22 Mont. 354 | Mont. | 1899
Lead Opinion
At the outset of this case we find ourselves confronted with a constitutional point of much importance, necessitating a decision of the question whether the amendment to the Constitution of the State relative to the j ustices of the Supreme Court, proposed by the act of the Fifth Legislative Assembly, approved March 3, 1897, and voted upon at the gen
When the case now before us was assigned for hearing, it appeared that Chief Justice Brantly was disqualified. Accordingly, assuming that the aforesaid constitutional amendment was in force, Justice Pigott and myself, by invitation, called upon the Honorable Frank Henry, Judge of the District Court of the Sixth Judicial District, to sit with us in the cause. But, before the case was regularly called, Hon. Wilbur F. Sanders, as amicus curies, addressed our attention to the fact that it was probable Judge Henry could not properly sit ior the reason that the amendment to the Constitution under the provisions of which we had acted in calling upon him had never been legally proposed for adoption by the Fifth Legislative Assembly, inasmuch as it never had been entered in lull on the respective journals of the two houses of the assembly, as required by Section 9 of Article XIX of the Constitution. The Attorney General appeared, and stated that it was a record fact that there never had been an entry in full of the proposed amendment upon the legislative journals. Thereupon, of its own motion, the Court, without delay, in
An amendment to the Constitution, like the Constitution, obtains life by the direct power of the people. No other authority can be put above them, or act for them, in respect to effecting changes in their organic law. A legislative assembly may amend or enact statutes, and, within their province as representatives of the people, legislators are supreme in the exercise of a constitutional lawmaking power (State v. Long, 21 Mont. 26, 52 Pac. 644); but, in respect to the Constitution, they are by that instrument’s terms proposers of amendments, — machinists operating intermediate machinery, through means of which, as the people’s agents, they may propose an amendment to their Constitution, but which the people have provided must eventually come directly before them in its molded form, to be adopted or rejected by their votes, and by them alone.
This distinction between the authority of the Legislature in relation to enacting laws and proposing changes in the Constitution must not be overlooked, for it emphasizes in an unmistakable way the measure of power which can be exercised effectively by delegated representatives, and that which can alone be exercised by the people in their own sovereignty. The legislative assembly can no more subtract from the various steps specified in the organic act to be taken by itself antecedent to submitting amendments to'the Constitution, than can it amend the Constitution without such submission to the
Thus the proposition comes back to the statement that from the people, as a source, alone flows the delegated power of the Legislature to even propose amendments to those “unvarying rules” by which “alike the government and the governed” are controlled, and where those rules adopted by the people are part of their Constitution, and lay down how this power may be exercised by the Legislature, there is no discretion in that body to ignore the commands of the fundamental authority, or override its limitations in great or small matters; and this principle holds good, not only for the legislative, but, so far as applicable, for the judicial and executive, departments of the government as well.
We conclude, therefore, that the failure to enter on the legislative journals the proposed amendment under which Judge Henry was invited to sit was a disobedience of the Constitution itself, and that our duty in expounding the supreme law compels us to decide that the proposed amendment never was proposed as required, and therefore never ought to have
The following authorities are cited to sustain our opinion: In re Convention, 14 R. I. 649; State v. McBride, 4 Mo. 303; State ex rel. Morris v. Secretary of State, 43 La. Ann. 590, 9 South. 776; Collier v. Frierson, 24 Ala. 100; Answer of the Justices, 6 Cush. 573; Oakland Paving Co. v. Hilton, 69 Cal. 479, 11 Pac. 3; Koehler v. Hill, 60 Iowa, 543, 14 N. W. 738, and 15 N W. 609; Russie v. Brazzell, 128 Mo. 93, 30 S. W. 526; Miller v. Johnson, 92 Ky. 589, 18 S. W. 522; Cooley, Const. Lim. p. 44; Jameson, Const. Con. Sec. 564 et seq.; State v. Tufly, 19 Nev. 391, 12 Pac. 835.
2. Upon the merits it is strenuously contended that the sale of the 127,029§ shares of the stock to the Thompson Investment Company was void because of a conspiracy; because it was a sale of a pledge before demand made for the performance of the act for which the pledge was a security; because of lack of actual notice of the time and place of the sale, and because the sale was not made by public auction, or upon any notice to the public.
Stating the transaction at the sale very briefly, it was this: The assignee on October 14, 1898, had advertised that 127,-029 shares of the capital stock of the Sunrise Company, held as collateral security by the Merchants & Miners’ Bank, would be sold at public sale, subject to the rights of said bank in said stock, and also that 138,371 shares of the capital stock of said mining company would be sold. On November 29th thereafter, the assignee, with Mr. Howell, his attorney, conducted a sale. Just before the sale it was announced that cash would be required from the successful bidder. The power of sale given to the assignee under the assignment was read by Mr. Howell, and it was announced that, if cash was not paid, the assignee reserved the privilege of rescinding any sale which might be made, and of selling the stock or property to any other person whom he might choose, according to the terms
As we regard the case, the sale to the Thompson Company was fairly and honestly conducted. Mr. Howell’s attitude is satisfactorily explained. We grant that he was in a delicate position, — one such as a lawyer always should avoid. But it having been honestly and openly assumed, and known by the parties buying and selling, and it being apparent that no injury has been done to any person’s rights on account of it,
The legal status of the parties was this: Durfee & Sherman owned the stock pledged to the bank prior to their assignment; — that is, the general property in the security remained in them. The bank had a lien only, dependent upon possession. (Civil Code, Sec. 3890 et seq.) Had no assignment to Harper been made, before the stock pledged could have been sold, demand of payment, and actual notice to Durfee & Sherman of the time and place at which the stock pledged would be sold by the bank, would have been essential, unless waived. But, it being a correct proposition that the general property in the stock remained in Durfee & Sherman, they had a perfect right to assign or transfer their interest in it, by any proper instrument, and upon valid consideration, subject always to the lien of the Merchants’ & Miners’ Bank. And, in so transferring it, the actual custody and possession being in the bank, under lawful lien, a constructive or symbolical delivery to Harper, assignee, was sufficient, where the bank knew of the assignment, as was the case here. Notice brought to the bank put it in the position of pledgee of the assignee, who stood in the shoes of the assignors, Durfee & Sherman. Story (Bailm. Sec. 350) says:
“Subject to the rights of the pledgee, the owner has a right to sell or assign his property in the pawn; and in such a case the vendee will be substituted for the pledgor, and the pledgee
The correct rule is stated by Edwards (Bailm. Sec. 316) as follows:
“When the general owner-sells the property held in pledge, the purchaser necessarily takes it subject to the rights of the bailee; that is to say, he acquires the title to the property, including the remedies given by law for its protection. As purchaser, he is entitled to redeem on the same terms as the original owner. On a tender of the amount due, the pledgee must deliver up the property to him. A refusal to do so on demand is a conversion. The owner’s right to sell the goods pending the pledge draws after it these rules of law. If the general owner become bankrupt, his assignee succeeds to his title and rights; the bailee retaining his lien unaffected. The same rule holds good where the bailee is summoned as a trustee of' the general owner, or where an attachment is procured against him. The process takes effect subject to the rights of the bailee. It enables the plaintiff to reach the interest of the general owner, and nothing more. The officer cannot, unless authorized by statute, seize and sell the property. A factor under advances is a pledgee entitled to hold the goods; so that an attachment binds only the surplus.”
Under the assignment, therefore, Harper, as assignee, succeeded to the title and rights of Durfee & Sherman, the assignors. While he is not to be regarded as a purchaser for value, yet his rights are as great as his assignors had in respect to things transferred by the assignment. (Civil Code, Sec. 4521.)
By the assignment it was his right, and, if he deemed it best for the creditors, his duty to discharge the note due by Durfee & Sherman to the bank, and redeem and take possession of the stock pledged as collateral to secure its payment. It was also a duty of the assignee with all convenient diligence
A sale .at auction- on November 29, 1898, was tried, and, although announcement was made that the sale would be for cash only, the bidder, the agent of the bank, was unable to pay the amount of his .bid, or any considerable part thereof. The assignee had a clear right to set aside this sale, and he committed no violation of his trust in doing so.
Standing in the same position that his assignors had occupied towards the bank, as the assignee of the general title to the pledged stock, Harper had authority to sell the interest of his assignors, Durfee & Sherman, in the stock, subject always to the lien of the bank. This sale of their general property right could be made publicly or privately. The assignee finally chose to make it by the latter way. To this method the pledgee assented, and, to permit the assignee to deliver the stock to the buyer, the pledgee surrendered the certificates of stock to the assignee, who thereupon sold the entire holdings of his assignors in one block, receiving a sufficient consideration therefor, and the best-then" obtainable.
The agreement between the assignee and the bank that he could sell the pledged stock at private sale was a fair one. The original pledgors could have made any reasonable arrangement with the bank looking to the disposition of the stock for cash, and under the assignment the assignee could do the same with a like end in view.
The bank, by surrendering its actual possession to the assignee, in order that he might .sell the stock, can scarcely be said to have waived its lien, where the rights of third persons, creditors, have not been prejudiced. The facts bring this feature of the case within the rule stated, as follows, by Jones (Pledges, Sec. 43):
*369 “A pledgee may employ the pledgor as his agent to sell goods held in pledge, and he does not lose his lien by allowing the pledgor to contract in his own name for their sale, or by
The sale, as made by the assignee, was not a sale under the pledge, but one with regard to the rights of the pledgee. It was really a redemption by the assignee, and a delivery of the certificates by the bank to the assignee, in order to permit him to obtain money sufficient to redeem the pledge. And, as said, the assignee having had a right to redeem at law, and a right to sell at private sale under the assignment, we are unable to perceive how the assignors can complain that their rights have been impaired by any act of the assignee or the bank, or any one else, in the sale to the Thompson Investment Company.
3. Referring to the mandamus proceeding, it is said that mandamus will not issue to compel a corporation or its officers to issue a certificate of stock, where there is a dispute as to its ownership, especially in an action or proceeding like that at bar, to which the corporation itself is not a party. We shall not here lay down a precedent which will deny in all cases a
That ample remedy could have been given in the injunction suit seems quite clear. Recovery for damages against Durfee would be inadequate compensation, for he is insolvent; and, remedy by mamdamus being improper, a court of equity alone could grant the proper relief. In Cushman v. Thayer Manfg. Jewelry Co., 76 N. Y. 365, it was expressly decided that an equitable action will lie to compel a transfer upon its books by a corporation of shares of its capital stock to the owner of the same. (See, also, Cook, Corp. Sec. 391.) And, if it could be compelled by the corporation, why could not an officer of a corporation be compelled to sign a certificate to make a transfer effectual ? If the corporation itself has a claim upon the stock, its rights are not affected, because it is not a party to this suit; but it does not follow that, because it is not joined, one of its officers cannot be made to do a ministerial duty.
We observe that neither the corporation itself nor its secretary appears to be directly at fault. It is the president only, F. M. Durfee, who refuses to sign the certificate of shares to the purchaser. This is apparent by the pleadings in the injunction suit, wherein F. M. Durfee, the president, made D. M. Durfee, the secretary, a defendant; alleging that, unless injunction issued to him as secretary, he would transfer the stock sold by the assignee to the Thompson Investment Com
‘ ‘There is nothing in the complaint showing, or tending to show, that the corporation, defendant is in any sense interested in this action. So far as can be seen from reading the allegations of the complaint, the attitude of the defendant corporation towards its co-defendant Houghton and the plaintiff is one of absolute indifference, — quite as much so as any stakeholder could be between conflicting claimants to a fund in his hands to which he had no claim himself. Not having any interest in the action which can be affected in any degree by the result of the trial, it makes no difference to the corporation defendant where the action is tried. Although not improperly made a party, the corporation defendant is not a party in interest. And it does- not appear that it. has ever manifested any interest in the case. We think the corporation defendant is not a necessary party to the action. The plaintiff might obtain all the relief he demands without making it a party.”
Here, as in the California case, the corporation seems indifferent, and, though its president and secretary were disagreeing with one-another, neither thought that his company’s attitude was one of interest in the suit; for neither asked to have it made a party thereto when the issues between the parties were being made up, or at any time thereafter.
The sequel of what we have said is that it was error in the District Court toissue the writ of mandate, for the relief sought by the defendants in the injunction suit could and should have been granted in the equitable action.
The cause is remanded, with directions to the District Court to set aside the decree made, and to dismiss the proceedings in mandamus. It is also ordered that a decree be entered in the injunction suit conforming to the views expressed in this opinion, and, when so made, judgment in defendants’ favor in the injunction suit will be affirmed. Each party to pay his or its own costs.
Remittitur forthwith.
Concurrence Opinion
I concur in the opinion and decision of the constitutional question passed upon, but, being disqualified as to all other points decided, and having taken no part in the hearing thereof, I express no opinion thereon.