Moore v. Boise Land & Orchard Co. , 31 Idaho 390 ( 1918 )

MORGAN, J.

Certain notes and mortgages involved herein were executed and delivered by Boise Land and Orchard Company on December 6, 1912, duly recorded and thereafter assigned to respondent, Moore, as collateral security. He holds legal title thereto and is such a party in interest that he may foreclose in his own name. (Craig v. Palo Alto Stock Farm, 16 Ida. 701, 102 Pac. 393; Utah Implement-Vehicle Co. v. Kenyon, 30 Ida. 407, 164 Pac. 1176.) On November 30, 1912, the charter of the Orchard Company was forfeited for nonpayment of its corporate license tax. On July 14, 1913, upon payment of the amount due, it was reinstated. (Sess. Laws 1912, chap. 6, p. 13.) By deed, dated August 14, 1913, but not delivered until November 12th, following, the Orchard' Company conveyed all its property to the Wyoming Holding Company, a corporation, subject to the mortgages, the amounts thereof being deducted from the purchase price. The Holding Company thereafter continued in possession of the property until the appointment of appellant, Perkins, as its receiver on August 3, 1914.

It is contended that, by reason of the forfeiture above mentioned, the mortgagor had no corporate existence at the time the encumbrances were made and that they are, therefore, void. The Holding Company cannot be heard to make such a defense. It is estopped from asserting that the encumbrances are void. (Burke Land & Livestock Co. v. Wells, Fargo & Co., 7 Ida. 42, 60 Pac. 87; Fremont County v. Warner, 7 Ida. 367, 63 Pac. 106; Hadley v. Clark, 8 Ida. 497, 69 Pac. 319; Hasselman v. United States Mortgage Co., 97 Ind. 365; Snider’s Sons Co. v. Troy, 91 Ala. 224, 24 Am. St. 887, 8 So. 658, 11 L. R. A. 515; Old Colony Trust Co. v. Allentown & B. Rapid Transit Co., 192 Pa. St. 596, 44 Atl. 319; Johnson v. Thompson, 129 Mass. 398; Merriman v. Moore, 90 Pa. St. 78; Hancock v. Fleming, 103 Ind. 533, 3 N. E. 254; Mississippi Valley Trust Co. v. Hofius, 20 Wash. 272, 55 Pac. 54.)

Appellant, Perkins, as receiver of the Holding Company, in the absence of fraud, and none is alleged or shown, can assort no rights the company could not. (34 Cyc. 191; Kane v. Lodor, 56 N. J. Eq. 268, 38 Atl. 966; Ryder v. Ryder, 19 R. I. 188, 32 Atl. 919; Albien v. Smith, 24 S. D. 203, 123 N. W. 675, 26 S. D. 551, 128 N. W. 714; Black v. Manhattan Trust Co., 213 Fed. 692.)

Respondent, Rayburn, recovered judgment against the Orchard Company on October 13, 1913, before the property was conveyed to the Holding Company. Appellant, Dean, recovered judgment against the Holding Company on March 15, 1915, subsequent to its acquisition of the land, and it was in his action the receiver was appointed. These judgments are, therefore, liens against the property, but neither of these creditors can, in the absence of fraud, acquire any greater rights than his debtor had at the time of the rendition of his judgment. (Donaldson v. Thousand Springs Power Co., 29 Ida. 735, 162 Pac. 334; Bank of Dillon v. Murchison, 213 Fed. 147, 129 C. C. A. 499; Eastman v. Parkinson, 133 Wis. 375, 113 N. W. 649, 13 L. R. A., N. S., 921; Albien v. Smith, supra; Coldiron v. Ashville Shoe Co., 93 Va. 364, 25 S. E. 238.) The liens of these judgments are, therefore, subject to the mortgages and that of Rayburn is entitled to priority over that of Dean.

Respondent, McReynolds, commenced' action against the Orchard Company on August 29, 1913, and secured judgment on April 27, 1914, after the property in question had been transferred by that corporation to the Holding Company. In his cross-complaint he did not plead the nature of his original claim, but asked that his judgment be, and the court decreed that it was, a lien upon the property in question which, according to the terms of the decree, was subsequent to the mortgages and to the lien of the judgment of Rayburn and prior to that of Dean. This was error. The case relied upon to sustain the decree in this particular is Seymour v. Boise R. R. Co., 24 Ida. 7, 132 Pac. 427, wherein it was held, as a matter of fact and law, that the Boise Railroad Company was a reorganization of the Boise Traction Company, against which a judgment had been recovered and that the former, having taken over the franchise and all of the property of the latter, was liable for the judgment. A case much more nearly in point, and one we deem to be controlling upon the matter here under consideration, is Anderson v. War Eagle Consol. Min. Co., 8 Ida. 789, 72 Pac. 671. (See, also, 7 R. C. L., p. 183, sec. 156.)

Sec. 4457, Rev. Codes, as amended by Sess. Laws 1913, chap. 22, p. 91, provides: “ .... from the time the judgment is docketed it becomes a lien upon all the real property of the judgment debtor, not exempt from execution, in the county, owned by him at the time or which he may after-wards acquire, until the lien expires.” There is no allegation that the transfer of the property from the Land and Orchard Company to the Holding Company was in fraud of the former’s creditors, nor does it appear that one of these corporations is a reorganization of the other. The McReynolds judgment is against the Land and Orchard Company and there is nothing in the record to justify the action of the trial court in making it a lien against the property of the Holding Company.

Other points presented by the specifications of error-have been considered and found to be without merit.

The decree appealed from .is affirmed so far as it affects the mortgages of Moore and the judgment of Rayburn. It is reversed so far as it decrees the judgment of M'eReynolds to be a lien upon the property in question". Costs are awarded against appellants and in favor of respondents, M'oore and Rayburn, and one-third of appellants’ costs upon appeal, heretofore incurred, is awarded in their favor against respondent, MeReynolds.

Budge, C. J., and Rice, J., concur.

Petition for rehearing denied.