State ex rel. Sorensen v. State Bank of Omaha

CourtSupreme Court of Nebraska
Citation260 N.W. 195,128 Neb. 705
Docket Number29228.
PartiesSTATE EX REL. SORENSEN, ATTY. GEN., v. STATE BANK OF OMAHA (MORGAN, INTERVENER).
Decision Date11 April 1935

Syllabus by the Court.

1. Every material allegation of the petition, not controverted by the answer, shall, for the purposes of the action, be taken as true, except allegations of value or amount of damage. Comp. St. 1929, § 20-842.

2. Where, by false and fraudulent representations of the vendor a vendee has been induced to purchase bonds, he may rescind the sale, tender back the bonds, and recover the purchase price as a trust fund.

Appeal from District Court, Douglas County; Dineen, Judge.

Action by the State, on the relation of C. A. Sorensen, Attorney General, against the State Bank of Omaha, wherein E. H Luikart was appointed receiver and wherein Frances C. Morgan intervened. From judgment for the receiver, the intervener appeals.

Judgment reversed, and cause remanded, with directions.

Reed, Ramacciotti & Robinson and Crossman, Munger & Barton, all of Omaha, for appellant.

F. C. Radke, of Lincoln, Hanley & O'Brien, of Omaha, and Barlow Nye and W. A. Crossland, both of Lincoln, for appellee.

Heard before GOSS, C. J., and ROSE, GOOD, EBERLY, DAY, PAINE, and CARTER, JJ.

GOOD Justice.

Mrs. Frances C. Morgan, intervener, in her petition in intervention alleged that she was induced by fraudulent representations, made to her by the president of the State Bank of Omaha, to purchase from it certain bonds. She sought rescission, tendered back the bonds, and asked that the amount paid by her for the bonds be declared held by the receiver in trust for and restored to her. The receiver in his answer pleaded the statute of limitations, and denied certain allegations in the petition. A reply put in issue the allegations of the answer. The trial resulted in a judgment for the receiver. Intervener has appealed.

The receiver now admits that the plea of the statute of limitations is unavailing.

Intervener in her petition alleged that, upon the recommendation of an employee of the State Bank of Omaha, she went to it for the purpose of consulting its officers and managers concerning an investment; that at the bank she met its president and manager and explained to him that she was a widow, without business experience and without knowledge of what were safe and reliable securities or the value of the same, and must rely upon the advice of others in making any investment in securities; that she had a small amount of money which she desired to invest in safe securities; that the president treated her very cordially and stated that he had been well acquainted with her husband in his lifetime and, in substance, that they were intimate friends, and pretended great sympathy for intervener because of the loss of her husband; that she was impressed with the apparent honesty and truthfulness of the statements made by the president; that he thereupon advised her to purchase from said bank two bonds, issued by the Keystone Water Works Corporation, a corporation organized under the laws of the state of Delaware; that he exhibited to intervener said bonds, then owned by the bank, each for $1,000, and stated to intervener that said bonds were perfectly sound and good and would be paid at their maturity; that the interest represented by the coupons attached to the bonds would be promptly paid when due; that said corporation was wealthy; that it had an enormous business throughout the United States; that its income annually was in the millions; that its assets were much greater than its liabilities; " that it was perfectly solvent and that for an investment there were no securities to be purchased anywhere that were better." Intervener alleged that she had no knowledge of said corporation, but relied wholly upon the statements made by the bank's president, purchased the bonds and paid therefor $2,028.75, being the face value of the bonds plus accrued interest; that the bank's assets were thereby augmented to the extent of the amount then paid by her, which remained in the hands of the bank up to the time that it was placed in the hands of the receiver, and still remains in the hands of its receiver. She further alleged that the statements were false; that, in fact, the corporation issuing said bonds, shortly before or immediately after the transaction between intervener and the bank's president, was placed in the hands of a receiver, and, at the time said statements were made to intervener, said corporation was insolvent and the bonds possessed no market or other value.

The only defense tendered in the answer was the plea of the statute of limitations and the following specific denial: " Defendant says that as to the matters and things alleged in said petition, in so far as they purport to set out any conversation or agreement had between the intervener and Albert L. Schantz, this answering defendant has no information, and therefore denies the same."

In her own behalf intervener testified concerning the transaction wherein she purchased the bonds. Her evidence, in the main, tended to support the allegations of her petition as to what occurred between her and the bank's president. The bank's president was the only witness called for defendant. He admitted there was a transaction wherein bonds were sold to intervener, but testified that he could not recall the conversation had between him and intervener, and did not remember what was said. His evidence, therefore, is practically of no value.

Section 20-842, Comp. St. 1929, reads: " Every material allegation of the petition not controverted by the answer, * * * shall, for the purposes of the...

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4 cases
  • Gatchell v. Henderson, 33161
    • United States
    • Supreme Court of Nebraska
    • 27 Junio 1952
    ...$240 damages, since clearly only such amount was established by the evidence. Section 25-842, R.R.S.1943; State ex rel. Sorensen v. State Bank of Omaha, 128 Neb. 705, 260 N.W. 195. In that connection also there was no finding, and under the record before us there could have been none, concl......
  • State ex rel. Sorensen v. State Bank of Omaha, 29228.
    • United States
    • Supreme Court of Nebraska
    • 11 Abril 1935
    ...128 Neb. 705260 N.W. 195STATE EX REL. SORENSEN, ATTY. GEN.,v.STATE BANK OF OMAHA (MORGAN, INTERVENER).No. 29228.Supreme Court of Nebraska.April 11, Syllabus by the Court. 1. Every material allegation of the petition, not controverted by the answer, shall, for the purposes of the action, be ......
  • First Trust Co. of Lincoln v. Bauer
    • United States
    • Supreme Court of Nebraska
    • 11 Abril 1935
    ......488, 221 N. W. 101;Norfolk State Bank v. Schwenk, 51 Neb. 146, 70 N. W. ......
  • First Trust Co. of Lincoln v. Bauer
    • United States
    • Supreme Court of Nebraska
    • 11 Abril 1935
    ...... 488, 221 N.W. 101; Norfolk State Bank v. Schwenk, 51. Neb. 146, 70 N.W. 970; ......

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