Fritts v. Palmer

Citation10 S.Ct. 93,33 L.Ed. 317,132 U.S. 282
PartiesFRITTS et al. v. PALMER
Decision Date25 November 1889
CourtUnited States Supreme Court

This is an action in the nature of ejectment to recover the possession of certain real property in Gilpin county, Colo., namely, the North Comstock, Grand View, Clipper, and Com- stock lodes, and a building lot in Central City, in the same county, together with the dwelling-house thereon, the fee and possession of all which property were claimed by the plaintiff, the present defendant in error. The defendants admitted their possession of the premises described in the complaint, except the Clipper lode, and alleged their ownership and right of possession of the other property. They distinctly disclaimed all interest in the Clipper lode, and denied that they were or had ever been in possession of it. A trial by jury was waived in writing by the parties, and the case was heard on an agreed statement of facts, upon which the court was asked to declare the law and enter judgment accordingly. Judgment was rendered in favor of the plaintiff for the possession of all the property described in the complaint, including the Clipper lode. The question to be determined is whether the judgment is supported by the agreed facts,

These facts are, in substance, as follows: The common source of title is William Groshon, who, on the 16th of June, 1877, at Central City, in the state of Colorado, conveyed, with warranty, all the property described in the complaint, to the Comstock Mining Company, a corporation organized under the laws of Missouri for the purpose of carrying on mining business, and with the object, expressed in its articles of incorporation, of purchasing, owning, and controlling mining property, both real and personal, in the state of Colorado, and of conducting a mining business therewith. This deed was duly recorded in the proper local office on the 25th of June, 1877. Before the purchase from Groshon the company was engaged in the prosecution of its mining business at and near Central City, where it established an office.

On the day of the execution of Groshon's deed, the company made to Ezra D. Fritts its three promissory notes, aggregating $30,000, which were intended to be used and were used in part payment of the price of the property conveyed to it; and, in order to secure the payment of the notes, it executed to Thatcher, as trustee, a deed of trust upon the property, except the Clipper lode, conditioned that on default in the payment of either of the notes, or the interest thereon, the trustee might sell and dispose of the said mining property. That deed of trust was duly recorded on the 26th of June, 1877.

On the 5th of January, 1878, default having occurred in the payment of the notes, the deed of trust was foreclosed under the power of sale contained in it, and on that day Thatcher executed, acknowledged, and delivered his deed for all said real estate and mining property (except the Clipper lode) to Fritts. That deed was duly recorded January 7, 1878.

The defendants claimed title and possession by virtue of divers mesne conveyances, in due form, from the company and its assigns under the above deed of trust, for all of the property, excepting the Clipper lode, which has never been conveyed by it.

On the 13th of April, 1878, Groshon executed, acknowledged, and delivered his deed of quitclaim of all the real estate and mining property in the complaint described to Samuel S. Porter. That deed was delivered to Porter on the 20th of May, 1878, but has never been recorded. The latter, by his deed of quitclaim, executed May 20, 1878, conveyed to defendant Palmer. The latter deed was delivered to the grantee on the 25th of May, 1878, but it remains unrecorded. Afterwards, June 28, 1879, Palmer filed in the office of the clerk and recorder of the county where the property is situated notice, according to law, of the bringing of this suit, and the object thereof.

The Comstock Mining Company, at the time of its purchase from Groshon, had not, nor has it since that time, complied or attempted to comply with section 10, art. 15, of the constitution of Colorado, nor with sections 23, 24, c. 19, of the General Laws of that state, otherwise known as sections 260, 261, c. 19, Gen. St. Colo. 1883, prescribing the terms and conditions upon which foreign corporations may do business in that state.

A copy of the incorporation laws of Missouri, under which this company was organized, was, at the time of its organization, on file in the office of the secretary of state of Colorado but was not filed by it. Its articles of incorporation were filed in the office of the clerk and recorder for Gilpin county, where its business interests were located, on August 10, 1877, and a copy of the incorporation laws of Missouri, under which the company was organized, was also on file in the same office at and after the time the company was organized.

The defendants, during the time of their possession of the property, have held the same in good faith under the above deeds, and have paid taxes legally assessed and levied upon it, to the amount of $400, and plaintiff has paid no taxes thereon. They have put improvements upon the property, in the way of building and repairing the dwelling-house described in the complaint, of the value of $350.

MILLER, J., dissents.

L. C. Rockwell, for plaintiffs in error.

Jos. Shippen, for defendant in error.

Mr. Justice HARLAN, after stating the facts as above, delivered the opinion of the court.

It is clear, from the facts agreed, that the object of Groshon's conveyance to the Comstock Mining Company was to pass to that corporation whatever interest he had in the property. It is equally clear that, under the trust-deed to Thatcher, the sale and conveyance to Fritts, and the subsequent mesne conveyances to the defendants, the latter acquired whatever interest the Comstock Mining Company got by Groshon's deed to it.

But it is contended that no title or interest whatever passed from Groshon, by his deed of June 16, 1877, even as between him and the company; and, consequently, it was competent for him, at his pleasure, and notwithstanding he received the consideration for which he stipulated, and even after the sale and conveyance of the property under the deed of trust, to make to other parties a quitclaim deed that would override, not only his conveyance to the Comstock Mining Company, but all subsequent conveyances based upon it.

This proposition is based upon certain provisions of the constitution and laws of Colorado relating to foreign corporations.

The constitution of that state declares that 'no foreign corporation shall do any business in this state without having one or more known places of business, and an authorized agent or agents in the same, upon whom process may be served.' Article 15, § 10.

The statutory provisions, for failing to comply with which the Comstock Mining Company is alleged to have taken nothing by Groshon's conveyance to it, are these:

'Sec. 260. Foreign corporations shall, before they are authorized or permitted to do any business in this state, make and file a certificate, signed by the president and secretary of such corporation, duly acknowledged, with the secretary of state, and in the office of the recorder of deeds of the county in which such business is carried on, designating the principal place where the business of such corporation shall be carried on in this state, and an authorized agent or agents in this state residing at its principal place of business upon whom process may be served; and such corporation shall be subjected to all the liabilities, restrictions, and duties which are or may be imposed upon corporations of like character organized under the general laws of this state, and shall have no other or greater powers. And no foreign or domestic corporation established or maintained in any way for pecuniary profit of its stockholders or members shall purchase or hold real estate in this state, except as provided for in this act; and no corporation doing business in this state, incorporated under the laws of any other state, shall be permitted to mortgage, pledge, or otherwise incumber its real or personal property situated in this state, to the injury or exclusion of any citizen, citizens, or corporations of this state who are creditors or such foreign corporation, and no mortgage by any foreign corporation, except railroad and telegraph companies, given to secure any debt created in any other state, shall take effect, as against any citizen or corporation of this state, until all its liabilities due to any person or corporation in this state at the time of recording such mortgage have been paid and extinguished.'

'Sec. 261. Every company incorporated under the laws of any foreign state or kingdom, or of any state or territory of the United States beyond the limits of this state, and now or hereafter doing business within this state, shall file in the office of the secretary of state a copy of their charter of incorporation, or, in case such company is incorporated by certificate under any general incorporation law, a copy of such certificate and of such general incorporation law, duly certified and authenticated by the proper authority of such foreign state, kingdom, or territory.' Gen. St. Colo. 1883, c. 19.

Precisely what was meant by the words in section 260, 'except as provided for in this act,' is difficult to tell, since the act does not indicate any particular mode in which a foreign corporation may acquire real estate in Colorado. But, perhaps, the reasonable interpretation of the statute is that a foreign corporation shall not purchase or hold real estate in Colorado, for purposes of its business, until it first acquires, in the mode prescribed by the local law, the right to do business in that state.

No question is made in this case—indeed, there can be no doubt—as to the validity, of these constitutional and statutory provisions, so far,...

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