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Webster, and that the title to the lots was with the money of the wife grew out of the taken in her name simply as a matter of con- improvement of said lots, by fencing and venience, and for the purpose of placing them building thereon, by the husband, in part, at beyond the reach of creditors who might least, with his own means; and the facts thereafter become such on account of busi- shown in that regard were not of such a ness operations in which the husband might nature as to overturn the presumption arisengage. It appears from the proofs that the ing from the purchase and deeding of the particular money which was used in the pur- lots. It follows that the lots must be assumchase of the lots had been paid to Mrs. Web-ed to have been the property of the wife, and ster for the support of certain minor chil- | subject to disposition by her last will, dren which had been placed in her care, and Hence we are called upon to decide the for washings done for outside parties. There other material question presented by the recwas proof tending to establish the contention ord. Said Phoebe Ann Webster died on the that, by an understanding between Mrs. Web- 1st day of February, 1881. She left a last ster and her husband, this money was to be will, the substantial part of which was in the her own; that he had made her a present of following language: “And as to my worldly any interest which he might have had there- estate and all the property, real and personal in. There was also proof tending to show or mixed, of which I shall die seised and posthat such was not the fact; that, while she sessed of, or to which I shall be entitled at claimed the money as her own, her husband the time of my decease, I devise and bequeath had made objections to its going to her as her and dispose thereof in the manner following, property. The proofs in the record enter to wit: As my will is that all my just debts with much detail into this question, and if and funeral expenses shall by my executors, we were called upon to decide the fact as to hereinafter named, be paid out of my estate whether this money belonged to the wife or as soon after my decease as shall by them be to the husband and wife together, uninflu- found convenient. Item. I give, devise and enced by the finding of the trial court, it bequeath to my husband, John Webster, the would be necessary to enter into an examina- use, improvements, and income of my dwell. tion of such proofs at great length. But the ing house and lots numbered two and three law does not authorize us to so decide the
in bleek ten (10) of C. D. Boren's plat of the question. Under the provisions of the stat
city of Seattle, territory of Washington, until ute of 1893, the findings of the trial court in such time as is deemed by my executors and an equity cause stand upon substantially the all interested in the sale of said lots, to sell same footing as those of a court or jury in a said lands, together with my lots numbered law case. Hence it will only be necessary thirteen (13) and fourteen (11) in block numfor us to determine whether or not the trial bered twelve (12) in McAleer's Second addicourt has made a finding upon this question, tion to the city of Seattle, and, out of the and, if it has, to further determine whether moneys arising from such sale, the sum of or not there is evidence to support it. In the four thousand dollars to be safely invested in determination of the latter fact, it is not securities, and the interest thereon to be paid proper that we should enter into an investi
as follows, to wit: The sum of twelve dolgation of the weight of the testimony. If the lars to be paid annually to the pastor of the finding is supported by proof which reason- Baptist Church of Seattle, and the remainder ably establishes the facts found, it will not to my husband, John Webster, during his natbe disturbed because there is testimony to ural life. I give, devise, and bequeath to my the contrary, even although we should be of sister, Louisa Bogart, the sum of two hundred the opinion that such testimony was entitled dollars, and the residue of money arising from to greater weight than that which tended to said sale to be equally divided between and support the finding. An examination of the among my son, David H. Webster, and my findings of fact contained in the record will daughter, Mary Elizabeth Thorndyke, Frank show that the trial court expressly found that E. Johns, and my adopted son, Eddie M. Webthis money was the separate property of the ster. I give, devise, and bequeath, after the wife; and since, as we have seen, there was death of my husband, John Webster, the resttestimony tending to establish that fact, as
due of the four thousand dollars to be divided well as to establish the contrary one, it fol- equally between and among my grandchillows that such finding must stand, and, in dren which shall be alive at his decease; the light of it, the rights of the parties must and, lastly, I do nominate and appoint Thomas be here adjudicated.
M. Alvord, of White River, to be the execuThe court found, as a result of the circum- tor of this, my last will and testament." It stances surrounding the ownership of the is contended by the appellants that the real money and of the purchase of the lots, that estate therein described was not disposed of upon their purchase they became the sep- by said will; that the only thing that passed arate property of the wife, and that they were thereby was the right to the possession by such at the time of her death, It is contend- the husband, John Webster, during his lifeed by the appellants that this finding is not time; that said will did not affect the title supported by the proofs. The only facts tend- to the property; but that it descended to the ing to contradict the presumption which heirs in the same manner that it would have would arise from the purchase of the lots done had Mrs. Webster died intestate. The claim of the respondents is that the title was, 3. Stockholders of a corporation are estopby the terms of the will, vested in the execu
ped to deny the validity of a mortgage in the givtor; that thereunder he was given full power
ing of which they have acquiesced.
4.1 Hill's Code, $ 1648, making a mortgage to sell the property, and apply the proceeds of personalty void as against creditors of the as directed in the will; that the only check mortgagor or subsequent incumbrancers for valplaced upon him in making such sale was
ue and in good faith, unless it is accompanied
by the mortgagor's affidavit that it is made in that he should consult those interested in the
good faith, and without design to delay creditproperty as to the time when it should be ors, does not apply where the subsequent incummade. The will was not drawn by an ex
brancers have knowledge of the mortgage. pert, and for that reason the most technical Appeal from superior court, King county; and appropriate language was not used in J. W. Langley, Judge. framing the different provisions; but, in our Action by Roy & Co., a corporation, against opinion, the intention of the testator can be Scott, Hartley & Co., a corporation, J. F. gathered from the language used, and, if it McNaught, and C. J. Johnson. From a judgcan, it is the duty of the court to see that ment for the plaintiff, defendants appeal. such intention is given effect. The appellants
Affirmed. call attention to the fact that there are no
Battle & Shipley, for appellant McNaught. technical words which show an intention to
Brady & Gay, for appellant Johnson. John pass the title in the real estate to the execu
W. Corson, for respondent. tor or to any other person. This is probably true, but the fact that such words are not GORDON, J. This action was brought by made use of is immaterial if the intent to
respondent, a corporation, to foreclose a pass the title is apparent. This intention may chattel mortgage given to secure two promnot clearly appear from any one clause or pro- issory notes, aggregating $3,000, said notes vision, but we think it does appear from the and mortgage bearing date September 2, language used, when construed as a whole. 1893, executed by Scott, Hartley & Co., a To otherwise construe the language used will corporation; also a bill of sale, absolute in make impossible of execution many of the form, but intended as a mortgage to secure provisions of the will. If, of two construc- a note for $500, to Barre Bros., which bill tions of an instrument, one will give effect of sale also bears date September 2, 1893, and to all the objects which it is evident were covers all of the property described in the sought to be accomplished by its execution, mortgage first mentioned, and, in addition and another will not, the one which will thereto, also includes one pair of horses not should be adopted, if the language used can covered by said mortgage. The last-menbe so interpreted as to allow such construc- tioned note and bill of sale intended to setion. This rule applied to the language of cure it were duly assigned to respondent the will above set out will compel us to hold prior to the commencement of this action. that the title passed to the executor. To hold Appellants McNaught and Johnson were otherwise would practically nullify the object made parties defendant in the action, and of the testator in making the will. The exec- filed separate
Appellant Mcutor is required to do things which could only Naught, having recovered a judgment against be done by the exercise by him of rights in the corporation of Scott, Hartley & Co., on the property flowing from full title; hence it March 13, 1894, caused an execution to be should not be held that it was only the use of levied upon the property included in the it that was devised. In our opinion, the trial bill of sale and mortgage. The appellant court correctly construed the will, and made Johnson claims a portion of the property by such a decree as, under the circumstances dis- virtue of a chattel mortgage executed by the closed by the record, did full justice to all of corporation of Scott, Hartley & Co., on the the parties to the action. Hence such decree
14th of February, 1894, to secure its note will be in all things affirmed.
to said Johnson, of even date therewith, in
the sum of $155. At the time when reSCOTT, DUNBAR, ANDERS, and GOR
spondent's mortgage and bill of sale were DON, JJ., concur.
executed, all of the property in controversy
was in King county, and said mortgage and (11 Wash. 399)
bill of sale were duly filed and recorded ROY & CO. V. SCOTT. HARTLEY & CO. therein. In January thereafter, pursuant to et al.
an arrangement between the corporation of (Supreme Court of Washington. March 14, Scott, Hartley & Co., mortgagor, and the 1895.)
respondent, that part of the property in CORPORATIONS-CONTRACTS WITA DIRECTORS--VA- question which is embraced in Johnson's LIDITY-CHATTEL MORTGAGES--VALIDITY
mortgage (consisting chiefly of horses and --SUBSEQUENT INCUMBRANCES.
their harnesses), was intrusted to one Lynch, 1. A corporation cannot avoid a mortgage given by its president and secretary, who are
and by him taken to Whatcom county, to be the only stockholders, to another corporation,
used in logging; the said Lynch promising in upon the ground that the same person is presi- writing to return all of said property to dent of both corporations. 2. Contracts made with a corporation by its
King county on or before February 15, 1894. own directors, in good faith, and for a sufficient
Respondent failed to record its mortgage and consideration, are valid.
bill of sale in Whatcom county within 30
days after the removal of said property to & Co. That there is no evidence that the said county, or at all; and it was while said said mortgages, or either of them, were givproperty was in Whatcom county that the en for the purpose of defrauding other credmortgage was given to Johnson, who duly itors of Scott, Hartley & Co.; and that there filed and recorded the same in said Whatcom is no evidence that Scott, Hartley & Co. was county. Prior to March, 1893, F. E. Scott on the 2d day of September, 1893, in any and Thomas Hartley were copartners in the way indebted to the defendant (appellant) J. logging business, under the firm name of F. McNaught. That the defendant Johnson Scott & Hartley, and as such were the own- took his mortgage upon portions of the iden. ers of nearly all the property in question; tical property covered by the plaintiff's mortand said firm was at that time largely in- gage, and covered also by the said bill of debted to the respondent. In March, 1893, sale, with full knowledge and notice of the the corporation of Scott, Hartley & Co. was mortgage of the plaintiff upon said property organized by said F. E. Scott, Thomas Hart- and the bill of sale
of the same ley, and Eugene Roy, sole incorporators and property, and took the said mortgage as setrustees, said Roy being also at that time and curity for an antecedent debt.” at all times thereafter the president of re- This court has held in Webster v. Thornspondent corporation; and, upon its forma- dyke (decided March 9, 1895) 39 Pac. 677, tion, the firm of Scott & Hartley transferred that, “under the provisions of the statute of to it all of the property here involved, ex- 1893, the findings of the trial court in an equicept a small portion which was subsequently ty cause stand upon substantially the same acquired. Thereafter said corporation of footing as those of the court or jury in a Scott, Hartley & Co. continued to deal with law case; and, if a finding is supported by respondent, and respondent extended credit proof which reasonably established the facts to it. On August 8, 1893, Hartley sold all found, it will not be disturbed because there his stock in the corporation of Scott, Hartley is testimony to the contrary, even although & Co. to Roy, who assumed, as part consid- this court might be of opinion that such teseration for such transfer, "all of the liabili- timony was entitled to greater weight than ties of T. J. Hartley upon the obligations of that which tended to support the finding." the firm of Scott & Hartley, including, an An examination of the record has satisfied account to Roy & Co., also a note of $1,330, us that there was competent proof in the due Roy & Co., and
* all other obli- court below tending “reasonably to estabgations of T. J. Hartley in said firm of lish" the facts found; and under the rule Scott & Hartley."
laid down in Webster v. Thorndyke, supra, Appellants assail the validity of respond- this court is not warranted in disturbing said ent's mortgage and bill of sale, and urge, findings. among others, the following objections: (1) Objections 1 and 3, above noticed, will, for The want of corporate authority to execute the sake of convenience, be considered tothe mortgage; (2) that they were given with- gether, and they are: "(1) The want of corout any consideration, and were fraudulent; porate authority to execute the mortgage;" (3) that, inasmuch as Roy was the common and “(2) that, inasmuch as Roy was the compresident of both mortgagor and mortgagee mon president of both mortgagor and mortcorporations, the transaction between them gagee corporations, the transaction between was and is void; (4) that the bill of sale in- them was and is void.” As already noticed, tended as a mortgage is void for want of the court found that, at the time of the exethe affidavit required by section 1648 of 1 cution, Roy and Scott were the only stockHill's Code, concerning mortgages. And the holders in the corporation of Scott, Hartley further point is made by appellant Johnson, & Co.; and acting as president and secreviz. (5) that his mortgage is a first lien tary, respectively, they executed the instruupon the property described therein, because ment in question. It follows, therefore, that of respondent's failure to record its mortgage neither they nor the corporation itself can be in Whatcom county.
heard to repudiate the transaction. Although The testimony upon the trial was very the law regards with disfavor contracts made conflicting, especially as to the condition of by directors of corporations with themselves, the accounts between the corporations of nevertheless such contracts are not necesScott, Hartley & Co. and respondent at the sarily void. The fact of such relationship time when the mortgage to respondent was does not of itself render the trausaction given; but, in so far as the propositions here fraudulent. While such a transaction is well urged are concerned, the court found: “That calculated to arouse suspicion, and calls for the said chattel mortgage and bill of sale in a “rigid and severe" scrutiny in its examthe plaintiff's complaint set forth were ex- ination, and requires clear and full proof of ecuted and delivered by Eugene Roy, as pres- a valuable and sufficient consideration and ident, and F. E. Scott, as secretary, of the of the good faith of the parties, still, when defendant corporation, Scott, Hartley & Co.; such examination has been made and such and that, upon the date of such execution proof has been furnished, the transaction is and delivery as aforesaid, the said Eugene valid as to creditors, and must stand. O'ConRoy and Frank E. Scott were the only stock- ner Min, & Manuf'g Co. v. Coosa Furnace Holders in the corporation of Scott, Hartley Co. (Ala.) 10 South. 290; Ashhurst's Appeal,
60 Pa. St. 290; Buell v. Buckingham, 16 Iowa, 281; Gordon v. Preston, 1 Watts, 385. But, assuming that the transaction was one that could be repudiated without any showing of fraud or injury, it would still be voidable merely, and not void; and the right to avoid it would belong only to persons who had an interest in the property before the transfer, and no other person has the right to question it or set the sale aside. Buell v. Buckingham, supra; Hawley v. Cramer, 4 Cow. 717, 74; Edmondson v. Welsh, 27 Ala. 578; Wightman v. Doe, 24 Miss. 675; O'Conner Min. & Manuf's Co. v. Coosa Furnace Co., supra; Gordon v. Preston, supra.
Here appellant McNaught not only had no interest in or lien upon the property at the time when the mortgage and bill of sale in question were given, but the court has found that he was not at that time a creditor, and that there was no actual fraud in the transaction itself. Hence he clearly is not in a position to avoid the transaction. Respondent's bill of sale and mortgage being executed by the only stockholders in the corporation giving the same as between the corporations of Scott, Hartley & Co. and respondent, the same became and were valid; and while it may be true, as a proposition of law, that a minority of the stockholders may attack and rescind a contract made without authority of the corporation, and without the consent of such stockholders, acquiescence in such contract estops the corporation from impugning the same, and this proposition seems to be fully sustained by the authorities already cited. Dealings between corporations represented by the same persons as directors may be binding upon each corporation and the stockholders thereof. They become binding if acquiesced in by the corporations and their stockholders. It follows that the corporation of Scott, Hartley & Co. is estopped from setting up the invalidity of the mortgage or bill of sale, the whole number of its stockholders having concurred therein and participated in their execution; and said instruments, being valid as against the corporation and its stockholders, are valid as to appellant McNaught, who, as we have already seen, was not at that time one of its creditors; and, for like reasons, they are also valid as to appellant Johnson, who is claiming merely as a subsequent incumbrancer.
The second objection noticed concerns exclusively a question of fact, and is answered by the finding "that there is no evidence that the mortgages, or either of them, were given for the purpose of defrauding other creditors of Scott, Hartley & Co."
The fourth contention is "that the bill of sale intended as a mortgage is void for want of the affidavit required by section 1618 of 1 Hill's Code, concerning mortgages." That section is as follows: "A mortgage of personal property is void as against creditors
of the mortgagor or subsequent purchasers, and incumbrancers of the property for value and in good faith, unless it is accompanied by the affidavit of the mortgagor that it is made in good faith, and without any design to hinder, delay, or defraud creditors, and it is acknowledged and recorded in the same manner as is required by law in conveyance of real property." And appellants rely upon this section, and upon the cases of Sayward v. Nunan, 6 Wash. 87, 32 Pac. 1022, and Say. ward v. Thayer, 9 Wash. 22, 36 Pac. 966, and 38 Pac. 137. The appellants do not occupy common ground as regards this contention. The appellant Johnson is claiming solely by virtue of a mortgage executed subsequently to that under which respondent claims. The court has found that he "took his mortgage
with full knowledge and notice of [respondent's] mortgage and bill of sale." Failure to attach the affidavit only renders the instrument void as to "creditors and subsequent purchasers and incumbrancers of the property” for value and in good faith. As to parties having actual knowledge of the existence of the mortgage, the failure to attach the affidavit is, in effect, under the statute, the same as a failure to record; and the court has held in the latter case that it was good as between the parties and those having actual notice. Darland v. Levins, 1 Wash. 582, 20 Pac. 309. Nor do we think that this objection can avail the appellant McNaught, who, as we have already seen, was not a creditor at the time when the instrument was executed and recorded. The statute makes the chattel mortgage (unaccompanied by the affidavit) void only as "against creditors of the mortgagor or subsequent purchaser, and incumbrancers of the property for value and in good faith.” The word "subsequent" relates not to creditors, but to purchasers and incumbrancers. As between mortgagor and mortgagee, the instrument was valid and binding as a mortgage without the affidavit; and McNaught, being at that time a mere stranger to the property, and having no interest in it, cannot invoke the aid of the statute, which favors a class to which he does not belong.
The sole remaining claim (and one which concerns appellant Johnson only) is "that his mortgage is a first lien upon the property described therein, because of respondent's failure to record its mortgage in Whatcom county.” As already stated, the court below found that Johnson had full knowledge of respondent's mortgage, and, that being true, it follows that what has already been said herein concerning the failure to attach the affidavit required by section 1648 applies to this last contention, and furnishes the answer to it.
The judgment appealed from is affirmed.
HOYT, C. J., and ANDERS, DUNBAR, and SCOTT, JJ., concur.
(11 Wash. 301)
for us to determine as to the sufficiency of LAMEY V. COFFMAN et al.
the proceedings in a single case. (Supreme Court of Washington. March 1,
In the judgment of the defendants San1895.)
born, Vail & Co. they were described as "A. LIEN OF JUDGMENT-How CREATED_TRANSCRIPT
H. Vail, W. I. Vail, and E. H. Shepard, partFILED WITH AUDITOR-NOTICE OF APPEAL ners doing business as Sanborn, Vail & Com-ON WHOM SERVED.
pany." It was against the defendants Coff1. Though Code Civ. Proc. $ 449, providing
man, the mortgagors, was in the usual form, in regard to the docketing of judgments so as to render them a lien on the judgment debtor's
and a transcript thereof, duly certified, had land, directs that a transcript of the statement
been filed in the office of the county auditor, entered by the clerk in his execution docket shall and duly entered and indexed by him. It be filed with the auditor, the filing of a transcript
did not appear from such transcript that of the judgment itself is sufficient. 2. The provision of such section that the
any adjudication had been made as to the transcript shall contain the names “at length" of amount of costs to which the plaintiff was all the parties merely requires the names as they entitled. All that appeared upon that subappear in the judgment entry not to be abbrevi. ated, and the full Christian names are not neces
ject was that plaintiff should recover his sary if not so set out in the judgment entry.
costs against the defendants. It is claimed 3. Under the provision that the transcript that the filing of this transcript was insuffshall contain the amount of the judgment and cient to make the judgment a lien upon the costs, the failure to include therein the amount of the costs defeats the lien for them alone.
real property of the defendants. Section 4. Under a statute requiring appellant to 449 of the Code of Procedure is in the folserve notice of appeal on all the other parties, lowing language: "Within twenty days after whether the issues were decided for or against
the entry of any judgment for the recovery them, it is proper to serve notice on a party against whom judgment has been rendered in of money, the clerk shall enter in said execufavor of appellant.
tion docket a statement of the judgment, Appeal from superior court, King county;
and shall, at the request of the judgment
creditor or his attorney, furnish a transcript T. J. Humes, Judge.
of said judgment to the judgment creditor, Action by Patrick Lamey against Walter J. Coffman and others. From a judgment
and upon the filing of said transcript in the
office of the county auditor, it shall be a lien adjudging liens of some of the defendants
upon all real estate of said judgment debtor prior to that of plaintiff, he appeals. Af
in the county where such transcript shall firmed.
be filed, for the period of five years from the Thomas B. Hardin, for appellant. P. P.
time of the entry of said judgment. The Carroll, for respondent Friedman. Carr &
lien shall attach from the day of the date of Preston, for respondents Sanborn, Vail &
said judgment, if said transcript shall have Co., Chin Gee Hee, and Len Oi Chin.
been filed within the said twenty days; and
in case an attachment has been levied upon HOYT, C. J. This action was brought to any real estate, then from the levy of the at. foreclose a mortgage made by the defend- | tachment. The fees for making and filing ants Walter J. Çoffman and Josie Coffman. such transcript shall be paid by the judgThe other defendants were joined for the ment creditor, and be taxed as costs against reason that they claimed some interest in the judgment debtor, and be collected as the mortgaged property. Upon the trial it other costs in the case. Said statements appeared that the interest of such defend- and transcripts shall contain: (1) The ants grew out of judgments in their favor names, at length, of all the parties; (2) the against the mortgagors. The court held that date of the judgment, and against whom the lien of some of these judgments was su- rendered; (3) the amount or nature of the perior to that of the mortgage of the plain- judgment and costs; (4) an abstract of the tiff. In so doing it is claimed error was costs of each party, and to whom belongcommitted which should reverse the judg- ing,"--and it is claimed that thereunder the ment. Appellant concedes that the judg- statement or transcript filed with the auditor ments in question were rendered prior to the must contain, among other things, the names giving of the mortgage, and that an attempt at length of all the parties, an abstract of had been made to make them a lien upon the the costs of each party, and to whom be. real property of the mortgagors by causing longing. It will be seen from the language notices to be filed in the office of the county of said section either that there are two auditor. He does not attack the judgments. methods by which the lien may be perfected His claim is that they were not liens upon or there is such a careless use of terms as to the real estate of the mortgagors for the rea- make the provisions of the section inharmoson that the provisions of the statute in that nious. The first part seems to clearly imply regard had not been complied with. The that the judgment creditor should obtain transcript or statement filed with the audi- from the clerk and file with the auditor a tor was not the same in each case, but all transcript of the judgment, while the lat. present substantially the same questions, ter part would be best interpreted by holding and, if what was done in one case was suifi- that such transcript was not of the judgcient, that done in the other cases was also ment itself, but of the abstract thereof resufficient. Hence, it will only be necessary quired by the clerk to be entered in the exe