Yates v. Jones National Bank

105 N.W. 287, 74 Neb. 734
CourtNebraska Supreme Court
DecidedOctober 19, 1905
DocketNos. 13,030, 13,031, 13,032, 13,033
StatusPublished
Cited by11 cases

This text of 105 N.W. 287 (Yates v. Jones National Bank) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Yates v. Jones National Bank, 105 N.W. 287, 74 Neb. 734 (Neb. 1905).

Opinion

Albert, C.

In 1893 the Jones National Bank and the Bank of Staplehurst each brought an action against Charles W. Mosher, Homer E. Walsh, David E. Thompson, Charles E. Yates, Ellis P. Hamer, Ambrose P. S. Stuart, Richard C. Outcalt and Rollo O. Phillips; and Thomas Bailey and the Utica Bank each brought an action against all of tlio said defendants except David E. Thompson. The actions were brought in the district court for Lancaster county, and the several petitions, so far as the present inquiry is concerned, as substantially the same, and the allegations are, in effect, as follows: That from the 9th day of December, 188G, to the 21st day of January, 1893, the Capital National Bank of Lincoln was a corporation duly organized and existing under and by virtue of the banking laws of the United States; that the defendants were the directors and officers thereof, and, as such, had exclusive control and managment of its affairs; that during the whole of said period the bank was insolvent, as the defendants well knew, or by the exercise of due dili[736]*736gence would have known, and that on or about the 23d day of January, 1893, it passed into the hands of a receiver, who at the commencement of the action was in possession of all of its assets; that from the 9th day of December, 1886, to the date such bank passed into the hands of the receiver, the defendants, in pursuance of the banking laws of the United States and on the demand of the comptroller of the currency, from time to time made statements, and caused and permitted statements to be made, to the comptroller of the currency, purporting to show the financial condition of such bank at the time such statements were respectively made, and caused, such statements to be published in certain newspapers of general circulation in this state; that the defendants, although chargeable with knowledge of the true condition of said bank and that it was not in a prosperous condition, but insolvent, when such reports were respectively made, for the purpose of deceiving the plaintiff and others and thereby inducing them to deposit their money in said bank, made out and caused said statements to be made in such a way as to show that the bank was in a prosperous condition, and that it was safe and. solvent; that such statements were brought to the notice of the plaintiff and- that, relying thereon and. believing them to be true, the plaintiff, induced thereby, made certain deposits in the said bank before it passed into the hands of the receiver; that, if each of the defendants did not have actual knowledge of the false and fraudulent character of such statements, and of the actual condition of the ban]?: when such statements were made, his lack of knowledge was the result of his gross negligence in respect to his duties as an officer of the bank. Then follow allegations to the effect that the defendants, as officers of such bank, had loaned sums of money and had allowed and paid dividends to its stockholders while the bank Avas insolvent, contrary to, and in violation of, the banking laws of the United States. The concluding allegations are as folloAVS: “And, by reason of the several violations [737]*737of the banking law, as above set forth, by these several defendants, they have become, and are, liable to this plaintiff for the damages he has sustained by reason of their said acts in the sum of $11,500, together with interest thereon from the 11th day of October to the 28th day of December, 1892, at the rate of seven per cent, per annum.” In each case the defendants demurred on four grounds: (1) Want of jurisdiction of the subject matter. (2) Plaintiff’s want of legal capacity to sue. (3) Defect of parties plaintiff. (4) Insufficiency of the facts stated to constitute a cause of action. The defendants also filed petitions, asking the removal of the causes to the federal court, for the reason that the actions involved a construction of the national banking act. The causes were removed, and thereupon the plaintiffs filed motions in the federal court, asking that the causes be remanded, for the reason that they involved no federal question. The. motion was overruled.

In the action brought by the’plaintiff Bailey, the federal court sustained the demurrer to his petition and dismissed the case. Bailey prosecuted error to the circuit court of appeals, where the rulings of the lower court on the motion to remand and the demurrer to the petition were sustained, and the judgment of dismissal was affirmed. Bailey v. Mosher, 63 Fed. 488. Whereupon the other plaintiffs dismissed their actions.

Thereafter, the plaintiffs each brought an action against the parties they had respectively made defendants before in the district court for Seward county. The petitions in the later cases, as they stood at the time of the trial, are substantially the same as those in the former, save that it is not alleged in the latter that the Capital National Bank was organized under the laws of the United States, nor that the statements therein mentioned, purporting to show the financial condition of said bank, were made in pursuance of the banking laws of the United States or on the demand of or to the comptroller of the currency. The concluding of the latter petitions is as [738]*738follows: “Plaintiff states that, by reason of the facts as above set forth and the false and fraudulent statements, advertisements and representations of the defendants, the plaintiff has been damaged in the sum of twenty thousand dollars ($20,000).” On the application of the defendants the case of Bailey v. Mosher was removed to the United States circuit court, on the theory that it Avas brought under the United States banking act for misfeasance or mismanagement of the defendants as officers of a national bank. On motion of the plaintiff the circuit court' remanded the cause to the state court, holding that no federal question was involved. Bailey v. Mosher, 74 Fed. 15. When the cause again reached the state court, the several petitions Avere amended by interlineation, whereby they were brought to their present form. Whereupon, on application of the defendants, the cases were removed to the United States circuit court, on the theory that the amendment had injected a federal question. .The circuit court overruled a motion to remand, sustained a demurrer to the petition and dismissed the cause. Bailey v. Mosher, 95 Fed. 223. On appeal, the question was presented to the circuit court of apeals, the judgment of the circuit court Avas reversed and the causes remanded to the state court, for the reason that they involved no federal question. Jones v. Mosher, 107 Fed. 561.

The subsequent pleadings are somewhat voluminous, and it will suffice to say that the questions hereinafter discussed are sufficiently presented. The defendant Stuart made default and judgment was taken against him. The defendants Hamer and Phillips died after the action Avas commenced; as to the former the action was revived against his estate; as to the latter no proceedings for revivor were had. The cases were all tried at the same time and submitted on the same evidence. At the close of the evidence the court directed a verdict in each case in favor of the defendant Walsh. As to the other defendants, in the several cases to Avhich they Avere respectively parties, the jury found for the plaintiff and [739]*739judgment was given accordingly, from which the defendants respectively prosecute error to this court.

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Bluebook (online)
105 N.W. 287, 74 Neb. 734, Counsel Stack Legal Research, https://law.counselstack.com/opinion/yates-v-jones-national-bank-neb-1905.