Paxton Cattle Co. v. First Nat. Bank of Arapahoe

• Decision Date: 09 June 1887
• Citation: 33 N.W. 271,21 Neb. 621
• Parties: PAXTON CATTLE CO. v. FIRST NAT. BANK OF ARAPAHOE.
• Court: Nebraska Supreme Court

21 Neb. 621

33 N.W. 271

PAXTON CATTLE CO.

v.FIRST NAT. BANK OF ARAPAHOE.

Supreme Court of Nebraska.

June 9, 1887.

Syllabus by the Court.

Where, after articles of incorporation were drawn up and signed by the promoters of a cattle company, but before they were recorded or filed for record in the office of the county clerk, and before the time fixed in such articles for the commencement of the business of such corporation, a president was selected for such corporation by such promoters, and the president, in the presence and with the approval of all of such promoters, executed and delivered to one M. a note in payment for and in consideration of the sale and delivery of certain horses, cattle, ranch, and other property to said corporation, which, after the perfecting of the said corporation, and of the time fixed for the commencement of the business thereof, came into its hands as its property, and continued to be used and enjoyed as such, held, that the assignee of M. could recover on said note.

When a defendant in an action alleges, by way of answer, any matter in bar of the plaintiff's action, the plaintiff may, by way of reply, allege any fact or facts not inconsistent with the facts alleged in his petition, by reason of which the defendant may be estopped to avail himself of such defense.

The sale and relinquishment of an inchoate homestead or other possessory right upon the public domain, together with the ranch and other improvements thereon, held to constitute a good and valid consideration for a promissory note.

Error from Red Willow county.

John Dawson, for plaintiff.

W. S. Morlan, for defendant.

COBB, J.

Plaintiff commenced its action in the district court of Red Willow county, by filing the following petition:

“(1) On the twelfth day of July, 1884, the defendant was justly indebted to one J. B. Meserve in the sum of five thousand five hundred dollars, balance due on the sale and delivery of certain horses, cattle, and a ranch at that time sold and delivered to said defendant by J. B. Meserve, and said defendant then agreed to pay J. B. Meserve said sum of $5,500 on the first day of April, 1885, with interest at eight per cent.; and thereafter, in consideration of the foregoing, on the fourteenth day of July, 1884, the defendant, in accordance with the terms of said contract, and as at the time of said sale mutually agreed, executed and delivered to said J. B. Meserve its promise in writing in words and figures following, to-wit:

‘PAXTON, ILLINOIS, July 14, 1884.

In consideration of the sale and delivery of all the cattle, horses, and ranch by J. B. Meserve to the Paxton Cattle Company, of Ford county, Illinois, the said Paxton Cattle Company promises to pay to J. B. Meserve $5,500 on April 1, 1885, with eight per cent. interest, provided said company has then sold capital stock of said company so as to have the means to pay the same; and, whenever any stock over $23,000 shall be sold, then such sums shall be applied on this note of April 1, 1885.

PAXTON CATTLE COMPANY.

By GEORGE WRIGHT, Pres.'

(2) On the first day of April, 1885, defendant had sold capital stock of said company so as to have the means to pay said indebtedness to said J. B. Meserve. Previous to the beginning of this suit, defendant had sold of the capital stock as follows, to-wit: On the fourteenth day of July, 1884, $32,200; on the third day of May, 1885, $1,000; on the twentieth day of July, 1885, $22,800. Total amount of capital stock sold, $56,000, from which the defendantrealized the sum of $56,000. No part of said indebtedness has been paid except the sum of $490 on the seventeenth day of December, 1884.

(3) On the first day of March, 1886, the plaintiff loaned to the said J. B. Meserve the sum of $4,000, to be repaid on the second day of June, 1886; and, in consideration of said loan, the said J. B. Meserve executed and delivered to the plaintiff his promissory note in writing, in words and figures following, to-wit:

+-------------------------------------------+
                ¦‘$4,000.¦ARAPAHOE, NEBRASKA, March 1, 1886.¦
                +-------------------------------------------+
                

Ninety days after date, we, or either of us, promise to pay to the First National Bank of Arapahoe, Nebraska, or order, four thousand dollars, for value received, payable at the First National Bank of Arapahoe, Nebraska, with interest at the rate of ten per cent. per annum from maturity until paid.

J. B. MESERVE.'

And, to secure the payment of said promissory note according to the tenor thereof, the said J. B. Meserve, on the first day of March, 1886, sold said claim against defendant, and delivered said instrument in writing of said Paxton Cattle Company to this plaintiff, by writing indorsed thereon as follows:

‘ARAPAHOE, NEB., March 1, 1886.

I hereby assign the within obligation to the First National Bank of Arapahoe as collateral security for the payment of my note of this date for the sum of $4,000, with the understanding that the said bank shall collect the amount due thereon, and apply the amount collected, first, to the payment of my said note, and the surplus to be paid to me.

+-------------------------+
                ¦[Signed]¦J. B. MESERVE.' ¦
                +-------------------------+
                

(4) No part of said debt has been paid, and the plaintiff is now the owner and holder of said obligation of Paxton Cattle Co., by virtue of said sale and assignment, and there is now due the plaintiff from defendant thereon the sum of $5,315.74, with interest at eight per cent. from April 1, 1885, against said defendant.”

On the first day of October, 1886, the defendant filed its answer, setting up that it is not now, nor was it ever, incorporated. That no meeting for the election of officers or the transaction of any other business was held in the state of Nebraska by the pretended stockholders or directors of said company, the state in which the articles of incorporation were filed, which was on the eleventh day of August, 1884, long after the instrument set forth in plaintiff's petition was executed. That the said George Wright, who executed said instrument, was never president of said company or association of persons, and had no authority to sign the said instrument. That, at the time of making said instrument, the Paxton Cattle Company consisted of the followingnamed persons: J. B. Meserve, the person mentioned in plaintiff's petition; George Wright, Calvin H. Frew, O. D. Sackett; and the said J. B. Meserve had full knowledge of all the facts connected with the attempt of the above-named persons to organize as a corporation. Setting up that the defendant, as a consideration for said instrument and indebtedness, received from J. B. Meserve cattle and ranch in Chase county, Nebraska; said ranch consisting of 1,040 acres, the whole for an agreed sum of $23,200, all of which has been paid except the sum mentioned in plaintiff's petition. That said ranch consisted of land held, under the United States homestead and pre-emption laws, by persons who agreed with said J. B. Meserve, for a consideration paid or to be paid, to convey said real estate to him, or to the persons to be designated by him; and the said J. B. Meserve, as a part of said agreement, and as a consideration for said instrument mentioned in plaintiff's petition, agreed to obtain and perfect the title to said real estate, and have it conveyed to said defendant, all of which was prior to the making proof and obtaining title to said real estate. That, at the time of making said agreement, said J. B. Meserve occupied and held, under the United States homestead laws, 160 acres as a part of said 1,040 acres, and agreed to convey said real estate upon the making of final proof, and obtaining title to the same,--the said company agreeing to furnish the necessary money to pay the expense of obtaining title to said real estate. All of the above agreements in regard to said real estate were fraudulently and corruptly made for the purpose and with the intent of violating the laws of the United States. Said J. B. Meserve has since made proof, and has obtained title to said real estate, but has refused, and still refuses, to convey said 160 acres to the defendant. Said 160 is reasonably worth the sum of $1,200. That defendant has not received title to any of said land except 320 acres. That the balance of said land which J. B. Meserve agreed to obtain the title to, and convey the same, is reasonably worth the sum of $7,000.

On the eleventh day of October, 1886, the plaintiff filed a reply to defendant's answer, to the second and third counts thereof:

“That on the twelfth day of July, 1884, Calvin H. Frew, George Wright, J. B. Meserve, and O. D. Sackett agreed on articles of incorporation for said Paxton Cattle Company, and on the said twelfth day of July all of said individuals subscribed said articles of incorporation, and adopted for said Paxton Cattle Company the name of Paxton Cattle Company, and afterwards, to-wit, on the twelfth day of July, 1884, said individuals, for the purpose of completing said corporation, and putting it into operation, assembled together and elected said Calvin H. Frew secretary and treasurer, O. D. Sackett vice-president, and George Wright president, of said company; and from said last-mentioned date up to the present time said individuals and others who have since the twelfth day of July, 1884, associated themselves with said individuals, and purchased capital stock of said company, have retained and assumed the name of Paxton Cattle Company, and acted in a corporate capacity, with a full set of corporate officers, acting as such from said last-named date up to the present time.

(2) And on said twelfth day of July, 1884, when said individuals were assembled as aforesaid, they elected the following board of directors, to-wit, George Wright, Calvin H. Frew, O. D. Sackett, and J. B. Meserve, and assumed full corporate powers, and at various times since have elected officers, bought, sold, and held property as a...