Fairview Inv. Co., Ltd. v. Lamberson

• Decision Date: 04 November 1913
• Citation: 25 Idaho 72,136 P. 606
• Parties: FAIRVIEW INVESTMENT CO., LTD., a Corporation, Respondent, v. JAY G. LAMBERSON et al., Defendants, and WARD LAMBERSON, Appellant
• Court: Idaho Supreme Court

136 P. 606

25 Idaho 72

FAIRVIEW INVESTMENT CO., LTD., a Corporation, Respondent, v. JAY G. LAMBERSON et al., Defendants, and WARD LAMBERSON, Appellant

Supreme Court of Idaho

November 4, 1913

PLEADINGS-AMENDMENT OF PLEADINGS-TRIAL BY JURY-SUIT TO QUIET TITLE-CORPORATIONS DE FACTO AND DE JURE-AGRICULTURAL CORPORATION-COLLATERAL ATTACK ON CORPORATION.

1. Complaint examined in this case, and held to state sufficient facts to constitute a cause of action for the purpose of determining adverse claims to real property and quieting plaintiff's title thereto.

2. Where a trial court orders persons who have not been made parties to the action to be brought in and made parties to the action, such order does not amount to an amendment of the pleadings so as to require the service of the amended complaint upon the parties who had already been brought in or appeared in the case and who were parties to the action.

3. An action to determine adverse claims to real property and quiet title thereto is a suit in equity, and the parties are not entitled to a jury as a matter of right. In such a case, it is a matter addressed to the discretion of the trial court as to whether he will submit any question of fact to the jury for their finding thereon.

4. Where a sheriff conducted a foreclosure sale in 1875 under the statutes of the territory as they then existed, and instead of giving the purchaser a certificate of sale gave him a sheriff's deed, and it appears that there was no attempt ever made to redeem the property and no offer was ever made to redeem, and that neither the owner of the property nor his successors were in any way prevented or precluded from exercising their right of redemption by reason or on account of the sheriff having given a deed instead of a certificate of sale, and the parties take no proceeding for more than thirty-five years thereafter, held, that no one has been prejudiced by reason of the giving of the deed instead of the certificate of sale, and that it is now too late for the original owner or his successor to complain of the error and mistake.

5. Where incorporators have attempted to form a corporation and the company has thereafter proceeded on the theory that it was duly and regularly incorporated and exercised the rights and powers of a corporation and acquired property and transacted business, even though it has failed to comply with the law in some particular in the matter of its incorporation, still these acts constitute it a de facto corporation, and it will be so treated in considering its subsequent business transactions.

6. Where the statute authorizes the formation of corporations for "agricultural purposes," a corporation, formed for the purposes of making agricultural exhibits and exhibiting horses and cattle and livestock and giving exhibitions of the speed of horses, will be held to come within the purview of the law and be for "agricultural purposes."

7. As to whether the question of the right of a corporation to exercise powers outside of and in excess of the powers conferred by the statute authorizing its organization may be raised in a collateral way by a private litigant, quaere.

APPEAL from the District Court of the Third Judicial District for Ada County. Hon. Carl A. Davis, Judge.

Judgment for plaintiff, and one of the defendants appeals. Affirmed.

Judgment affirmed. Costs awarded in favor of respondents.

A. C Vaughan, for Appellant.

Where the complaint starts to set up title and fails in any part of the chain of title, the complainant will be bound by what is plead. The allegation that the plaintiff is the owner in fee simple and entitled to the possession of the land as described in the complaint is treated as a conclusion of law. (Sutherland, Pleading & Practice, sec. 6205; Turner v White, 73 Cal. 299, 14 P. 794; Gruwell v Seybolt, 82 Cal. 7, 22 P. 938.)

We contend that when the court sustained a general demurrer to the complaint that no complaint existed originally, and that the complaint could not be amended so as to state a cause of action, that it was a new cause of action, if any, and that service of the same must be made upon the defendant personally. (Vermont Loan & Trust Co. v. McGregor, 5 Idaho 510, 51 P. 104; Wooddy v. Jamieson, 4 Idaho 448, 40 P 61.)

The defendant demanded a jury trial, because the questions of title and possession were in issue. It is a constitutional right that the defendant has, when adverse possession is set up in the pleading, and the complaint is based upon adverse possession, and the title through which the plaintiff claims title is adverse possession. (32 Cyc. 1374, 1375; Midgett v. Midgett, 129 N.C. 21, 39 S.E. 722.)

Questions as to the legal title to land are of right triable by jury, and this right cannot be abrogated by statute. (24 Cyc. 109; Newman v. Duane, 89 Cal. 597, 27 P. 66; Smith v. Moberly, 15 B. Mon. (Ky.) 70; Blackman v. Wheaton, 13 Minn. 326; Glenn v. Lancaster, 109 N.Y. 641, 16 N.E. 484; King v. Van Vleck, 109 N.Y. 363, 16 N.E. 547; Meigs v. Willis, 66 How. Pr. 466; and numerous cases cited in 24 Cyc. 109.)

"The facts to establish adverse possession are to be found by the jury, but what constitutes adverse possession is a question of law." (1 Sutherland, Code Pleading & Practice, sec. 1126; Macklot v. Dubreuil, 9 Mo. 477, 43 Am. Dec. 550; Bowie v. Brahe, 3 Duer (N. Y.), 35; Jackson v. Walker, 7 Cow. (N. Y.) 637; Munroe v. Merchant, 26 Barb. 383; Park v. Wilkinson, 21 Utah 279, 60 P. 945; Donahue v. Meister, 88 Cal. 121, 22 Am. St. 283, 25 P. 1097; Norris' Appeal, 64 Pa. 281; Haines' Appeal, 73 Pa. 169.)

"In a proceeding under the statute to quiet title a jury may be demanded as of right, the action being statutory." (Trittipo v. Morgan, 99 Ind. 269; Johnson v. Taylor, 106 Ind. 89, 5 N.E. 732.)

"The burden is on plaintiff to establish that it has a perfect legal or equitable title without reference to and regardless of whether the defendant's title be valid or invalid." (32 Cyc. 69; Keller v. McGilliard, 5 Cal.App. 395, 90 P. 483; Shelton Logging Co. v. Gosser, 26 Wash. 126, 66 P. 151; 41 Cent. Dig., tit. "Quieting Title," sec. 89.)

There is no proof whatever that had there been a law by which said company could have been incorporated that they ever complied substantially with the statute in force. (Martin v. Deetz, 102 Cal. 55, 41 Am. St. 151, 36 P. 368; People v. Volcano Canyon etc. Co., 100 Cal. 87, 34 P. 522.)

The articles themselves are the sole criterion to ascertain the purpose for which it was formed, and the intent must be gathered alone from the written instrument and cannot be aided or varied or contradicted by testimony or averments aliunde the instrument itself. (Attorney General v. Lorman, 59 Mich. 157, 60 Am. Rep. 287, 26 N.W. 311; Detroit Driving Club v. Fitzgerald, 109 Mich. 670, 67 N.W. 899; Distilling etc. Co. v. People, 161 Ill. 101, 43 N.E. 779; Evanston Electrical etc. Co. v. Kochersperger, 175 Ill. 26, 51 N.E. 719; State v. Minnesota etc. Co., 40 Minn. 213, 41 N.W. 1020, 3 L. R. A. 510; State v. International Inv. Co., 88 Wis. 512, 43 Am. St. 920, 60 N.W. 796.)

The purposes of a corporation which are inadequately declared in its articles of association cannot be aided and cured by the by-laws. (Thompson on Corporations, sec. 41; Indiana Bond Co. v. Ogle, 22 Ind.App. 593, 72 Am. St. 326, 54 N.E. 407; 1 Cook, Corp., sec. 4; Thompson, Corp., 2d ed., sec. 44; Market St. Ry. Co. v. Hellman, 109 Cal. 571, 42 P. 225.)

Three things are necessary to constitute a corporation de facto: First, a law under which a corporation of the powers assumed must lawfully be incorporated; second, a tolerable compliance with the laws requiring it; third, a user of the rights claimed under the law. (Thompson on Corp., par. 224; 10 Cyc. 253.)

It is essential to the validity of a conveyance that there should be a grantee; therefore a deed to a supposed corporation which has not been duly incorporated and which subsequently had no legal existence is a nullity at law and does not divest the grantor of title. (10 Cyc. 1021; Harriman v. Southam, 16 Ind. 190; Douthitt v. Stinson, 63 Mo. 268; German Land Assn. v. Scholler, 10 Minn. 331; Russell v. Topping, 5 McLean, 194, 21 F. Cas. No. 12,163.)

"The owner of the mortgaged premises, where no power of sale is embraced in the mortgage, cannot under any circumstances be cut off from his estate except by sale in pursuance of a degree of the court." (Goodenow v. Ewer, 16 Cal. 461, 76 Am. Dec. 540; Phillips v. Hagart, 113 Cal. 552, 54 Am. St. 369, 45 P. 843; Boggs v. Fowler & Hargrave, 16 Cal. 566, 76 Am. Dec. 561.)

Title never passed from the Lambersons to Huntoon or to the Idaho Agricultural Park Association, and plaintiff is estopped from asserting any interest or adverse possession by reason of any deed prior to 1908, according to the testimony. (2 Devlin on Deeds, 3d ed., sec. 850-C.)

Hawley, Puckett & Hawley, Wyman & Wyman and B. F. Neal, for Respondent.

The court did not err in entering default against certain defendants for failure to answer or otherwise plead to the amended complaint, "for the reason that no service of the amended complaint had been made upon them." (Bates v. Carpentier, 98 F. 452, 454; Cooper v. Preston, 105 F. 403, 404; Carothers v. McKinley etc. Co., 116 F. 947, 951; Carothers v. McKinley etc. Co., 122 F. 305, 307; Manufacturers Co. v. Brown Alaska Co., 148 F. 309.)

"Unless the exercise of the court's discretion in the amendment of pleadings deprives a party of some substantial right, there is no error." (Havelick v. Davidson, 15 Idaho 787, 100 P. 91; Harrison v. Russell & Co., 17 Idaho 196, 105 P. 48.)

If plaintiff had any right of action, it was in equity to restrain defendants from asserting any adverse claim, thus quieting...