author: MR. CHIEF JUSTICE BRANTLY

text:
    LEONARD, Respondent, v. CITY OF BUTTE, Appellant.
    (No. 1,334.)
    (Submitted May 14, 1901.
    Decided June 17, 1901.)

      ■Municipal Corporations — Sidewalks—Defects—Notice to City —Questions for Jury — Instructions.
    1. In a sidewalk composed of cement blocks, four were broken and replaced. The new blocks were so hard and smooth that 100 persons slipped and fell thereon in about a year, and 25 fell within two months of plaintiff’s, accident. Iie7c7, that the question whether the walk was defective and in a dangerous condition was for the jury.
    2. Where four blocks in a cement sidewalk differed from the others, and were so slippery that 100 people had fallen thereon within a year, and 25 within two months, — one of them* being seriously hurt, and another being helped up by a policeman, — and the place had grown so notorious that it caused amusement among the passers when persons fell there, the question whether the city authorities had notice, actual or constructive, of the-defect, was for the jury.
    3. Where, in an action against a city for injury caused by a defective sidewalk, the jury are correctly instructed as to the duty of the city relating to walks, but the court, in a paragraph relating to the notice to the city of a defect, declared its duty to be to keep sidewalks “in* good condition and safe,” instead of in a reasonably safe and good condition, the verdict should not be set aside on that ground, since it was manifest the jury could, not have been misled by the charge as a whole.
    4. Where in an instruction the court inadvertently uses expressions which assume the existence of a fact in issue, but, taking the whole charge together, it does not appear that the appellant has suffered prejudice thereby, such instruction will not work a reversal of the judgment.

      Appeal from District Court, Silver Bow County; John Lindsay, Judge.

    Action by Philip P. Leonard against the city of Bntte. Erom a judgment for plaintiff, and an order denying a new trial, defendant appeals.
    Affirmed.

      Mr. Edwin M. Lamb, for Appellant.

      Mr. M. J. Cavanaugh and Mr. Bernard Noon, for Respondent.
   MR. CHIEF JUSTICE BRANTLY

delivered the opinion of the Court.

This action was brought by the plaintiff to recover damages for personal injuries alleged to have been caused by a defect in a sidewalk upon one of the principal streets of the defendant-while plaintiff was. traveling’ thereon. There were a verdict and judgment for plaintiff. The appeal is from the judgment and an order denying a new trial. The questions presented to this court are whether the evidence is sufficient to justify the verdict, and whether the court misdirected the jury to the prejudice of the defendant.

1. Counsel for the defendant contends that the evidence is insufficient-to justify-the verdict, in two- particulars: (1) In that no. defect was shown to. exist in the sidewalk in question; and (2) in that, though a defect was shown to exist, it was not known to the defendant.

From the evidence it appears that the walk in question was upon the east side of Main street, between Quartz and Granite streets, and that there was a great deal of travel over it. It was constructed in 1892 of cement flags, about three feet square. The grade of the street and wall?: at that point is considerable. From some imperfection in construction four of these flags, covering a space about six feet square near the middle of the walk, in front of Mullins’ grocery store, became chipped and broken to such an extent that in the spring or summer of 1895 they were removed and four others substituted in place of them. The substituted flags differed in appearance from the rest of the walk; no coloring matter having been used in their construction, as was the case with those first laid. They seemed to be unusually hard and smooth, some of the witnesses stating that they had a hard, greasy or oily appearance and were as, smooth as glass. The employees in Mullins’ store first observed persons slipping and falling at this point in the fall of 1895; after that time such occurrences were very frequent. One witness states that while he was working for Mullins, between November, 1895, and January, 1896, he saw as many as twenty-five persons fall there; on some of these occasions he saw city officials in the neighborhood, and once a policeman assisted a woman wbo liad fallen. Another states that he saw as many as one hundred persons -slip and fall there at various times before the accident by which plaintiff was injured. These accidents always occurred at the point where the four new flags had been laid, and became so frequent that they were the occasion of a great deal of mirth to other persons in the vicinity who observed them. This witness went to work for Mullins on November 3, 1895; toi prevent accidents to Mullins’ employees and customers, as well as others, he put dirt or sawdust upon this portion of the walk two- or three times a day; he himself fell there and broke his kneecap on July 31, 189G. Accidents always befell passengers going down the street; those going up experienced no' trouble. The condition of the weather made little or no difference. This condition of the walk re^ mained unchanged until after plaintiff fell there on the morning of December 11, 1896, when, under the direction of Mullins, this witness and another of his employees cut grooves with a chisel in the surface of these four flags at right angles with the line of grade. After this no accidents occurred. . .

Under the ordinances of the city, abutting lot owners are required to construct and keep in repair the walks in front of their property. The construction and repairs are required to be of such material as is prescribed by ordinance or resolution of the city council, and to be done to the satisfaction of the street and alley committee or the street commissioner, under the superintendence of the city engineer. It is the duty of the city marshal and all policemen to report to the street commissioner any defects in sidewalks, and, in case of accident, to report the same to the city attorney, with the names of the witnesses. The city engineer is required to fix the grade of the streets and sidewalks, and to' see that all work of construction and repairing is properly done. These ordinances were in force at the time of the accident. In this particular instance neither the original construction nor the work of repair was. ever formally approved by the city authorities, all having been done under contract let by the abutting owner. A great deal of evidence was introduced by defendant tending to show that the flags used in repairing the walk were of good materials, properly proportioned, and that the walk was as good as any other of similar construction in the city. There is no proof tending to- show that any person made complaint to- any of the city authorities about the condition of the alleged defect, though it does appear that such complaint was made to the owner of the building from whom Mullins leased his store.

Counsel argue that upon this evidence this court should declare, as a matter of law, that no defect was shown to exist in the sidewalk in question. The position thus assumed is untenable. There is no controversy upon the evidence but that passengers descending along this walk experienced difficulty in retaining their footing at the point where the repairs had been made, and often met with disaster. We are unable to see why a smooth and slippery condition of a walk, caused wholly by the peculiar construction of it, or resulting from wear by use of the material of which it is composed, may not be a defect, as well as a condition resulting from a fault in construction or from natural decay. A sidewalk upon which a person cannot step without peril of limb from slipping and falling seems equally as defective as one upon which he is constantly in danger of falling from stumbling, or in which there are unguarded openings rendering jiassage over it dangerous. It was held by the Illinois court of appeals-in City of Centralia v. Baker, 36 Ill. App. 46, that it was a question for the jury whether a sidewalk on the principal street of the village was defective and dangerous because one of the boards out of which it was constructed was so warped by sun and rain as to stand a small distance above the general level, thus presenting an obstruction against which a passenger was liable to stumble and fall. In Cromarty v. City of Boston, 121 Mass. 329, 34 Am. Rep. 381, the court considered a case in which the injury was caused by a passenger falling upon a portion of a walk rendered smooth and slippery by constant use. The particular portion of the surface of the walk in question was formed by a “Hyatt patent cover,” made partly of iron and partly of glass, and presumably designed to close some opening’ in the walk. Counsel for the defendant contended that inasmuch as the general surface of the walk was level, and the “cover” wTas level with the rest of the walk, there was no evidence of a defect. The court said: “This position cannot be maintained. It cannot be said, as matter of law, that smoothness and slipperinesa of a sidewalk, resulting from the condition of the surface of the material of which the walk is made, and not dependent on nor resulting from atmospheric influences, may not render the walk so unsafe and inconvenient for travelers thereon as to be defective and out of repair, within the meaning of the statute. If a walk is constructed of material so smooth and hard that travelers shod in the ordinary way are defeated or obstructed in their attempts to pass over it by inability to get the hold upon it with their feet which is necessary to their walking forward, or the want of which causes them to lose their balance and fall, such walk cannot be said, as matter of law, to be safe and convenient. And if, in a sidewalk, the chief part of which is in proper condition for travel, a small part of the surface is constructed of material different from the remainder, and so smooth and slippery that a foot traveler, stepping suddenly upon it from the portion otherwise constructed, necessarily or probably slips, and is likely to fall, it cannot be said, as matter of law, that such walk is not defective.” These remarks are entirely pertinent to the present case. Here the claim is made by plaintiff that the walk was defective. In support of this claim it is shown that many persons had slipped and fallen in the same place, — some twenty-five in the course of two months, and one hundred during about a year’s time: One sustained a serious hurt, though accustomed to pass over it in the course of his employment every day, perhaps many times each day. Attempts were made to remove the trouble by putting dirt and sawdust upon the dangerous spot. Finally, when the surface was grooved by Mullins’ employees, the difficulty disappeared. We think that the facts shown present a question for the jury, and not for the court, and that the case falls within the general rule that whether or not there is in fact a defect is a question for the jury. (Sullivan v. City of Oshkosh, 55 Wis. 508, 13 N. W. 468; McCloskey v. Moies, 19 R. I. 297, 33 Atl. 225; Harris v. Inhabitants of Great Barrington, 169 Mass. 271, 47 N. E. 881; Todd v. City of Troy, 61 N. Y. 506.)

AYe are also of the opinion that the evidence warranted a finding that the city authorities had notice.of the defect. Part of the evidence showing that a policeman observed an accident on one occasion, and lent his assistance to aid a woman who had fallen, tended to show actual notice to the city. It was his duty, under the ordinance, to report to the street commissioner if there was a defect, and, presumably, he performed his official duty. (Twogood v. City of New York, 102 N. Y. 216, 6 N. E. 275; Rehberg v. Mayor, etc. of the City of New York, 91 N. Y. 137, 43 Am. Rep. 657; City of Denver v. Dean, 10 Colo. 375, 3 Am. St. Rep. 594, 16 Pac. 30; Farley v. Mayor, etc. of the City of New York, 152 N. Y. 222, 57 Am. St. Rep. 511, 46 N. E. 506; Elliott on Roads and Streets (2d Ed.) Sec. 629.) But, even without this item of evidence, and conceding that no duty rested upon the policeman to make report, we think the facts and circumstances shown by the evidence properly presented a case for the jury as to constructive notice. The defect,- if it was one in fact, had existed for about a year. It had grown to be quite notorious in the neighborhood, so that it caused amusement among the passengers when persons fell there. At least one serious accident had happened there. It was on a street where there was much travel, and so many falls had occurred there that dirt or sawdust had been cast upon it from day to day to increase the friction and thus lessen the danger. It is hardly conceivable that this condition should exist for a whole year without being in some way brought to the attention of some of the officers of the city whose duty it was to remedy it. In.any event, the evidence is sufficient to be submitted to the jury upon the question of constructive notice. “AATherever the defect has existed for such a length of time and under such circumstances that the city or its officers, in the exercise of proper care and diligence^ ought to have obtained knowledge of the defect, notice thereof will be presumed. Having means of knowledge, and negligently remaining ignorant, is equivalent to knowledge. It is generally for the jury to determine, as a question of fact, whether a city has notice or not, although it may become a question for the court where the facts are undisputed, and but one reasonable inference can be drawn from them.” (Elliott on Loads and Streets, Sec. 626.)

2'. Counsel for defendant criticise paragraph 2 of the instructions on the alleged ground that it declares it to be the duty of a city to keep sidewalks “in good condition and safe” for the passage of persons traveling over them. We understand the rule to be that a city is bound only to use reasonable care to keep its streets and sidewalks in a reasonably safe and good condition for travel (Dillon on Hun. Corp'. Sec. 1019), exercising reasonable care in inspecting them to discover any defects therein (Id. Sec. 1025). Having observed both of these precautions, reasonable attention being had to the effects of natural deterioration and decay, the authorities will have discharged their full duty. The paragraph under consideration is inaccurate, in that it omits to state that reasonable care, only, is the measure of duty. Yet, when all of the instructions are read together, we think it is apparent that the jury could not have been misled by this error. Paragraph 2 was intended to-be a statement of the rule of law as to notice to the city authorities before liability could attach, and it is in connection with the statement of this rule that the inaccurate expression was used. Other paragraphs state clearly and accurately the law relative to the duty of the city generally, and as applied to this particular case. Hpon the whole of the instructions upon this-point, we think it is clear that the defendant suffered no prejudice.

Counsel also find fault with paragraph 3 of the instructions, in that it assumes the existence of the alleged defect, instead of leaving tlie question of its existence to be determined by the jury. In the preceding instruction the court had clearly and explicitly left it to the jury to find whether there was a defect in the walk as alleged, and whether the city had actual notice of it, and, if not, whether, under all the circumstances, and by the exercise of reasonable diligence, it should have had notice of it. In paragraph 3 the expressions “the defect” and “the unsafe condition” were inadvertently used, the court thus speaking for the moment as if the alleged defect stood as an admitted fact. The word “any” should have been used for “the” in each of the expressions; but, taldng the whole charge together, we do not think the defendant has suffered prejudice. The cause seems to have been carefully tried, and, except in the particulars mentioned, the charge was correct, and fairly submitted to the jury all the questions involved in the case.

The judgment and order appealed from are affirmed.

Affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    PAPE et al., Appellants, v. CHAUVIN-FANT FURNITURE COMPANY, a Corporation, Respondent.
    (No. 1,341.)
    (Submitted May 17, 1901.
    Decided June 17, 1901.)

      Costs — Disallowance—Tender or Payment of Part of Sum Due,' After Suit Brought — Finding for Plaintiff — Stipulations.

    1. Where defendant paid $1,095 after suit brought, and in a stipulation admitted a balance due plaintiff of $6.64, but made no offer to allow judgment for that amount, it was error to refuse plaintiff a judgment for costs on his obtaining judgment for the $6.64, under Code of Civil Pro- * cedure, Sec. 1851, providing that costs are allowed of course to plaintiff on a judgment in his favor, in an action to recover money or damages, exclusive of interest, where he recovers over $50.

      2. Tender or payment after suit brought, to be effectual to prevent further costs, must be of the sum due, with costs accrued up to that time, and interest, if interest be due.

      Appeal from District Court, Silver Bow County; William Clancy, Judge.

    Action by Frederick Pape and William Schleiger against the Cliauvin-Fant Furniture Company. From a judgment in favor of plaintiffs, but without costs, they appeal.
    Reversed.

      Mr. John A. Shelton, for Appellants.

      Mr. Charles O’Donnell, for Respondent.
   MR. CHIEF JUSTICE BRANTLY

delivered the opinion of the Court.

This suit was brought on February 4, 1895, to recover the price of goods, wares and merchandise theretofore sold and “delivered to defendant on account by plaintiffs, and various other persons whose several claims were assigned to plaintiffs. From the amended and supplemental complaint it appears that judgment was demanded for $1,398.16. After the issues were made up, and on June 18, 1895, the parties filed in the cause, in the district court, a written stipulation containing the following paragraph: “It is hereby stipulated and agreed by and between the above-named plaintiffs and defendant, that defendant above named has paid, to apply in the above-entitled action upon the demand therein, the sum of $1,095, and that there yet remains 'unpaid in said action the sum of $6.64, admitted by defendant to he due therein on said demand, hut plaintiffs claim a greater sum, which is disputed.” This stipulation contained the further agreement that the cause should he continued until the determination by the supreme court of an appeal then pending, which involved the validity of attachnfbnt proceedings instituted in this suit at the time it was begun, and that thereupon “the amount due plaintiffs and costs of this action shall he determined according to law.” The appeal to this court was prosecuted under the title of Omaha Upholstering Co. v. Chauvin-Fant Furniture Co., and the opinion rendered therein is reported in 18 Mont. 468, 45 Pac. 1087. Before the issues were finally made up in the district court, such proceedings were had in the cause in that court that the present plaintiffs were substituted for the original plaintiff, and the title of the cause was changed accordingly. After the appeal was determined, and on October 22, 1897, the cause, under its present title, came regularly on for trial in the district court, sitting without a jury. Evidence was heard, and the cause submitted, and taken under advisement until May 20, 1898, when tbe court ordered judgment entered for plaintiffs for tbe balance of $6.64, admitted to bo due under tbe stipulation, and for costs of suit. On the following day, however, and it seems before tbe entry of tbe judgment, the court modified tbe order and directed judgment entered for tbe balance found due, but without costs, which was accordingly done. This action was taken in the absence of, and without notice to^ plaintiffs’ counsel, though be bad served upon defendant’s counsel and filed with tbe clerk a memorandum of bis costs and disbursements claimed, as required by Section 1867 of tbe Code of Civil Procedure. Tbe cause is brought here on appeal from tbe judgment.

Several errors are assigned and argued in the brief filed by appellants, but upon tbe bearing tbe only question urged upon our attention and submitted for decision was whether tbe district court erred in refusing to include in the judgment plaintiffs’ costs and disbursements in tbe district court.

Tbe court made no formal findings, but tbe judgment as entered contains tbe findings- “that tbe said defendant herein has paid to tbe plaintiffs named in tbe amended and supplemental complaint on file herein tbe sum of $1,095, to apply on tbe causes of action set forth in tbe said amended and supplemental complaint, which said payment was made after tbe commencement of this action, and after the filing of tbe said amended and supplemental complaint; and tbe court further finds that tbe further sum of $6.64 is due by tbe defendant to tbe said plaintiffs, and tbe court finds for tbe plaintiffs and against the defendant,'in tbe sum of $6.64, and costs of suit.” So far as we can judge upon the record before us, but for tbe payment made after the beginning of tlie action tlie plaintiffs would have been entitled to recover judgment for $1,101.64. Under the circumstances, we think it was error to disallow plaintiffs their costs. Section 1851 of the Code of .Civil Procedure provides: “Costs are allowed, of course, to the plaintiff, upon a judgment in his favor, in the following cases:

* * [3) In an action for the recovery of money or damages, exclusive of interest, when plaintiff recovers over fifty dollars.” The rule of law as to tender after suit brought is that, to be effectual to prevent further costs, it must be of the sum due1, with costa accrued up' to that time, and interest, if interest be due. In the absence of such a tender, the defendant may offer to allow judgment against him, under the provisions' of Section 1800 of the Code of Civil Procedure. In the latter case the judgment, as in ease of a tender, must include costs up to the time of making it. So, in case of payment after suit begun, the plaintiff is entitled to' costs accrued up to the date of payment, unless he stipulates to the contrary.

Under the stipulation which was introduced, the balance due, after payment of the sum of $1,095, was to be determined according to law; that is, by a trial. The costs were to abide the issue, whether the balance was greater than that admitted. No offer was then or afterwards made to allow judgment for that amount. Had this been done conformably to the provisions of Section, 1800, supra, an acceptance of it would not have relieved the defendant from costs already accrued, but its rejection would have excused him from tlie payment of those subsequently accruing. As it is, we think the plaintiffs were entitled, as a matter of course, to have judgment for all costs and disbursements lawfully taxable up to and including the entry of judgment.

The cause is remanded to the district court, with directions to set aside and vacate the judgment entered on May 21, 1898, and to render and cause to be entered a judgment in favor of plaintiffs for $6.64, the balance found due, together with costs to be ascertained or taxed according to law.

Remanded.


author: MR. JUSTICE PIGOTT

text:
    SHACKLETON, Appellant, v. ALLEN CHAPEL AFRICAN METHODIST EPISCOPAL CHURCH, a Corporation, et al., Respondents.
    (No. 1,340.)
    (Submitted May 16, 1901.
    Decided June 17, 1901.)

      Mortgages — Corporations — Trustees —■ Officers — Notice— Foreclosure — Parties.
    1. Where a second mortgage of church property did not purport to be the deed of the corporation, but was executed by the president and secretary of the trustees individually, and duly recorded,-it was not necessary, in order to foreclose their equitable right to redeem, to make the second mortgagees parties to an action to foreclose a prior mortgage on the church property, since the second mortgage was- not constructive notice that it was on such property.

      2. Deeds executed by an agent or attorney in fact should be executed in the name of the principal.
    5. An instrument executed by a stranger to the title, whose authority does not appear of record, is not within the purview of the recording acts.

      Appeal from District Court, Silver Boiu County; John Lindsay, Judge.

    Action to foreclose a mortgage by J. W. Shackletoii against the Allen Chapel African Methodist Episcopal Church, S. V. Kemper and another. From a judgment in favor of defendants Kemper, plaintiff appeals.
    Affirmed.

      Mr. Robert Coombe, for Appellant.
    Assuming that the evidence shows a title in defendant, S. V. Kemper, prior and superior to plaintiff’s' lien, nevertheless the undisputed evidence in this case shows that plaintiff has an equitable mortgage upon the premises, and such an interest therein as will entitle him to redeem, and not having been made a party to the foreclosure suit, brought by S. V. Kemper, he still has a right to foreclose his mortgage, and to a decree permitting him to redeem from said Kemper. (Carpenter v. Brenham, 40 Cal. 221.) Plaintiff’s equitable mortgage was of record and contains a correct description of the mortgaged premises, and shows that the property belonged to Allen Chapel A. M. E. Church. It was therefore notice to Kemper sufficient to put him on enquiry as to plaintiff’s rights in the premises, and any decree entered in, for or of defendant, Kemper, to which plaintiff was not a party, would be a nullity as to him. (Fversdon v. Mayheiu, 85 Cal. 8; Anderson v. Baughman, I Mich. 69; Fversdon v. Mayheiu, 24' Pac Rep. 382; Frisco Land & Irrigation Go. v. Rowell, 80 Cal. 114; Miller v. Ilichen, 92 Cal. 229; Shere v. Larsen, 22 Wis. 142; Malbon v. Graiu, 46 Pac. 330.)

      Mr. Robert McBride, for Respondents.
   MR. JUSTICE PIGOTT

delivered the opinion of the Court.

On the 6th day of July, 1892, the Allen Chapel African Methodist Episcopal Church, a corporation created under the laws of Montana, executed to Simeon V. Kemper its mortgage of land to secure the payment of its promissory note of that day for $3,500. On the 15th day of August, 1892, the mortgage was recorded in the office of the county clerk and recorder of Silver Bow couiity, Montana, in which county the land mortgaged is situate. On the first day of October, 1892, a mortgage purporting to be “between the trustees of the Allen Chapel A. M. E. Church, of Butte City, Montana, party of the first part, and J. W. Shackleton and E. S. Leek, of same place, party of the second part,” was made by which “the said parties of the first part for and in consideration of the sum of two. hundred and twenty-eight dollars * to them in hand paid by the said parties of the second part * have granted, bargained, sold and conveyed * unto the said parties of the second part, and to their heirs and assigns forever,” the land which had been theretofore mortgaged to. Kemper. The instrument was declared to be a mortgage to secure the payment of a certain promissory note “executed by the said first parties to.the second parties, which, said note is in words and figures as follows., to-wit:

“$228.00. October the first, 1892.
“Six months after date, we promise to pay to the order of J. W. Shackleton and E. S. Leclc, two hundred and twenty-eight dollars, at one per cent, interest, from date, per month. Value received.
“Silas Eagan,
“Chairman of Trustees of Allen Chapel A. M. E. Church. “Andrew Henson, Secretary.”

The attesting clause and subscriptions thereto are as follows:

“In witness whereof, the said parties of the first part have hereunto set their hands and seals the day and year first above written.
“Silas Eagan, (l, s.)
“Chairman of Trustees of Allen Chapel A. M. E. Church. “Andrew Henson, Secretary, (l. s.)”

This mortgage was recorded in the office of the county clerk and recorder of Silver Bow county on the 6th day of October, 1893. Lock afterwards assigned his interest as mortgagee to the plaintiff Shackleton. On July 30, 1895, Kemper brought an action against the corporation to foreclose his mortgage. Shackleton ivas not made a party. A decree of foreclosure was entered on the 4th day of November, 1895, and the property was sold by the sheriff to Kemper. No redemption having been made within six months after the sale, the sheriff on the 6th, day of May, 1896, executed a conveyance of the property to' Kemper. ' Thereafter and on the 2d day of July, 1896, the plaintiff, Shackleton, brought this action to foreclose the mortgage of October 1, 1892, making Kemper and his wife parties and asserting that he has the right to redeem the property, for the reason that at the time the action by Kemper was commenced the plaintiff, Shackleton, had a mortgage of record upon the property executed by the Allen Chapel African Methodist Episcopal Church. The trial resulted in a judgment in favor of the defendants Kemper, but so far as the transcript shows no determination was made with, respect to the rights of the plaintiff as against the corporation defendant. From the judgment in favor of the defendants Kemper, and from an order ■overruling his motion for a new trial, the plaintiff appeals.

There is but one question presented upon this appeal, or rather the determination of one question in favor of the defendants Kemper will render unnecessary the decision of any other. The question is: Was the record of the mortgage of October 1, 1892, constructive notice to Kemper that the Allen Chapel African Methodist Episcopal Church, a corporation, had mortgaged to Sliaekleton the land theretofore mortgaged to Kemper ? If it was, the plaintiff has the right to redeem; if it was not, then, as against the defendants Kemper, the plaintiff is without any right whatever.

It. is not pretended that Kemper had actual notice of the mortgage to Shackleton. The plaintiff bases his alleged right of redemption upon the constructive notice which he contends was imputed to Kemper by the record of the mortgage to Shackleton and Leek. It is provided in Section 1290 of the Code of Civil Procedure, which is substantially Section 358 of the First Division of the Compiled Statutes of 1881, that “no person holding a conveyance from or under the mortgagor of the property mortgaged, or having a lien thereon, which conveyance or lien does not appear of record in the proper office at the time of the commencement- of the action, need be made a party to such action; and the judgment therein rendered, and the proceedings therein had, are as conclusive against the party holding such unrecorded conveyance or lien as if he had been made a party to the action.”

The trustees or directors are the governing or managing-agents of a corporation. The president and secretary, when acting within the scope of their authority, are agents of the trustees or directors and-of the corporation. Its business affairs must be transacted through agents. The common-law rule that deeds executed by an agent or attorney in fact should be executed in the name of the principal has not been abrogated in Montana. The rule, in part, finds expression in Section 1504 of the Civil Code.

The mortgage to Shaeldeton does not purport to be the deed of the corporation; it is not named as the grantor, nor did it, so far as the instrument discloses, execute or intend to execute the grant. The mortgage is declared, in terms, to be between the trustees of the “Allen Chapel A. M. E. Church” of the one part and Shaeldeton and Leek of the other. The trustees are described as the parties of the first- part, and the mortgage recites that it is executed as security for the jiayment of a promissory noto by Silas Eagan and Andrew Henson, chairman and secretary, respectively, of the trustees. Instead of affixing the corporate seal, the chairman and secretary affixed their own seals, expressly declaring that they do so. Of course, we do not mean L> say that if in the body of the mortgage the corporation appeared to be the grantor, the fact that the persons after subscribing their names used their own seals, or omitted to use any seal whatever, would prevent the instrument from being the deed of the corporation, it not appearing that the corporation was required to attest its action under seal (Section 1963 of the Eiftli Division, General La-ws, Compiled Statutes of 1887). Nor do wre hold that as between Siiackleton and the corporation and persons having notice of the facts, the mortgage might not be upheld in equity upon proof being made that Eagan and Henson were duly authorized to act for the corporation ; but this consideration has no weight with respect to Kemper. Upon its face the mortgage to' Siiackleton ivas the act of persons other than the corporation wdiich made the mortgage to Kemper; the record of the Shaeldeton mortgage could not constitute notice, for the design and purpose of the recording-acts are to give notice that the owner, general or special, of the property has conveyed or incumbered it. Tlio record is notice to purchasers from or under the same grantor, and an instrument executed by a stranger to the title wdiose authority does not appear of record, is not within the purview' of the acts. This seems clear. (Hagar v. Spect, 52 Cal. 579 ; Wade on the Law of Notice, Sec. 205; Devlin on Deeds, Sec. 713.) The prima facie presumption is that the note and mortgage in question were the acts of the trustees, or of Eagan and Henson, and not of the corporation; in order to' rebut the presumption evidence would be required. As being more or less pertinent and as supporting this conclusion we cite: Taft v. Brewster, 9 Johns. (N. Y.) 334, 6 Am. Dec. 280; Klopp v. Moore, 6 Kan. 27; Fullan v. West Brookfield, 9 Allen (Mass.) 1; Stinchfield v. Little, 1 Mo. 231,10 Am. Dec. 65; Brinley v. Mann, 2 Cush. (Mass.) 337, 48 Am. Dec. 669; Hatch v. Barr, 1 Ohio, 390; Chamberlain v. Pacific Woolgrowing Co., 54 Cal. 103; Richardson v. Scot River W. & M. Co., 22 Cal. 150; Secs. 5015-5107, Thompson on Corporations. Since the mortgage to Shackleton was not upon its face the deed of the corporation which granted to Kemper, its inscription upon the county records was without efficacy as notice to Kemper, the holder of the prior mortgage, of any lien upon the land embraced therein, and hence did not charge him with the duty of making Shackleton a party defendant in the action to foreclose the prior mortgage. It necessarily results that the judgment rendered in the action of Kemper against the Allen Cliapel African Methodist Episcopal Church is conclusive against Shackleton.

The judgment and the order denying a new trial are affirmed.

Affirmed.


text:
    MONTANA ORE PURCHASING CO., Appellant, v. BUTTE & BOSTON CONSOLIDATED MINING CO. et al., Respondents.
    (No. 1,318.)
    (Submitted April 16, 1901.
    Decided June 24, 1901.)

      Highway — Prescription — Limitations — Injunction — E riden ce — Discretion.
    1. Plaintiff for several years had hauled the ore from its mine across defendant’s land to a public highway. The public had traveled across the land where they chose since 1887, but the particular road -since traveled by plaintiff was constructed by persons hauling its ores under contract in 1893. Held, that plaintiff had not acquired a prescriptive right to such road under Compiled Statutes of 1887, Div. I, Sec. 29, fixing a limitation of five years for actions to recover real property, when the Code of Civil Procedure took effect, July 1, 1895, which, in Section 4S3, prescribes a limitation of ten years, since such right over uninclosed land cannot be acquired until the travel has been confined to a particular way for the length of time prescribed by such statutes.
    2. Where, on an application for an injunction pendente lite to restrain defendants from obstructing a private road which plaintiff claims by prescription, the evidence is conflicting, the finding of the trial court that such right has not been acquired, and order denying an injunction, should be affirmed.
    3. Under Political (’ode, Sec. 2G00, providing that roads laid out or erected by others than the public, dedicated or abandoned to the public, are public highways, such dedication or abandonment is not shown by mere user until the period of limitations of actions to recover real property has elapsed.
    4. Where, on an application for injunction to restrain the obstruction of a. road, the trial court admitted irrelevant evidence, its order should not be reversed on that ground, if there was sufficient competent evidence to sustain its findings, since it will be presumed that its decision was based on such competent evidences

      Appeal from District Court, Silver Bow County; John- Lindsay, Judge.

    Action by tlie Montana Ore Purchasing Company against the Bntte & Boston Consolidated Mining Company and others. From an order refusing- a preliminary injunction, plaintiff appeals.
    Affirmed.

      Messrs. Mediation & Cotter and Messrs. Clayberg & Corbett, for Appellant.

      Messrs. Forbis & Evans, for Respondents.
   MR. CHIEF JUSTICE BRANTLY

delivered the opinion of the Court.

This action was instituted by the plaintiff for the purpose . of obtaining a perpetual injunction restraining the defendants from obstructing a certain way or road used by plaintiff in hauling lumber and other supplies to its mines and in conveying the ores extracted therefrom to its smelter. The smelter is situated near Meaderville, in Silver Bow coxxnty, northeast of Bxxtte. The pxxblic highway leading from Bxxtte to Meaderville runs first east from Bxxtte, and then north, passing immediately to the xxrest of the smelter. A short distance to the soxxth of the smelter the road in controversy leaves this, highway, and leads off in a northwesterly direction, passing over the Never Despair, Michael Devitt and other patented mining claims belonging to the defendant Bxxtte & Boston Consolidated Mining Company, to the Rarxxs and Johnstown mines, which belong to the plaintiff. The Michael Devitt claim lies in an easterly and westerly direction contigxxoxxs to and west of the Never Despair claixn, and the l'oad in question, entering xxpon the former claim near the soxxtheast corner, passes diagonally over it towards the northwest. At the time this sxxit was brought, the defendant corporation, through the other defendants, its officers and ageixts, was engaged near the soxxtheast corner of the Michael Devitt claixn in making excavations for the foxxndations of á boiler lxoxxse and oi*e bins, which it intended to xxse in hoisting and storing ore from a shaft sunk on the Never Despair claim, a short distance to the east. The complaint alleges that these operations of the defendants had seriously obstructed the road, and deprived the plaintiff of a free passage over it; that the said road had for many years been used and traveled by the public generally with the knowledge and acqxxiescence of the defendant corporation and its predecessors, and in common with them; that the same is a pxxblic highway by prescriptive use; and that the obstructions created by the defendants woxxld resxxlt in special damage to plaintiff, in that they exxt off all access to its mines, and necessitate a complete suspension of its operations. The plaintiff also' alleges that it has a special easement in the said way by prescriptive use by itself and its predecessors.

The defendants admit that their operations interfere with free passage over the road, but deny that the road is a public highway by prescriptive use or otherwise, or that plaintiff has a special right or easement therein. Upon the filing of the complaint the district court made an order to show cause why an injunction ad litem should not issue. Upon a hearing the order was discharged, and the injunction denied. The plaintiff has appealed.

1. The principal question presented to this court is whether the district court abused its discretion in refusing to issue the injunction as prayed. We do not think it did.

Plaintiff did not claim, nor did it make any effort to show, that the authorities of Silver Bow county had ever attempted to establish by the ordinary legal proceedings, or to assume control over, the road in controversy, or that plaintiff had ever secured a right of way therein under the provisions of the statute regulating’ the procurement of access by private roads 1o mines and mining claims. (Compiled Statutes 18S7, Fifth Division, Secs. 1496-1507; Political Code, Secs. 3630-3641.) Its effort was directed altogether to an attempt to show adverse user by the public for the period prescribed by law as sufficient to bar a recovery of the land occupied by the road, and, in case the evidence fell short of establishing this, to show' that the user by plaintiff had been exclusive and adverse for this period; so as to establish the right to such a private way as is provided for under the sections of the statute cited, and thus to bring the case within the principle of State v. Auchard, 22 Mont. 14, 55 Pac. 361. Under the law as declared in that case, a high-wyay by prescription exists only where the general public has used the Avay without substantial interruption for the period of time fixed by the statutes of limitation applicable to' lands. By analogy, and of necessity, the same rule applies to private ways provided for under the statutes cited. Prior to July 1, 1895, when the present Code went into effect, the- limitation fixed by law' was five years. (Comp. St. 1887, First Division, See. 29.) Under the new Code the limitation was changed to ten yeai's. (Code Civ. Pfoc. Sec. 483.) The new limitation was also made to apply to all causes of action not already barred under the old law, the same as if they had arisen after the Code went into- effect, except that the time already elapsed should be counted as. a part of the limitation under the Code. (Code of Civil Procedure, Secs. 3455, 345 6,-3482; Guitermanv. Wishon, 21 Mont. 458, 54 Pac. 566; Sherman v. Nason, 25 Mont. 283, 64 Pac. 768.) This suit was brought on April 29, 1898. Under the rule established by the Code, if the limitation had expired on July 1, 1895, plaintiff’s rights were not affected by the Code provision; but, if the limitation had not then expired, the new limitation applies, and the time already elapsed on July 1, 1895, should be counted as a part of the ten-year limitation. The plaintiff’s evidence tended to show that there had been a considerable amount of travel over the Michael Devitt and the adjoining claims, beginning as early as 1887 or 1888, from the neighborhood of the smelting works, and from along the line of the Meaderville road in the direction of plaintiff’s mines, and thence towards the northwest to other mines and to the village of Walkerville, and that there had existed from that time a well-defined way for teams. It is thus seen that this evidence tended to establish a highway by prescription. On the other hand, however, defendants submitted evidence tending to show that the whole country in that neighborhood was open and uninclosed; that people generally traveled over it in any direction they chose; that no well-defined track or way existed anywhere in the neighborhood of the road in question until the summer of 1893, when parties who had made a contract with plaintiff to haul ore from its mines to' its smelter constructed the road for their own convenience, without aid or direction from plaintiff. The evidence thus ‘presented a sharp conflict, and it is apparent that the district court found in favor of defendants’ contention. Upon this, theory of the case the contention that the road is either a public or private way by prescriptive use cannot be sustained; for, if the way. did not become fixed and defined until 1893, — and we cannot say that the district court was wrong in finding this to be the fact,— tli§ new limitation must be applied, anxL the plaintiff’s contention fails. Por we understand the rule to be that, where the claim is founded upon rise only, without color of title, it must appear that the use has been • confined to the particular way for the full time of the prescribed limitation. (State v. Anchará, supra.) Travel by the public generally over uninclosed land, but not confined to any particular way, will not inaugurate such an adverse claim as will presently ripen into a right which may be asserted against the owner. (State v. Aichard, supra; Elliott on Boads and Streets (2d Ed.) Sec. 175.) The evidence being in conflict, and the finding of the district court thereon not appearing to be the result of an unwise exercise of discretion, this court will not interfere. That court saw and heard the 'witnesses, and we would not be justified in saying that it was an abuse of discretion to give credit to those who testified in behalf of defendants.

Upon the whole case the defendants made a reasonable showing that the plaintiff’s claims are unfounded in fact, and, under the rule heretofore declared by this court in similar cases, the order will not be reversed on the ground that the trial court might have entertained a different view. (Parrot Silver & Copper Co. v. Heinze, 25 Mont. 139, 64 Pac. 326, and cases cited.)

Counsel argue that, as it appears from the evidence that the road in controversy had been in use for more than five years at the time of its obstruction, it is a public highway within the meaning of Section 2600 of the Political Code. This section was construed in State v. Auchard, supra, as “a remedial statute, curing irregularities, but not supplying jurisdiction, where none was acquired, in the creation of the roads, and as recognizing the existence of highways by prescription when they had been used or traveled by the people generally for the period named in the statutes of limitation.” It is not susceptible of the construction contended for by the plaintiff.

2. The court admitted, over the objection of the plaintiff, evidence tending to show the character of the buildings which the defendants were engaged in erecting, and the amount intended to be expended thereon. Counsel for appellant contend that this evidence was irrelevant and immaterial, and that the action of the trial court in admitting it was prejudicial. We are not prepared to say that the evidence was not properly admitted, but, conceding that plaintiff’s position is correct, we think the error without prejudice. Presumably the trial court based its findings upon such of the evidence before it as was competent, excluding from consideration, such as had no weight or relevancy. The other evidence in the record, the competency of which is unquestioned, was sufficient to justify the findings, and the order will not, therefore, be reversed. (Merchants’ Nat'l Bank v. Greenhood, 16 Mont. 395, 41 Pac. 250, 851.)

The order is affirmed.


author: MR. JUSTICE MILBURN

text:
    WITHERS, Respondent, v. KEMPER et al., Appellants.
    (No. 1,331.)
    (Submitted May 13, 1901.
    Decided June 24, 1901.)

      Evidence — Appeal—Review on Appeal from Judgment —Statement on Motion for New Trial — Bill of Exceptions — Presumption — Eri-ors of Law.

    1. In a suit to foreclose a mortgage, it was proper to refuse to strike out the testimony of the plaintiff at the close thereof on the ground that her testimony was incompetent, immaterial and irrelevant, in that she had failed to produce, or account for the nonproduction of, the note on which the action was based; plaintiff’s testimony being not only as to a search for the note, but as to circumstances tending to support her allegation that the note had not been paid; and, as the testimony for plaintiff was not all in, the court had no knowledge but that further evidence might be introduced, showing a search.

      2. Code of Civil Ih’ocedui'e, Sec. 1736, enacts that any statement used on a motion for new trial may be used on appeal from a final judgment, equally as upon appeal from the order granting or refusing a new trial. Held, that q statement on a motion for a new trial cannot render the question whether or not the evidence was of sufficient weight to sustain the decision of the court or the verdict of the jury reviewable on appeal from the judgment, since such question could only be reviewed on appeal from an order granting or denying a motion for a new trial.
    3. A bill of exceptions can raise only errors of the court in its rulings upon points of law.
    4. It is presumed on appeal from a judgment that the court has passed upon all the points raised by the bill of exceptions.
    5. To attack a judgment as not supported by the findings is to raise a question of law.
    6. To attack a decision on the ground that there was a total failure of any evidence is to raise a point of law.
    7. Under Code of Civil Procedure, Sec. 1736, on an appeal from, tlie judgment the court cannot consider any questions raised in the statement on motion for a new trial which it could not consider on a bill of exceptions regularly in the record on appeal from, the judgment.

      A.ppeal from District Court, Silver Bow County J John Lindsay,. Judge.

    Suit by Mollie Withers against S. V. Kemper aiul others. From a decree in favor of plaintiff, defendants appeal.
    Affirmed.

      Mr. E. B. Howell, for Appellants.
    Testimony concerning loss of papers is immaterial until it is first shown that the paper in controversy was among then.. To ¡Drove the loss of any document it is first necessary to prove its previous existence1. (Jones on Evidence, See 211; Weatherhead v. Baskerville, 11 How. 329; Oliver v. Persons, 76 Am. Dec. 657.) The admission of the answer of the original making of the note is by no means an admission of its existence subsequent to the date vdien the answer alleges it wras paid. “The lavr does not presume nonpayment of a note when due, but payment, unless the note is produced or other evidence repelling the presumption of lavr when the note cannot be produced.” (George v. Ludlow 66 Mich. 176; Bassett v. Hathaway, 9 Mich. 28.) A judgment of foreclosure should only be rendered upon the request of the holder of the note, and upon his either producing it or accounting for its nonproduction by clear and conclusive proof. (Jones on Mortgages, Sec. 1308 (Fourth Edition) ; George v. Ludlow, 66 Mich. 176, 33 N. W. Rep. 171; Young v. McKee, 13 Mich. 552; Hungerford v. Smith, 34 Mich. 300; Mickle v. Maxfield, 42 Mich. 310; Vanauken v. Hornbeck, 14 N. J. L. 178; Bergen v. Urbahn, 83 N. Y. 49.)

      Messrs. McHatton & Cotter, for Respondent.
   MR. JUSTICE MILBURN

delivered the opinion of the Court.

This case is before this court on appeal from the judgment, the appeal from the order denying a new trial having been dismissed.

The plaintiff sued the defendant S. V. Kemper, his wife, and one other, — a grantee of said Kemper, — in foreclosure of a mortgage on certain real estate; the note secured by the mortgage being a negotiable instrument, and having fallen due on May 28, 1891, in this state..

The defendants admit all the allegations of the complaint, except that it is denied that there is anything unpaid on the note; the answer alleging payment of the full sum of the face and interest of said note as having' been made by Kemper on the day of the maturity thereof. The court below, on motion of plaintiff, held that the burden of proof was upon the defendants to show payment. The note and the mortgage — the latter being duly recorded — were not produced upon the trial; but the plaintiff introduced evidence tending to show that search had been made for the instruments, and that they were lost. No reference was made in the pleadings to the inability of the plaintiff to produce the note or mortgage, and no> demand was made by defendant Kemper that he be indemnified against any lawful claim thereon.

The appellants, in their brief, rely upon fifteen assignments of error. The first and second of the alleged errors are as to admission of testimony, and are, in our opinion, without- merit. The fifth, sixth, seventh, eigth, ninth and tenth charge error in instructions; and, without passing upon the question whether or not material error in instructions to a jury in an equity case is ground for reversal, when the court adopts material findings of the jury which were influenced by such instructions, it is sufficient to say that the only error which appears in the charge to the jury, in the parts complained of, pertains to the question of agency of the husband of the plaintiff, and his power to receive the money in payment of the note and to discharge the debtor, Avhich question it is not necessary to consider at all in this case, for the reason that the court found and set out in the decree that the money due on the note had not been paid to the husband at all; the defendant Kemper having claimed, as his sole defense, that he had paid the money to the husband.

Assignment No. 3, to-wit, that “the court erred in refusing to strike out the testimony of Mollie Withers, the plaintiff, at the close thereof, for the reason that said testimony ivas incompetent, immaterial and irrelevant, in this: that the plaintiff wholly failed to produce, or to account for the nonproduction of, the note upon which said action was brought,” — is not maintainable, for the reason that the testimony of the plaintiff was not only as to search for the note, but as to circumstances tending to support her averment that the. note was not paid at all; and for the further reason that, at the time of the court’s refusal to strike out the said testimony of the plaintiff, the testimony of the witnesses for the plaintiff ivas not all in. The court had no knowledge at the time that material and further evidence might Hot bo introduced by the plaintiff, showing that she had made necessary and diligent search for the instruments by her' claimed t.o be lost. The motion b> strike out the testimony, so far as it pertains to the search for the instruments, was not renewed after the evidence for the plaintiff was all in. It would be better practice, in a proper case, to move the court for judgment for want of sufficient evidence, than to move to strike out what evidence ivas introduced.

Assignment No. 4 refers to the matter of agency, which has already been considered in this opinion.

Assignment No. 11, to the effect, that the court erred in allowing a general verdict to be rendered by the jury in the action, on the ground that said action was equitable in its nature, cannot be sustained, as it does not appear that there was anything prejudicial in the jury’s action in having unnecessarily rendered a general verdict.

Assignment, No. 12 is as follows: “The court erred in overruling defendants’ motion to reject the findings and verdict of the jury, and to render judgment for defendants notwithstanding such findings and verdict, for the reason that there ivas no evidence produced at the trial of said cause to sustain said findings and verdict, or either of them, and that the same are contrary to the evidence;” and assignment No. 13 reads: “The court erred in sustaining the plaintiff’s motion to adopt the findings and verdict of the jury, and to order judgment entered in favor of the plaintiff and against the defendants for the amount found in said verdict, for the reason that the evidence conclusively shows that, the note and mortgage upon which said action was brought were paid by defendant S. Y. Kemper at their maturity, and that at the commencement of this action there was nothing due the plaintiff thereon, and for the further reason that there is no evidence to sustain the said findings and verdict, and that the same are contrary to the evidence.” Upon appeal from the judgment alone; the court cannot, consider the question whether or not the evidence is of sufficient weight to sustain the decision of the court or the verdict of the jury, as that is a matter which can be considered only upon an appeal from an order granting or denying a motion for a new trial, when duly assigned as one of the grounds of motion for such new trial. There is conflicting evidence upon the material findings, and this is not a case'in which there is not any evidence at all tending to sustain the verdict or the decision of the court. Under the provisions of Section 1736 of the Code of Civil Procedure, “any statement used on motion for a new trial may 1)0 used on appeal from a final judgment equally as upon appeal from the order granting or refusing a new trial.” Tlie question as to the extent to which the statement will supply the place of a bill of exceptions has not been determined in this statu; hut, on authority (Carpenter v. Williamson, 25 (Cal. 158) and reason, wc believe1 and hold that the statement can be used in place of a bill of exceptions in the1 judgment roll only for the purposes for which such bill of exceptions could be used if the appeal from the judgment were brought up on a bill of exceptions contained in the judgment roll. The language of the section referred to is not, in our opinion, intended to enlarge the scope of a bill of exceptions on appeal from a judgment. On appeal from the judgment the court cannot consider any questions raised in the statement on motion for a new trial which it could not consider on a bill of exceptions regularly in the record on appeal from such judgment. It was attempted in this case to use the statement in support of the contention that the evidence does not support the decision of the court finding for the plaintiff. A bill of exceptions can raise only errors of the court in its rulings upon points of law. It is presumed on appeal from a judgment that the court has passed upon all the points raised by the bill of exceptions. Before the court could err in ruling upon the weight of the evidence to support a decision in faAror of the plaintiff, it Avould be necessary for the question to bo raised before the court. To hold that on appeal from the judgment such a, question could he raised Avould he to enlarge the number of questions Avhich, under the laAV in this state, can be considered on appeal from the judgment.

To attack a judgment of the court as not supported by tho findings is to raise a question of law. To attack a decision of the court on the ground that there Avas a total failure of any evidence is to raise a point of laAAT. But, in order to bring questions of the Aveight of evidence before this court on appeal, there must haA-e been a hearing on motion for a neAv trial, and an appeal from the order granting or refusing the same. (Allport v. Kelley, 2 Mont. 343; Largey v. Sedman, 3 Mont. 472; Chu masero v. Vial, 3 Mont. 376; Broadwater v. Richards, 4 Mont. 78, 2 Pac. 544, 546; Princeton Min. Co. v. First Nat. Bank, 7 Mont. 530, 19 Pac. 210; Lloyd v. Sullivan, 9 Mont. 589, 24 Pac. 217; Emerson v. Eldorado Ditch Co., 18 Mont. 247, 44 Pac. 969.)

Assignment No. 14, alleging* that the court erred in overruling the defendants’ motion for a new trial, of course; cannot be considered on this appeal.

Assignment No. 15 is to the effect that the court erred in rendering judgment in favor of the plaintiff and against the defendants, and has been sufficiently covered in this opinion.

Although this case has been treated by counsel as an equity case, still it has been suggested that-, so* far as the suit is to recover on the note; — a negotiable instrument, — the suit is in law, as well as to foreclose the mortgage in equity. The question, is not before ns to determine, and we express ho opinion as to any question of the power of the judge, as- chancellor, to set aside findings of the jury as to payment or nonpayment of the note, or to adopt the same if they be found by the jury because of materially erroneous and prejudicial instructions. The question is not before ns in the case.

We find no> errors appearing in the judgment roll, except that in the decree there are certain immaterial findings. The findings of the court as contained in the decree are sufficient to support the judgment; we cannot go outside of them on this appeal, as presented, and we must affirm the judgment of the court below.

The judgment is affirmed.

Affirmed.

Motion for rehearing denied July 18, 1901.


text:
    BOUCHER, Respondent, v. BARSALOU, Appellant.
    (No. 1,335.)
    (Submitted May 15, 1901.
    Decided July 8, 1901.)

      Unlawful Detainer — Pleading — Inconsistency — Findings— Disposition of Cause — Quieting Title.

      1. A complaint to recover land .alleged that defendant unlawfully withheld the same, and that the relation of landlord and tenant existed betweeu the parties, which defendant denied, and alleged that plaintiff’s grantor-held the property as trustee to secure certain indebtedness due him from defendant, and not as owner, of which fact plaintiff had knowledge, and defendant demanded to be decreed the owner of the premises. On plaintiff’s motion the equitable defense was tried first, resulting in a finding that plaintiff had no knowledge of the equities existing between defendant and plaintiff’s grantor, and that the relation between the latter parties was that of trustee and cestui que trust, as alleged by defendant. Held,. that it was error to refuse to dismiss plaintiff’s complaint, since the relation of landlord and tenant, as alleged by the plaintiff, was inconsistent with the facts already found.
    2. The action cannot be maintained as a suit to quiet title, since the necessaryaverment of ownership on the part of plaintiff does not aiipear, and the-case was not tried on that theory.

      Appeal from District Court, Silver Bow County; John Lindsay, Judge.

    Action by Erank Boucher against Joseph Barsalou. From, a judgment in favor of plaintiff, defendant appeals.
    Reversed..

      Mr. Robert McBride, for Appellant.

      Messrs. McHalton & Cotter, for Respondent.
   MR. JUSTICE MILBURN

delivered the opinion of the-. Court.

This cause is on appeal from the judgment entered in favor of the plaintiff. The plaintiff filed his complaint in unlawful detainer, setting up that the defendant unlawfully withheld form Ms possession certain real estate, and averring that the-relation of landlord and tenant existed between the parties, in. that the defendant had been the tenant of his former landlord, •one Ayotte, the latter having conveyed said property for a good .and valuable consideration and in fee simple to the plaintiff; .and that the plaintiff had given the. necessary notice to the defendant to quit said premises. The defendant denied each and ■every allegation'of the complaint, except that ho admitted that he was during all the time named in possession, and was, and had been for more than ten years last- past, the owner of and entitled to the possession of said property. He unnecessarily, but fully, set out as affirmative matter in his answer an equitable defense, to-wit, that the said Ayotte, at the time that he conveyed the said property to the' plaintiff, held the property by deed from him, the said defendant, as security for certain moneys due by defendant to Ayotte; and that the plaintiff, at the time that he took tire title from Ayotte, was fully cognizant of the relation existing between Ayotte and defendant. He further alleged that the transfer from Ayotte was fraudulent, and made in collusion with Boucher to- defraud him, the defendant; and that all the money, the payment of which was secured by the said deed, had been repaid by defendant to- Ayotte; and that he (defendant) was entitled to a reconveyance to him of said property. Defendant demanded, in his-answer, that plaintiff take nothing by the action, and that he (defendant) be decreed to be the owner of the premises. The plaintiff, in his reply, denied the affirmative allegations of the answer, and prayed that his right and title to the ownership of said property be quieted.

The cause came on for trial. Bpon the motion of the plaintiff, and by order of the court, the equitable defense was tried to the court with a jury, before entering upon the case of plaintiff. The jury made its findings adversely to the defendant as to his equitable defense, and the court adopted the same, and found, among other things, that the plaintiff had no knowledge •of the equities existing between the defendant and said Ayotte, and that the relations between defendant and Ayotte were as alleged by the defendant; thus, in effect, declaring that the relation of landlord and tenant, had never existed between Ayotto and the defendant, or between the plaintiff and the defendant. Thereupon the court proceeded to try the original case of tho plaintiff on his complaint, in unlawful detainer before a jury, and, the first witness, haying been sworn for the plaintiff, the defendant objected to the introduction of any evidence on the part of tho plaintiff, and asked for a judgment of dismissal upon the following grounds: That “this action is brought under the laws of the state of Montana relative to unlawful detainer by a tenant of real property. The allegations in the complaint are: ‘That on or about, the 1st day of February, 1897, one Sam Ayotte was the owner in fee simple of the premises known and designated as the premises at No: 520 West. Granite street, together with the premises in the rear of said number, in the city of Butte, county of Silver Bow, state ox Montana, together with the dwelling houses and appurtenances thereto belonging. That on said last mentioned date, and for some time prior thereto, the said defendant, Joseph Barsalou,was in possession of said promises as the tenant of said Sam Ayotte, under a monthly tenancy of $10 per month, payable monthly in advance. That on the 20th day of February, 1897, the said Sam Ayotte conveyed to the plaintiff herein the premises above described, and said plaintiff, as the grantee and successor in interest of said Sam Ayotte, by liis agent, notified the defendant of his having bought and purchased the said above described real property from said Sam Ayotte; and the defendant herein was notified by said agent of plaintiff that, his rent thereafter and from that time would bo $12.50 per month, payable monthly in advance. That said defendant, after said notification as aforesaid by the agent of said plaintiff, continued and remained in possession of the said premises as the tenant of said plaintiff, holding over under the terms of the verbal lease and agreement made by him with his former landlord, Sam Ayotte, the grantor of the plaintiff herein, and said defendant is now in possession of tho said premises, and still continues to hold and occupy the same. That, pursuant to the terms of said verbal lease and agreement made by this defendant with said Sam. Ayotte, there became and was dno to the plaintiff, as the grantee and sucJ cessor in interest of said Sam Ayotte, and as the landlord of this defendant, as rent for the above described and leased house and premises, on the 20th day of Bebraary, 1897, the sum of $12,507

“The only claim that the plaintiff in this case makes to be considered the landlord of this defendant is the claim that there was a verbal lease between Samuel Ayotte and Joseph Barsalon, whereby Barsalon had agreed to pay rent tói the said Ayotte, and Mr. Boucher, as the successor in interest of Ayotte, claims to be the landlord of said Barsalon. lie does not claim to1 be the landlord by any agreement between himself and Barsalon.

“Now, in this case the court has already found, upon the equitable issues, that the relation existing between Samuel Ayotte and Joseph Barsalon at all times mentioned in the complaint was the relation of trustee and cestui que trust, and not the relation of landlord and tenant.

“Now, the equitable title belonging to Barsalon and the naked legal title to Ayotte, at any time prior to the time of the alleged conveyance of the property by Ayotte to Boucher, Mr. Barsalon would have the right to demand and compel a reconveyance of the property to him. Therefore the. relation of landlord and tenant is absolutely inconsistent with the facts already found, and therefore we object to any testimony under the pleadings.” Whereupon the court ruled as follows: “My view of this matter is in accordance with the contention of counsel for defendant, and that to. proceed with the trial of this case, in view of the findings of the court, would be improper and inconsistent; and the objection will be sustained, and the jury are discharged.” To this ruling of the court plaintiff excepted. Thereupon the court caused to be entered upon the court’s record the-following order, to-wit: “And the defendant objected to the introduction of any and all testimony on the part of plaintiff, and also moved the court to dismiss the action, and for judgment for his costs. Said objection and said motion are argued by counsel, and said objection to tlie introduction of any testimony is by tlie court sustained, to which ruling counsel for plaintiff duly excepts, and the jury are discharged from further service.” Thereafter, and on the next day, the court made the following order: “This day the motion of defendant that the action bo dismissed and for judgment for costs, heretofore argued, is by the court overruled; to which ruling counsel for defendant duly excepts.” On the same day the court signed and there is filed a judgment in favor of the plaintiff and against the defendant for the ownership of the property described in plaintiff's complaint, and for plaintiff’s costs of suit.

The proceedings, as presented on the record, are anomalous, and without precedent, so far as Ave know. It is apparent from tlie argument used by the defendant in his objection to tlie introduction of evidence, and from the remarks of the court and his ruling on the objection, that up to the time of the court’s order sustaining the said objection, the case had not b'een tried upon the theory that it Avas a suit to quiet title. NoAvhere. in the pleadings of the plaintiff is there any allegation of ownership on the part of the plaintiff. The principal point s.aAred in the exceptions and treated by the several counsel in their briefs is error of .the court in entering the said judgment for plaintiff. When the court, held that by laches on the part of the defendant he could not maintain his equitable defense, and, in effect, found that the relation of landlord and tenant did not exist bctAveen the plaintiff and the defendant, and declined to allow any evidence to be introduced on the part of the plaintiff in support of his complaint, the duty of the court A\ras to dismiss the action at the cost of the plaintiff.

Without passing upon the point contended for by plaintiff’s counsel, to-wit, that a suit to quiet title can be maintained, tried and adjudicated'on the issues raised in the equitable defense to a suit in unlawful detainer, suffice it to¡ say that the necessary averment of OAvnership. on the part of the plaintiff does not appear in the pleadings; and, further, that the case Avas not tried upon the theory thm it Avas in anyAvise a cause to quiet- title in t.lio plaintiff. As we bave said before, the proceedings are anomalous, and the action of the court, under the circumstances as set forth in this opinion, was 'error.

The judgment, of the court is reversed, and the cause remanded.

Reversed and remanded.

Rehearing denied July 31, 1901.


author: MR. CHIEF JUSTICE BRANTLY, Mr. Justice Pigott: Mr. Justice Milburn:

text:
    FERRELL, Appellant, v. EVANS et al., Respondents.
    (No. 1,330.)
    (Submitted April 19, 1901.
    Decided July 15, 1901.)

      Building and Loan Associations — Expiration of Charter — Unmatured Stock — Borrower—Application of Bonus— Credit ■for Stock — Receiver.

      1. Where, the charter of a building and loan company having expired, the directors, as trustees in winding up its affairs, collected from a borrower interest and dues on shares of stock, on foreclosure of his mortgage the sums so collected should be credited on the mortgage debt.
    2. Plaintiff, a stockholder in a building and loan association, borrowed therefrom, giving a bonus. Before the stock matured the charter expired. Held, that plaintiff should be credited with so much of the bonus as was unearned, computed by dividing the amount of bonus by the number of months which would be required to mature the stock, and multiplying the quotient by the number of months still to elapse before such maturity.
    3. When the charter of a building and loan association expired before its stock matured, a borrower should be credited with the accrued value o£ his shares of stock and the unearned portion of his bonus, computed to the time the charter expired, less his share of expenses of administering the affairs of the association.

      4. Under Civil Code, Sec. 06I, constituting the directors of a corporation dissolved for any reason trustees to wind up its affairs, when the directors of a building and loan association, whose charter has expired, are acting as such trustees, a receiver should not be appointed unless it appears that the party complaining has been, or is about to be, injured by unwarranted procedure on the part of such trustees.

      Appeal from District Court, Missoula County; Frank II. Woody, Jlodge.

      Action by Van R. Ferrell against L M. Evans and others. From a judgment for defendants and an order denying a new trial, -plaintiff appeals.
    Reversed.
    Statement oe tile Case.
    The plaintiff brought this action against the defendants, as trustees of the Missoula Building & Loan Association, a corporation, to obtain a judgment requiring them to cancel upon the records of Missoula county as fully paid three several mortgages executed to the corporation by one Cain B. Mahoney, plaintiff’s grantor. Judgment is also demanded for a.balance which is alleged to have been paid by plaintiff and Mahoney in excess of the amounts secured by the mortgages. As incidental relief, the court is asked to appoint a receiver to take-charge of the assets of the corporation and wind up its business. The answer of defendants denies the material allegations contained in the complaint, and then, by way of separate counterclaims, alleges a breach of the conditions of each of the mortgages, and demands a decree of foreclosure to enforce the payment- of the respective amounts secured by them.
    The facts, as they appear from the evidence, are: On May G, 1886, the Missoula Building & Loan Association ivas incorporated under the provisions of an act of the legislative assembly of the territory of Montana approved March 7, 1888, for the purpose of enabling its shareholders to1 erect buildings and improve land. The corporation conducted its. business successfully and profitably until May 6, 1896, the date on •which the ten-years limitation fixed in its charter expired, and tlie corporation was dissolved, whereupon the defendants, its then acting directors, under the authority vested in them by law, assumed control of all the property and assets belonging to it, and proceeded to wind up its affairs. At various times after its organization the corporation had issued five different series of shares of the par value of $200 each, designated as Series A, B, 0, D and E. Of these the first two series had matured prior to May 6, 1896, and were then in process of redemption. The remaining three series had been issued on June 4, 1888, November 3, 1890, and June 8, 1895, respectively; and it was estimated by the directors at the time they assumed control, the estimate being based upon the time required to mature Series A and B, that each of these series would have matured in 101 months from the dates of issuance, or in 6 and 35 months, respectively, after the date of dissolution. Upon the assumption of their duties as trustees, the directors were of the opinion that they were empowered to continue the collection of dues, fines, premiums and interest until the maturity of the outstanding shares, and proceeded to do so. Subsequently, however, they changed their views, and on August 22, 1896, issued a circular to the shareholders, in which they set forth in detail the condition of affairs, and announced that thereafter no dues or fines would be collected from nonborrowing shareholders, and that upon application all payments made by such' shareholders after May 6, 1896, would be refunded, but that borrowing shareholders would be required to keep up their monthly payments as theretofore until the maturity of their shares. It was also stated that on May 6, 1896, the shares of Series C had an earned value of $182.82, of Series D, $113.42, and of Series E, $23.62, and that, as fast as the assets could be turned into money, payments would be made to nonborrowing shareholders until they had received full earned value of their shares fixed at these amounts. Thereafter they proceeded upon this idea of the extent of their powers, collecting dues and fines from the borrowing shareholders, until their regular monthly meeting in December, 1896, when, by resolution, they declared all shares of Series C fully matured, and thereupon executed releases of all mortgages given by the borrowing shax*eholders of this series. On June 4, 1888, Mahoney purchased of the association eight sliax'es of Series 0, and on November 3, 1890, four shares of Series D. On the first Monday in September, 1888, the association having money in its treasury, under the provisions of its by-laws offered to loan $1,200 thereof to the shareholder who would pay the highest premium thereon. Mahoney having' offered 30% per cent, premium, became Hie borrower, and, in accordance with the requirements of the by-laws of the association, executed a bond to the association under the terms of which he agreed to repay the amount so borrowed on or before ten years from date, unless the association should sooner terminate, and then upon such termination, with interest at the rate of 9 per cent, per annum payable monthly on the first day of each and every month thereafter. He also agreed to keep up the monthly dues of one dollar a share upon six of the shares of Series C belonging to him until he had fully repaid the said sum of $1,200, and to assign 'these six shares to the company as security for the repayment of the loan. It was further provided in the bond that the principal sum mentioned therein, with interest, should become immediately due and payable upon default in payment of interest, or if the taxes due on the property or the premium upon not less than $900 of insurance thereon should be due and unpaid for six months, or in case the shares of stock should at any time be sold for the nonpayment of dues or fines, or become forfeited to the association for reason. At the same time, as further security for the repayment of the sum borrowed, Mahoney executed to the association a mortgage upon the real estate in controversy. This instrument contained the same conditions as those in the bond, and further provided that all insurance stipulated for should be effected for the benefit of the association, and that, in case of default in this particular or in the prompt payment of taxes, the association might advance such sum or sums as might bs necessary to meet these charges, and that they should, upon foreclosure, be deemed secured by the mortgage, and bear the same rate of interest as the principal sum secured thereby. Subsequently, and on July 3, 1889, a similar transaction took place between Mahoney and the association, by which, upon paying a premium of 21 per cent.., Mahoney obtained a loan of $400, and to secure the same assigned to the association the remaining two shares of Series C, and executed his bond, with a second mortgage, upon the property on the same terms and conditions as tliose contained in the first mortgage. Again, on May 2, 1892, by a similar transaction, Mahoney secured a third loan of $800 on his four shares of Series D, but at a premium of 20 per cent-., and thereupon executed to the association his third bond and mortgage, with terms and conditions identical with those upon which the other loans had been obtained. In case of each loan the premium was paid in advance; the association deducting the amount from the face of the loan; the bond and mortgage being executed to the full amount for which each bid was made. Mahoney made all payments of interest, dues and fines when they were assessed under the by-laws of the association until November 6, 1893, when the plaintiff purchased the mortgaged property from him, assumed the payment of the mortgages, and became substituted to all his rights and liabilities as a borrowing shareholder in the association. After this date, and until May 0, 1896, the plaintiff met. all the obligations assumed by him as a shareholder, kept paid up the monthly installments of interest., and observed all the conditions of the several mortgages, but after that date, failed and refused to make any other payments of dues or interest, except that on August 1, 1896, he paid the dues for June, July and August on the four shares of Series I), and the interest due for those months upon the loan secured upon these shares, amounting together to the sum of $30. He also, failed to keep the property insured, insisting that the payments already made had more than discharged the various loans, and that he was entitled to have the mortgages released. On November1 6, 1897, the trustees had the property insured at a cost of $25.60.
    Upon these facts the district court found that the association was .dissolved, and that the directors had properly assumed control of its affairs as trustees of the shareholders and creditors, and that the plaintiff was not entitled to. have a receiver appointed; that the trustees had m> authority to collect fines and dues upon the unmatured shares, whether held by a borrower or not, but that their functions and powers were limited to the doing of such acts only as were necessary to> collect and distribute the assets; that the fines and monthly dues, paid by the shareholders were not to be regarded as credits upon loans, but belonged to all the shareholders; that the plaintiff was not entitled to a credit for the full amount of the premiums paid upon his loans, but for such part thereof only as had not been earned, this amount to be determined by dividing the whole premium paid by the number of months required to mature the shares upon which the particular loan was made, and multiplying the quotient by the number of months still to elapse before maturity; that the monthly payments of interest were not ipso facto credits upon the mortgage indebtedness, but should be so treated, the payment on each loan to be applied to it under the rule of partial payments; and that the unearned premium was to. be deducted in each instance from the loan upon which it w’as paid as of the date at which it was made.
    The cause wTas then submitted to a refprce to ascertain the difference between the parties under these findings as follows: (1) to ascertain the amount of unearned premium on each loan, and deduct the same from the amount of the loan at the date at which it was obtained; (2) to compute the interest on the balance at 9 per cent, per annum from the date at which the loan was made; (3) to find the amount paid as interest on each loan, and give plaintiff credit for the same on the principle of partial payments, and thus find the difference; and (4) if there should thus be found any sum still due defendants, then to add to such amount the $25.60 paid by defendants for insurance, with interest at 9 per cent, per annum from November 6, 1897, the date of payment.
    The referee found and reported a balance due defendants, including the sum paid for insurance, with interest thereon, of $2,753, and a judgment of foreclosure was entered in their favor directing a sale of the property. Plaintiff has appealed from the judgment and an order denying a new trial.

      Mr. Marcus L. Crouch and Mr. Gust Moser, for Appellant.

      Mr. George B. Wilds and Mr. E. E. Hershey, for Respondents.
   MR. CHIEF JUSTICE BRANTLY,

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

Many errors are alleged as grounds for a reversal of the action of the district court, but of these we shall notice only three.

1. In the directions given to the referee touching the credits to be allowed plaintiff in ascertaining the balance due, no' account was taken of the sum of $30 paid as interest and dues for June, July and August on the four shares of Series D. This amount, with interest from the date of payment, should have been allowed as a credit.

2. Plaintiff insists that he should have been allowed as •credits upon his loans the whole amount of the premiums paid by him as of the respective dates of payment. The theory of his argument is that the consideration or inducement for paying these large premiums was the mode of payment, being in small sums monthly, and his participation in profits resulting from premiums, dues and fines from time to time, and other sources of income; and that as the association allowed itself to become dissolved by limitation, this consideration has failed. He insists, also; that the relation between himself and the association should be declared to be that of debtor and creditor simply, and that the settlement should be made on that basis, he being allowed credit for all payments made on the principle of partial payments. Taking the contracts as they are stated in the bonds and mortgages according to their terms, they provide for a repayment of the sums advanced absolutely at the end of ten years, or upon the expiration of the charter limit, without reference to the maturity of the shares. They contain no stipulation that upon the maturity of the shares they should be finally surrendered in full payment of the loans. Under the by-laws of the association, however, this stipulation is to- be read into them, and they are to be construed accordingly. The shares were bought, and the loans or advancements were made, ■with the intention that this should be the result. Indeed, no other claim is made by the trustees. They assume the position, however, that the possible dissolution of the association before maturity of all shares was a matter within the contemplation of the plaintiff as well as of the association, and that, having secured the advancements under such circumstances, it would be inequitable to allow him accredit for the premiums, or any part of them, thus depriving the nonborrowing shareholders of a part of the value of their shares as ascertained at the date of dissolution. They insist also that under the circumstances of this case, other borrowing shareholders having fully matured their stock without taking credit for any portion of the premium paid, the plaintiff should not be allowed a credit for his. We do not think either of these positions correct. The plan adopted by the trastees to. mature the shares of the borrowing members was entirely unauthorized. As there were no outside creditors, the only power possessed by them was to collect up the assets, and distribute them pro rata among all the shareholders. Apart from the payment made by the plaintiff m August, 1896, which has already been disposed of, we shall, therefore, disregard entirely what has been done by the trustees since Way, 1896, and ascertain from the conditions then existing what the rights of the parties are. The weight of authority is, perhaps, in favor of plaintiff’s position that he should be credited with the full amount of the premiums paid as of the date of each loan. This coincides with the view stated by Mr. Endlich in section 531 of his work on Building Associations. It is not controverted by plaintiff, however, that the ascertained value of unmatured shares of Series C and D, on May 6, 1896, was correctly stated in the circular of August 22. These values were obtained by apportioning all premiums, interest, dues and fines paid up to that time, and also, funds aidsing from forfeitures. The premiums had been paid with full knowledge that the association would be dissolved on that elate, without reference to the maturity of the shares. It is not claimed that the holders of these shares would not, under the value thus ascertained, receive all that they had paid into the association, dollar for dollar, and a profit besides. In fact, from the condition of affairs as shown in the record, the shares were worth more than had been paid upon them, with accumulated interest. The association was, therefore, not insolvent. This condition exists only where, in the cou-rse of the business, the principal of tlie shareholders has besóme so impaired as toi fall below the level of the amount paid in. The premium paid by plaintiff, as well as by the other advanced members, entered into and made a part of the value of the shares. This adjustment gives to the unadvanced members somewhat the advantage, and to this extent is inequitable. At the same time, to allow plaintiff credit for the whole of the amounts paid would give him a much greater advantage over them. The question how to dispose of it presents great difficulty, but the plan adopted by the court below, by which he was given credit for the unearned portion,, seems, under all the circumstances, to be the most equitable; for it must be remembered that the obligations resting upon the members are mutual, and that all are parties to the contract of advancement or loan. Though, upon the dissolution, the contract was broken down, yet in adjusting the rights of the shareholders as among themselves it should be enforced as near as may be with the view of allowing each to receive nothing-more than his associate. The consideration for which the premium was paid has failed in part, but only in part. The statutes in some of the states governing these associations provide that upon voluntary repayment of a loan there must be an equitable apportionment of the premium, and this principle', which produces a fair result, has been recognized and applied to cases where the association has become insolvent, and has had its affairs administered by a court of equity. (Towle v. Am. Bldg. Loan Inv. Society (C. C.), 61 Fed. 446.) Though the act authorizing the association in question here contained no provision on this subject, subsequent acts of both the territorial and state legislatures have recognized and provided for its application to voluntary payments. Under the circumstances of tliis case> we think its application just and equitable.

The district court held that the only credits to which the plaintiff was entitled were the interest payments and the unearned portion of the premiums, and that he must pay the balance due upon the bonds and mortgages. No provision was made in the decree allowing him a distributive share in the assets upon final distribution. We think it was its duty to ascertain what the accrued value of the shares of each class was, and to allow plaintiff a credit also for these amounts upon the respective loans, without interest, after deducting’ from the value of the stock a sufficient amount to pay plaintiff’s proportionate share of the reasonable expenses of administration of affairs by tlm trustees. There can be no just reason assigned, under the circumstances, why the plaintiff should be compelled to pay the full amount, of his loan as found by the trial court, and then be presently reimbursed by the trustees. The method of settlement thus indicated not only secures to- plaintiff all the rights to which he is entitled, but. it also does no wrong to other shareholders. The settlement should, therefore, have been made as follows: Charge the plaintiff with the amounts of the loans, without interest, including the earned portion of the premiums as found by the district court; credit him with the ascertained value of his shares on May 6, 1896, less his share of expenses of administration; then charge interest from that date until the date of judgment upon any balance found due. Plaintiff should also be credited, as hereinbefore indicated, with the amount of the payment made in August, 1896, and in like manner charged with the insurance premium paid by the trustees in November, 1897.

3. Plaintiff contends that a receiver should have been appointed, because the evidence demonstrates that the association was insolvent at the date of its dissolution, and that at the time, this suit was brought the trustees were proceeding to continue the business by collecting dues, fines and interest from the borrowing shareholders, instead of limiting themselves to collecting and distributing the assets; thus casting an unequal birrcien upon the borrowing shareholders. Section 561 of the Civil Code constitutes the directors of a corporation dissolved for any reason trustees for the creditors and shareholders, with full power to wind up its affairs, unless some other person be appointed for that purpose. No exception is made in case of insolvency. The intention of the legislature seems to have been to provide the most inexpensive and expeditious way for me administration of the affairs of a defunct corporation by confiding them to the hands of those who are best acquainted with them, and have a direct personal interest in preserving and appropriating the assets to their legitimate purposes, subject to an accounting or removal by a court of equity at the instance of a shareholder or creditor whose rights are jeopardized or betrayed. ([Havemeyer v. Superior Court, 84 Cal. 327, 24 Pac. 121, 10 L. R. A. 627, 18 Am. St. Rep. 192.) In no case, however, will a court resort to a removal of a statutory receiver, and appoint one in his stead, until it is made to appear that the-person complaining has been, or is about to be, injured by an unwarranted procedure on his part. In this case, as we have seen, the association was not insolvent-. The principal of the; contributing shareholders was not impaired in any'way at the time of the dissolution, and it is not claimed that the assets have been mismanaged, or in any way misappropriated by the trustees. Time, as has already been stated, their action in attempting to mature the shares of the borrowing shareholders was and is unauthorized; but t-heir course in this particular has not resulted in loss, nor has it in any way injured plaintiff. Indeed, the holders of shares of Series C who- paid their interest and dues after the dissolution, thus mailing a conventional arrangement with the trustees, received all the advantages they would have received if there had been no- dissolution. Instead of ascertaining the balance due from himself, and tendering it to the trustees, thus securing his release, or, which would have been better, demanding an accounting o-f them, and thus speeding them in the administration of t-heir timst, he took advantage of the indulgence extended to him by them, and, when they refused to release him from his just obligations to the other shareholders, he sought to further delay and confuse matters and incur expense by insisting that they should be declared unworthy of confidence, and a receiver be appointed in their stead. Their acts, though unauthorized, have not injured him. He therefore has no sufficient ground upon which to urge the court to discredit them. The appointment of a receiver was properly refused.

Let tho judgment and order be reversed, and the cause be remanded, with directions to proceed in accordance with the views herein expressed.

Reversed and remanded.

Mr. Justice Pigott:

I concur.

Mr. Justice Milburn:

I concur in the judgment of reversal, and with the conclusions and reasoning of the Chief Justice as to all matters except as to the premiums. There seems to be no contention between the parties as to the district court’s finding that the plaintiff was entitled h> a credit for unearned premiums or “bonus,” but as to its correctness I am not sure. If the company had failed to do its part of the contract, or if it had agreed to let the plaintiff pay up before the end of the life of the concern, then we should have a different case from the one at bar; but when the borrower gives a bonus for the use of the money, to be paid back in installments during a term limited, as he contemplates, by the life of the association, I cannot see why, at the end of such life, he should have a special credit upon his mortgage debt for any alleged unearned part of the bonus. In the auction sale of the money to. the borrower, he, knowing the term of the company’s life, made his bid proportionately large or small. I do not- see how he can get any credit for any alleged unearned part, except indirectly,, and so far as all the bonus went to swell the value of his stock with all the other stock, the value of the stock going to wipe-out his mortgages.