72 P. 671 | Idaho | 1903
Lead Opinion
— Appellant commenced his action in the trial court to recover on a certain hank cheek purporting to be the check of the Twin Springs Placer Company, alleging: That defendant is a Connecticut corporation, and that the Twin Springs Placer Company is a West Virginia corporation. That the defendant company was authorized by the laws of Connecticut to consolidate with other companies engaged in like business as said defendant, and that by virtue of and under the authority of the laws of Connecticut defendant company did consolidate with the Twin Springs Company, and absorbed
“Boise, Idaho, March 8th, 1900.
“Twin Springs Placer Company.
“Pay to the order of J. M. Anderson $1338.48, thirteen hundred and thirty-eight and 48/100 dollars.
“TWIN SPEINGS PLACEE CO., .
“By E. J. ANDEESON.
:<The Capital State Bank, Boise, Idaho.”
The answer admits that defendant is a corporation as alleged. Denies that defendant company was authorized by the laws of Connecticut, or at all, to consolidate with other companies or corporations in any manner, or at all. Denies that toy virtue of or under authority of the laws of Connecticut, or at all, defendant did at any time consolidate with the Twin Springs Placer Company, or absorb the same. Denies that defendant was organized to operate, acquire, or own properties in connection with other parties or corporations, or to purchase stock or other securities of other corporations engaged in like business. Denies that defendant at any time, or at all, became the owner of all the stock or all or any of the property belonging to or owned by the Twin Springs Placer Company, or that it took or held possession of any property belonging to said company, or managed or operated the same in any manner other than as hereinafter specifically set forth. Denies that by virtue of any authority or acts or in any manner it ever consolidated with the Twin Springs Placer Company, or that the Twin Springs Placer Company was merged or absorbed into defendant company, or that there was ever any consolidation or merger in any manner between the War Eagle Consolidated Mining Company and the Twin Springs Placer Company, or that the War Eagle Consolidated Mining Company is now, or was at any time, the owner or in possession of all or any of the property
Owing to the condition in which this case comes to this court, and the conclusions we have reached, we have deemed it proper to copy the pleadings almost entirely as they appear in the record. It will be seen that this is an action at law, as shown by the complaint, and was so treated in the trial court, by all parties to the action, and down to the time appellant filed his reply brief in this court. The findings of the court are as follows:
Third shows the purpose for which defendant was organized to be to purchase, acquire, hold, and lease mines, timber and/ agricultural lands, the operation of mines, development and use of water or electrical power, the construction and operation of drainage or irrigation canals, flumes, and tunnels for the operation of the property of this corporation, or in connection with the properties, owned by other parties or corporations, or the construction of canals, flumes, or tunnels for the supply of water or electric lights, or domestic or corporate purposes, the construction, operation, and management of smelters, assaying and refining works, mills, foundries, factories, and stores engaged in the manufacture of any product.
Fourth sets up the check in full upon which this action is based.
Fifth finds that the check was not presented to the Capital State Bank for payment until the twenty-eighth day of May, 1900, and payment was not made.
Sixth finds that afterward plaintiff went to R. J. Anderson, general manager of defendant, and called his attention to the fact that said check had not been paid; that the residence of plaintiff from the time he received the check until it was presented for payment was in Boise City, and the bank where it was made payable was also in Boise City; that no notice of the nonpayment of said check had ever been given to the Twin Springs Placer Company.
Seventh finds that upon November 19, 1900, the board of directors of the War Eagle Consolidated Mining Company passed a resolution, whereby, under the terms of its contract with R. J. Anderson, it became the owner of certain obligations and evidences of indebtedness wherein the Twin Springs Placer Company was the obligor, amounting to $262,100, with accrued interest. Defendant also became the owner of nearly all the capital stock of said Twin Springs Placer Company, amounting
Eighth finds that upon the thirtieth day of November, 1900, the Twin Springs Placer Company, by E. V. Douglass, executed and delivered to defendant a certain deed reciting a consideration of $36,000, by the terms of which said grantor granted, quitclaimed, etc., the Sea Gull placer mining claim and a large number of others enumerated in the finding, together with-water rights, ditches, etc. That said deed had attached to it a receipt, to wit:
“Received of the War Eagle Consolidated Mining Company, $36,000, full consideration herein mentioned in the obligations of this company, in accordance with the terms of a resolution passed November 14th, A. D. 1900, by the board of directors of this company.
“TWIN SPRINGS PLACER COMPANY,
“By F. S. LEWIS,
“Treasurer.”
Tenth finds that the evidence fails to show the value of the property deeded by the Twin Springs Placer Company to the War Eagle Consolidated Mining Company. Fails to show whether or not the Twin Springs Placer Company owned other property than that conveyed by the deed to the War Eagle Consolidated Mining Company. Fails to show what assets the Twin Springs Placer Company had after said deeds were executed; that the Twin Springs Placer Company was merged in-the War Eagle Consolidated Mining Company, or consolidated therewith. That there is no evidence that.the transfer from the Twin Springs Placer Company to the War Eagle Consolidated Mining Company of property above mentioned was fraudulent, or that said transfer was without consideration, or made for the purpose of defrauding the creditors of the Twin Springs Placer Company. That the evidence fails to show that the Twin Springs Placer Company was at the time of issuing the check, or at any time thereafter, insolvent, or unable to pay said check.
As conclusions of law the court finds that plaintiff is not entitled to recover against defendant, the War Eagle Consolidated Mining Company, upon the check sued upon in this action, and that the War Eagle Consolidated'Mining Company is not liable therefor.
Counsel for appellant, in their brief, have twenty-two assignments of error. They first urge that the denials in paragraphs 4, 5, 7, and 9 of defendant’s answer do not deny any allegation contained in the complaint. We cannot agree with this contention. The denials are in the usual language, and each one concludes' with, “other than as hereinafter specifically set forth.” If the pleader had not again referred to the particular paragraphs of the complaint, we think the denials would have been sufficient; but in the case at bar he did thereafter set up a separate defense, so far as those allegations are concerned, by
It is next urged that “defendant company acquired all the property, stock, and business of the Twin Springs Placer Company, and hence cannot escape liability to the plaintiff in this action.” In support of this position counsel cite Blair v. St. Louis etc. R. Co. (C. C.), 22 Fed. 36, and quote from the decision to wit: “A transfer of all the assets from, one company to another, whereby, through a mere change of name, an attempt is made to defraud creditors, or which would operate as a fraud on them, will not be upheld as against them, and the transferee taking the property with notice takes it cum onere.”
Appellants next urge that by reason of the complaint alleging the acquisition of all the stock, property, and business of the Twin Springs Placer Company by defendant company, that the plaintiff was a creditor of the Twin Springs Placer Company, that the defendant company had knowledge of the debt prior to the acquisition of such property, that E. J. Anderson was the general manager of both corporations, a stockholder in both, and had full knowledge, management, and control of both, and such facts being the case, within the rule laid down in C. R. I. & P. R. R. v. Howard, 7 Wall. 392, 19 L. ed. 120, they quote from this • authority following: “Equity regards the property of a corporation as held in trust for the payment of the debts of the corporation, and recognizes the right of creditors to pursue it into whosoever’s possession it may be transferred, unless it has passed into the hands of a bona fide purchaser.” 1 Thompson on Corporations, section 375, is cited to the effect that, where several corporations are united in one, and the property of the old companies rests in the new, the corporation holds the property received from the absorbed companies with notice of any trust attached to it in favor of its creditors, and cannot claim the right of a bona fide purchaser without notice. McVicker v. American Opera Co. (C. C.), 40 Fed. 861, is cited. It holds that, where an insolvent corporation organizes under a new charter with a different name, its property is still liable for its debts, though transferred to the new corporation for a valuable consideration. Hibernia Ins. Co. v. St. Louis etc.
It will be observed that there is no allegation of fraud in the complaint; neither is it shown that the defendant company in any manner assumed the payment of this obligation. The obligations assumed by defendant, as shown by the list, amounting to $262,100, do not include the checks sued upon. It is also shown that defendant company, in addition to assuming the payment of the obligations of the Twin Springs Placer Company to the amount of $262,100, paid $36,000 for the property transferred to it by said Twin Springs Placer Company, and that the receipt for such amount was given at the time of the execution and delivery of the quitclaim deed for the property sold, which, as shown by the record, was on the nineteenth day of November, 1900, more than eight months after the execution and delivery of the check sued upon. By the pleadings and entire record in this case it is shown that it was never treated as a suit in equity. We are in harmony with the authorities that, if there was a fraudulent intent on the part of defendant in the purchase of the property of-the Twin Springs Placer Company, and the pleadings and proof established such fraud, then plaintiff might follow the property of the Twin Springs Placer Company, and recover the amount due on his obligation; but the mere fact that the War Eagle Consolidated Mining Company purchased a large portion, or even all, of the property of the Twin Springs Placer Company, the former being a Connecticut corporation, and the latter a West Virginia corporation, is not sufficient evidence to entitle the plaintiff to recover on the latter’s obligation, unless it is in some way shown that in the purchase defendant assumed the debt, or that fraud was practiced to defeat appellant’s claim.
A great many authorities are cited by counsel for respondent in support of his contention that defendant is not liable to plaintiff on the check sued upon under the pleadings and proofs in this case. We have examined them, and think they sustain his position. (See 1 Beach on Private Corporations, secs. 328-344; Southgate v. Railway Co., 61 Mo. 90; 7 Thompson on Corporations, secs. 8217, 8218; 6 Ency. of Law, 2d ed., 102; Pearce v. Company, 21 How. 441, 16 L. ed. 184; Shields v. Ohio, 95 U. S. 319, 24 L. ed. 357; Topeka Co. v. O. P. Co., 7 Okla. 220, 54 Pac. 445; 1 Thompson on Corporations, see. 263; Wyman v. Hallowell Bank, 14 Mass. 58, 7 Am. Dec. 194; Wenger v. Company (C. C.), 105 Fed. 796.)
We think the judgment of the lower court should be affirmed, and it is so ordered, with costs to respondent.
Rehearing
ON REHEARING.
— A rehearing was granted in this case, and orally reargued to this court by respective counsel, and substantially the same as at the original hearing. The pleadings in the case are quite fully set out in the opinion on the original hearing, and it is not necessary to repeat them here.
But it is contended that it was a fraud on appellant for said respondent corporation to take over all of the property of the Twin Springs corporation without providing for the payments of its debts. Conceding that to be true, in order to hold respondent the complaint must contain the proper allegations. It must contain a statement of the facts constituting the cause of action in ordinary and concise language. It is too well
It is contended that under our constitutions and statutes, all distinctions are prohibited between actions at law and suits in equity, and that the court was authorized to give judgment according to the justice of the case. We shall proceed to consider the section of our state constitution and statute bearing upon this contention.
Section 1, article 5, of the constitution, is as follows: “The distinctions between actions at law and suits in equity, and the forms of all such actions and suits are hereby prohibited; and there shall be in this state but one form of action for the enforcement or protection of private rights, or the redress of private wrongs, which shall be denominated a civil action; and every action prosecuted by the people of the state as a party, against a person charged with a public offense, for the punishment of the same, shall be termed a criminal action. Feigned issues are prohibited, and the fact at issue shall be tried by order of court before a jury.” Section 4020 of the Revised Statutes of 1887, is as follows: “There is in this territory but one form of civil actions for the enforcement or protection of private rights and the redress or prevention of private wrongs; provided, that in all matters not regulated by this code, in which there is any conflict or variance between the rules of equity jurisprudence and the rules of the common law, with reference to the same matter, the rules of equity shall prevail.”
Finally, it is urged that appellant is entitled to some relief, and this court is asked to modify its decision so that it will not be. a bar to another action to recover on said check. The court, in its former decision, did not intend to deprive the appellant of any right he might have left for recovery on said check; and, if he has an equitable remedy after being defeated in a suit for a legal one, this court has not deprived him of that right. In Pratt v. Ratliff, 10 Okla. 168, 61 Pac. 523, it was held that a judgment i§ a bar to another action if the cause of action be the same, though the form be different, and that the cause is the same when the same evidence will support both actions. If, under the well-established rules of law applicable to the question under consideration, the appellant is entitled to an equitable remedy to enforce the collection of said check, this court does not intend to deprive him of that remedy; but if, under said rules, the present action is a bar to another action, this court is powerless in the matter.
We adhere to the former opinion in this case.
The judgment is affirmed. Costs of this appeal are awarded to respondent.