Old Nat. Bank of Evansville v. Heckman

• Decision Date: 12 October 1897
• Citation: 47 N.E. 953,148 Ind. 490
• Parties: OLD NAT. BANK OF EVANSVILLE et al. v. HECKMAN et al.
• Court: Indiana Supreme Court

148 Ind. 490

47 N.E. 953

OLD NAT. BANK OF EVANSVILLE et al.

v.HECKMAN et al.

Supreme Court of Indiana.

Oct. 12, 1897.

Appeal from superior court, Vanderburgh county; John H. Foster, Judge.

Suit by Rosine Heckman and others against the Old National Bank of Evansville and others. From a judgment for plaintiffs, the bank and defendant David Ingle appeal. Reversed.

Gilchrist & De Bruler and Chas. L. Wedding, for appellants. John Brownlee and Philip W. Frey, for appellees.

McCABE, J.

This suit was brought by the appellees Rosine Heckman, Elizabeth Weinheimer, Rose Kreipke, and Philip W. Frey, against the appellant the Old National Bank of Evansville, and against the appellee the Indiana Pottery Company, to foreclose a mortgage given by the Indiana Pottery Company to the other appellees. The issues formed were tried by the court, resulting in special finding of the facts, on which the court stated its conclusions of law, favorable to the appellees, and rendered judgment accordingly.

The substance of the special finding is as follows: The plaintiffs Rose Kreipke and Elizabeth Weinheimer are both daughters of the plaintiff Rosine Heckman, and are the wives of William Kreipke and Louis Weinheimer, respectively. Prior to the year 1892, the plaintiff Rose Kreipke loaned said William Kreipke the sum of $1,650, and afterwards she loaned him the further sum of $1,350, and took his note for the sum of $3,000. That with the proceeds of said loan he purchased real estate on Main street, in the city of Evansville. That he afterwards sold said real estate, and with the proceeds of said sale he purchased stock in the Uhl Pottery Company. That the plaintiff Elizabeth Weinheimer, in 1888, loaned Louis Weinheimer, her husband, the sum of $1,600, and took his note for that amount. That he purchased stock in the Old National Bank with the proceeds of said loan, and that afterwards he sold said bank stock, and with the proceeds of such sale he purchased stock in the Uhl Pottery Company. That at the time of said purchase he borrowed from the plaintiff Elizabeth Weinheimer the further sum of $1,400, and with the proceeds of said loan purchased stock in the Uhl Pottery Company. That at the time he borrowed said sum of $1,400 from her he took up the note for $1,600, and gave her his note for $3,000. No part of either of these sums has been paid by the said Kreipke and Weinheimer to their wives. After giving the note for $3,000, and while he was solvent, said Kreipke built a house for the plaintiff Rose Kreipke, on her real estate, at the cost of $1,200, which he donated to her. On and before the 23d of December, 1893, the Uhl Pottery Company was a corporation organized under the statutes of this state providing for the incorporation of manufacturing and mining companies. It had an authorized capital of $25,000. It was organized in 1891, and its term of existence was 10 years. Its place of business was Evansville, and its object of formation, as stated in its articles of association, was the manufacture and sale of pottery and similar goods. At the date above mentioned, it had but three stockholders, namely, Louis Weinheimer, William H. Kreipke, and one Arthur W. Blackman; said Weinheimer and Kreipke having each stock in said company of the par value of $5,000, and said Blackman having stock in said company of the par value of $1,000, which he, at the time of the conveyance next mentioned, sold to said Weinheimer and Kreipke for $250. The only directors of said company at said date were said Louis Weinheimer, William H. Kreipke, and said Blackman. On said 23d of December, 1893, a conveyance was made of all the property of the Uhl Pottery Company to said Louis Weinheimer and William H. Kreipke. Said deed was made in the name of the Uhl Pottery Company, and was executed by said Kreipke as president of said company, and by said Weinheimer as secretary of said company, to themselves as individuals. At once upon the transfer of all property of the Uhl Pottery Company to themselves, as hereinbefore stated, said Weinheimer and Kreipke began and continued the same kind of business that said Uhl Pottery Company had been engaged in, as partners, under the name of the Indiana Pottery Company, using in said business the plant and all other property of said Uhl Pottery Company. Shortly after said 23d day of December, 1893, said firm of Weinheimer and Kreipke, by the name of the Indiana Pottery Company, assumed the said indebtedness of the individual members of said firm to their wives, and gave a note of said firm to the plaintiff Elizabeth Weinheimer of $3,000, and to the plaintiff Rose Kreipke of $3,000. Neither said Uhl Pottery Company nor said firm of Weinheimer and Kreipke at said time, nor at any other time, was indebted to either of said plaintiffs in any sum whatever; and the only consideration for the assumption of said indebtedness and the giving of their said note was the fact, as herein stated, that each of said husbands owed his wife. Said Weinheimer and Kreipke conducted said business under said name of the Indiana Pottery Company until the 3d day of October, 1894, when they, with their brother-in-law, Louis Heckman, filed articles of association under the laws providing for the incorporation of manufacturing and mining companies, and formed a corporation under the same name of the Indiana Pottery Company, with a capital stock of $25,000, and term of existence of 50 years, with their place of business at Evansville, Ind., and to carry on the same kind of business as had been carried on by said Uhl Pottery Company. There were but three incorporators, namely, said Louis Weinheimer, William H. Kreipke, and Louis Heckman; said Weinheimer and Kreipke taking each 100 shares of $50 each of the capital stock of said new corporation, and said Louis Heckman 1 share, said individuals being the sole stockholders and only directors of said company. At once upon the organization of said company, said Louis Weinheimer and William Kreipke made a deed to said new company, in which their wives joined, of all the real estate which had been transferred from said Uhl Pottery Company to said Weinheimer and Kreipke, including the plant of said Uhl Pottery Company; and they also made a bill of sale to said new corporation of all the other assets of said firm of Weinheimer and Kreipke, which included all they had received from said Uhl Pottery Company. Said Weinheimer and Kreipke, upon such conveyance and transfer, caused said Indiana Pottery Company to enter on its minutes an agreement to assume the debts of said Weinheimer and Kreipke, and they caused said Indiana Pottery Company, as a corporation, to execute and deliver to the said Elizabeth Weinheimer and to said Rose Kreipke, each of them, a note for $3.000, in lieu of the notes of said Weinheimer and Kreipke held by said plaintiffs, which were by the said plaintiffs surrendered to the said Weinheimer and Kreipke. At the same time, said Weinheimer and Kreipke caused said corporation, the Indiana Pottery Company, to execute and deliver to the plaintiff Rosine Heckman a note for $6,000, which note, as hereinafter shown, was without consideration, except for the sum of $2,000. Said Weinheimer and Kreipke and said Louis Heckman paid nothing for the stock so taken by them in said new corporation, except by the transfer of said plant and other property to said corporation. That on September 27, 1894, said firm of Weinheimer and Kreipke, doing business under the name of the Indiana Pottery Company, borrowed from the plaintiff Rosine Heckman the sum of $2,000. That on said last-mentioned date the said firm executed and delivered to the plaintiff Rosine Heckman its note for the sum of $6,000. That said note was without consideration, except the sum of $2,000, borrowed as aforesaid. On April 20, 1895, the defendant the Old National Bank recovered a judgment in the Vanderburgh superior court for $10,302.03, against said Indiana Pottery Company, and against said Louis Weinheimer and William H. Kreipke, who were makers with the Indiana Pottery Company of the notes on which said judgment was recovered. That execution was thereafter issued on said judgment to the sheriff of Vanderburgh county, the residence of each of the defendants in said judgment, and said execution was thereafter returned wholly unsatisfied. Neither at said date, nor at any time, was there any property out of which said judgment could be made, except the property included in the mortgage to plaintiffs; and said judgment is wholly unpaid, and there is now due thereon the sum of $11,062.40. On April 20, 1895, defendant David Ingle recovered a judgment in said court for $361.80 against said Indiana Pottery Company, which is wholly unpaid. Execution was thereafter issued to said sheriff of Vanderburgh county upon said judgment, and was returned wholly unsatisfied, for the reason that there was no property out of which to make the same, except the property included in plaintiffs' mortgage. The debt upon which said last-named judgment was recovered was created after the transfer of the property of the Uhl Pottery Company to said Weinheimer and Kreipke, and there is now due thereon the sum of $388.20. At the time the mortgage was made to the plaintiffs, the Indiana Pottery Company was insolvent. The value of its assets at said time was not to exceed $12,000; and, if the notes of said company given to the plaintiffs were valid, the debts were more than $21,000. At the time the corporation the Indiana Pottery Company was organized, if the alleged debts of Weinheimer and Kreipke to the plaintiffs are counted as valid debts, said Weinheimer and Kreipke were insolvent, and the property transferred to the new corporation was not sufficient to pay the debts of Weinheimer and Kreipke assumed by it. At the time the property of the Uhl Pottery Company was transferred to Weinheimer and Kreipke, as hereinbefore stated, the Uhl Pottery Company had...