Frank v. Hicks

35 P. 475, 4 Wyo. 502, 1894 Wyo. LEXIS 6
CourtWyoming Supreme Court
DecidedJanuary 16, 1894
StatusPublished
Cited by51 cases

This text of 35 P. 475 (Frank v. Hicks) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frank v. Hicks, 35 P. 475, 4 Wyo. 502, 1894 Wyo. LEXIS 6 (Wyo. 1894).

Opinions

CoNaway, Justice.

On October 22, 1886, the Cheyenne Land & Live Stock Company, a corporation, made its deed purporting to convey'' to William W. Corlett and Truman B. Hicks “and their sue-' cessors in trust forever,” fifteen thousand two hundred and eighty-five and forty-nine one-hundredths acres of land, described by section, township 'and range, without using the word appurtenances or appurtenant or appendant, and without mentioning any water, wafer right, or irrigating ditch;, and a large amount of - personal property consisting of live' stock of the bovine and horse species, and ranch implements, farm utensils, blacksmith tools, etc., all being property appro-. priate to the business of a land and live stock company. The [511]*511description of the property conveyed concluded with the following words: “Also all property of like land and character to that hereinbefore described which shall hereafter be acquired by said first party, together with all the corporate privileges, liberties and franchises of said party of the first part.”

This property was conveyed in trust for the equal pro rata benefit and security of certain first mortgage bonds, not exceeding the limit of one hundred and fifty thousand dollars, which said company proposed to issue, and did thereafter, issue, “without any preference or priority of any one bond over another by reason of any priority of the time of issue or negotiation thereof or otherwise.”

A copy of one of these bonds is in evidence and bears date of September first, 1886. It would seem that the bonds had been executed and were ready for issue at the time of the execution of the trust deed, but were not actually issued within the meaning of the deed until afterward.

The principal of said bonds becomes due and payable at the office of the Farmers Loan and Trust Company in the City of New York, on the first day of Septejnber, 1896, and interest at the rate of six per cent, per annum on the first days of March and September in each year. The trust deed provides that in case of default in the payment of the principal of any of the bonds or any interest when the same shall become due and within ninety days thereafter the entire prin-. cipal sum and interest becomes due and payable forthwith, at the option of the holder or holders of any of said bonds, and the trustees may then, at the request of the holder of any of said bonds, sell the trust property and apply the proceeds to the payment of the bonds after paying the expenses of taking and keeping the property and the charges and expenses of sale, paying the surplus, if any there be, to the party of the first part in the trust deed. William W. Corlett died prior to the commencement of this action. Truman B. Hicks, as provided in the trust deed, is acting as sole trustee. The trust. deed was filed for record on the twenty-fifth day of October, 1886, and was duly recorded.

[512]*512The trial court finds as a matter of fact, and the evidence in the record sustains the finding, that the trustees named accepted the trust;, that the trust deed was duly delivered after its execution, and that the Cheyenne Land & Live Stock Company defaulted and failed to pay three semi-annual payments of interest upon the bonds falling due, respectively, on the first day of March, 1890, the first day of September, 1890, and the first day of March, 1891, and that Horace K. Thurber is the holder for value and in good faith of forty-four of the bonds mentioned, and that upon said defaults in said payments of interest he made a written request for the foreclosure of said trust deed in accordance with the provisions thereof, electing to declare the whole principal indebtedness due and payable; and that thereupon said Truman B. Hicks, as surviving trustee, brought this suit for the foreclosure of said, trust deed; and for an injunction restraining the sale of property on execution sued out by Elise Frank. After the execution of the trust deed and before the commencement of this action in the district court, the Cheyenne Land & Live Stock Company, grantor in said trust deed, acquired considerable additignal property in lands, and also received a deed stating the nominal consideration of one dollar, of the water rights and irrigating ditches in controversy between Truman B. Hicks, as trustee, and Charles A. Badgette, who seeks to sell them on his execution as the property of said company, and as not subject to the lien of said trust deed.

On June twenty-seventh, 1889, Elise Frank obtained her judgment against the Cheyenne Land & Live Stock Company in the sum of fifteen thousand and ninety-six dollars, and on July first, 1889, caused execution to issue thereon, and on July third, 1889, caused such execution to be levied upon all the lands described in the trust deed and all the lands acquired by the Cheyenne Land & Live Stock Company after the execution of the trust deed, except one hundred and twenty acres. The sheriff of the county was proceeding to advertise and sell the lands so levied upon, when, on August fifteenth, 1891, this action was begun, and a temporary order of injunction sued out, restraining such sale. On final hear[513]*513ing the district court made this order perpetual as to the lands described in the trust deed, but dissolved the injunction as to the lands acquired by the Cheyenne Land & Live Stock Company after the execution of the trust deed.

On August twenty-fourth, 1891, Charles A. Badgette obtained his judgment against the Cheyenne Land & Live Stock Company, for the sum of one thousand and seven hundred and sixty dollars and forty cents. On August thirty-first he caused execution to issue. On September third, 1891, the sheriff of the county levied the execution upon the water rights and irrigating ditches in controversy. He was proceeding to advertise and sell them when, on September twenty-third, 1891, by supplen^ntal petition of Truman B. Hicks as trustee, a temporary order of injunction was sued out, restraining such sale. On final hearing the district court dissolved this injunction.

The trust deed in question was defectively executed and was not entitled to record. Although recorded the record was not constructive notice to any one of its contents. It is not a legal mortgage, but is effective between the parties as an equitable mortgage.

The informality in the execution of the trust deed in question is that there is no subscribing witness as required by statute, and that the acknowledgment is by the president alone, whereas the acknowledgment of the secretary is also necessary as one of the parties authorized by the resolution of the board of trustees of the company to execute the trust deed, and as the party having custody of the corporate seal. As between the parties the following seems to be a correct and comprehensive statement of the law applicable to such cases:

“A mortgage or trust deed which cannot be enforced by a sale under the power or by a judgment of foreclosure, on account of some informality (in a matter) requisite to a complete mortgage or deed of trust, will nevertheless be regarded as an equitable mortgage, and the lien will be enforced by special proceedings in equity. The attempt to create a security in legal form upon specific property having failed, effect is given to the intention of the parties, and the lien enforced [514]*514as an equitable mortgage. Any agreement between tbe parties in interest that shows an intention to create a lien may be, in equity, a mortgage.

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Bluebook (online)
35 P. 475, 4 Wyo. 502, 1894 Wyo. LEXIS 6, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frank-v-hicks-wyo-1894.