Amick v. Elwood

• Decision Date: 10 September 1957
• Docket Number: No. 2783,2783
• Citation: 314 P.2d 944,77 Wyo. 269
• Parties: Roy AMICK, Mayor, and C. A. Thomas, William Goodwin, J. Q. Adams, and John Erlewine, constituting and being the Mayor and Town Council of the Town of Glendo, Wyoming, a Municipal Corporation, Plaintiffs and Respondents, v. C. K. ELWOOD, Defendant and Appellant.
• Court: Wyoming Supreme Court

Page 944

314 P.2d 944

77 Wyo. 269

Roy AMICK, Mayor, and C. A. Thomas, William Goodwin, J. Q. Adams, and John Erlewine, constituting and being the Mayor and Town Council of the Town of Glendo, Wyoming, a Municipal Corporation, Plaintiffs and Respondents, v. C. K. ELWOOD, Defendant and Appellant.

No. 2783.

Supreme Court of Wyoming.

Sept. 10, 1957.

William G. Watt, Wheatland, for defendant and appellant.

Jones & Jones, Wheatland, and oral argument by William R. Jones, Wheatland, for plaintiffs and respondents.

Heard before BLUME, C. J., and HARNSBERGER and PARKER, JJ.

Mr. Chief Justice BLUME delivered the opinion of the court.

This case involves an action to quiet title to the following property:

'A tract of land in the Southeast quarter of the Northwest quarter of Section 9, Township 29 N.Rg. 68 W. 6th P.M., in Platte County, Wyoming, more particularly described as follows:

'Beginning at the Northwest corner of the SE 1/4 of NW 1/4 of said Sec. 9, Twp. 29 N.Rg. 68 W. 6th P.M. thence along the North line of the SE 1/4 of NW 1/4, South 89~7' East, 676.43 feet; thence South 0~05' East 639.54 feet; thence South 89~55' West 673.87 feet; thence along the West line the SE 1/4 of NW 1/4 0~18' West, 650.96 feet to the point of beginning, containing 10 acres.'

The plaintiffs in paragraph 2 of the petition alleged that they were the owners and in possession of the property above described 'in trust to be delivered to the United States, Department of Interior, Bureau of Reclamation, at the proper time.' It was further alleged that the defendant Elwood claimed an interest in the property and plaintiffs prayed that title to the property be quieted in the plaintiffs against such claim of the defendant. After a motion to make the petition more specific and a demurrer to the petition were overruled, the defendant answered denying the allegations of paragraph 2 of the petition, and further alleged that he had a lien on the property involved herein by reason of a judgment against O. J. Leech. The trial court found in favor of the plaintiffs and entered judgment quieting the title in the plaintiffs and from that judgment the defendant Elwood has appealed.

It appears that defendant Elwood obtained a judgment against O. J. Leech on December 18, 1939, and that the judgment was kept alive by reason of issuance of executions thereon. On October 14, 1952, Agnes M. Austin, a widow, quitclaimed to O. J. Leech and Edith M. Leech a life estate in the above described property. The Leeches at that time were husband and wife, which is denied by counsel for the defendant in his brief filed in this court. But it appears in the record that the parties at the trial of this case stipulated as follows:

'It is hereby stipulated between the counsel for respective parties that there may be received in evidence defendant's Exhibit 2 which is a quitclaim deed from Agnes M. Austin to O. J. Leech and wife Edith M. Leech, dated October 14, 1952, for the land therein described.'

The court stated:

'The stipulation was as to this deed by which Oral Leech and his wife have taken this property?'

Counsel for defendant Elwood answered: 'Yes.'

We take it, accordingly, that at the date of the deed O. J. Leech and Edith M. Leech were husband and wife, hence holding the property by the entirety. Peters v. Dona, 49 Wyo. 306, 54 P.2d 817.

Roy Amick, mayor of the town of Glendo, was the only witness in this case. It appears from his testimony that the town council of Glendo acquired the interest of Agnes M. Austin in the property involved. It further appears that Edith M. Leech and O. J. Leech quitclaimed the foregoing property to the town council of Glendo on November 1, 1955. Counsel for defendant Elwood now claims in his brief that the deed from the Leeches was never introduced in evidence. But the record shows the following:

'Mr. Jones: I would like to offer in evidence plaintiff's Exhibit A, quitclaim deed from Mr. and Mrs. Leech to the Town Council of Glendo together with the endorsement.'

Counsel for defendant Elwood objected on the grounds that the deed was incompetent, irrelevant and immaterial and that the town council was not legally authorized to receive the deed. The court overruled the objection. While it did not state specifically that the deed was admitted in evidence, the overruling of defendant's objection was to that effect.

The details of the holding of the title by the town council of Glendo are not altogether clear. We gather the facts to be substantially this: The Federal Bureau of Reclamation wanted the property in question for the purpose of erecting buildings thereon. The own council undertook to acquire the property for the Bureau. The money required for that purpose was raised by subscription among the citizens of Glendo. It appears from the testimony of Mr. Amick that the Bureau in return for the property, with good title, would give, in consideration for such title, as Mr. Amick stated, 'Seventy-five thousand dollars worth of goods', that is to say it would give credit for $75,000 on a sewer system for the entire town of Glendo. Counsel for the defendant at the trial claimed that the town council took the title because the Leeches were unable to give good title, by virtue of the lien which the defendant had and that the town council acted beyond the scope of its authority in attempting to act as trustee for acquiring good title for the benefit of the Federal Bureau of Reclamation, that is to say its action was ultra vires.

Section 29-430, W.C.S.1945, provides:

'The town council of any such town, in its corporate capacity, shall have the following powers:

* * *

* * *

'To purchase, receive by donation or otherwise and to hold real and personal property for the use of the town, and to sell and convey any real or personal property, and to make such orders respecting the same, as may be conductive (conducive) to the best interests of the town.'

The power granted is broad and comprehensive. It is difficult to see that the act of the town council mentioned above should be ultra vires, where the town received goods or credit in the sum of $75,000 for the benefit of the town for a proper purpose.

The subject of ultra vires actions of corporations generally is treated in 19 C.J.S. Corporations § 965, p. 419 and subsequent pages. Ultra vires acts of municipalities is considered in 63 C.J.S. Municipal Corporations § 1007, p. 594 and subsequent pages. In 19 C.J.S. Corporations § 981, p. 441, it is stated:

'A most important general principle connected with the subject of the validity of corporate transactions, and one which arises above the mere principle of estoppel, is that whether a corporation has acted without authority or has abused its authority or has acted in contravention of law, ordinarily cannot be set up collaterally by individuals, but can be set up only by the state in a direct proceeding for that purpose.'

The attack herein is a collateral attack. Some exceptions are mentioned in 19 C.J.S. Corporations § 981, p. 443, which are applicable at least where the attack is direct and it is there stated that a creditor may not attack any ultra vires acts of the corporation, when 'the other party to the contract, would be precluded from attacking the transaction as ultra vires.' Nothing...