author: MR. CHIEF JUSTICE BRANTLY,

text:
    POWER et al., Respondents v. SLA et al., Appellants.
    [No. 1203.]
    [Submitted April 11, 1900.
    Decided June 25, 1900.]

      Mines and Mining — Ejectment—Pleading—Forfeiture—Annual Representation Expenditure — Declaratory Statement —Demurrer to Counterclaim.

    1. Equitable defenses — as well as defenses at law — may be interposed in actions in ejectment, but, in such cases, the answer must contain all the allegations necessary to constitute the defense or warrant the relief sought.
    2. After patent has passed to the entryman, mere strangers will not be heard to question the validity of the proceedings by which the patent was obtained; in such cases the government only can contest its validity.
    3. The annual expenditure required by Rev. Stat. U. S. Section 2324, may be made either in labor or improvements put on the claim itself, or upon one of a group of contiguous claims to which the particular claim belongs, or, in some instances, upon adjoining ground not included in any claim.
    4. One who relies upon the plea of forfeiture must set forth in his pleading: (l) the facts upon which he relies to overthrow the prior right of his adversary, (2) the facts sufficient to show that he himself was entitled to demand a patent from the government; and there rests upon him the burden of establishing such facts by clear and convincing proof.
    5. Since Rev. St. U. S. Section 2324, authorizes the expenditure required to be made on lode mining claims to be either in work and labor or improvements, it is not sufficient for defendants, claiming under a relocation after an alleged forfeiture by plaintiifs, to allege as such forfeiture that plaintiffs failed during certain years to perform $100 worth of work and labor on the claim, but they must also negative the expenditure of that amount in improvements.
    C. Under the Compiled statutes of 1887, Section 1477, requiring locators of mining claims to make and to lile for record with the county recorder a declaratory statement thereof on oath, it is not sufficient for defendants, claiming under a location after an alleged forfeiture by plaintiffs, to allege simply that they have caused a record notice of their location to be made, for this is a mere conclusion, and does not suggest that the notice was ever verified, or put on record in the proper county, nor is such allegation aided in any respect by the subsequent averment that the defendants have fully complied witli the laws of the United States and the State of Montana, as this is but a conclusion.

      7. The fact that a demurrer to an answer denominates it a “defense” instead of a “counterclaim” will be regarded In the appellate court as immaterial, where both counsel and the trial court have treated it as attacking the pleading as a counterclaim.
    8. Where a demurrer is interposed to a counterclaim on the ground that it does not state facts sufficient to constitute a cause of action, this being a ground of demurrer under Code of Civil Procedure, Sec. 680, Subd. G, it is sufficient to state the objection in the language of that subdivision.

      Appeal prom District Court, Lewis a7id Ciarke County/ Ilewy N. Dlalte, Judge.

    Action in ejectment brought by T. C. Power and John B. Wilson against James Sla and Con. Kelly. From a judgment in favor of plaintiffs, defendants appeal.
    Affirmed.
    Statement oe the Case.
    Action in ejectment involving the ownership and possession of the Clementh, Union Jack, and Bine Boy contiguous lode mining claims, situate in Lewis and Clarke county, and designated by the United States surveyor general at Helena as mineral surveys Nos. 1,743, 2,206, and 2,207.
    The complaint states first á cause of action in the usual form, and then in a second count alleges grounds for equitable relief by way of injunction to prevent trespassing by defendants pending the litigation. The defendants join issue upon all the allegations except as to their hostile possession of the ground embraced in the Clementh lode mining claim. Of this they claim to be the beneficial owners. They then proceed to set up an equitable defense by way of “cross complaint,” by which it is sought to have plaintiffs declared trustees of the legal title to the Clementh claim for the benefit of defendants, and to compel a transfer of this title to them by suitable conveyance. The facts upon which they seek this relief are alleged as follows:

       “That on the 10th day of April, 1886, plaintiffs claimed to be in the actual occupation and possession of that certain quartz lode mining claim known and designated as the ‘Clementh Quartz-Lode Mining Claim,’ situate in Ten Mile (unorganized) mining district m Lewis and Clarke county, Montana, under a location' and record thereoi theretofore claimed to be made, in accordance with the regulations of said district and the laws of the United States and of the said territory in such ease made and provided by their grantors and predecessors in interest. ’

       “That on the 10th day of April, 1886, the said plaintiff's made their application in the United States land office at Helena, in said territory, now state, of Montana, for a patent for said premises, the same being designated ‘Survey No. 1,743’ and ‘Mineral Application No. 1,662’; and that, notwithstanding said plaintiff's were so claiming to be in possession thereof, and entitled to the possession thereof, they failed and neglected to do and perform one hundred dollars’ worth of work or labor thereon, or any work or labor thereon, during the years 1889, 1890, and 1891, on account whereof said mining claim became open for relocation in the same manner as if no location had ever been made of the same, and said application abandoned. ’ ’

       “That while the said premises were thus a part of the unoccupied and unappropriated lands of the United States, and open to relocation, and before the said plaintiffs, or their grantors, or the original locators thereof, or their successors in interest, had resumed work upon said premises, defendant •James Sla and one E. Bur ridge, being then citizens of the United States of America, on the 22d day of July, 1892, entered upon and discovered upon said claim a vein or lode, bearing gold, silver, and lead, with two well-defined walls, and distinctly marked the boundaries of the said premises as a new location, under the name hereinafter mentioned, upon the ground, so that said boundaries could.be readily traced, and did, on the 23d day of July, 1892, cause a record notice of their said location to be made, which contained the names of the locators, the date of the location, and such description •of said claim by reference to permanent monuments as would and did identify the same, and which was designated and named the ‘Minnehaha Lode Mining Claim, ’ and which is more particularly described as follows, to wit: ‘That certain quartz lode mining claim designated as the ‘Minnehaha Lode Mining Claim, ’ situate in Ten Mile (unorganized) mining district, Lewis and Clarke county, Montana, about six hundred feet east of Sand Creek, and about three miles west of Ten Mile creek, and more particularly described as follows: Beginning at the discovery and running eightv-five feet southwest to post No. 1; thence running three hundred feet southeast to post No. 2; thence fifteen hundred feet in a northeast direction to post No. 3; thence six hundred feet north to post No. 4; thence fifteen hundred feet southwest to post No. 5; thence three hundred feet southeast to post No. 1, the place of beginning, ’ — on account whereof defendant James Sla and said R. Burridge became possessed and entitled to the possession thereof. ’ ’

       “That said R. Burridge conveyed and transferred all of his right, title, and interest in said premises to defendant Con Kelly, and that ever since the location and recordation of said mining claim and the possession and right of possession thereof by said defendants and their predecessors in interest they have done and performed work and labor thereon required to be done and performed, and in all respects complied with the regulations of said mining district and the laws of the United States and the said state of Montana; and that, notwithstanding plaintiffs had forfeited their possession and right of possession of said premises as aforesaid, they did, by virtue of their said application and publicatipn of notice theretofore given on the 11th day of April, 1886, and for sixty days thereafter, as by law required, and without any new application or notice, on the 25th day of November, 1892, enter and pay for said Clementh lode claim as aforesaid, being mineral entry No. 2,774, and on the 6th day of June, 1893, obtained a United States patent therefor, being patent No. 23,010, and which said premises are more particularly described in said patent, to which reference is made, — all of which said proceedings had on or before November 25, 1892, were without the knowledge, acquiescence, or consent of defendants or their predecessors in interest. ’ ’
    Then follow the additional allegations that defendants and their predecessors in interest have in all respects complied with the law so as to entitle them to a patent; that no notice of application for patent for plaintiffs was ever given after the Clementh lode had become subject to relocation; that the United States land department erroneously proceeded to issue patent to plaintiffs without notice to defendants or their predecessors, and without any hearing; that the rights of the defendants were never considered nor passed upon by said land department; that the plaintiffs and their predecessors in interest had full knowledge of the fact of the location of the property by defendants and their predecessors, and well knew that the defendants claimed the same by virtue of their location aforesaid; that, so knowing of defendants’ claims, they fraudulently proceeded to obtain patent for the said Clementh lode without the knowledge of defendants or their predecessors in interest; that the defendants and their predecessors in fact had no knowledge of the plaintiffs’ application; that the plaintiffs’ patent was secretly obtained while the defendants were in the actual, quiet, and peaceable occupation and possession of the premises aforesaid, and were entitled to the entire beneficial interest therein; that by reason of the erroneous issuance of the patent aforesaid to plaintiffs they have acquired an apparent legal title to said premises which, in equity and good conscience, belongs to defendants; that plaintiffs hold such title for the exclusive use and behoof of the defendants; that there are no claimants to said land, or any part thereof; that under the law applicable to mineral lands of the United States, after the expiration of the notice of the application for a patent by plaintiffs, the only mode of ascertaining whether or not the work and labor for the years 1889, 1890, and 1891 had been done and performed by the plaintiffs was by requiring them to give a new notice as if said application was an original one; that by mistake in the interpretation of the law and the principles applicable thereto the officers of the United States land department dispensed with the publition of such notice; that, if said notice had been given, the defendants would have been afforded an opportunity to interpose their adverse claim, and to fully and completely establish the validity of the same; and that by reason of the interpretation so erroneously made of the law, and the mistake on the part of the officers of the land department in not requiring a republication of notice aforesaid, the defendants were deprived of their opportunity of being heard.
    • Judgment is demanded that the plaintiffs be enjoined from the prosecution of their suit, that they be declared trustees of the legal title to the ground embraced by the Clementh lode for the use and benefit of defendants, and that they be directed to transfer the title to defendants by a suitable and proper conveyance.
    To the ‘ ‘cross complaint’ ’ plaintiffs interposed a general demurrer, which was sustained. Eo amendment being made, a trial was had upon the issues made by the denials of defendants, which resulted in a verdict and judgment for plaintiffs. Defendants appeal from the judgment.

      Mr. E. W. Toole, for Appellants.

      Messrs. Walsh ds Newma/n, for Respondents.
   MR. CHIEF JUSTICE BRANTLY,

after stating the case, delivered the opinion of the Court.

The only question presented upon this appeal arises upon the correctness of the action of the district court upon the demurrer. It is conceded by the appellants that the proceedings of the land department of the United States in the disposition of the public lands are judicial in their character, and that the determinations therein by the proper officers, acting within their jurisdiction, upon questions of fact, or of mixed law and fact, are conclusive upon the courts, and cannot be revised or disturbed by them. The contention is made, however, that the courts, while recognizing the dignity of a patent from the government, may, nevertheless, through their equitable powers, control and limit its operation in accordance with the principles of common justice as between the grantee of the legal title under the patent and others who have the beneficial interest in the land conveyed; that section 2322 of the Revised Statutes of the United States secures to the locator of a mining claim valuable property rights which cannot be taken away by the government or any person 'except by due process of law which affords reasonable notice and an opportunity to be heard; that when a valid relocation of a claim has been made after forfeiture of the original location pending a suspended application for patent by failure on the part of the applicant to do annual representation work pending the suspended proceedings, and before payment to the government by the applicant, the relocation wipes out the original location completely, and gives to the second locator all the rights conferred by the original location; and that if, after the relocation is completed, the first locator proceeds under his. suspended application to make payment, and thus secures a patent without publication of an additional notice, and without the knowledge of the second locator, a wrong is thus committed upon the second locator, which a court of equity will redress by holding the patentee a trustee for the second locator. This argument proceeds upon the assumption that it is incumbent upon the officers of the land department under these circumstances to require a new notice to be published when the proceedings for patent are resumed, and that the failure in this particular on their part is such a mistaken application of the law to the facts of the case that a court of equity ought to intervene and correct the wrong thus done by decreeing the legal title to the rightful owner. This is upon the principle that one who wrongfully ' obtains the title to land which, in equity and good conscience, belongs to another — whether it be done in good faith or not — will be charged as trustee for the latter.

It is well settled that under our system equitable defenses, like the one sought to be invoked here, as well as defenses at law, may be interposed in actions in ejectment. In such cases however, the answer is in the nature of an original bill in equity, and must contain all the allegations necessary to constitute the defense or warrant the relief sought. (Reece v. Roush, 2 Mont. 586; Lamme v. Dodson et al., 4 Mont. 560, 2 Pac. 298.) It must disclose a case, which, if established by proof, would constitute a bar to plaintiff’s case, and justify a decree granting appropriate affirmative relief to defendant, such as is demanded in this case. Assuming, for the purpose of this discussion, without deciding the question, that the law is as defendants assert it to be, and that this court would be warranted, in a proper case, in granting appropriate relief, the defendants do not disclose a case calling for its application. It is incumbent upon them to show such facts as that it will appear therefrom that they have connected themselves with the original source of title in the government, and that their rights are injuriously affected by the existence of the patent. They must show such equities in themselves as will control the legal title in plaintiffs’ hands. (Foss v. Hinkell, 78 Cal. 158, 20 Pac. 393; Chapman v. Quinn, 56 Cal. 266; South End Mining Co. v. Tinney 22 Nev. 19, 35 Pac. 89; Hermocilla v. Hubbell, 89 Cal. 5, 26 Pac. 611; Boggs v. Merced Mining Co., 14 Cal. 279; Van Wyck v. Knevals, 106 U. S. 360, 1 Sup. Ct. 336, 27 L. Ed. 201; Ard v. Brandon, 156 U. S. 537, 15 Sup. Ct. 406, 39 L. Ed. 523; Smelting Co. v. Kemp, 104 U. S. 636, 26 L. Ed. 875; Morre v. Robbins, 96 U. S. 530, 24 L. Ed. 848; Steel v. Smelting & Refining Co., 106., U. S. 447, 1 Sup. Ct. 389, 27 L. Ed. 226; Johnson v. Towsley, 80 U. S. (13 Wall.) 72, 20 L. Ed. 485; Sparks v. Pierce, 115 U. S. 408, 6 Sup. Ct. 102, 29 L. Ed. 428; Deffeback v. Hawke, 115 U. S. 392, 6 Sup. Ct. 95, 29 L. Ed. 423.) making the statement in another form, the defendants stand in no attitude to question the title of plaintiffs unless by their allegations they present facts showing not only that at the time the patent was issued to plaintiffs they (plaintiffs) were not entitled to it by reason of their failure to perform the conditions required by law, but also that they themselves have performed all the conditions necessary to entitle them to demand a patent from the government. The rule is deduced from the. cases cited: That, after the patent has passed to the entryman, mere strangers will not be heard to question the validity of the proceedings by which the patent was obtained. In such cases the government only can contest its validity in proceedings properly brought to set it aside.

The defendants, in order to show their right to a patent, attempt to allege a forfeiture by tbe plaintiffs during the years 1889, 1890, and 1891, and a relocation of the ground covered by the Clementh lode by Sla and Burridge in 1892 under the name of the “Minnehaha Lode.” Their averment in this connection is that ‘ ‘they (plaintiffs) failed and neglected to do and perform one hundred dollars’ worth of work or labor, or any work or labor, thereon during these years. ’ ’ The language of the statute (Rev. St. U. S. Sec. 2324) is: “On each claim * * * not less than one hundred dollars’ worth of labor shall be performed or improvements made during each year. ” It is the well settled doctrine that the annual expenditure required by the foregoing provision may be made either in labor or improvements put upon the claim itself, or upon one of a group of contiguous claims to which the particular claim belongs, or, in some instances, upon adjoining ground not included in any claim. (2 Lindley on Mines, Sections 629-631; Smelting Co. v. Kemp, supra; Jackson v. Roby, 109 U. S. 440, 3 Sup. Ct. 301, 27 L. Ed. 990; Book v. Justice Mining Co. (C. C.) 58 Fed. 106; Rev. St. U. S. Sec. 2324.) The outlay is to be regarded as made upon the claim, within the meaning of the statute, whenever it is made for the development of the claim, and to facilitate the extraction of the minerals it may contain. (Smelting Co. v. Kemp, supra.)

The plea, of forfeiture is in the nature of a confession and avoidance. It admits a prior right in the plaintiff, which would have continued but for the entry and location by the defendant, which, under the mining law, has terminated it. (Morenhaut v. Wilson, 52 Cal. 263.) One who relies upon such a plea, must set forth the facts upon which he relies to overturn the prior right of his adversary, and establish them by clear and convincing proof. (Renshaw v. Switzer, 6. Mont. 464, 13 Pac. 127; Wulf v. Manuel, 9 Mont. 286, 23 Pac. 723; Mattingly et al., v. Lewisohn, 18 Mont. 508, 35 Pac. 111; Strasburger et al. v. Beecher, 20 Mont. 143, 49 Pac. 740; Hammer v. Garfield Mining and Milling Co., 130 U. S. 291, 9 Sup. Ct. 548, 32 L. Ed. 964.) He assumes the burden of pleading and proving that the prior owner has done none of the acts which, under the statute, he may do to preserve his right. The allegation quoted from the answer is not sufficient. True, it negatives the doing of any “work or labor” upon the Clementh claim during the years 1889, 1890, and 1891, and this constructively excludes the idea that any expenditure was made in this way on any adjoining ground for the benefit of the claim; but the terms “work” and “labor” are not synonymous with the term “improvements.” The former have reference to prospecting and excavating for the purpose of development; while the latter, though comprehensive enough to include everything signified by the former, has reference also to tangible, material additions to the claim in the way of machinery, buildings, and other structures put in place or erected for the purpose of developing the property and extracting minerals contained in it. Therefore, merely to negative in the pleading that $100 worth of labor has been done during the year, and to establish this by proof, be it ever so clear and convincing, is not sufficient to warrant a finding of a forfeiture. The pleading must also negative the second alternative, so as to admit proof showing a non performance in that particular. The allegations of the answer are directed to the first alternative only. Under them, proof would not be admissable to show that plaintiffs did not, during the years named, put upon the surface of the claim, or upon adjoining ground, machinery, buildings, or other structures which were designed to be used and could be used for the purpose of aiding in the extraction of ores from the Clementh claim. In this respect, therefore, the statements in the answer are insufficient, and the demurrer was properly sustained.

The demurrer was also properly sustained on another ground; for not only was it incumbent upon the defendants to properly plead and prove a forfeiture on the part of the plaintiffs, but also to allege facts sufficient to show that they were themselves entitled to demand a patent from the government. They attempt to allege the facts showing their location of the Minnehaha lode, but fail in two particulars >to show a valid location. The statute (Compiled Statutes of 1857, Fifth Division, Section 1477) provides: “Any person or persons who shall hereafter discover any mining claim upon any vein or lode bearing gold, silver * * * or other valuable deposits, * * * shall, within twenty days thereafter, make and file for record in the office of the recorder of the county in which said discovery or location is made, a declaratory statement thereof, in writing, on oath, made before some person authorized by law to administer oaths, describing such claim in the manner provided by the laws of the United States.” It is nowhere alleged in the answer that the required declaration was ever made and filed with the recorder of Lewis and Clarke county or elsewhere. The allegation on this subject is that Sla and Burridge “did, on the 23d day of July, 1892, cause a record notice to be made.” This statement is at best a conclusion, and, in the connection in which it is made, can be held to mean no more than that some sort of a notice in writing was made. It does not suggest that the notice was ever verified, or put upon record in the proper county. Nor is it aided in any respect by the subsequent averment that defendants have fully complied with the laws of the United States and the state of Montana, and are entitled to a patent. This is but a conclusion, and embodies no fact to supply the omissions made in the foregoing allegations. The answer, therefore, fails to show that defendants so connected themselves with the government that they may assert title in themselves at the time plaintiffs’ patent was issued, and that their rights have been injuriously affected by an erroneous application of the law by the officers of the land department. No matter what notice should have been given by these officers, the defendants do not disclose facts sufficient to show that they were other than strangers to the title, and cannot be heard to complain.

The defendants, in their reply brief, argue that the questions raised by the plaintiffs as to the sufficiency of the allegations contained in the affirmative answer should not be considered, because the demurrer denominates it a “defense” instead of a ‘counterclaim, ’ ’ and does not distinctly specify objections to it, as required by section 715 of the Code of Civil Procedure. This part of the answer is in form and substance an equitable counterclaim and not a defense. (Bliss on Code Pleading, Sec. 349.) It properly belongs to the class of counterclaims mentioned in section 714 of the Code of Civil Procedure, as distinguished from defenses and counterclaims mentioned in section 711, and should have been attacked accordingly. Both counsel and the trial court, however, treated the demurrer as an attack upon the pleading as a counterclaim instead of a defense. It is, therefore, of no moment in this court that the demurrer does not correctly name the pleading which it sought to attack.

Nor can counsel be sustained in the contention that the demurrer is insufficient in that it does not point out specific objections to the answer. Section 715, supra, provides that the demurrer to a counterclaim may specify the objections to it in the same way as when interposed to a complaint. Section 681 of the Code of Civil Procedure provides that, when the demurrer to a complaint is upon the ground mentioned in subdivision 6 of section 680, which enumerates the grounds of. demurrer to a complaint, the objection may be stated in the language of that subdivision.

The judgment of the district court is affirmed.

Affirmed.

Mr. Justice Word, not having been a member of the Court when this case was argued, took no part in the decision.


source: Caselaw Access Project

license: Public Domain

text:
    TRENT et al., Respondents, v. SHERLOCK, Appellant.
    [No. 1,231.]
    [Submitted April 24, 1900.
    Decided July 2, 1900.]

      Corporations — Principal and Agent — Superintendent—Implied Powers — Unauthorized Acts — Acquiescence—Bill of Sale — President—Ratification— Delegation of Powers— Evidence.

    1. The superintendent of a mining company had been permitted in one instance to contract for the purchase of machinery, and to sign the contract as “manager,” and on another occasion he had deposited the corporate money in his own name, and issued his personal checks thereon, but this had been stopped by the president. Held, that such acts did not constitute such a consent and acquiescence on the part of the corporation in the exercise of powers by the superintendent as to authorize him to pledge the company’s property for a corporate debt, due for the price of property bought by the company, even though his previous acts might have conferred on him the implied power to purchase property.
    2. Buying and selling, or pledging, are acts of a different nature, and an authority in an agent to do the one does not imply the authority to do the other.
    3. A creditor of a mining company importuned its president to give him a bill of sale of ore mills of the company as security for a debt. The president refused to do so, but referred the creditor to the company’s superintendent, who, he said, had full authority in the matter. The creditor then went to the superintendent, who signed a bill of sale as “manager” of the company. The president was authorized by the company’s by-laws to buy and sell property for the company, but was given no power to delegate that authority. Held, that the act of the president in referring such creditor to the superintendent did not authorize the latter to execute the bill of sale, nor did his act amount to a ratification of the superintendent’s act, though he had an imperfect knowledge of what had been done; and such bill of sale was void as against a subsequent attaching creditor.
    4. In the absence of authority, either express or implied, to employ a sub-agent, the trust committed to the agent is personal and cannot be delegated to another.
    5. A bill of sale of a portion of a mining company’s property, by the superintendent, which he had no authority to make, was not prima facie binding on the corporation, and did not tend to show that he had an implied power to make it.
    6. Proof of previous acts of the same kind on the part of the agent is not sufficient to show an implied authority from the principal, unless it be also shown that they were done so frequently, and under such circumstances as to warrant the inference that it was the custom or usual course of business.

      Appeal from District Court, Jefferson Country; M. U. Parker, Judge.

    Action by L. C. Trent and S. V. Trent, partners as L. C. Trent & Co., against Henry L. Sherlock, for possession of personal property. From a judgment in favor of plaintiffs, and an order overruling a motion for a new trial, defendant appeals.
    Reversed.
    Statement oe the Case.
    Action in claim and delivery. The plaintiffs, L. C. and S. Y. Trent, are co-partners, engaged in the business of manufacturing and selling mining machinery at Salt Lake City, Utah, under the firm name of L. C. Trent & Co. This suit was brought by them to recover the possession of two Bryan roller quartz mills complete, with attachments, the value of which is alleged to be $3,900. Their right of recovery is based upon their prior possession under the following instrument, which purports to have been executed by the Hope Mining Company, a corporation organized under the laws of the state of Washington, and engaged in mining and milling-ores at Basin, Montana, by its manager, P. A. H. Franklin:
    “The McDermott,
    “B. F. Locke, Manager
    “Butte, Montana, March 12, 1897.
    “Know all men by these presents, that the Hope Mining-Company of Seattle, Washington, has, in consideration of five hundred dollars, sold & transferred to L. C. Trent & Company two Bryan roller quartz mills and all extras and fittings belonging thereto. Said L. C. Trent & Company hereby agree to reconvey said property to the said Hope Mining Company on the payment to them of twenty-eight hundred dollars, if such amount is paid within ninety days from date hereof. In witness whereof said parties have hereunto set their hands & seals this twelfth day (12th day) of March, 1897.
    ‘ ‘Hope Mining Co.
    ‘ ‘P. A. H. Franklin, Manager Hope Mining Co. ’ ’
    The facts leading up to and attending the execution of the instrument are the Allowing: L. C. Trent & Co., during the month of October, 1896, sold to the Hope Mining Company, through its superintendent, Franklin, two Chilian roller quartz mills at the price of §2,800. The contract of sale was made by a letter of L. C. Trent & Co. to P. A. H. Franklin, as manager of the mining company, in which the terms of the sale were set forth in full, and upon which was written an acceptance in the name of the Hope Mining Company by Franklin, as manager. The mills were to be shipped within 35 days from the date of the contract, but payment was not to be made until after trial by actual operation of them in the works of the company at Basin; the plaintiffs retaining title until full payment should be made. The machines were shipped under this agreement on December 12, 1896, and, after some delay, were installed in the works at Basin. In the meantime the mining company had purchased the Bryan mills in controversy from the Bisdon Iron & Locomotive Works, in San Francisco, Cal. These had been shipped to Basin, and, at the time this controversy arose, were lying at the works of the company near the railroad, where they had been unloaded from the cars. On February 28, 1897, the purchase price of the Chilian mills became due. Payment not having been made, L. C. Trent went to Basin on March 8th to effect some arrangement about it, or, in' default of it, to recover the mills under the contract. He proposed to L. J. Pitner, the president of the mining company, that the company give to L. C. Trent & Co. a bill of sale of. the Bryan mills. This Pitner refused to do, saying that it would not be fair treatment of the Bisdon people to sell property just purchased from them in this way. Thereupon Trent, Franklin and Pitner went to Butte, stopping at the McDermott hotel. During the time they were there Trent again sought to induce Pitner to give him a bill of sale for the Bryan mills. Pitner again refused to do it. Trent then went to the room of Franklin, who executed the instrument quoted above. There is some evidence tending to show that Pitner told Trent, at the McDermott hotel, when urged to execute the bill of sale, to go to Franklin; that Franklin had full authority to act in the matter; and that anything he did would be satisfactory. Trent testifies to this, and also that he told Pitner, immediately after his return from Franklin’s room, that Franklin had executed the bill of sale. Pitner denies all connection with the transaction, and says he had no knowledge of it until about April 27th; he having gone to Boston shortly after March 12th, where he remained until the latter date. On the next morning after the arrangement was made in Butte, Trent went to Basin, and took possession of the mills. After being there for some two or three days, and putting notices upon the mills, he returned to Salt Lake City, leaving the mills lying where he found them, but in charge of the railroad agent. On April 1, 1897, the defendant, as sheriff of J efferson county, attached and took the mills in a suit brought by the Risdon Iron & Locomotive Works against the Hope Mining Company to recover judgment for the price of them. The consideration for the instrument in question was an extension of time for 90 days for the payment of the amount due L. C. Trent & Co. for the Chilian mills, and an agreement to let the mining company have on credit some other articles needed to repair the machinery in the works. These articles were never furnished, and the Chilian mills were retaken by L. C. Trent & Co. in May or June, 1897, and sold to satisfy their claim. After the amount received for them was applied upon the original purchase price, there still remained due $1,500. The complaint is in the usual form. The answer joins issue by general denial, and sets up title in the Hope Mining Company, and justification under the attachment issued in the case of Bisdon Iron <& Locomotive Works v. Sope Mining Co. From a judgment in favor of plaintiffs, and an order denying his motion for a new trial, defendant has appealed.

      Mr. George F. Cowan and Mr. WilUam II. De Witt, for Appellant.

      Messrs. McSatton <& Cotter, for Respondents.
    The record shows that Pitner, the president of the company, Field as secretary, Bird as superintendent, and all cf the officers and employes of the Hope Company knew for some considerable period of time that Franklin had executed and delivered the bill of sale under which plaintiffs claim the property in question. It further discloses that the company accepted the benefit of Franklin’s act, that is to say, it had the use of che Chilian mills, which were installed in its concentrator during the period of time covered by the extension of the credit from the 28th day of February, 1897, until the company’s works were closed by the attachment levied in the suit of the Risdon Company versus the Hope Company. The record further discloses that Trent complied with all of the terms and conditions of his agreement, which was the consideration for the bill of sale, and that the Hope Company received the benefit of the same so far as Trent was able to confer it upon the company. As to whether or not Franklin had authority to execute the bill of sale, we submit that was a question of fact to be submitted to the jury, under proper instructions by the court. (Mahoney v. Butte Hardware Co., 19 Mont, page 377, 384-5.) This question, as the record will disclose, was submitted to the jury by the court and no error is assigned upon the instructions or the rulings of the court covering the point. It is also shown that Franklin was either the general manager or general superintendent of the company, signing himself as general manager or managing agent, the president Pitner claiming that he was only the general superintendent. There is little distinction between the powers of a general manager or agent and a superintendent of a corporation. (4 Thompson on Corporations, Secs. 4853, 4858.) A mining superintendent has the right to expend the company’s funds for necessary supplies for the mine without express authority. (Jones v. Ciarle, 42 Cal. 180; Stuart v. Adams etal., 89 Cal. 367, 26 Pac. Rep. 970.) Mr. Thompson in his work on corporations says that the general agent is virtually the corporation itself. (4 Thompson on Corporations, 4848.)
    In this case the evidence shows that Franklin had authority to purchase .the Chilian mills; that they were accepted and installed by the company, and used. It is also shown by the record that he purchased the Bryan mills from the liisdon people, and that his acts were ratified. It is furthér shown that he entered into the contract for the extension of the time for payment of the Chilian mills to plaintiffs, and also for the furnishing of some additional rolls and supplies therefor, and as a consideration for the said extension of time and the furnishing of such supplies he executed and delivered to the plaintiffs the bill of sale in controversy in this action. It is further shown that the company had full knowledge of all these acts of Franklin, made no objection thereto, accepted the benefits of the same without any complaint. We submit that under the showing made in this case that the authority of Franklin is fully shown in the first instance. All these facts taken together clearly show the authority of Franklin to execute and deliver the bill of sale. (Starr v. Gregory Con. Mg. Go., 6 Mont. pp. 465, 487.) Corporations in the natoe of their constitution must act through their officers and agents. There is no other mode possible in which they can act. The act of any officer is the act of the company, and even the acts of their many mere agents are considered the acts of the company. The authorities are numerous and uniform on this point. (Starr v. Gregory Con. Mg. Go., 6 Mont. 487; citing Merchants Banh v. State Banh, 10 Wallace, 644, etc.; Woods Field on Corporations, Secs. 181-83, 220; Taylor on Corporations, Secs. 193-204.)
    We submit that under the foregoing statements and the authorities that Franklin’s authority to execute the bill of sale is affirmatively shown. Admitting, however, for the purposes of the argument, that his authority in the first instance is not shown, we submit that the subsequent conduct of the company and its officers in accepting the benefits of his unauthorized act without objection would amount to a ratification, which is equivalent to a previous authorization. Pitner says that he became acquainted with the nature of the paper that Franklin had executed and delivered to Trent during the latter part of April, 1897. Field and. Bird were made acquainted with it immediately after it had been executed and delivered to Trent, the evidence showing that he delivered the paper to them for their perusal, and no objection was made to Franklin’s authority, or otherwise. The record further shows that Trent took possession of the property and was in possession of it by his agent at the time that the defendant in this case attempted to levy the writ of attachment thereon. During all of this time no objection was made by the company or its officers as to Franklin’s authority, neither did the company decline to accept the benefits conferred upon it by reason of Franklin’s act. It is a well established principle of law that the unauthorized act of the agent may be ratified. (Con. Gregory M. Co. v. Haber, I Oolo. 512; Union Mining Co. v. Banlc, 1 Colo. 530; Shaver v. Bear River Co., 10 Cal. 396; Underhills. Santa Barbara, Etc. Co., 93 Cal. 312, 28 Pac. 1049.) Silence on the part of the principal for a sufficient length of time without a sufficient excuse, as in this case, will amount to a ratification. (1 Am. & Eng. Ency. of Law, U. S. 1203, Notes.) Accepting benefits arising from the unauthorized act or contract of an agent is a ratification of such act or contract. (Despatch Line s. Bellamy Co., 32 Amer. Dec. 203; 4 Thompson on Corporations, Secs. 5303-7; Shaver s. Bear River Co., 10 Cal. 396; Angel & Ames on Corporations, 304; Underhills. Santa Barba Company, 93 Cal. 312; Civil Code, Sec. 3086, Note.) A ratification by a corporation may be made in the same manner as by an individual. (4 Thompson on Corporations, Secs. 5285, 5286.) An acquiescence after knowledge of the agent’s act or contract is a ratification of the same. (4 Thompson on Corporations, Secs. 5298-5302.) Where the act or contract of the agent is beneficial to the corporation, as in this case it is shown to have been, a ratification will be presumed on very slight evidence. (4 Thompson on Corporations, Sec. 5312.) Despondent further submits that the company had conferred upon Franklin such authority as was sufficient in this case for the reason that by its acts and conduct it had ostensibly conferred upon Franklin the authority to execute and deliver the bill of sale and thereby mislead the plaintiffs to their injury and damage. Ostensible authority is such as a party intentionally or by want of ordinary care causes a third person to believe a person possesses. (Civil Code, Secs. 3092-3; Heald v. Handy, 89 Cal. 632. 27 Pac. 67.)
    The bill of sale we submit was executed and delivered to Trent for a valuable consideration, Trent agreeing to extend his credit and to forbear suing the company, and also to furnish certain supplies and money. Under the agreement by which the Chilian mills were furnished to the company, Trent at the expiration of the contract could have removed them on the 28th day of February, 1897, had it not been that Franklin procured the extension in consideration for the execution of the bill of sale. The bill of sale being based upon a valuable consideration can be enforced against the company and its successors in interest and its creditors, where the possession of the property was taken, as is shown was done in this case. Any benefit conferred or agreed to be conferred on the promisor by another, etc., is a good consideration. (Civil Code, Secs. 2160, Note, 2161, 2169 — 70.) Any abandonment of right by the promisee is a good consideration. (Pitner v. Gentle, 49 Mo. 74.) Forbearance to sue is a good consideration. (,Stuart v. Me Quin, 1 Cow. 99; Ward v. Friar, 19 Wend. 494; Hartford Ins. Go. v. Oleott, 97 111. 439.)
    Franklin certainly had in view the benefit of his company when he executed and delivered the bill of sale, and the record discloses that Pitner and the other officers concurred with him in the necessity of preventing any proceeding on the part of the plaintiffs; but it matters not what Franklin’s motives were if he had the authority, either actual or ostensible, or if not having the authority in the first instance his unauthorized act was afterwards ratified by the company, then it was binding. Courts cannot inquire into the motives which prompt acts of corporate officers within their powers, particularly where the act is not attacked on the ground of fraud, collusion, conspiracy, etc. (Triseoni v. Winshift, 9 S. Rep. 29.)
    It is shown in this case that Franklin was the moving spirit in the Hope Mining Company at the time of the execution and delivery of the bill of sale and was in custody of the machinery sold and had control of the same for the reason that the record discloses that Pitner referred Trent to him with the statement that anything that he would do would be satisfactory to Pitner. A bill of sale executed by an officer under the corporate seal and signed in its behalf by one who had custody of the note sold thereby, and testimony that the corporation executed it by him as vice president and the purchaser testifying that he purchased the note of the corporation, is sufficient to show authority in the agent to execute the same. (Security Bank, v. Fogg, 19 N. E. 387.) Where a mortgage is executed by the president and secretary of a corporation, with the seal attached, the burden of proof is on the corporation to show that they were not authorized to execute. (Shallard v. Navigation Co., 70 Cal. 144.) The company having, as we submit, accepted the benefit of and ratified Franklin’s act, defendant cannot controvert his authority or disaffirm the sale to respondents by him. (1 Am. & Eng. Ency. of Law (U. S.) 1181 et seq.; Scott v. Young Men's Soc., 1 Douglas (Mich.), 119, 149; Tennis et al. v. Barnes et al., Colo., 52 Pac. Pep 1038-40.)
   MR. CHIEF JUSTICE BRANTLY,

after stating the case, delivered the opinion of the Court.

A reversal of the judgment herein is sought upon two grounds: (1) That the trial court erred in admitting in evidence the paper purporting to be a bill of sale executed by P. A. H. Franklin, as manager for the Hope Mining Company; and (2) that it committed error in refusing to give instruction No. 6, as requested by defendant, as follows: “An authority of Franklin to make the sale of the property in controversy, as it is claimed by plaintiffs that he did, cannot be implied from evidence that he did attempt to make the sale in question. ’ ’

No principle of law is more clearly settled than that an agent to whom is intrusted by a corporation the management of its local affairs, whether such agent be designated as president, general manager, or superintendent, may bind his principal by contracts which are necessary, proper, or usual to be made in the ordinary prosecution of its business. (Thompson on Corporations, Sec. 4850; Victoria Gold Mining Co. v. Fraser, 2 Colo. App. 14, 29 Pac. 667; Sparks v. Dispatch Transfer Co., 104 Mo. 531, 15 S. W. 417, 12 L. R. A. 714; Ceeder v. Lumber Co., 86 Mich. 541, 49 N. W. 575; Stokes v. Jersey Pottery Co., 46 N. J. Law, 237; Georgia Military Academy v. Estill, 77 Ga. 409.) The fact that he occupies, by the consent of the board of directors, the position of such an agent, implies, without further proof, the authority to do anything which the corporation itself may do, so long as the act done pertains to the ordinary business of. the company. (Mathias v. White Sulphur Springs Association, 19 Mont. 359, 48 Pac. 624; Ceeder v. Lumber Co., supra; Adams Mining Co. v. Senter, 26 Mich. 76; Marlatt v. Levee Steam Cotton Press Co., 10 La. 583; Siebe v. J. Hendy Machine Works, 86 Cal. 391, 25 Pac. 14.) Even where the contract in question pertains to matters without the ordinary course of business, but within the power of the corporation, — that is, such as is not prohibited by its charter or by express provision of law, —the authority of the agent may be established by proof of the “course of business between the parties themselves; by the usages and practice which the company may have permitted.to grow up in its business; and by the knowledge which the board, charged with the duty of controlling and conducting the transactions and property of the corporation, had, or must be presumed to have had, of the acts and doings of its subordinates in and about the affairs of the corporation. ’ ’ (Mahoney Mining Co. v. Anglo-Californian Bank, 104 U. S. 192, 26 L. Ed. 707. See, also, Martin v. Webb, 110 U. S. 7, 3 Sup. Ct. 428, 28 L. Ed. 49; Sparks v. Transfer Co., supra.) “There is no reason, and can be no legal principle, which will put the agent of a corporation on any different footing than the agent of an individual in regard to the same business. ’ ’ (Ceeder v. Lumber Co., supra.)

Applying these general principles to the facts in this ease, what rights, if any, did L. C. Trent & Co. acquire under the instrument in question? This instrument is denominated in the record a bill of sale. ” It is clear from an inspection of it, however, in the light of the facts surrounding its execution, that it is in fact, and was intended to be, a pledge of the Bryan mills as security for the price of the Chilian mills, which fell due on February 28, 1897. The ground of the objection to its introduction in evidence was, among others, that the proof did not show either an express or implied authority to enter into the arrangement disclosed by it. The proofs presented by the plaintiffs show that Franklin was in fact the superintendent of the mining and milling operations of the company at Basin, and not the general manager. One W. D. Field was the business manager, and had control over the finances of the corporation. Pitner was the president, and in supreme charge of its local affairs. The checks of the company were signed by Field under authority of Pitner, and countersigned by Franklin. Some time before the date of the transaction in question, Franklin had exceeded his authority by depositing the company’s money in his own name and issuing his personal checks; but this had been stopped by Pitner as soon as it came to his knowledge. In one instance, before the purchase of the Chilian mills from plaintiffs, Franklin had contracted for machinery, and signed the contract as manager. There was no proof that he had any authority from the directors to sell or pledge the property of the company, nor that he had ever assumed authority to do so before. Assuming that, by acquiescence by the compauy in his previous conduct, he had the implied authority to purchase machinery for use in the mills, and pledge the credit of the company for it, it does not therefore follow that he was authorized to sell or pledge the property thus purchased. Buying and selling, or pledging, are acts of a different nature. An authority to do the one by no means implies the authority to do the other; and, when it is sought to show an implied authority in the agent to do the act in question by proof of consent or acquiescence of the principal, this can be done only by proof of consent to, or acquiescence in, acts of a similar nature, or by proof of such acts as tend to show a general power. (1 Am. & Eng. Ency. Law (2nd Ed.), 1002; McAlpin v. Cassidy, 17 Tex. 449; Rankin v. Mining Co., 4 Nev. 78; Thompson on Corporations, Sec. 4633.) The fact that Franklin, on two occasions, assumed to act as general manager of the business of the company in the purchase of machinery for use in the mill at Basin, does not in any way tend to show such a usage or practice in its affairs as that one dealing with him would be justified in acting upon the presumption that he had authority to execute the instrument in question.

Nor do we think the proof tends in any way to establish a ratification of the transaction on the part of the company. The proof on this point is meager and unsatisfactory at best, for it rests entirely upon a conflict of statement between Pitner and L. C. Trent. At most it shows merely that Pitner had referred Trent to Franklin, and had knowledge of some sort of an arrangement about the matter, made between them at the McDermott hotel in Butte. True, it appeared from defendant’s proof that Pitner was authorized by tbe by-laws of the company to make contracts for the purchase and sale of all property bought or sold by the company; but there was no power given him to delegate this authority to any other person. It is the rule that in the absence of authority, either express or implied, to employ a subagent, the trust committed to the agent is personal, and cannot be delegated to another. (Mechem on Agency, Sec. 185.) This is especially true where the performance of the agency requires the exercise of special skill, judgment or discretion. (Id. Sec. 186.) There was no proof tending to show that the directors ever knew anything of the transaction. Upon the theory, therefore, that the company could confer upon Pitner the authority to sell any or all of its property in Montana, whenever, in his judgment, it might be proper to do so, and that this authority included the power to mortgage or pledge the property at his discretion,' he could not, unless also clothed by the company with the power of substitution, delegate this trust to Franklin. If he could not delegate this trust to Franklin, neither could he under the circumstances, ratify Franklin’s act, at least not until he was fully informed of the nature of it, which did not occur until long after the rights of the Eisdon Iron & Locomotive Works had accrued under the attachment in defendant’s hands. It was then out of Pitner’s power to defeat the rights of the attaching creditor by any act of ratification.

The instrument in question not being prima facie binding upon the corporation, because not executed by Franklin within the scope of his authority in the ordinary course of business, and the proof having failed to show that it was authorized by the usage of the business, or ratified by the company, it was clearly not competent evidence in favor of the plaintiffs, and should have been excluded.

To comment upon the instruction requested and refused would be to reiterate in large measure what has already been said. The making of the contract was clearly not within the scope of the ordinary authority of the superintendent. It was not prima facie binding upon the company. The fact that Franklin did attempt to enter into it did not tend in any way to show that he had the implied authority to make it. Even proof of previous acts of the same kind on his part would not be sufficient to show an implied authority from the company, unless it be also shown that they were done so frequently, and under such circumstances, as to warrant the inference that it was the custom or usual course of the business. (Bank of Deer Lodge v. Hope Mining Co., 3 Mont. 146; Helena Nat'l Bank v. Rocky Mt. Tel. Co., 20 Mont. 379, 51 Pac. 829.) The jury should therefore have been instructed as defendant requested.

It is ordered that the judgment and order appealed from be reversed, and that a new trial be granted.

Reversed and remanded.

Mr. Justice Word, not having been a member of the Court when this case was argued, took no part in the decision.


author: MR. JUSTICE PIGOTT

text:
    FINCH et al., Respondents, v. KENT et ux., Appellants.
    [No. 1,238.]
    [Submitted April 26, 1900.
    Decided July 2, 1900.]
    Oi'editors’ Suit — Pleading — Frcmd — Issues and Proof-— Fraudulent Sales— Change of Possession — Liability of Purchaser — Evidence—Possession of Third Party — Ownership —Proof—General Reputation-^Copy of Bill of Sale — Admissibility — Transfer of Property — Intention of Parties —Debt—Judgment—Trial by Jury — Statute of Limitations Transcripts — Briefs.
    1. Where a creditors’ bill to set aside a sale as fraudulent averred that the sale was made with the actual intent to defraud the creditors ot the vendor, the burden of proof is on the plaintiff to show facts which will invalidate the sale.
    2. Where a creditors’ bill to set aside a sale as fraudulent averred that the sale was made with the actual intent to defraud the creditors of the vendor, a finding of constructive fraud, based on the fact that there was no continued change of possession after the sale, is not sufficient to support a judgment for the plaintiff, since he cannot plead actual fraud and recover on proof of constructive fraud.
    3. Where plaintiff in a creditors’ suit pleaded actual fraud in a sale by a husband to his wife, and introduced evidence of constructive fraud, in that there was no change of possession of the property, the fact that defendants did not object to the introduction of such evidence did not constitute a.waiver of their right to raise the question that the proof was not responsive to the pleadings.
    4. Comp; St. 1887, div. 5, sec. 226, provides that every sale of chattels by a vendor in his possession or under his control, not accompanied by immediate delivery and followed by an actual and continued change of possession of the thing sold, shall be conclusive evidence of fraud, as against the creditors of the vendor. Held, in a creditors’ suit to set aside a sale of sheep as fraudulent because there was no continued change of possession, where only a part of them remained in the possession of the purchaser at tile time the creditors secured their lien, a judgment that the purchaser should deliver to the sheriff, for the benefit of the creditors, all the sheep purchased, or account for their proceeds, was erroneous, since the purchaser was liable, under the statute, only for the identical chattels, remaining in his possession at the time the creditors’ lien attached.
    5. In a creditors’ suit to set aside a sale as fraudulent, the judgment roll in another suit is not admissible to show that the title to the property was undetermined, where such record does not disclose that it concerns any party to the present action.
    6. On the issue whether a sale of property was fraudulent as to creditors of the vendor, the plaintiff having introduced evidence that there was no continued change of possession after the sale, for the purpose of showing constructive fraud, it was competent for the defendant to show in rebuttal that a third person had possession of the property after the sale.
    7. Where an execution was returned nulla bona, and in proceedings supplemental to execution the defendant was examined as to his property, his testimony so given was competent against him in a subsequent creditors’ suit to set aside a sale of his property as fraudulent.

      8. In a creditors’ suit to set aside a sale by tlie husband to his wife as fraudulent, a transcript of a bill of sale of the property from the husband to the wife, hied in the county recorder’s office, is admissible in evidence for the purpose of showing the nature of the transfer, where the original was shown to have been lost.
    9. In a creditors’ suit to set aside a sale of sheep by a husband to his wife as fraudulent, both the husband and wife may testify that the transfer was not made with the intention of defrauding any creditors, since their intention was material to the issue.
    10. In a creditors’ suit to set aside a sale of property made on January 3,1893, as in fraud of a judgment obtained by the vendor’s creditors against him on February 17,1894, evidence that defendant did not owe plaintiff anything at the time of the sale was relevant.
    11. In a creditors’ suit to set aside a sale of property made on January 3,1893, as in fraud of a judgment obtained by the creditors against the defendant on February 17, 1894, evidence of the defendant that he did not owe the amount of the judgment is properly excluded, since the judgment was conclusive evidence of his liability, in the absence of evidence on his behalf tending to show fraud, accident, mistake or satisfaction.
    12. In a creditors' suit to set aside a sale of 3,400 sheep by a husband to his wife as f i aud' ulent, evidence that the wife was generally reputed in the ne ghborhood where they resided to be the owner of the sheep was incompetent as hearsay. (The rule of evidence laid down in Griswold v. Bole /, l Mont., 515, disapproved.)
    13. Under Const. Art. 3, Wee. 23, providing that the right of trial by jury shall be secured to all, and shall remain inviolate, the direction of a verdict in a creditors’ suit to set aside, a sale as fraudulent was not an infringement on the defendant’s right to a trial by jury, though the testimony in the case was conflicting, since such cases were within the exclusive jurisdiction of clianceryat the time the constitution was adopted, and the constitution did not enlarge the right of trial by jury.
    14. Under Comp. St. 1887, div. 1. sec. 42, subd. 4, providing that an action for relief on the ground of fraud shall be commenced within two years, where an action to set aside a sale of property as in fraud of a ludgment against the seller was commenced in the year after the rendition of the judgment, it was not barred by limitations, since the right of action did not accrue until plaintiff’s judgment was obtained.
    15. Parties whose duty it is to prepare transcripts and briefs should exercise care and diligence in the preparation thereof and not file slovenly prepared ones.

      Appeal from the District Court, Yellowstone County; C. 3. Loud, Judge.

    Action by George R. Finch and others against Thomas Kent and wife. From a judgment in favor of plaintiffs, and from an order denying a new trial, defendants appeal.
    Reversed.

      Mr. Gib. A. Lane, for Appellants.

      Messrs. Campbell da Stark, for Respondents.
    (Sumitted on briefs, without oral argument.)
   MR. JUSTICE PIGOTT

delivered the opinion of the Court.

This action, in the nature of a creditors’ bill, was brought to set aside, as fraudulent and void, a sale of 3,4:00 sheep made by the defendant Thomas Kent to the defendant Mary Kent on the 3d day of January, 1893.

The complaint states that on the 3d day of January, 1893, the defendant Thomas Kent, being then the owner of the sheep, sold them to his wife, the defendant Mary Kent; that the sale was fraudulent, without any consideration, and void as against the plaintiffs and the other creditors of Thomas, and was made for the purpose of hindering, delaying and defrauding his-creditors; that the defendant Mary Kent, for the sole and only purpose of assisting Thomas in his intent to hinder, delay and defraud, took the sheep at that time, and has ever since pretended to be the owner thereof, but that she holds title to the sheep in trust for Thomas, the real owner; that the defendant Thomas has no property, other than these sheep, which is subject to the levy of an execution; that on the 17th day of February, 1894, the plaintiffs recovered a judgment against the defendant Thomas for $1000, with interests and costs, upon which they subsequently caused a writ of execution to be issued to the sheriff of the county of Yellowstone, where the defendants reside and the sheep were situate, which execution was duly returned, with the sheriff’s certificate thereon to the effect that he had been unable to find any property of the defendant therein subject to the writ; that thereafter proceedings supplemental to execution were had, under which the defendant Thomas was examined, and the judge of the court, by order, authorized the plaintiffs to bring an action to subject to the satisfaction of their judgment the interest of the defendant Thomas in the sheep transferred by him to his wife.

The answer contains denials of the allegations of fraud, and sets up affirmatively that the 3,400 head of sheep were on the 12th day of January, 1893, by the sheriff of Yellowstone county, levied upon under an execution issued on a judgment in favor of a certain bank against one John Tinkler, and that thereafter one Sweetman, as bailee, replevied them from the sheriff, one Ramsey; that the action of Sweetman against Ramsey was determined in favor of the defendant therein, and that the cause is now pending on appeal in the supreme court of Montana; defendants pleaded, also, that the remedy of the plaintiffs was barred by subdivision 4 of section 42 of the First Division of the Compiled Statutes of 1887. By reply, the affirmative matters of the answer were denied.

Upon the trial the plaintiffs moved the court to direct a verdict for the plaintiffs, and to enter its decree setting aside the transfer of the 3,400 sheep, and requiring Mary Kent to account to the sheriff for the proceeds of the sale, or to deliver the sheep over to the sheriff, to be sold on execution to satisfy the judgment against Thomas Kent, for the reason that it conclusively appeared that there was no actual or continued change of possession of the property after the making of the bill of sale, and that Thomas Kent continued in the possession and control thereof. The court granted the motion, and the jury, under the direction of the court, returned their verdict that the sale was made for the purpose of defrauding the plaintiffs and other creditors of Thomas Kent, and was void. The court thereupon found, as a conclusion of law, (1) that the sale of the 3,400 sheep by Thomas Kent to Mary Kent was fraudulent and void and made for the purpose of defrauding the plaintiffs and other creditors of Tüomas Kent; and, as a conclusion of fact, (2) that there was never any change of possession of the sheep, and that Kent had continued in the possession of them ever since the time of the sale. A judgment was thereupon entered to the effect that Mary Kent deliver to the sheriff of Yellowstone county the 3,400 head of- sheep alleged to have been sold to her, or that she account to him for the proceeds of the sheep, or of so much thereof as may be necessary to satisfy the demands of the plaintiffs. From the judgment and from an order denying a new trial, the defendants have appealed.

In the absence of an attack thereon by demurrer, by objection to the introduction of evidence, or otherwise, we shall, for the purposes of the appeal, treat the complaint as stating facts sufficient to constitute a cause of action.

The complaint charges that the sale or transfer by Thomas Kent to Mary Kent was made with the actual intent to defraud the creditors of the seller, and that the purchaser entertained the like intent. The court found fraud in fact, and also fraud iu law, or constructive fraud, basing its judgment upon both these findings. We think that the defendants have inf erentially presented the contention that the finding in respect of constructive fraud, arising out of want of an actual and continued change of possession, is without the issues joined. True, the continued possession of the seller is some evidence tending to prove actual fraud in the sale, but, unless it be alleged, a judgment overturning the sale on the ground of such constructive fraud only is erroneous. Where the purchaser sues to recover chattels sold to him by a debtor, and siezed as the property of the debtor while in the latter’s possession, an answer denying the title of the purchaser and justifying under the writ is sufficient to raise the question of whether there was actual fraud, as well as the question- of whether there was constructive fraud, in the sale, for in such a case the burden is upon the plaintiff to establish his title to the property, and, in order to prove his ownership and the consequent right to recover, he must show a sale valid as against the creditor. Under these circumstances the burden is upon the plaintiff purchaser to prove that the sale was accomplished by an immediate delivery, and followed by an actual and continued change of possession, such as will satisfy the requirements of the statute. A. sues B. to recover chattels or their value, alleging title in himself; B.’s answer denies A.’s title, and justifies under a writ of execution issued on a. ‘judgment for money rendered against C., whose property he asserts the chattels to be. As soon as it appears upon trial that B. took the property from the possession of C., the presumption arises that C. was then the owner, and A., to prevail must overcome the presumption. If he bought the chattels from C., who at the time of the sale was in possession or control, he must establish the immediate, actual and continued change of possession contemplated by the statute, else, the sale is void as to B., who siezed the chattels under the writ and a valid judgment. If, however, the chattels were levied upon in A. ’s possession, he may in the first instance safely rely upon the prima facie presumption of ownership arising from possession, and the necessity of introducing evidence tending to show a purchase by him from.C. in actual or constructive fraud of B. is upon the latter. The necessity of adducing evidence respecting ownership may, during the progress of the trial, shift from one party to the other; the onus of establishing the evidentiary or intermediate facts often shifts to B., —as, for example, when he would prove actual fraud vitiating as to him the sale by C. to A., or when the property is, on execution, taken from A., who purchased from C. But the burden of proving the ultimate fact, namely, a title in A. which is valid as to B., remains upon A. throughout. He has asserted title; the wrong alleged is invasion by B. of the rights flowing from, and dependent upon, ownership; title is denied by B.; unless title be shown to be in A., he fails to prove a cause of action. A sale or transfer in fraud of B. is void as to him; so far as he is concerned, the situation is the same as if the sale or transfer had not been made. Proof of .either actual or constructive fraud on creditors is, as to the demand of B., fatal to the title of A., or, rather, establishes conclusively that A. did not acquire a title which can be maintained against B. The burden is upon the plaintiff, A., and, if no evidence were received, B., the creditor, having denied A.’s allegation of ownership, would prevail. But a different rule, founded upon other principles, applies to a case like the one at bar, in which, if no evidence were received, the defendants would be entitled to judgment. Here the plaintiffs aver that a sale was made by Thomas Kent to Mary Kent, and seek to have it set aside and declared void. It becomes necessary, therefore, for the plaintiffs to allege and to prove the facts which invalidated the transaction. It is incumbent upon them to point out the particulars which render the sale void as to them, and the evidence is to be restricted to proof of these allegations. If the vice which renders the sale null as to them was the existence of actual fraud, the complaint must, as the complaint in this case does, charge its presence. If the vice was constructive fraud, then it is incumbent upon the plaintiffs to state the matters which constitute that cause of action. Of course, both actual and constructive fraud may be pleaded in the same complaint, but if actual fraud only be set up, then, although proof of constructive fraud ’ may be evidence, having a tendency to support the allegation of actual fraud, yet the finding of constructive fraud is not of itself sufficient to support a judgment, for the allegations and proofs must correspond. Evidence tending to show want of change of possession may be introduced upon the issue of a personal intent to defraud. Such evidence is not obnoxious to the objection of incompetency or of irrelevancy, and therefore its reception without objection would not be deemed a waiver by the defendants of their right to insist that the judgment shall be based upon the questions presented by the pleadings; in other words, by the admission of such evidence without objection, the defendants are not to be considered as having consented to a trial of the issue of constructive fraud. When a cause is tried upon the theory, adopted by the losing party, that a certain question not presented by the pleadings was in issue, and the issue is decided, the judgment will not be reversed for that reason; it does not appear, however, in the case at bar, that the evidence touching the want of a continued possession in the purchaser was adduced ■ for any purpose except as tending to prove fraud in fact, and the defendants do not seem to have had their attention directed to its bearing upon constructive fraud (the existence of which was not suggested by the pleadings) until the motion was made upon that ground for judgment, which was granted without hearing argument, the defendants excepting. The finding of constructive fraud is not responsive to the issues. The judgment, therefore, in so far as it is based upon the. existence of mere constructive fraud is erroneous. Had constructive fraud been pleaded, the judgment, if based upon that ground, would be incorrect, in so far as it requires Mary Kent to deliver to the sheriff the 3,400 head of sheep, or that she account to him for the proceeds of the sheep, or of so much thereof as may be necessary to satisfy the demands of the plaintiffs, for the reason that the evidence falls short of proving that there remained in her possession or under her control sheep to the number stated. The evidence shows only that she still had some of these sheep, and the well-recognized rule is that the subject of a sale constructively fraudulent because of a want of a change of possession may be siezed by a creditor, — the property itself may be taken, — but that the purchaser at such a sale is not liable for its proceeds, nor for the property taken in exchange for the property sold, provided the proceeds arise or the exchange be effected before the creditor obtains a lien; as to the proceeds or the property taken in exchange, the seller did not have possession or control, nor was either obtained or purchased from him. (Weeks v. Prescott, 53 Vt. 57; Capron v. Porter, 43 Conn. 383.) Hence the declaration in section 226 of the Fifth Division of the Compiled Statutes of 1887 that every sale made by a vendor of chattels in his possession or under his control, unless it be accompanied by the immediate delivery, and followed by an actual and continued change of possession, of the thing sold, shall be conclusive evidence of fraud, as against the creditors of the vendor, cannot be successfuly envoked as against the purchaser guilty of constructive fraud only, so as to reach any property other than the identical chattels transferred, unless the chattels have.been converted or exchanged after the creditors have secured a lien.

As we have seen, under the pleadings, no issue was raised of fraud in law, as contradistinguished from fraud in fact; nor did the trial proceed, so far as the defendants were concerned, upon the theory that such question was before the court. The suggestion of the plaintiffs that the judgment must be susr tained upon the ground that the evidence tended to show con-, structive fraud, even though there may have been errors committed in the exclusion of evidence offered by the defendants Avith respect to the existence of actual fraud, cannot be adopted.

Having eliminated the matter of constructive fraud as a substantive cause of action, we proceed to ascertain whether theocourt erred to the prejudice of the defendants, restricting the inquiry to the rulings of the court made in the investigation of the question of the actual fraud alleged in the complaint.

The defendants offered in evidence the judgment roll in the case of Sweetman against Ramsey, to which reference has been made, for the purpose of showing that the legal status of the sheep was then undetermined. So far as the record discloses, Sweetman against Ramsey was an action in no wise involving or concerning any party to the present suit. The record in that action was therefore not relevant as evidence for or against either the plaintiffs or the defendants in this. The proceedings in the action of Sweetman against Ramsey were, for aught that is shown, res inter alios acta. Of course competent evidence tending to show that Sweetman, after the sale to Mary Kent, had possession of the sheep, would be relevant.

The defendants complain of the admission in evidence of the report of the testimony given by the defendant Thomas Kent before the referee on proceedings supplemental to execution. This evidence, under the circumstances of the case, was both relevant and competent upon at least two grounds: (1) As declaration of a party to the action; and (2) as statements touching ownership made by the seller of chattels while remaining in possession after the sale — there being testimony having a tendency to show that he was still in possession at the time the declai’ations were made.

The defendants, after showing the loss of the original, offered in evidence a copy of the bill of sale made by Thomas Kent to Mary Kent, the copy being a transcript in the office of the county recorder. It was error to exclude this item of evidence, for it had some relevancy. It must be remembered that the sale’was attacked for actual fraud; while the bill of sale might not have been competent as proof of the truth of the recitals therein (upon which question we express no opinion), still the paper was part of the res gestae, and should have been admitted for the purpose of shedding light upon the issue of whether the transfer was made with the intent that the sheep should be held in trust for the seller. Ordinarily the omission to execute some written evidence of the sale of several thousand sheep might properly be regarded as an unusual, and perhaps suspicious, circumstance. But neither the bill of sale/ nor the so-called list of separate property of Mrs. Kent, was admissible by virtue of any provision contained in section 1432 of the Fifth Division of the Compiled Statutes of 1887. Section 1439 of the same division (being part of an act approved March, 3, 1887) by implication repealed that part of Sec. 1432, supra, requiring a list to be recorded in the office of the register of deeds. (Kelly v. Jeffries, 13 Mont. 170, 32 Pac. 753; Lambrecht v. Patten, 15 Mont. 260, 38 Pac. 1063.)

While testifying in his own behalf, the defendant Thomas Kent was asked the following question: “Did you transfer these sheep with the intention of defrauding any creditor?” The answer to this question was: “I did not.” On motion of the plaintiffs, the question was stricken out, as a conclusion of the witness. A like question ivas put to Mary Kent, and objected to as incompetent because a conclusion, which objection the court sustained. These questions were proper, for whenever, in an action like the case at bar, the actual or personal intent becomes a material inquiry, the seller or the purchaser may testify that he did or did not have a fraudulent intent. The cases announcing this doctrine are many; indeed, the admissibility of such evidence is almost universally conceded.

The defendant Thomas Kent testiffed that at the time the sale was made he was not indebted to the plaintiffs. The defendants insist that the court excluded this evidence; but it is impossible to determine from the transcript whether or not the contention of the defendants is well founded. If the court struck out the evidence or disregarded it, as irrelevant, error was committed, for the defendants had the right to show that at the time of the sale Thomas Kent was neither indebted, nor anticipated becoming indebted or otherwise liable, to the plaintiffs. We observe, in passing, that it does not appear that there was a debt or liability on the 3d day of January, 1893, when the sale was made, or at any time before the 17th day of February, 1894, when the judgment was rendered. The rejection of Kent’s statement that he did not owe the amount of the judgnient was proper, for the reason that in the absence of evidence tending to show fraud, accident, mistake or satisfaction, the judgment was conclusive evidence of his liability.

To a witness for the defendants was put the following question upon direct examination: ‘ ‘What is the general reputation throughout that neighborhood as to her [Mary Kent] being the owner of sheep and property running on the Crow Indian reservation and other places?” The question was ruled out as incompetent. In this there was no error. The question was too general; it was not confined to the sheep in controversy. Furthermore, the question seems to have been propounded for the purpose of eliciting hearsay testimony, which, if received, would have been immaterial. We are unable to perceive in what way evidence showing that Mary Kent was generally reputed to be the owner of sheep purchased by her could,have served to show good faith towards creditors. The inquiry seems to have been into a collateral matter. In Griswold v. Boley, 1 Mont. 545, which is cited by the defendants in support of their contention that evidence of such general reputation is competent and relevant, it appeared that the plaintiff had allowed her husband to control the property, to call it his own, and to exercise acts of ownership over it, with her consent, whereby the defendant supposed, and had a right to suppose, that the husband was the owner. The court said that, for the purpose of rebutting the allegation and proof as to fraud and conspiracy by the plaintiff and her husband, it was competent for her to show that it was generally known in the neighborhood that the property belonged to her, and was competent, also, for the reason that it tended to show that the defendant had not been fraudulently deceived as to the ownership of the property. In so far as the views expressed on this subject in the Griswold case may be deemed pertinent to the facts in this action, we are of the opinion that the rule of evidence there laid down is incorrect, and must be disapproved.

The assertion is repeatedly made in the brief of the defendants that the questions of fact should have been submitted to the jury, and determined by them, and not by the court. The remedy sought in the case at bar is purely equitable, and therefore the court, sitting as a chancellor, must determine the issues for itself, and may direct a verdict, (if there be a jury,) even though the evidence be conflicting. (Sanford, v. Gates, 21 Mont. 277, 53 Pac. 749; Power v. Lenoir, 22 Mont. 169, 56 Pac. 106.) Technically correct practice is not followed when, in such a case as the one at bar, the court directs a verdict; strictly proper practice requires the court to take the matter entirely from the jury and decide the cause itself; the same result is, however, substantially accomplished by the course pursued in this case. Section 23 of Article III of the constitution of Montana ordains that the right of trial by jury shall be secured to all and remain inviolate; but this means nothing more than that the right of trial by jury as it. existed when the constitution was adopted shall remain inviolate and be secured to all. The section does not enlarge the right to jury trial, nor does it extend that right to suits which were within the exclusive jurisdiction of chancery at the time the constitution became the organic law of Montana. Such an action as the one at bar was then, and ever has been, cognizable upon the equity side, and upon the equity side only, of the court.

Subdivision 4 of section 42 of the First Division of the Compiled Statutes of 1887 provides that “an action for relief on the ground of fraud or mistake (the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting fraud or mistake) shall be commenced within two years. ’ ’ The present action is one based upon an alleged fraud against creditors; its purpose is to annul a sale because of such fraud; the right of action did not accrue, that is to say, the cause of action did not arise, until, (at the least,) the plaintiffs had recovered judgment against Thomas Kent, for before that time they were, (in the absence of a lien acquired by attachment) mere general creditors. (Brown v. Campbell, 100 Cal. 635, 35 Pac. 433; Weaver v. Haviland, 142 N. Y. 534, 37 N. E. 641.) The judgment against Thomas Kent was rendered on the 17th day of February, 1894, and this action was commenced during the following year. It is plain, therefore, that the remedy is not barred by statute.

We have now considered all the errors assigned which are worthy of attention, with the exception of the specification that the evidence is insufficient to justify the decision of the court. As the judgment must be reversed, and the cause remanded for a new trial, it is deemed proper to reserve any expression of opinion upon the specification last referred to.

The transcript is so disfigured with erasures, corrections, and interlineations, and is so deficient in punctuation marks and neatness, as to be in parts scarcely legible; it is occasionally unintelligible. Such a transcript should not have been filed. The brief of the defendants, although it specifies the errors relied upon, is not to be approved in respect of the manner of argument. Instead of setting out separately and distinctly the arguments applicable to the different points, the brief commingles all propositions relied upon for a reversal into one rambling discussion, out of which it has been impossible to extract the reasons urged in support of any one proposition without much labor, rendered necessary by the slovenly arrangement mentioned. Attention is called to these matters, so that more care may be observed and a greater degree of diligence exercised by those whose duty it shall be to prepare transcripts and briefs.

The order denying a new trial and the j udgment are reversed, and the cause is remanded.

Reversed and remanded.