Mullen v. Morris

• Decision Date: 05 February 1895
• Citation: 62 N.W. 74,43 Neb. 596
• Parties: MULLEN ET AL. v. MORRIS.
• Court: Nebraska Supreme Court

43 Neb. 596

62 N.W. 74

MULLEN ET AL.

v.MORRIS.

Supreme Court of Nebraska.

Feb. 5, 1895.

Syllabus by the Court.

1. Held, that the petition states a cause of action.

2. Where one signs, as surety, a bond, which in form is a joint obligation, upon condition that others are to sign the same with him, and it is delivered without the condition having been complied with, the instrument is invalid as to the one so signing as surety, unless the obligee, prior to the delivery, had no notice of such condition, or the surety, after signing, waived the condition.

3. Where such a bond is delivered to the obligee without being executed by all the persons named in the body thereof as obligors, it is sufficient to put the obligee upon inquiry whether those who signed consented to its being delivered without the signatures of the others.

4. Where a bond, not signed by all the persons named in the body as obligors, is delivered to the obligee, there is no presumption that the instrument was not to be considered binding upon those signing until executed by all the obligors named in the body thereof. It is for those who executed it to show that they were not to be bound unless it was executed by the others.

5. An agreement by the creditors of an insolvent bank, with the stockholders and officers thereof, to discount their claims against the bank 10 per cent., to throw off all interest after a certain date, and to extend the time of paymentof the claims for a definite period, is a sufficient consideration for a bond given to a trustee of such creditors by such stockholders and officers to secure the payment of the indebtedness of the bank.

6. An assignment in a petition in error, “errors of law occurring at the trial, excepted to at the time.” is too indefinite to secure a review of the rulings of the trial court on the admission or exclusion of testimony. Murphy v. Gould, 59 N. W. 383, 40 Neb. 728, followed.

7. In an action on a penal bond, judgment may be recovered for the actual damages sustained, not exceeding the penalty of the bond and interest from the date of the breach of the conditions, less all the payments made by the obligors.

8. Payment, to be available as a defense, must be pleaded. Where payments are alleged in the petition, and proven at the trial without objection, although denied by the answer, the defendant will be entitled to credit for such payments.

9. Held, that the damages assessed by the jury are excessive.

Error to district court, Richardson county; Bush, Judge.

Action by Creighton Morris, trustee for the Farmers' & Merchants' Bank of Humboldt, Neb., against Barney Mullen and others. Judgment for plaintiff, and defendants bring error. Reversed.

J. H. Broady, E. W. Thomas, R. S. Molony, Isham Reavis, and C. F. Reavis, for plaintiffs in error.

Francis Martin and C. Gillespie, for defendant in error.

NORVAL, C. J.

The Farmers' & Merchants' Bank of Humboldt was incorporated under the laws of this state in July, 1879, and thereafter was engaged in the business of banking at Humboldt until in June or July, 1889, when the bank closed, and made an assignment for the benefit of its creditors. Creighton Morris was appointed assignee, and qualified as such. Negotiations were soon thereafter had between the officers and stockholders of the bank and the creditors, for the purpose of effecting a settlement or compromise of the claims of the creditors. A proposition was finally made to the creditors, to pay them 90 cents on the dollar of their claims within two years; the creditors to throw off all interest accruing after September 19, 1889. This proposition was favorably received by nearly all the persons who held claims against the bank. The following paper was prepared, and presented to the creditors for their signatures: “The undersigned, creditors of the Farmers' and Merchants' Bank of Humboldt, Nebraska, being desirous of effecting a compromise and settlement of all differences touching the liability of the several stockholders of said bank, hereby severally agree to discount the sum of ten (10) per cent. from the face of each of our respective claims, as the same may be filed, proven, and allowed before the county court of Richardson county, Nebraska, and to forbear the collection of interest accruing thereon after September 19, 1889: provided, the stockholders of said bank shall on or before said 19th day of September, 1889, convey and assign unto Creighton Morris, receiver for said bank, all the property held by them, or either of them, as trustees of said bank, and shall file with said county court a good and sufficient bond, conditioned that said stockholders shall on or before October 1st, 1889, pay unto the receiver appointed by the court for said bank the sum of twelve thousand two hundred ($12,200) dollars, and as soon thereafter as all the assets in the hands of the receiver shall have been converted and disbursed, and within two (2) years thereafter, at furthest, shall pay unto the said receiver such further sum of money as shall suffice to liquidate in full all of the claims allowed by the court against such bank, without interest after September 19th, and after deducting from the face of such claims a discount of ten (10) per cent. as above provided. Dated this 13th day of August, 1889.” The foregoing instrument, after being signed by all the creditors of the bank excepting three or four, who refused to sign, was delivered to Creighton Morris, the assignee, and the following bond was also executed and delivered to said Morris: “Know all men by these presents, that we, W. W. Turk, Barney Mullen, J. C. Fergus, Wm. N. Nims, and R. C. Lamberton, are held and firmly bound, jointly and severally, unto Creighton Morris, receiver for the Farmers' and Merchants' Bank of Humboldt, Nebraska, in the penal sum of twenty-five thousand dollars ($25,000.00), good and lawful money, for the payment of which well and truly to be made unto the said Creighton Morris, receiver, and to his successors, we jointly and severally bind ourselves, our heirs, executors, and administrators. Witness our hand and seals this twenty-fourth day of August, A. D. 1889. The conditions of this obligation are such that, whereas, certain differences have existed between the creditors of the said Farmers' and Merchants' Bank and the stockholders of said bank, touching the liability of such stockholders towards such creditors; and whereas, one of the conditions of such compromise is that the stockholders of said Farmers' and Merchants' Bank shall on or before the first day of October, 1889, pay unto the receiver appointed by the court for said bank the sum of twelve thousand two hundred dollars ($12,200.00), and, within ninety days after all the assets in the hands of the receiver or assignee shall have been converted and disbursed, shall pay unto said receiver such further sum of money as shall suffice to liquidate in full all of the claims proven and allowed by the court against such bank, without interest after the 19th day of September, 1889, deducting from the face of each said claim a discount of ten per cent. (said amount of ninety per cent. to be paid creditors not over and above the expenses of the assignee and the court proceedings; the entire amount of ninety per cent. to be paid within two years from October 1, 1889): Now, therefore, if said stockholders of the Farmers' and Merchants' Bank aforesaid shall well and truly pay, or cause to be paid, unto said receiver, the said several sums of money at the times and in the manner hereinabove recited, these presents shall become null and void; otherwise, to remain in full force and effect. Done in the county of Richardson and state of Nebraska. W. W. Turk. [Seal.] Barney Mullen. [Seal.] J. C. Fergus. [Seal.] Wm. N. Nims. [Seal.] A. L. Fry. [Seal.] R. A. Stewart. [Seal.] T. J. Frazier. [Seal.] A. R. Nims. [Seal.] R. C. Lamberton. [Seal.]”

On the 12th day of January, 1892, this action was brought by the defendant in error for the use and benefit of, and as trustee for, the creditors of the bank, upon the foregoing bond, against each of the signers thereof. The return on the summons discloses that W. W. Turk, A. R. Nims, and R. C. Lamberton were not served, and the first two named made no appearance in the cause. It is stated in the briefs filed that Lamberton appeared and filed a general demurrer; that the same was overruled, and he stood upon the demurrer. The record fails to show that he appeared in the action for any purpose, nor has he joined in the petition in error, although his counsel have filed for him a brief in this court. A brief statement of the issues made by the pleading will be necessary to an understanding of the questions presented for our consideration. The petition alleges substantially the incorporation of the bank; that it made an assignment for the benefit of its creditors; that the defendants were incorporators and stockholders of said bank, and that it, for more than a year prior to the incurring of the indebtedness from the bank to its creditors, had wholly failed to give the notice required by section 136 of chapter 16 of the Compiled Statutes; that by reason thereof the stockholders were individually liable for the debts of the bank; that on the 24th day of August, 1889, a settlement and compromise were made between the defendants and certain creditors of the bank, whose names are set forth in the petition, by which the latter should receive 90 cents on the dollar of their claims, and the defendants were to have two years in which to pay the same. The petition sets out a copy of the paper signed by the creditors heretofore mentioned, together with the names and amount due each of the persons signing the same; alleges that the proposition contained in said paper was accepted by the defendants, and in consideration of said extension of time, and the discount of 10 per cent. and interest, said defendants executed and delivered to the...