of parties, the statute of limitation, laches, and the pendency of another action for the collection of the debt. Many assignments are made, but we think...
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