Johnson v. Sage

• Decision Date: 15 April 1896
• Parties: JOHNSON v. SAGE
• Court: Idaho Supreme Court

44 P. 641

4 Idaho 758

JOHNSON v. SAGE

Supreme Court of Idaho

April 15, 1896

MINING CORPORATION-PRESIDENT AND SECRETARY-BOARD OF DIRECTORS-THEIR SEVERAL POWERS.-The president and secretary of a mining corporation have no power to appoint an agent or attorney in fact to manage, control, sell and transfer the property of the corporation, without being themselves authorized so to do, by order or resolution of the board of directors duly adopted by said board.

AUTHORITY OF AN ATTORNEY IN FACT.-A power of attorney to manage control and lease the property of a mining corporation, does not authorize an attorney in fact, or agent, to sell and transfer the property of the corporation, either in trust or absolutely.

SALE IN TRUST FOR BENEFIT OF GRANTOR IS VOID AS AGAINST CREDITORS.-A sale and transfer of all the earth, rock, gold and everything of value now in the sluice boxes, or to be hereafter in the sluice boxes, with the right to take possession of the sluice boxes, superintend the clean-up, and take and have all the results of the said clean-up, to have and to hold the same for the use and benefit of the grantee, with a contemporaneous verbal agreement between grantor and grantee that any excess of said clean-up above what was necessary to pay grantee what was due him is a sale in trust for the benefit of grantor, and is void as against creditors, being forbidden by section 3019 of the Revised Statutes of Idaho.

SAME-SECTION 3020 OF THE REVISED STATUTES CONSTRUED.-A sale of personal property with intent to delay or defraud creditors of grantor is void under section 3020 of the Revised Statutes of Idaho.

(Syllabus by the court.)

APPEAL from District Court, Shoshone County.

Judgment reversed, with instructions.

E. M Heyburn, for Appellant.

It appears from the testimony contained in the transcript that there was no actual change of possession in this case. That Cunningham, who signed the checks, made up the payrolls and generally attended to the business of mining on this claim before the alleged assignment, continued, according to the testimony of the plaintiff's witnesses to perform the same acts and functions afterward. That he signed the checks generally for labor and other indebtedness incurred in connection with working the mine as "manager." That he made up payrolls as "manager," and that Mr. Johnson, the alleged owner of the property, was on the premises but once and paid out no money except upon the payrolls and checks made by Mr. Cunningham as manager. (Rev. Stats., secs. 3021, 5932; Harkness v. Smith, 3 Idaho 221, 28 P. 423.) If the Spokane Hydraulic Mining Company at the time of appointing Mr. Cunningham agent on March 15, 1895, did not contemplate the necessity of his acting for the company in making an absolute assignment of its property, then any such act on the part of the agent would not be within the scope of the authority conferred on him. Admitting the doctrine of the more modern authorities that under especial circumstances and urgent necessity an agent may act even to the extent of pledging the property of his principal, yet in this case there is no evidence that any such necessity existed, but on the contrary positive testimony of Cunningham's, the agent, that the assignment was purely voluntary and was not demanded on the part of any beneficiary under it. And Mr. Cunningham's own testimony, that it was to delay and hinder creditors, takes it out of the most liberal construction that the rule has ever received that an agent may under pressing circumstances transfer or pledge the property of his principal. The making of the contract was clearly not within the scope of the authority of the agent. (McCord etc. Furniture Co. v. Wollpert, 89 Cal. 271, 26 P. 969; Borderre v. Den, 106 Cal. 594, 39 P. 946; Bronson v. Ashlock, 2 Kan. App. 255, 41 P. 1068; Union Gold Min. Co. v. Rocky Mountain Nat. Bank, 2 Colo. 565; Holbrook v. McCarthy, 61 Cal. 216; Harris v. San Diego Flume Co., 87 Cal. 526, 25 P. 758; Smyth v. Lynch, 7 Colo. App. 383, 43 P. 670.) Where the agent's power is in writing, or the facts are undisputed, the question as to the extent of the agent's authority is purely a question of law. (Mechem on Agency, secs. 104, 105; Gulick v. Grover, 33 N. J. L. 463, 97 Am. Dec. 728; Claflin v. Continental Jersey Works, 85 Ga. 27, 11 S.E. 721.) There is no sufficient evidence in the record of any ratification of the act by the company, and unless his authority appears to be clearly established by the written appointment, the assignment to Johnson would be unauthorized. (4 Thompson on Corporations, c. 113, secs. 5305-5307, 5327, 5328.)

W. W. Woods and Albert Allen, for Respondent.

We submit that under the authority given him Mr. Cunningham had power to contract such debts as were necessary in the ordinary management of the affairs of the company, and therefore necessarily had the power to secure the same by lease or pledge of the property of the company in his possession. (Hatch v. Coddington, 95 U.S. 48.)

Action by Albert Johnson against Eugene Sage. This suit was brought by the plaintiff, against the defendant, in the district court of the first judicial district of Idaho to determine the ownership and right to possession of the three-fourths interest in and to the following described property, to wit: "All the earth, rock, gold, and all things of value in the sluice-boxes, and on the bedrock connected therewith, upon the Dry Gulch placer mining claim, situated in the Summit mining district, in the county of Shoshone and state of Idaho." The complaint was filed July 12, 1895. The plaintiff alleged ownership, possession, and right to possession on July 6, 1895; that defendant on said date, wrongfully took possession of said goods, and wrongfully withholds the same; alleged value to be $ 4,000, and damages at $ 2,000. Defendant's answer denies each allegation of plaintiff and alleges that defendant, as sheriff of Shoshone county, levied upon and seized said property by virtue of a writ of execution issued out of said district court, on July 2, 1895, upon the judgment in said court in favor of George B. Dean, and against the Spokane Hydraulic Company; that said property was, at the time of said levy, the property of and in the possession of the said Spokane Hydraulic Mining Company. The cause was tried before the court and jury, resulting in a verdict and judgment for the plaintiff, that said property is the property of plaintiff, and that he is entitled to the possession of the same, and assessing his damages at one dollar. From this judgment, and from an order overruling the motion for new trial, the defendant appeals to this court. Reversed.

MORGAN, C. J. Sullivan and Huston, JJ., concur.

OPINION

MORGAN, C. J. (After Stating the Facts.)

The plaintiff assigns the following errors, among others, to wit: 1. The court erred in admitting in evidence plaintiff's exhibit "A." 2. The court erred in admitting in evidence plaintiff's exhibit "B." 3. The court erred in refusing to sustain the defendant's motion for nonsuit.

The defendant, as sheriff of Shoshone county, levied upon the property in question by virtue of an execution...