Vian v. Hilberg

• Decision Date: 26 November 1923
• Docket Number: No. 22551.,22551.
• Parties: VIAN v. HILBERG ET AL.
• Court: Nebraska Supreme Court

111 Neb. 232

196 N.W. 153

VIAN

v.HILBERG ET AL.

No. 22551.

Supreme Court of Nebraska.

Nov. 26, 1923.

Syllabus by the Court.

A number of persons at different times were induced by fraud to purchase shares of stock in a corporation giving their notes therefor; the corporation, being indebted to a bank, transferred the notes to the bank as collateral security for such indebtedness; the bank received the notes in good faith and before maturity; the corporation failed to pay the bank, whereupon one of the note-makers brought suit against the others and the bank to enforce contribution between the note-makers, the amount due the bank being less than the total amount of the notes. Held, that, under the conditions stated, the note-makers stood in the relation of sureties for the corporation, and in equity should bear the loss proportionately; that payment of the debt is not a prerequisite to the bringing of such a suit.

The corporation was not a necessary party to the suit for contribution.

A purely personal action must be brought in the county where at least one of the substantial defendants resides, or may be summoned, in order to authorize issuance of summonsto other counties, and the rule is the same in equity as at law.

In the present case, the note-makers other than plaintiff were made defendants; all of them resided in Custer county and were the only defendants served in that county; the corporation and all others were residents of Lancaster county, to which summons was sent and service made. Held, that such summons was unauthorized.

Certain defendants having made timely objection by answer to the jurisdiction of the court over their persons, the objections should have been sustained.

Under the allegations of the petition, as stated in the opinion, the want of jurisdiction did not appear upon the face of the record in such manner as to require a special appearance to raise the question, but the same was properly presented by answer.

The bank was also served in Lancaster county, but made no objection to the jurisdiction of the court over its person. Held, that the failure of the bank to claim its privilege from suit in a county other than that of its residence, if it had such privilege in this case, could not operate as a waiver of the like privilege of the objecting defendants. First State Bank v. Ingrum, 107 Neb. 468, 186 N. W. 334, distinguished.

The letter set out in the opinion held to be a mere expression of the opinion of the writer, and, in the absence of evidence that the letter was written with a fraudulent intent, it did not amount to a false representation.

Appeal from District Court, Custer County; Hostetler, Judge.

Action by Eugene Vian against Benjamin J. Hilberg, one Lewis, one Eddie, one Pryor, Neil Logan, the Sarvis Lumber Company, the Lincoln State Bank and others, in which the first four named defendants file cross-petitions. From the judgment rendered the defendant Sarvis Lumber Company and unnamed defendants appeal, and the plaintiff, the first named defendants, and the defendant Lincoln State Bank cross-appeal. Reversed in part, and affirmed in part, and remanded.

Sullivan, Squires & Johnson, of Broken Bow, for plaintiff.

Sullivan, Squires & Johnson, of Broken Bow, and Good & Good, of Lincoln, for defendants Hilberg and others.

H. R. Ankeny, of Lincoln, for defendants Logan and others.

Doyle, Halligan & Doyle, of Lincoln, for defendants Sarvis Lumber Co. and others.

Dort, Cain & Witte, of Falls City, for defendant Kimball.

W. A. Selleck, of Lincoln, for defendants Lincoln State Bank and others.

Heard before DEAN, ROSE, and GOOD, JJ., and REDICK, District Judge.

REDICK, District Judge.

This is an action in equity brought in the district court for Custer county; and before stating the substance of the pleadings it will be necessary to state the facts regarding the parties. The plaintiff, Vian, and the defendants Hilberg, Lewis, Logan, Eddy and Pryor are all residents of Custer county; the defendants Sarvis Lumber Company, Lincoln State Bank, George W. Kimball, Willard Kimball, Perry Anthony and W. A. Selleck are all residents of Lancaster county. All the defendants residing in Custer county were served with summons therein, and all the defendants residing in Lancaster county were served in that county on summons issued by the district court for Custer county. None of the nonresidents of Custer county could be served in that county, and jurisdiction over their persons is asserted under the authority of our statute permitting issuance of summons to counties other than the residence of the defendants where the suit is properly brought in the county from which summons issued.

The facts stated in the petition, and upon which plaintiff bases his cause of action, are substantially as follows: That in 1919 defendant Anthony, the duly authorized agent of the lumber company, and Willard and George Kimball made certain false representations to the plaintiff and the defendants Hilberg, Lewis, Logan, Eddy and Pryor (all residents of Custer county), whereby they were induced to purchase in varying amounts shares of stock of the Sarvis Lumber Company, for which they executed their several notes as follows: Vian $5,000, Hilberg $750, Pryor $4,750, Eddy $2,500 and $5,000, Lewis $5,000, and Logan $5,000 and $5,000, aggregating about $33,000; that the Sarvis Lumber Company, being indebted to the Lincoln State Bank in an alleged amount of about $17,000, transferred the notes above mentioned to said bank as collateral security for said indebtedness, but that said bank was not an innocent holder thereof and at the time of receiving them knew that the payors had a good defense as against the lumber company; that the defendant Selleck and the bank aided the agents of the lumber company in the perpetration of the alleged fraud by means of a certain letter of introduction and recommendation of defendant Willard Kimball, signed by Selleck as president of the bank. The petition then contains the following which seems to present the theory upon which this action is founded:

“That said lumber company, after obtaining said notes above set out, transferred the same to the defendant bank, as collateral to an alleged indebtedness from said company to the bank, of something like $17,000, and said bank now holds all of said notes above set out, and at the time this action was begun threatened to sue this plaintiff upon his said note. Said bank knew at the time of said threats that all of the makers of said notes, as well as this plaintiff, denied that it was an innocent purchaser in due course of this said note, and knew that this plaintiff and the other defendants deny liability upon said notes to said bank, and knew that all of said parties claimed and insisted that said bank obtained the said notes with the due notice of the fraud that was practiced upon the makers thereof, in procuring the same, but plaintiff alleges that, at the time this action was begun, the defendant bank was about to single out plaintiff and to sue him first, and to make the said threatened suit against plaintiff a test case, and did not intend to bring suits against the other defendants until the suit against this plaintiff had been finally determined, and plaintiff alleges that said threatened suit against him by said bank was not in good faith for its own use and benefit, but that said suit was threatened against this plaintiff for the benefit of the said lumber company and the said defendants, Kimball and Anthony, and that at the time this action was begun the said bank proposed, at the request of the officers and stock salesmen of said corporation, to hold certain of said notes without suit, and at the time this action was begun said bank intended, if it succeeded in procuring judgment against plaintiff, to compel him to pay the full amount thereof, regardless of the obligation, of the other defendants to pay any part of their notes to said bank, and it is the purpose of said bank to bring said action against plaintiff in the courts of Lancaster county, by making the said lumber company a party, which lumber company has an office in said county, although it knows full well that a judgment against said lumber company could be, and would be, of no avail to it, and knows full well that it could never realize anything on a judgment against said lumber company.”

The prayer of the petition is that the bank be required to bring said notes into court and that the same be canceled as having been obtained by fraud and without consideration; that it be decreed that the bank was not an innocent purchaser of said notes; that, in the event that the bank was found to be an innocent purchaser, judgment be rendered proportionately against the several note-makers for the amount found due, and the remainder of the notes canceled upon payment of such proportionate share, and that the plaintiff and other makers of said notes, if they desire, have judgment against the Kimballs, Anthony and Selleck for the amount required to be paid by them respectively upon said notes, and for general relief.

The defendants Hilberg, Lewis, Eddy and Pryor filed answers and cross-petitions setting up the same facts as stated in the petition, and prayed for the same relief.

Defendant Logan answered, and alleged that the court had no jurisdiction over his person or the subject-matter of the action, for the reason that the petition did not state a cause of action against him, and because plaintiff had an adequate remedy at law; admits the purchase of the stock in the lumber company from Anthony, that he gave two promissory notes therefor and the same were afterwards delivered to the bank by Willard Kimball, but denies they were delivered to the lumber company or that the lumber company was ever the owner thereof or that the bank ever had any title or interest therein; and denies each and every other allegation of the petition. He also filed a cross-petition to the same...