Ehret v. Price

• Decision Date: 25 January 1927
• Docket Number: Case Number: 14678
• Citation: 122 Okla. 277,1927 OK 19,254 P. 748
• Parties: EHRET et al. v. PRICE.
• Court: Oklahoma Supreme Court

1927 OK 19

254 P. 748

122 Okla. 277

EHRET et al. v. PRICE.

Case Number: 14678

Supreme Court of Oklahoma

Decided: January 25, 1927

Syllabus

¶0 1. Appeal and Error--Review--Finding of Ownership of Corporate Bonds in Action to Foreclose Mortgage Lien.

The finding of fact by the trial court that plaintiff in an action for foreclosure of mortgage lien on corporate bonds was the owner and holder of such bonds at time of suit and had purchased same in good faith, without notice of any defense, such finding not being against the clear weight of the evidence, will not be disturbed.

2. Corporations -- Issuance of Mortgage Bonds--Lien on After-Acquired Real Estate at the Time Held Under Contracts for Deed.

Where a resolution passed by the board of directors of a corporation authorizes the president and secretary thereof to issue bonds in the name of the corporation, and to negotiate sale of same on the most favorable terms obtainable, and to secure the payment of same by executing a mortgage lien on all property of the corporation, both personal and real, where such corporation owns contracts for deeds to such real estate, and owns no other real estate except such contracts for deed, such resolution contemplates and includes authority of the designated officers of the corporation to mortgage the real estate covered by such contracts for deed although the legal title be thereafter acquired.

3. Same--Ratification of Mortgage by Corporation's Recognition of Validity.

The execution of a mortgage on the property of a corporation by its officers, though done without previous authority to do so, may be impliedly ratified and confirmed by the payment of interest on the bonds and by other acts showing a clear recognition of the mortgage by the corporation.

4. Same--Validity of Mortgage on After-Acquired Property.

"A valid mortgage may be made of property not in existence at the date of the mortgage so as to operate and attach upon it so soon as it comes into existence, and make it effective security for the debt provided in the mortgage," and the rule extends to corporations the same as to individuals.

5. Same--Sufficiency of Description--Notice Putting Upon Inquiry.

The office of a description in an instrument of conveyance is not to identify the property conveyed, but to furnish a means of identification.

A description, however general and indefinite, if sufficient upon the face to cause a reasonably prudent person to investigate, and if by extrinsic evidence on investigation, it can be made practically certain what property the instrument was intended to cover, will be sufficient to sustain the lien.

6. Same--Registration as Constructive Notice.

The proper registration of a conveyance operates as constructive notice to all subsequent purchasers and is as effectual in law as personal notice.

Every person who has actual notice of circumstances sufficient to put a prudent man upon inquiry as to a particular fact, and who omits to make such inquiry with reasonable diligence, is deemed to have constructive notice of the fact itself.

7. Corporations--Foreign Corporation Doing Business in Oklahoma Territory--Validity of Organization After Proclamation Opening Territory.

A corporation duly organized under the laws of another state, after the issuance of the proclamation opening Oklahoma Territory to settlement, but prior to the organization of same into territorial government, for the purpose of doing business in such parent state and also Oklahoma Territory, the same being valid under the laws of the parent state, was valid in Oklahoma Territory.

8. Limitation of Actions--Suit on Corporate Bonds and Matured Coupons.

The plea of the statute of limitations, in an action upon corporate bonds and matured coupons, is not good as against such matured coupons, where it would not be a good defense to the bonds themselves.

9. Public Lands--Settlers on Town Sites in Oklahoma Territory--Right of Contract to Convey for Rights of Way, etc., for Public Purposes.

Upon the opening of Oklahoma Territory to settlement, settlers upon lands duly mapped and platted for town-site purposes were not forbidden by law to contract for conveyance of title to such land for the purpose of rights of way, franchises, etc., for public purposes.

Error from District Court, Oklahoma County; Geo. W. Clark, Judge.

Action by Anna W. Price against Con Ehret and others. Judgment for plaintiff, and defendants bring error. Affirmed.

Everest, Vaught & Brewer, G. A. Paul, Geo. J. Eacock, Cottingham, McInnis & Green, and Stuart, Sharp & Cruce, for plaintiffs in error.

Wm. P. Harper, for defendant in error.

HARRISON, J.

¶1 This was an action against the Oklahoma City Ditch & Water Power Company, a corporation, and other defendants, by Anna W. Price, to recover on certain corporate bonds of said Ditch & Power Company and to foreclose a mortgage lien, given to secure payment of said bonds on certain lots in Oklahoma City. Said corporation had issued its bonds, 50 in number, each of the face value of $ 500, aggregating the sum of $ 25,000, and had executed a trust deed to one Joseph S. Chick, as trustee, which contained a mortgage clause, to secure the payment of such bonds. Plaintiff, Anna W. Price, claimed to have purchased eleven of such bonds, that same were past due and unpaid, and that she was the owner and holder of same at the time this action was begun.

¶2 The facts leading up to this suit, as found by the trial court, are that upon the issuance of the proclamation opening Oklahoma to settlement, in April, 1889, the lands which now constitute the south portion of Oklahoma City, and lying along the north side of the North Canadian river, were settled upon by emigrants, and later in the year 1889 some of said lands, including the lands involved, were platted into lots and blocks for city purposes, and designated as South Oklahoma addition to Oklahoma City, and thereafter a provisional city government was organized. Subsequently, in September, 1889, J. B. Weaver, C. W. Price, C. P. Walker, and others organized the defendant corporation, viz., the Oklahoma City Ditch & Water Power Company, under and in compliance with the laws of the state of Colorado, and procured a charter from said state, one of the purposes of which was to construct and operate ditches in Colorado and Oklahoma for water power and irrigation purposes. C. W. Price, C. P. Walker, and Robert Kincaid, respectively, were elected president, secretary, and treasurer of the corporation.

¶3 After the organization of said corporation, it procured assignments to it of certain contracts for deeds, grants of rights of way and franchises, which had theretofore been obtained by other persons from settlers upon the lands and from the said provisional city government, and thereupon began the construction of a ditch from a point on the north side of the North Canadian river something like six miles west of Oklahoma City, extending eastward, down through and across the lands between such point and a point east of the Santa Fe railroad track to the intersection of said river, crossing and including the lots and blocks alleged to have been covered by the contract for deeds, franchises, etc., above mentioned, and by the mortgage lien herein sought to be foreclosed.

¶4 Thereafter, in November, 1889, said corporation issued the bonds and executed the deed of trust above mentioned, which purported to include all the property then owned by said corporation, together with all property which might thereafter be acquired by such corporation. Said deed of trust was recorded in the office of the register of deeds of Oklahoma county, Oklahoma Territory, June 27, 1890.

¶5 Each bond recites on its face that if default in payment of installments of interest be made for more than 60 days after same becomes due, the principal of the bond shall become due and payable in the manner provided for in the deed of trust; and the further recital, to wit:

"This bond is one of a series of first mortgage bonds of fifty of like tenor, amount and date * * * the aggregate sum being $ 25,000, the payment of the principal and interest of which is secured by a first mortgage or deed of trust of even date herewith made by the Oklahoma City Ditch & Water Power Company to Jos. S. Chick, * * * as trustee, upon his refusal or inability to act, then the sheriff of Arapaho county (Col.) together with the rights and franchises belonging to said company under its charter and under the ordinances of Oklahoma City, Indian Territory, and including all such as may hereafter be acquired by said company."

¶6 The deed of trust contains the following, to wit:

"Said company * * * does hereby grant * * * unto the said party of the second part in trust forever all of the following property now owned by the said company, consisting in part of a canal near Oklahoma City, Oklahoma Territory, situated upon and constructed across the real estate, described in Exhibit 'A', which is hereto attached and made a part of this trust deed; the said canal being about six miles in length, constructed by said company for manufacturing and other purposes, together with the flumes, dams, bulkheads, tail races, water wears, piling, water power, right of way and all and every description of property constituting a part of the said canal and necessary to its use and operation and all other property whether real or personal, now owned, or which may hereafter be owned by said company, together with the franchises belonging to said company under its charter and under the ordinances of Oklahoma City and South Oklahoma, I. T., and including all such as may hereafter be acquired by said company. * * *"

¶7 The exhibit "A", referred to in the above granting clause as being attached to and made part of the mortgage was a map consisting of lines showing the meanderings and course of the river and the course of the ditch and the various tracts of land which it crossed.

¶8 The foregoing facts are mentioned in...