Ward v. Scheeline Banking and Trust Co.

22 P.2d 358, 54 Nev. 442, 1933 Nev. LEXIS 19
CourtNevada Supreme Court
DecidedMay 24, 1933
Docket3010
StatusPublished
Cited by5 cases

This text of 22 P.2d 358 (Ward v. Scheeline Banking and Trust Co.) is published on Counsel Stack Legal Research, covering Nevada Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ward v. Scheeline Banking and Trust Co., 22 P.2d 358, 54 Nev. 442, 1933 Nev. LEXIS 19 (Neb. 1933).

Opinion

*446 OPINION

By the Court,

Coleman, J.:

This is a suit in equity to set aside a judgment. The trial court entered judgment in favor of the defendants. The plaintiffs have appealed from both the judgment and the order denying the motion for a new trial. We shall refer to the parties generally as plaintiffs and defendants.

The complaint and supplemental complaint allege the following facts: The corporate existence of the two corporations made parties to the suit; that on the 31st of December, 1923, the Stockgrowers and Ranchers Bank of Reno, a corporation, entered into a written agreement with the defendant corporation, pursuant to which it sold to said defendant corporation all of its assets, and that on said day, in accordance with the terms of said agreement, the plaintiff corporation, as principal, and the plaintiffs Ward and Cameron and John Poco, as sureties, executed and delivered an undertaking in favor of the defendant corporation in the sum of $40,000, guaranteeing the defendant corporation against all loss which might be sustained by defendant corporation resulting from its assumption of obligations of the plaintiff corporation.

It is further averred that defendant Harry H. Scheeline was the controlling owner of the defendant corporation prior to and at the time of the said purchase; that at divers times prior to and after the execution of said agreement of sale the said Harry H. Scheeline, acting in his individual capacity, and not as an officer of defendant corporation, promised, covenanted and agreed with plaintiffs herein, for a valuable consideration, that he would assume and pay one-third of any and all monetary payments, if any, which might thereafter be recovered of plaintiffs by virtue of said undertaking; that the plaintiffs believed and relied upon said promises and agreements, and were induced thereby *447 to make, execute and deliver said agreement and undertaking, but for which they would not have entered into the same.

It is further averred that on December 28, 1928, the defendant corporation filed an action against the plaintiffs herein and John Poco, wherein judgment was demanded in the sum of $34,946.62; and that on January 25, 1929, the defendant corporation filed in the same court a second action, against the same parties, to recover $34,946.62 (that the relief sought in said two actions flows from the same alleged losses, the second action being brought as a precaution), and that thereafter, on July 9, 1929, on motion of plaintiffs in said actions, an order was entered consolidating said actions for the purpose of trial.

It is also averred that immediately after the institution of the two actions last mentioned the plaintiffs herein were approached by the defendant corporation, acting, through W. A. Shockley, its vice president and manager, and Harry H. Scheeline, its cashier, both of whom stated and represented to the plaintiffs that they had received direct information and believed that John Poco had declared his intention to defend said actions and to do everything in his power to prevent recovery by defendant corporation by virtue of said undertaking, and that said Poco had declared his intention to hinder and delay the trial of said actions by all means within his power; that thereupon and by reason of said alleged existing circumstances said Shockley and Scheeline, acting for and in behalf of defendant corporation, proposed and offered the plaintiffs herein that defendant corporation and Scheeline and Shockley would select and provide legal counsel for the plaintiffs herein, and pay such counsel out of the funds of defendant corporation, and would cause such counsel to appear for plaintiffs herein and to enter a cross-complaint against John Poco, and thereafter to permit a default to be taken against the plaintiffs herein, and, eventually,, *448 admit a judgment to be entered against plaintiffs herein, on the pleadings, for the amount claimed by the plaintiffs in said actions upon said bond, with interest thereon from the date of judgment; that said Harry H. Scheeline and W. A. Shockley, acting for and in behalf of defendant corporation, promised, covenanted and agreed that defendant corporation would wholly disregard and waive the joint and several obligations of said undertaking, and would refrain from enforcing said judgment against the plaintiffs herein jointly, either by way of execution, attachment or otherwise, until said Poco had been compelled by appropriate proceedings in said action, or by proceedings in another action for contribution, to pay and liquidate his just share and proportion of all moneys found to be due upon said undertaking, and that thereafter, and not otherwise, the remaining two-thirds of the amount so found due should be paid in equal parts by Harry Scheeline, T. O. Ward and John D. Cameron.

In paragraph VIH of the complaint the plaintiffs admit that there is justly due from the plaintiffs and John Poco to the defendant corporation by virtue of the bond above mentioned an undetermined sum, which ought to be paid, but allege that the true amount thereof has not been ascertained. The plaintiffs aver that they acted in good faith as to the transactions above mentioned, and relied upon the promises and agreements of the said Scheeline and Shockley, acting in their individual behalf and in behalf of the defendant corporation herein; that the plaintiffs believed in the truth and good faith of said representations and were thereby induced and deceived into giving their consent and accepting said offer and promise of the said Scheeline to pay personally one-third of the aggregate two-thirds found to be due from the plaintiffs herein by virtue of said undertaking, and the further promises relative to the employment of counsel, and promises made in connection therewith, and the further promises to refrain from enforcing such judgment as might be rendered *449 until final determination ■ of the liability of all of the parties upon said undertaking, and all other promises made as hereinabove stated.

It is further averred that on July 10, 1929, judgment in accordance with the pleadings was rendered and entered in favor of defendant corporation and against the plaintiffs Ward and Cameron, jointly, and severally, in said actions, in the sum of $34,946.62, with interest from December 31, 1923, at the rate of seven per cent per annum, amounting in all to $54,516.72; that these plaintiffs were never informed by counsel, and did not discover until shortly prior to the filing of this action, that the judgment so entered was joint and several and was greatly in excess of the amount actually due upon said bond; that for a long time subsequent to the entry of said judgment defendants herein continued the prosecution of said action against the defendant John Poco, and that by reason thereof the plaintiffs herein were lulled into a sense of security, and continued to believe and rely upon the good faith of the defendant corporation, of Harry H. Scheeline and W. A.

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Bluebook (online)
22 P.2d 358, 54 Nev. 442, 1933 Nev. LEXIS 19, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ward-v-scheeline-banking-and-trust-co-nev-1933.