Reed Bros. Co. v. First Nat. Bank of Weeping Water

• Decision Date: 15 October 1895
• Citation: 64 N.W. 701,46 Neb. 168
• Parties: REED BROS. CO. ET AL. v. FIRST NAT. BANK OF WEEPING WATER.
• Court: Nebraska Supreme Court

46 Neb. 168

64 N.W. 701

REED BROS. CO. ET AL.

v.FIRST NAT. BANK OF WEEPING WATER.

Supreme Court of Nebraska.

Oct. 15, 1895.

Syllabus by the Court.

1. Where a partnership engaged in a general mercantile business, in straitened and failing circumstances, incorporated, and the assets and business of the partnership were transferred or assigned to the corporation, and appropriated to its objects and purposes, the business of the partnership being continued by the corporation, the corporation was presumptively liable for the partnership debts.

2. The acts of an agent or officer of a corporation which he was not authorized to perform may be ratified by it. The approval may be by express action or indirectly. It may be proven by evidence of a direct recognition or acceptance of the act, or an acquiescence, or may be an inference from the facts and circumstances shown.

3. Statements by a debtor engaged in general mercantile business, disclosing a determination to defeat the claim of a creditor, and arrangements made in pursuance of such intention, combined with the further facts that the stock of goods has, during several months, been as rapidly as possible converted into cash by sales, and depleted in the aggregate several thousand dollars, and no satisfactory account given of the disposition of moneys derived from the sales, may be sufficient to sustain an attachment on the stock of goods on the grounds of a fraudulent disposal or concealment of property.

Error to district court, Cass county; Hall, Judge.

Action by the First National Bank of Weeping Water against the Reed Bros. Company, E. L. Reed, and James A. Leach. Plaintiff had judgment, and defendants bring error. Affirmed.Byron Clark, J. R. Clarkson, and Isaac Congdon, for plaintiffs in error.

Wooley & Gibson, for defendant in error.

HARRISON, J.

The First National Bank of Weeping Water commenced this action against Reed Bros. Company, alleged to be a corporation doing business at Weeping Water, E. L. Reed, and James A. Leach, to recover the sum of $6,358.15, alleged in the petition filed to be due the bank upon two promissory notes, as executed and delivered to it by the parties named. The answer denied generally each and every allegation of the petition, except that of the corporate character of Reed Bros. Company, which it admitted, and alleged that the notes sued upon were given for debts which were the liabilities of a copartnership doing business under the name and style of Reed Bros. & Co., and were signed by the company or partnership, and were not a liability of the corporation; and especially denied that the signature of Reed Bros. Company was attached to the notes in suit, or either of them. The reply of the bank was as follows: “Comes now the above-named plaintiff, and for reply to defendants' answer denies each and every allegation therein except such as admit the allegations of plaintiff's petition. Further replying, plaintiff alleges that if the notes sued on are not that of Reed Bros. Company, but is the signature of Reed Bros. & Company, that the plaintiff was deceived at the time said note was signed, and led to believe by the representations of E. L. Reed, president of the corporation, that they were signed ‘Reed Bros. Company,’ and that it is immaterial whether the signature is ‘Reed Bros. Company’ or ‘Reed Bros. & Company,’ for the reason that the assets sought to be reached are those of Reed Bros. & Company absorbed by Reed Bros. Company; and that, while said business is conducted in the name of Reed Bros. Company, it is still but a partnership name, the firm of Reed Bros. & Company having never been legally converted into a corporation, or the corporation of Reed Bros. Company having never been legally formed or incorporated.” The counsel for Reed Bros. Company and its codefendants filed a motion to strike what was styled in the motion the “pretended reply” from the files, the grounds therefor being three in number: (1) That the issues were complete without the reply; (2) the allegations contained in said pretended reply were immaterial and irrelevant; (3) for the reason that the reply was filed without leave of court, and out of time. This motion was sustained by the court, but upon motion leave was granted to refile it instanter. A general demurrer to the reply was then filed, which, upon hearing, was overruled, and an exception noted. At some date after the commencement of the action there was filed an affidavit in attachment, the grounds alleged therein being: “That the defendants, and each of them, is about to remove their property, or a part thereof, out of the jurisdiction of the court, with intent to defraud their creditors; are about to convert their property, or a part thereof, into money, for the purpose of placing it beyond the reach of their creditors; have property or rights of action which they conceal; have assigned, removed, disposed of, and are about to dispose of, assign, and remove, their property, or a part thereof, with intent to defraud their creditors.” An undertaking was also filed and approved, and a writ of attachment issued and served by levy upon a stock of general merchandise then in the possession of and being handled and sold by the corporation at its place of business in Weeping Water. There was a separate motion filed for defendants the corporation, Leach, and Reed, respectively, to discharge the attachment, the reasons being the same in each, and as follows: (1) Because the facts stated in the affidavit are not sufficient to justify the issuing of the same; (2) because the statement of facts in said affidavit are untrue; (3) because the facts set forth in the affidavit are not shown to have existed at the time the order of attachment was issued and the affidavit filed.” These motions were heard and overruled, and the attachment sustained, May 31, 1892, an exception being noted for each party for whom motion had been filed. During the progress of the case there was a petition filed by the bank, the relief sought being the appointment of a receiver to take possession and dispose of the effects of the corporation Reed Bros. Company, and, after answer to this petition and reply to the answer, a trial of the issues with reference to the appointment of a receiver was had, and the application was denied. There was a trial to the court without the intervention of a jury, of the issues in the main action, and findings and judgment in favor of the bank, and the attached property ordered sold. Motions for new trial were filed on behalf of each of the parties defendant, and upon hearing they were overruled, and exceptions noted on behalf of such parties, and the case has been presented to this court for review.

The first assignment of error which we shall notice is that the court erred in overruling the demurrer to the reply. We are inclined to the view of counsel for plaintiffs in error that the reply was...