Tulleys v. Keller

• Decision Date: 22 May 1895
• Citation: 45 Neb. 220,63 N.W. 388
• Parties: TULLEYS v. KELLER ET AL.
• Court: Nebraska Supreme Court

45 Neb. 220

63 N.W. 388

TULLEYS

v.KELLER ET AL.

Supreme Court of Nebraska.

May 22, 1895.

Syllabus by the Court.

1. Where the president of a loan company consented that securities in the nature of trust deeds should be made to himself, described as trustee, he thereby gained no right to use such designation to the injury of the company of which he was president, and which was in fact the beneficiary named or contemplated in such trust deeds.

2. One who submits to the determination of a court of equity his claim of a right to employ the designation of himself as trustee to the disadvantage of the beneficiary, and prays the judicial recognition and enforcement of such right, has no cause to complain if such court, having taken jurisdiction of the subject-matter for said purpose, administers complete relief as between all the parties to such litigation.

3. The facts in this case stated, and held to justify the decree entered in the district court.

Appeal from district court, Douglas county; Ferguson, Judge.

Action by Lysander W. Tulleys against Charles B. Keller, the Anglo-American Mortgage & Trust Company, and W. S. Weldon. There was a judgment for said company upon its cross petition, and plaintiff appeals. Affirmed.Breckenridge & Breckenridge, for appellant.

Charles B. Keller, for appellees.

RYAN, C.

This action was brought in the district court of Douglas county by appellant against the appellees for an injunction restraining the defendants from interfering with the business of L. W. Tulleys, both as an individual and as trustee. It was likewise sought to prevent defendant's use of the name of L. W. Tulleys and of the name of Burnham, Tulleys & Co. The defendants Keller and Weldon were joined with the Anglo-American Mortgage & Trust Company simply because, one, as its attorney at law, and the other, as its manager, was acting in its behalf in the matters of which complaint was made. By its answer, in the nature of a cross petition, the Anglo-American Mortgage & Trust Company prayed that plaintiff, L. W. Tulleys, might be enjoined from advertising and doing business as “Successor to L. W. Tulleys, Trustee,” and from interference with the right of such defendant to the use of the designation, “L. W. Tulleys, Trustee”; and that plaintiff might be restrained from the use of the above designation of himself in respect to papers, securities, and titles taken by plaintiff for which funds loaned by the mortgageand trust company had been used while plaintiff was president of said defendant. There was also in the said answer a prayer that plaintiff might be enjoined from interfering with said defendant's use of the firm name of Burnham, Tulleys & Co. in respect to commission notes and mortgages which had been taken in the name of said firm, but which in reality belonged to said mortgage and trust company; and in such cases as plaintiff, while president of said mortgage and trust company, had appropriated its funds to payments for foreclosing commission mortgages in which L. W. Tulleys, as a member of the firm of Burnham, Tulleys & Co., had or claimed an interest. There was also a prayer that a commission might be appointed by the court to make such conveyances as should be found necessary in case plaintiff should fail to execute them within such time as should by the court be fixed for that purpose. There was also a prayer for general equitable relief.

It is not attempted to set out or epitomize the pleadings, for thereby would be involved much needless repetition. To avoid misapprehension, however, it is perhaps necessary to state that there was in an answer of all the defendants a denial of the averments of the petition, and that, by reply, a like issue was joined upon each of the averments of the answer. On final hearing, the plaintiff was denied relief, and the prayer of the mortgage and trust company was for the most part granted. While this case has been pending in this court, there has been filed an opinion upon an application for an order for an additional supersedeas bond. Vide Tulleys v. Keller (Neb.) 60 N. W. 1015. For some time prior to June 1, 1888, the firm of Burnham, Tulleys & Co., of which firm plaintiff was a member, was engaged in loan business, taking only real-estate security. Its principal office was at Council Bluffs, Iowa, where its membership was A. C. Burnham, L. W. Tulleys, and J. N. Brown. It had a branch office at Sioux Falls, S. D., where, in addition to the above membership, there was included J. V. McDowell. For such sums as were loaned, bonds were taken payable, principal and interest, to C. K. Hesse. To secure each bond, a trust deed of the real property offered as security was required to be executed to “L. W. Tulleys, Trustee.” Where a commission for effecting a loan was not paid in cash, it was secured by a mortgage, subject to the above-described deed of trust, the firm of Burnham, Tulleys, & Co. being named as the mortgagee. Mortgages of this class were throughout this case described as commission or second mortgages. It was claimed by the plaintiff on the argument that the business of Burnham, Tulleys & Co. during the years 1886, 1887, and up to its discontinuance, about June 1, 1888, was very prosperous. This was denied by the defendants. It is difficult from the evidence before us to determine satisfactorily what was, in fact, the financial condition of Burnham, Tulleys & Co. at the date last above mentioned. There is found in the bill of exceptions a letter of Burnham, Tulleys & Co. of date November 13, 1886, addressed to P. L. Johnson, at Hastings, Neb., in which occurs this language: “We may need $5,000 to $10,000 more money from C. B. Nat'l Bank; but, as we have already borrowed there, in order to get a further loan we will have to use different names. If agreeable, send us a note similar to the inclosed, signed by your brother and yourself, but make out the amount on a blank you have in Hastings. We send the inclosed as a sample. It looks better to have two names. We will guaranty the note, and hold you harmless as to its payment. Your early attention will oblige,” etc. In a letter of Burnham, Tulleys & Co., addressed to A. C. Burnham at his residence (Champaign, Ill.), of date January 17, 1888, there are contained these statements: “We have arranged for a 90-days extention on the $25,000 note due at the Chemical Nat'l to-day. * * * The frequent calling for papers at the East is materially affecting our business, and doubtless, in a measure, is the reason of calling in of funds. In Dec. we sent back quite a large amount. The business is practically at a standstill, and what we did in Dec. & Jany. will not pay expenses. We deem it advisable to acquaint you with this condition.” The extension above arranged with the Chemical National Bank, it will be noted, expired after the middle of April, 1888. Before this extended loan fell due, there were sent out circular letters of which the following is a sample: “Alfred Walker & Co. Farm loans & real estate, 85 Orange St., New Haven, Conn. A. C. Burnham. L. W. Tulleys. J. N. Brown. Office of Burnham, Tulleys & Co., Council Bluffs, Iowa, April 2, 1888. Realizing the advantage of permanence and perpetuity in a business conducted under a corporate form, the American Mortgage & Trust Co. has been organized under the laws of the state of Iowa, to succeed the old and well-known firm of Burnham, Tulleys & Co., which has been placing western farm mortgage loans for more than twenty-five years, and has now many millions upon its books. The proposed capital is $500,000, a large part of which has been taken by ourselves. If it were practicable, we should take it all, as from our past experience in the business we feel sure it will be a profitable investment. We offer a limited amount of stock to our friends at par & fifty cents per share. Under our articles of incorporation and the laws of this state, the stock is full paid and nonassessable. The company will be under the management of the members of said firm, and will adhere to the same conservative methods which have characterized their past record. It needs no argument to demonstratethe value of our plant, or that the stock will pay handsome dividends. The new form will increase our facilities, both east and west, for a more extended business, and with a larger business will come increased profits. As the amount we have to dispose of is limited, we offer it to all our friends and customers, and subscriptions will be accepted in order of the priority of their receipt. Subscriptions should be accompanied by 25 per cent. of the amount subscribed. The balance will be called in between now and June first, as the directors may elect. As soon as the amount to be sold is taken, we reserve the right to reject subscriptions in excess.” Almost immediately after the incorporation of the American Mortgage & Trust Company it was found advisable to adopt an additional distinctive designation, and the result was the incorporation of the Anglo-American Mortgage & Trust Company. Neither party questions that this change was simply for the purpose indicated, and all concede the substantial identity of these corporations.

From the deposition of L. W. Tulleys we learn that up to June 1, 1888, or thereabouts, when the firm of Burnham, Tulleys & Co. was succeeded in business by the corporation last above named, the capital stock of said firm was owned by A. C. Burnham. It is not very clear just what is meant by this statement, but we assume that it means that Burnham alone had advanced the funds necessary for carrying on the business of said firm; for, whatever this interest may have been, it was arranged between Mr. Burnham and his partners, Tulleys, Brown, and McDowell, that they should give to him their notes to the amount, in the aggregate, of $100,000. There had been earned by the firm of Burnham, Tulleys & Co. about $140,000, which was evidenced by commission mortgages, book accounts,...