Romig v. West Point Butter & Cheese Ass'n

• Citation: 11 N.W. 884,12 Neb. 567
• Parties: JEREMIAH D. ROMIG, ET AL., APPELLANTS, v. THE WEST POINT BUTTER AND CHEESE ASSOCIATION, ET AL., APPELLEES
• Decision Date: 05 April 1882
• Court: Supreme Court of Nebraska

11 N.W. 884

12 Neb. 567

JEREMIAH D. ROMIG, ET AL., APPELLANTS, v. THE WEST POINT BUTTER AND CHEESE ASSOCIATION, ET AL., APPELLEES

Supreme Court of Nebraska

April 5, 1882

THIS was an action brought in the district court for Cuming county, by judgment creditors of John D. Neligh and the West Point Manufacturing Company, for the purpose of subjecting the property and assets of said West Point Manufacturing Co. to the payment of their claims; for a determination of the priorities of the respective liens against said property and assets; and for having certain apparent liens against said property and assets, decreed to have been paid. Certain of the defendants answered setting up their judgments, and filed cross petitions for relief. The finding below by BARNES, J. was in favor of the Manufacturing Co., the Butter and Cheese Association, and others impleaded with those corporations, a decree entered dismissing the petitions of plaintiffs and cross petitioning defendants, who thereupon brought the case here on appeal.

Reversed and remanded.

John D Howe, R. F. Stevenson, and Uriah Bruner, for appellants.

J. C Crawford, for appellees.

OPINION

COBB, J.

J. C. Crawford, agent of the West Point Manufacturing Company, with full power and authority from said company in its behalf, applied to the West Point Butter and Cheese Association, at its principal office at Middletown, New York, for a loan of $ 35.000, to be evidenced by the interest bearing coupon bonds of the first named company. The declared object of such loan was to enable the said first named company to pay off its indebtedness, estimated at $ 30,000, but which it was believed could be bought in at from $ 15,000 to $ 25,000, and to give it a working capital for the purpose of operating its mills. After attending two meetings of the Butter and Cheese Association, Mr. Crawford was met by the following counter proposition: "If the West Point Manufacturing Company, or John D. Neligh, will donate to the undersigned West Point Butter and Cheese Association a controlling interest in its stock, it--the West Point Butter and Cheese Association--in consideration thereof, agrees within ninety days from the date of the delivery of a majority of said stock, to negotiate a loan for said company of $ 35,000, bearing ten per cent. Principal payable in two to five years. Loan to be secured by a first mortgage bond on the real estate of said company, and to be negotiated at par. All real property remaining after paying off loan and making additions or repairs, is to be divided as follows, to-wit: The present stockholders to get two-thirds, and the new stockholders one-third. The profits of the business to be divided equally among all stockholders." Dated, Middletown, Aug. 9, 1878; and signed by the president of said West Point Butter and Cheese Association.

This proposition Mr. Crawford received from the said West Point Butter and Cheese Association, and with it returned to West Point. A meeting of the boar of directors of the said West Point Manufacturing Company was immediately called; the said counter proposition of the West Point Butter and Cheese Association laid before the said board of directors; and resolutions adopted in due form accepting the same, and ordering the officers of said company to make the necessary arrangements to carry the same into effect without delay. At the same meeting a resolution was also duly passed in the following words: "Resolved, that the president and secretary of the West Point Manufacturing Company be and are hereby authorized and directed to issue 35,000 dollars of coupon bonds of said West Point Manufacturing Company, bearing ten per cent interest, payable five years from date thereof. That said company sell said bonds at their par value and apply the proceeds thereof toward the paying of the debts of said company, and the liens against its said property, and the repairing and operating its mills, etc. That the president and secretary are further authorized to execute and deliver a trust deed to secure the payment of said bonds, on the real estate of said company."

The above meeting was held on the 27th day of August, 1878. On the 2nd day of September, following, the president and secretary of the West Point Manufacturing Company executed and delivered the deed of trust of the said company to Benjamin D. Brown, trustee, who was also the president of the West Point Butter and Cheese Association, to secure the payment of seventy bonds for the sum of five hundred dollars each, with interest coupons attached, etc., therein specifically described. The said deed of trust was also at the same time signed by the said Benjamin D. Brown, in evidence of his acceptance of the said trust. The seventy bonds for five hundred dollars each were also on the same day delivered to the said Benjamin D. Brown, who took the same, as well as the said deed of trust, to the office of the West Point Butter and Cheese Association at Middletown, New York.

It appears from the testimony, that between the last above date and the 21st of October following, the said Benjamin D. Brown was back and forth between West Point, Nebraska, and Middletown, New York, two or three times, remaining about an equal portion of his time at either place. While at West Point he was busy examining the mills, water power, and other property of the West Point Manufacturing company, and looking into its business and affairs. He never called on the president or secretary of the West Point Manufacturing Company for the certificate of stock in said company or any other evidence of the ownership by the West Point Butter and Cheese Association of a majority of the stock, or any stock of the West Point Manufacturing Company. But the certificate or certificates for said stock were made out to the said West Point Butter and Cheese Association, signed by the president and secretary, and verified by the seal of said West Point Manufacturing Company. There is evidence, which however is contradicted, that said certificates of stock were tendered to said Benjamin D. Brown for and...