George R. Barse Live-Stock Commission Co. v. Range Valley Cattle Co.

• Decision Date: 13 October 1897
• Docket Number: 854
• Citation: 16 Utah 59,50 P. 630
• Court: Utah Supreme Court
• Parties: THE GEORGE R. BARSE LIVE STOCK COMPANY, RESPONDENT, v. THE RANGE VALLEY CATTLE COMPANY AND J. M. DART, APPELLANTS

50 P. 630

16 Utah 59

THE GEORGE R. BARSE LIVE STOCK COMPANY, RESPONDENT, v. THE RANGE VALLEY CATTLE COMPANY AND J. M. DART, APPELLANTS

No. 854

Supreme Court of Utah

October 13, 1897

Appeal from the Third district court, Salt Lake county. Ogden Hiles Judge.

Action by the George R. Barse Live Stock Commission Company against the Range Valley Cattle Company and J. M. Dart to compel a transfer of stock on defendant corporation's books to plaintiff, and free plaintiff's title to said stock from a cloud arising from a sale of the same to defendant Dart under execution in his favor. From a judgement for plaintiff defendants appeal.

Affirmed.

Charles J. Pence, for appellants.

The right of Dart had ripened into a legal title and possession before any demand for transfer by the holder of the stock. Abels v. Mobile Real Est., etc. (Ala.), 9 So. 423; Fiske v. Carr, 20 Me. 301; In re Murphy, 51 Wis. 519; Conway v. John, 14 Colo. 30; Colt v Ives, 31 Conn. 25; Bullock v. Weber, 35 P. 183; First Nat. Bk. v. Hastings, 42 P. 691; Nat. Bank v Folsom, 38 P. 253.

MINER, J. ZANE, C. J., and BARTCH, J., concur.

OPINION

MINER, J.:

This action in equity was brought by the plaintiff, a corporation organized and existing under the laws of Kansas, against the defendant, a corporation organized under the laws of Utah, and J. M. Dart, who was president of the defendant corporation. The court found, among other things: That on March 19, 1894, one A. E. De Ricqles was the owner of 75 shares of stock in the defendant company, of the par value of $ 100 each, evidenced by certificate of stock No. 36. That on the same day, at Kansas City, Kan., De Ricqles, by an assignment and indorsement in blank, pledged said certificate of stock to the plaintiff company as collateral security to secure the payment of two notes theretofore executed by De Ricqles to the plaintiff, as follows: One for $ 2,477.20, dated October 21, 1893, due March 4, 1894, with interest at 10 per cent.; the other for $ 3,238.85, dated March 18, 1894, due March 19, 1895, with interest at 10 per cent.,-- and that no part of said notes had been paid. That De Ricqles pledged this stock to the plaintiff, with power to sell and dispose of it at public or private sale, without notice, and apply the proceeds to the payment of said indebtedness, and plaintiff was entitled to receive all dividends accruing on the stock. Both defendants had actual notice and knowledge of this pledge and agreement between De Ricqles and the plaintiff as early as the month of June, 1894,--long before the wrongful acts complained of. That on January 9, 1896, plaintiff, by its attorneys, presented to the defendant company the stock so pledged and indorsed, and offered to surrender the same for transfer to plaintiff on the books of the company, but defendant company refused to make the transfer on the books, for the reason that said shares of stock had been sold on execution, on a judgment in favor of defendant Dart against said De Ricqles, and that Dart had purchased said stock on execution, and had it transferred to him on the books of the defendant company. On the same day, plaintiff demanded from Dart said stock and all dividends he had received thereon, amounting to $ 4 per share, and subsequently demanded the further dividends received by Dart thereon, of $ 14 per share. That said Dart refused such demand. That on July 31, 1894, with actual knowledge and notice of said transfer to the plaintiff of said stock, defendant Dart took a note from De Ricqles for $ 3,896 in payment of the balance due said Dart from De Ricqles for the purchase price of said stock. That plaintiff knew nothing of said indebtedness until long thereafter, and had believed said De Ricqles to be the owner of the stock. That on the 26th day of October, 1895, said Dart recovered judgment on said note for $ 4,332.10, and had execution issued and levied upon said stock standing on the books of the company in the name of De Ricqles, and the said Dart purchased the same at the execution sale, and had a new stock certificate issued to him thereon by the defendant company. That said Dart and the defendant company had due and actual notice at and before such execution sale that plaintiff held said stock as aforesaid, together with dividends paid thereon. That such certificate had upon its face the following provision: "Transferable on the books of the company by indorsement hereon and surrender of this certificate." That the by-laws of said company contain the following provision: "The stock may be transferred on the books of the corporation, upon indorsement and surrender of the certificate, and the secretary shall thereupon issue a new certificate therefor." The court found the transaction on the part of Dart to be fraudulent, and that such proceeding left a cloud upon the title of plaintiff to said stock and dividends. As conclusions of law, the court found that the plaintiff was entitled to said stock and dividends for the purpose for which it was assigned, and that said Dart holds whatever interest he may have acquired in said stock subject to the lien of the plaintiff, and in trust for the carrying out of the agreement between plaintiff and De Ricqles; that the plaintiff was entitled to a decree to compel said defendants to transfer said stock to plaintiff on the books of the company, free from any cloud, for the purposes aforesaid, and that said dividends so paid to defendant Dart by the defendant company be paid to the plaintiff, with interest; that Dart be entitled to the surplus arising from such stock and dividends after plaintiff's notes are paid. Judgment was entered for the plaintiff in accordance with the findings. This appeal is taken from the judgment.

The appellants contend that the plaintiff, being a foreign corporation, could not bring suit in this state without first filing with the secretary of state a copy of its articles of incorporation and by-laws. This complaint was filed January 20, 1896. Section 2392, Comp. Laws Utah 1888 in force in 1896, provides "that all foreign corporations not organized under the laws of Utah, now doing business in this territory, shall, within 60 days after the passage of this act, and all foreign corporations, within 60 days after the commencement of business in this territory, file with the secretary of the territory, and with the probate judge of the county wherein their principal office is situated, certified copies of their articles and certificates of incorporation and by-laws, * * * and shall designate some person living in the county in which its proposed place of business in this territory is situated upon whom process may be served." Section 9, art. 12, of the constitution, in force January 4, 1896, provides "that no corporation shall do business in this state without having one or more places of business, with an authorized agent, or agents, upon whom process may be served, nor without first filing a certified copy of its articles of incorporation with the secretary of state." Section 4 of article 12 provides "that all corporations shall have the right to sue and shall be subject to be sued in all courts in like cases as natural persons." It will be conceded in the outset that, if the contract upon which the plaintiff's action was brought was made in violation of a law of the state, it cannot be enforced by any court in the state. So far as appears, plaintiff had no place of business, with an authorized agent upon whom process could be served, within the state, and had not filed a certified copy of its articles of incorporation with the secretary of state. The contract and notes upon which suit was brought were made in Kansas City, Kan., where plaintiff conducted its business, and the notes were made payable there. The plaintiff had never done or contemplated doing any business in this state, except in bringing this action to enforce the contract and rights sued upon. Under these circumstances, was the bringing of this action to enforce the contract and obtain rights thereunder forbidden by the constitution and laws of this state, which provide that "no corporation shall do business in this state," etc. "To do business," as defined by Webster, is "to carry on any particular occupation or employment for a livelihood or gain, as agriculture, trade, mechanic arts, or profession; that which busies or occupies the...