98 Kan. 234 | Kan. | 1916
The opinion of the court was delivered by
This was an action brought by Hiram C. Root to recover from the Kaw River Sand Company and others
The plaintiff insists that as the Kaw Eiver Sand Company had not complied with certain legal requirements and had become defunct it had no right to appear in court nor to claim ownership of the land. The company appears to have been fully organized and to have transacted business for a time through its officers and agents, and undoubtedly had a legal existence for a number of years. Much of its business was conducted through its selling agent, The Wear Sand Company, but the fact that it acted through an agent does not affect its corporate existence. It appears to have made but one annual report to the secretary of state, and that was done in 1906. Its failure to make, reports or the omission of some other duty enjoined by statute might have justified the exercise of the visitorial power of the state through the medium of the courts, but it gave the plaintiff no right to call the corporation to account for its failure to observe these or any like regulations. The legal existence of the corporation was generally recognized, and its right to do business or its corporate existence was not open to attack by the plaintiff or any other private individual-' (Railroad Co. v. Leavenworth County, 89 Kan. 72, 130 Pac. 855; Murdoch v. Lamb, 92 Kan. 857, 142 Pac. 961.) It appears that the corporation became defunct before the action was brought, but the expiration of its charter or the dissolution of the corporation did not cause a reversion of the land to the plaintiff or other grantors nor affect the right of the stockholders and creditors to the assets of the corporation. (Sword v. Wickersham, 29 Kan. 746.) When the power of a corporation to do business ceases, unless a receiver is appointed, the last board of directors are authorized to settle its affairs, pay its debts and distribute any remaining funds or property among the stockholders. (Gen. Stat. 1909, § 176Ó.) The trustees who intervened were the members of the last board, and they had a right to make a defense against the claims of ' the plaintiff.
The principal controversy in the case is whether the payment of the $500 by Wear to Eoot was intended as a loan, and.
In McNamara v. Culver, 22 Kan. 661, it was said:
“Now that a deed and an agreement to reconvey, though separate instruments, may operate as simply a mortgage, is clear, and that they do not necessarily create one is equally clear. The test is the existence or nonexistence of a debt. And equity looks behind the form to the fact. If the transaction was intended as a loan, if there remains a debt for which the conveyance is only a security, and the collection of which may be enforced independent of the security, equity will hold it a mortgage, no matter whether the transaction is evidenced by one or two instruments. But if there be no debt, there can be no security — no mortgage.” (p. 668.)
“It is a settled rule of law that the intent of the parties to a deed, absolute in form, at the time it is executed and delivered, must govern, and that the rights of the parties must be mutual.” (p. 608.)
To make it a mortgage it must appear that the plaintiff or grantor in the deed sustained the relation of debtor to Wear, and that Wear had the right to enforce the payment of the debt. The rights of the parties to the transaction must be reciprocal. There are circumstances outside of the direct testimony that indicate that the parties did not regard themselves as standing in the relation of debtor and creditor, and the finding of the court that they did not occupy that relation is well sustained by the evidence.
Other cases applying to the question of relationship and when deeds of conveyance should be treated as mortgages are, Eckert v. McBee, 27 Kan. 232; Elston v. Chamberlain, 41 Kan. 354, 21 Pac. 259; Martin v. Allen, 67 Kan. 758, 74 Pac. 249; Fabrique v. Mining Co., 69 Kan. 733, 77 Pac. 584.
The judgment is affirmed.