Oregon & C. R. v. Grubissich

206 F. 577, 124 C.C.A. 375, 1913 U.S. App. LEXIS 1576

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 17, 1913
• Docket: No. 2,181
• Status: Published

Opinions

GILBERT, Circuit Judge

(after stating the facts- as above). The appellant relies upon'the'alleged copy of the instrument of date March 28, 1870, and contends that at the date thereof the property in controversy belonged to Ben Holladay & Co., and that, although it is not described in the copy of that instrument, it was intended to be included therein and conveyed thereby. There is no legal proof, however, that the alleged instrument was ever executed, or that it was ever seen or was in existence or was lost. The evidence offered to prove that there was such an instrument is the minutes of a meeting of the board of directors of the Oregon Central Railroad Company of March 28, 1870, which contain a record of the agreement of cancellation of the construction contract of Ben Holladay & Co., and what purports to be a copy of the instrument which is" relied upon, together with certain admissions which are alleged to have been made by Ben Holloday in the answer in the suit of Nightengale & Elliott v. Oregon Central Railroad Company and the Oregon & California Railroad Company, and in an affidavit made by Ben Holladay and filed in that suit, which' is referred to in the record as Exhibit 52. We agree with the court below that this evidence is not sufficient to overcome the legal title of record. There is no evidence as to the original of the alleged copy of the instrument which is found in the minutes. It is shown in whose handwriting the copy is made, but it is not shown that the copyist was at any time an officer or- employé of the corporation.

[1] While a corporation’s books and records are evidence to-prove its own acts, they are not competent evidence against third persons to prove contracts with them, in the absence of proof that they knew and assented thereto. Carey v. Williams, 79 Fed. 906, 25 C. C. A. 227; Edwards v. Bates County (C. C.) 117 Fed. 537; Harrison v. Remington Paper Co., 140 Fed. 402, 72 C. C. A. 405, 3 L. R. A. (N. S.) 954, 5 Ann. Cas. 314; Rudd v. Robinson, 126 N. Y. 113, 26 N. E. 1046, 12 L. R. A. 473, 22 Am. St. Rep. 816. In Thompson on Corporations (1st Ed.) § 7740, it is said:

“The general rule is believed to be that, excepting for the purpose of proving what the corporation did, or what action its corporators took in effecting its organization, its books and records are not evidence as against a stranger, or as against a stockholder holding adversely to it.”

[2] Nor does the record show that Ben Holladay ever admitted his knowledge of the alleged conveyance. It does appear that his name was affixed to an answer made by the Oregon & California Railroad Company in the Nightengale suit, to which was annexed as an exhibit what purports to 'be a copy of the instrument which is copied in the minutes. The execution of the instrument, however, was not made an issue in that case. But Holladay did not make the verification to the answer. His name appended thereto appears only as that of the pres-ideiit of the corporation. It does not appear whether he signed it, or whether the attorney of the corporation signed for him. There is nothing to show that 'Holladay ever read the answer or the exhibit attached thereto, or knew that his name was signed thereto. No presumption that he did can arise from the fact that his signature is found subscribed to ihe answer as an officer of one of the corporations defendant. He was not a party to that suit, and it was not his, answer, and, in the absence of proof that he knew and assented to the contents of the answer, nothing contained therein can be properly considered as an admission b}i him against his individual interest.

[3 ] In McCaskill Co. v. United vStates, 216 U. S. 504-514, 30 Sup. Ct. 386, 391 (54 L. Ed. 590), the court said:

“Undoubtedly a corporation-is, in law, a person or entity entirely distinct from its stockholders and officers. T1 may have interest distinct from theirs. Their interests, it may be conceived, may be adverse to its interest, and hence has arisen against the presumption that their knowledge is its knowledge, ihe counter presumption that, in transactions with it, when their interest is adverse their knowledge will not be attributed to it.”

[4] The affidavit of Ben Holladay (complainant s Exhibit 52) which is said to contain an admission of his knowledge of a conveyance of the property may be searched ,in vain for any statement or suggestion, directly or indirectly, or even remotely, relating to the question of a conveyance of this real estate or the title thereto. It contains no reference whatever to any sale or conveyance of real or personal property from Ben Holladay & Co. to the Oregon Central Railroad Company. Holladay’s statements as to the proceedings at the stockholders’ meeting of March 28, 1870, and the vote of the stockholders in favor “of said sale and transfer,” refer only to the sale and transfer of the franchises and property of the Oregon Central Railroad Company to the Oregon & California Railroad Company. From the fact that Holladay admitted that it was the common judgment of all the stockholders of the Oregon Central Company, its directors, and'himself, that the corporate proceedings of March 28 and 29, 1870, were had for the best interests of all concerned in said company, it is not to be inferred that he ratified or affirmed the alleged instrument of March 28, 1870, as a conveyance of, or as expressing an intention to conve}', real estate to the Oregon Central Company.

[5] It is contended that the decree of the court: below should be reversed ■ on the ground that upon the facts proven the presumption arises that a deed was executed from Ben Holladay or Ben Holladay & Co. to the Oregon Central Railroad Company. The presumption of a deed is not only not suggested by the facts alleged in the bill, but is directly at variance with those facts and with the prayer for relief. The appellant’s claim of title, as presented in the bill, is based entirely upon the alleged instrument of date March 28, 1870, which it alleges should in equity be deemed either a deed or an agreement to make a deed, and the prayer is that the same be reformed and specifically enforced, and that the appellee be required to execute a good and sufficient deed of conveyance of the premises in controversy; in other words, the appellant by the allegations of its bill expressly negatives the presumption of a conveyance and rests its claim of title wholly upon a specified instrument which it says has .been lost, but the terms of which it presents to the court as shown by an entry in the minute book of the Oregon Central Railroad Company. The presumption of a conveyance is said to be aided by the proof of two facts: First, the payment of the taxes upon the property bjf the appellant, and the failure of Ben Holladay or his heirs to pay the same; and, second, tho'se alleged admissions by Ben Holladay of the appellant’s title which have already been discussed in this opinion.

[8] 'To sustain the contention the following authorities are cited: Fletcher v. Fuller, 120 U. S. 534, 7 Sup. Ct. 667, 30 L. Ed. 759; Holtzman v. Douglas, 168 U. S. 278, 18 Sup. Ct. 65, 42 L. Ed. 466; and United States v. Chavez, 175 U. S. 520, 20 Sup. Ct. 159, 44 L. Ed. 255. In Fletcher v. Fuller, the count held that although, as a general rule, it is only where the possession has been actual, open, and exclusive for the period prescribed in the statute of limitations, to bar an action for the recovery of land that the presumption of a deed can be invoked, yet that presumption may. properly be invoked where a proprietary right has been exercised beyond such statutory period, although the exclusive possession of the whole property to which the right is asserted may have occasionally been interrupted during such period, if in addition to the actual possession there have been other open acts of ownership. In that case there had been an exclusive working of a quarry on the land for more than 28 years under a claim of title of the whole tract by virtue of conveyances in which it was described, and the parties in possession had paid taxes on the property for a period of 77 years. In Holtzman v. Douglas, there was no question or discussion of a presumption of a conveyance. The defendants relied entirely upon title derived through a tax deed, and continued adverse possession thereunder for more than twenty years. In United States v. Chavez, the proof showed uninterrupted possession of lands in Mexico for more than 100 years prior to the transfer of the territory in which they were situated to the United States, and continuing thereafter until the presentation of a petition to the court of private land claims for a decree confirming the title of the petitioners. It was upon these facts that the court remarked:

“Upon a long and uninterrupted possession, the law bases presumptions as sufficient for legal judgment, in the absence of rebutting circumstances, as formal instruments, or records, or articulate testimony. Not that formal instruments or records are unnecessary, but it will be presumed that they once existed and have been lost.”

It is apparent that the facts in those cases differ widely from the facts in the case at bar.

[7] As to-the possession of the land in controversy, the court below found that it has never been in the actual possession or occupancy of any person or persons since Holladay & Co. ceased logging operations thereon in 1869. It is admitted that the land has never been cleared or cultivated, and that it was not inclosed until March, 1905. ’ It is true that the complainant has paid taxes on the land since 1873, but in the year 1880 the property was assessed to Ben Holladay, and from 1902 to 1910 it was assessed as the property of Ben Holladay & Co. The mere fact of the payment of these taxes is certainly no ground on which to presume a conveyance to the taxpayer. The land had been denuded of its timber, and in 1870 it was of little value. There is no evidence of any act of possession, or any assertion of ownership, by the Oregon Central Company or by the appellant, other than the payment of taxes, until after the death of Ben Holladay. The first act of assertion of ownership that is claimed was in 1890, when an agent of the appellant examined the land to ascertain its value. In 1905, the appellant placed a wire fence about it, the explanation of which was that:

“Inasmuch as there was no record title, it would be inadvisable to stir tbe matter up, and thought we would just fence it, and assert our possession in that way, and I presume to take advantage of the statute of limitations in that case.”

The statutes of Oregon assume to declare upon what the presumption of title may be based. It is upon ten years of continuous adverse possession. Under those statutes mere silent: possession, no matter how long continued, does not destroy the right of another.

The presumption of a grant had its origin at a time when there was no registration of conveyances, and the muniments of title were subject to loss or destruction. It was indulged upon the theory that long-continued, open, notorious, and adverse possession of property must have had its origin in a conveyance, which had been lost. The best expression of the doctrine is found in Ricard v. Williams, 7 Wheat. 59, 108 (5 L. Ed. 398) where Judge Story said:

"Presumptions of this nature are adopted from the general infirmity of human nature, the difficulty of preserving muniments of title, and the public policy of supporting long and uninterrupted possessions. They are founded upon tlie consideration that the facts are such as could not, according to the ordinary course of human affairs, occur, unless there was a transmutation of title to, or an admission of ail existing- adverse title in, the party in possession. They may therefore he encountered and rebutted by contrary presumptions, and can never fairly arise where all the circumstances are perfectly consistent with the nonexistence of a grant.”

With this doctrine for our guidance, we have to inquire whether the elements on which such a presumption is based are to be found in the case at bar. It is to be observed, first, that during the period of the* appellant’s alleged possession there has been no difficulty in the way of preserving muniments of title; the registration laws having obviated that difficulty. Nor, according to the policy of the present laws of the states, is there a necessity for indulging a presumption to support long and uninterrupted possession; the policy of the law in that respect being definitely expressed in statutes of limitation, and in provisions for the acquisition of title through short periods of adverse possession. These statutes leave little or no room for the indulgence of the presumption of a grant. In Wigmore on Evidence, § 2522, it is said:

“But the systematic extension of the principle of acquisition by limitation, the reduction of tbe required possession to short periods, and (in the United States) the practice of compulsory registration of deeds of conveyance, have left little scope for the presumption.”

[8] Again, all the circumstances in the present case are “perfectly consistent with the nonexistence of a grant,” and, in fact, those circumstances, instead of supporting the presumption of a deed, tend strongly to rebut it. The alleged copy of the instrument found in the minutes, if it has any probative effect, establishes the fact that no other instru-m'ént was executed, and that therefore there was no conveyance. “Where the origin of the claim of title is known, there will be no presumption of a lost grant.” Claflin v. Boston & Albany R. R. Co., 157 Mass. 499, 32 N. E. 659, 20 L. R. A. 638. And the presumption cannot arise “where the claim is of such a nature as is at variance with the supposition of a grant.” Ricard v. Williams, supra, 7 Wheat, page 108, 5 L. Ed. 398.

[9] There is no legal proof whatever of the execution of the alleged instrument of date March 28, 1870. There is no evidence that the instrument ever was signed or was in the ’possession of any one, or that it was lost. There is only the bare fact that what purports to be a copy of an instrument is found in the minute books of the Oregon Central Railroad Company. And that copy does not appear to be the copy of a deed, but of a bill of sale of personal property. In the granting part thereof there is enumerated:

“All sawmills and machinery connected therewith, all machinery, tools, implements, apparatus of every name and description, all live stock, horses, mules, cattle, work oxen, carts, drays, wagons, gearing-tackle, and all leases and all property of every name and nature owned by us, in the possession of Ben Iiolladay & Co.”

Then follows the further specification:

“The same being the mills, machinery, tools, implements, apparatus, live stock, horses, mules, cattle, carts, drays, wagons, gearing-tackle, railroad ties, iron rail spikes, and other railroad, materials, now and heretofore used by us in the construction of the Oregon Central Railroad Company.”

So far there is no mention or suggestion of any real property. But next there is added, as through inadvertence or afterthought, the words:

“It being the intention of this conveyance to transfer to said Oregon Central Railroad Company all property, real and personal, of every name and nature now owned or possessed by the undersigned in the state of Oregon.”

That it was not the intention of the parties to the instrument to convey real property is shown by the form of the instrument itself. If such a paper was executed, it was executed as a bill of sale, for it was not sealed, witnessed, or acknowledged, and it was stamped with the revenue stamp of a bill of sale, and not with the stamp required of a conveyance of real estate. If it was ever delivered, it was treated as a bill of sale, for it was never recorded; no recording of a bill of sale being necessary under the registration laws of Oregon. Now, this very copy of an instrument, which is not a copy of a deed nor of an agreement to make a deed, is referred to to support the presumption that there was another instrument, and that that other instrument was a deed, and this in the face of the evident fact and the distinct allegation of the bill that the appellant’s claim of title had its origin in the very instrument of which the minute book contains the alleged copy.- We find no ground on which to sustain such a presumption and no ground for reversal oí the decree of the court below.

The decree is affirmed.