tle, such title inured to the benefit of the hold- | per cent. of their par or face value; and the ers of the bonds secured by the mortgage. [Ed. Note. For other cases, see Mortgages, Cent. Dig. §§ 13, 14; Dec. Dig. 12.] Appeal from Circuit Court, Johnson County. Consolidated actions by Leonard Johnson and another against the Yellow Chief Coal Company. Judgments for plaintiffs, and defendant's trustee in bankruptcy appeals. Re versed. H. R. Dysard, of Ashland, for appellant. C. B. Wheeler, of Ashland, and J. K. Wells, of Paintsville, for appellees. NUNN, J. The appellees, Leonard and Charles Johnson, were plaintiffs below in separate actions. By an agreed order the actions were consolidated and tried together. Separate judgments were rendered against the Yellow Chief Coal Company, whereby Charles Johnson recovered $5,625, and Leonard Johnson recovered $3,375. The court also adjudged a lien upon certain lands for the payment of each judgment, and ordered a sale of the lands for that purpose. Pending the action the coal company was adjudg ed a bankrupt in the United States District Court for the Eastern District of Kentucky, and the trustee, who intervened, brings this appeal. Except in the amounts claimed, the actions of Leonard and Charles Johnson are identical. In the year 1909 James M. Lively, of New York, came to Johnson county and started negotiations with the appellees and others for the purchase of coal lands on Bobbs branch, in that county. Upon his return to New York the owners made a proposition in the form of a letter agreeing to sell their lands at $25 per acre, one-third to be paid in cash, and the balance in one and two years. In November, 1909, Lively returned to Johnson county, in company with Henry Taylor, and, after further negotiations, procured, on the 30th day of that month, separate writings or options from Charles and Leonard Johnson whereby Charles agreed to convey 300 acres, and Leonard agreed to convey The consideration was $25 per The options recited that Taylor and Lively were to organize a company, and the conveyances were to be made to that company within 60 days. One-third of the consideration was to be paid in cash when the conveyances were made, and the remaining two-thirds "to be paid for in the first mortgage, 20-year, 5 per cent. sinking fund bonds of said company, at the rate of 80 per cent. on their par value." During the interval the appellees agreed to furnish an abstract of title. The options also contained this clause: 180 acres. acre. "It is further provided that the vendor shall have the option, at any time after the expiration of eighteen (18) months from the delivery of such bonds, and before the expiration of twentyfour (24) months, to sell such bonds to the company so organized at the price of ninety (90) said company shall within sixty (60) days after such notice take up said bonds and pay therefor such price." In the meantime the Johnsons were having abstracts made, and Taylor and Lively proceeded with the organization of the Yellow Chief Coal Company, which was tentatively formed by the subscribing stockholders on the 1st of January, 1910. While so organized the company took an assignment of the options executed to Taylor and Lively. On that date the company executed and acknowledged a mortgage or deed of trust to secure an issue of first mortgage bonds of $500 each, aggregating $100,000. The mortgage covered all the lands upon which Taylor and Lively appellees. January 29, 1910, was the last of had secured options, including the lands of the 60 days on which the option to purchase might be exercised, and on that day the articles of incorporation of the Yellow Chief Coal Company were filed for record in the Johnson county court clerk's office, as well as the mortgage or deed of trust referred to. delivered their deeds to the company, which On the same day, the Johnsons executed and were then recorded, conveying the lands which they had theretofore optioned, and the consideration was paid therefor as stipulated in the option, viz., one-third cash, and the balance by delivery of first mortgage, 20-year, 5 per cent. bonds; that is, a sufficient number of them at 80 cents on the dollar to equal in amount the balance of the purchase price. The deeds, however, did not recite the whole consideration or the manner of payment. The consideration named was "the sum of $10 and other considerations in hand paid." It was the ordinary form of general warranty deed, without reservations or limitations of any kind, except an exclusion of two small surveys. No question about the exclusions is involved in this controversy. On the 11th of February, 1910, a certified copy of the articles of incorporation were filed for record with the secretary of state. On April 18, 1911, at a stockholder's meeting, a resolution was adopted ratifying the mortgage and again declaring it to be the act and deed of the corporation. By the sale of bonds secured by the mortgage executed and recorded in the way already explained the company procured funds with which to develop the property, and which it commenced to do as soon as titles were acquired. The appellees held their bonds and drew interest thereon semiannually for two years. At that time it became apparent that the company was in failing circumstances. It was unable to pay about $5,000 which it owed for merchandise supplied by wholesalers to its mine commissary. In February, 1912, appellees filed their suits against the Yellow Chief Coal Company, and averred that it was a corporation "duly organized and existing under and by virtue of * a lien by virtue of the mortgage, but assert that the Johnsons, have no purchase-money or other prior lien, and plead that the Johnsons are estopped from asserting or claiming any lien for purchase money after having recited in the deed of conveyance that the consideration had been fully paid, and after having accepted the bonds of the company as payment. For the creditors it is said they extended credit in good faith, and, in substance, the plea of the bondholders is relied upon. We are of the opinion that the court erred in rejecting the plea of the creditors and bondholders, and erred also in adjudging appellees a prior lien for purchase money. the laws of Kentucky and was or-, lege, in substance, that the bonds were issued ganized for the purpose of taking over said and purchased in good faith, and that the property [referring to the land in question]." bondholders, including the Johnsons, have After setting up the terms of the option, they alleged that, when they made the contract and agreed to accept the bonds as therein stipulated, "the defendants [Lively and Taylor] represented to plaintiff that the mortgage securing the same included only enough bonds to cover the purchase money on this and other tracts adjoining it, bought by defendants as aforesaid, and upon this representation, and believing it to be true, plaintiff agreed to accept same under the terms aforesaid." They alleged that said representation was falsely made for the fraudulent purpose of cheating plaintiffs, for at that time Taylor et al. intended to, and the company did, issue bonds aggregating $100,000, [1, 2] The court properly held that the "which was more than four times the amount Johnsons failed to show such fraud as would of purchase money for land, as aforesaid." entitle them to a rescission of the option conIt is further alleged that before the expira- tract or cancellation of the deed. There is tion of 24 months they gave to the company no more justification for adjudging them a notice of their desire to sell the bonds so held priority of lien over innocent creditors and by them at the price of 90 cents on the $1, and bondholders. No relation of trust or confithe company failed and refused to purchase or dence is shown as would impose upon Lively pay for the bonds or any part thereof, "and or Taylor, or the other promoters or organtherefore the full amount therefor is now izers of the company, a duty to protect the due, just, and owing to plaintiff * * interests of the appellees. They were tradand plaintiff has a purchase-money lien up-ing at arm's length, and the contracts enteron said land to secure the payment of said ed into were carried out to the letter, except sum, which should be enforced by a sale the final redemption of the stock. The oblithereof." By an amended petition they say gation of the company in that regard is not that the corporation was not, in fact, organ- disputed. The mortgage was recorded in ized with power to do business until Feb- Johnson county on the day the deeds were deruary 11, 1910, but that Lively and Taylor, livered, and it showed the entire bond issue when the deed was demanded on January and the acreage covered. The company did 29th, falsely and fraudulently represented pay for the land "as mentioned in said [opthat the corporation had been organized, and tion] contract." The Johnsons made no comthat the "plaintiff, believing said representa-plaint until the company got in failing cirtions to be true, and believing he was legally cumstances, two years later. bound to execute said deed, signed and acThe fraud relied upon to vitiate the option knowledged the deed mentioned and set out contract and deed is that the first mortgage in the petition, but with the express under- bonds were to be issued only in an amount standing that the company, which he thought sufficient to pay for the land. The option was then organized and existing, would pay contract which they signed contained no such the purchase money on said land as mentioned and set out in said [option] contract." It stipulation, and it is nowhere alleged that is further alleged that at the time the com- bonds showed on their face that they were anything was left out of the contract. The pany executed the mortgage or trust deed to secure the $100,000 bond issue the plaintiffs part of a series, the whole number of which and other landholders had not executed their aggregated $100,000. These bonds were acdeeds for any of the land, covered by the cepted when their deeds were written and demortgage, and the company "had no title, livered. The transaction took place in the office of their attorney, and their attorney, a except the contract aforesaid, which was executed by the plaintiff and other vendors to relative, was there for the purpose of advisthe defendants, James M. Lively and Henry ing them and protecting their interests. A. Taylor," and for this reason, and because There is no pretense that they were ignorant the company had no corporate existence, it is or unlettered men. They retained these argued that the mortgage and bonds are void, bonds for two years and drew the interest and that the bondholders have no lien of thereon, and all the time they knew or must They pray for a cancellation of have known that they were part of an issue their deeds or else that they be adjudged far in excess of the amount which they now to have a prior lien upon the lands they con- insist was the limit agreed upon. The facts veyed to secure the balance of their purchase alleged merely show an obligation on the money. part of the company to redeem their bonds The trustee, in behalf of the creditors, at 90 cents on the $1. It may be that the good, but that is not ground for canceling | 87 Ky. 6, 7 S. W. 170; 9 Ky. Law Rep. 845; the deed, nor is it a badge of fraud. The Manly v. Bitzer, 91 Ky. 596, 16 S. W. 464, 13 deeds which were made to the company recited that the consideration was fully paid, and it was. The bonds accepted as part consideration were a vendable commodity, and the option contract obligated the vendors to accept them as part consideration, and they did accept them when they executed the deed. Clearly, whatever cause of action they have is upon the bonds, and their rights and remedies are the same as the other bondhold ers. Ky. Law Rep. 166, 34 Am. St. Rep. 242; Hutchison, McChesney & Co. v. Ford, 9 Bush, 318, 15 Am. Rep. 711. But the rule has no application here; for the corporation did have such an estate in the land as could be conveyed by mortgage. It was the owner by assignment of the option contracts, and, as expressly held in the case of Bank of Louisville v. Baumiester, supra, a contract for an option to purchase real estate at an agreed price within a specified time may be sold, assigned, or mortgaged. Section 2341, Kentucky Statutes. When the contract was completed, and the legal title taken, it inured to the benefit of the mortgagees, who are the bondholders in this case. The judgment is reversed for proceedings consistent with this opinion. v. PRESTON et al. [3] There is no merit in appellees' claim for rescission upon the plea that at the time they made the deeds the corporation was not duly or completely organized. The petition expressly alleged that it was duly organized for the purpose of taking over this land, and the option contract stated that the company was to be organized, and during the next 60 days one was organized, and on the day the deed was made its charter was filed for rec- YELLOW CHIEF COAL CO.'S TRUSTEE ord in the county court clerk's office, as required by law, and in 12 days thereafter record had been made of it in the office of the secretary of state. While it it true it accepted the conveyance before the organization was complete, yet, as between the parties to the conveyance, it was valid. Miller v. Flemingsburg & Fox Springs Turnpike Co., 109 Ky. 475, 59 S. W. 512, 22 Ky. Law Rep. 1039; Bank v. Matthews, 98 U. S. 621, 25 L. Ed. 188. NUNN, J. Except the amount of money in"The conveyance of land to an intended corpo- volved, the issues and the principles of law apration before its organization will take effect plicable thereto, as well as the judgment apwhen its organization is completed. ***pealed from, are identical with those in the The fact that a corporation has been irregular- case of Yellow Chief Coal Company's Trustee ly organized will not be sufficient to render in- v. Johnson, 179 S. W. 599, this day decided. valid the title to land conveyed by it in good faith." 3 Thompson on Corporations, § 2372. Section 566 of the Kentucky Statutes pro vides: "No corporation organized under this chapter shall be permitted to set up or rely upon the want of legal organization as a defense to any action against it; nor shall any person transacting business with such corporation, or sued for injury done to its property, be permitted to rely upon such want of legal organization as a defense." (Court of Appeals of Kentucky. Nov. 11, 1915.) Appeal from Circuit Court, Johnson County. Action by McClelland Preston and others against the Yellow Chief Coal Company's trustee. Judgment for plaintiffs, and defendant appeals. Reversed, with directions. H. R. Dysard, of Ashland, for appellant. J. K. Wells, of Paintsville, for appellees. On the authority of that case, the judgment is reversed, with direction for proceedings in the lower court consistent with the opinion rendered in that case. Although appellant on the last day took his appeal from a judgment of the district court, but did not file his brief 20 days before the date set for hearing on the appeal, as required by rule 3 of the Court of Appeals (154 S. W. vii), and the appeal was dismissed, the dismissal was erroneous, where the appellant had not summoned the appellee and the case was therefore never properly docketed. [4] It has been repeatedly held by this court that, where a person executes an obligation to a corporation, he cannot, in an action on it by the corporation, deny that such a corporation had an existence. Lail v. Mt. Sterling Coal Co., 13 Bush, 32; Jones v. Bank, 8 B. Mon. 122, 46 Am. Dec. 540. Nor can he set up as defense that it had no power to contract, unless the contract be express-773.] ly forbidden by law. Johnson v. Mason Lodge, 106 Ky. 838, 51 S. W. 620, 21 Ky. Law Rep. 493; Blitz v. Bank, 55 S. W. 697, 21 [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 3104, 3108-3110; Dec. Dig. Appeal from Circuit Court, Jefferson County, Common Pleas Branch, First Division. Action by Charles J. Doherty against the First National Bank. On motion to set aside order dismissing appeal and to reinstate case upon the docket. Motion granted. Ky. Law Rep. 1554; Oliver v. Louisville Realty Co., 156 Ky. 628, 161 S. W. 570, 51 L. R. A. (N. S.) 293, Ann. Cas. 1915C, 565. [5, 6] It is a general rule that a mortgage of property to be acquired in futuro is void O'Doherty & Yonts, of Louisville, for apagainst mortgagors, creditors, or purchasers pellant. Helm Bruce and Bruce & Bullitt, all for value. Bank of Louisville v. Baumiester, of Louisville, for appellee. HURT, J. The judgment appealed from was rendered April 14, 1913. On the 13th day of April, 1915, which was the last day upon which an appeal from the judgment could be granted by the clerk of this court, he filed in the clerk's office of this court a copy of the judgment and what purported to be a transcript of the record in the case, and a statement, as required by section 739 of the Civil Code, and moved the clerk of this court to grant him an appeal. The appeal was granted, as appears from the memorandum made by the clerk upon the transcript, and a summons and copy issued to Jefferson county, for the appellee. The case was set upon the present September docket of this court for the 28th day of September, 1915. On the last-named day the appellee filed a motion to dismiss the appeal, because the appellant had failed to file his brief 20 days prior to that date, as required by rule 3 of this court (154 S. W. vii). The motion was sustained, and the appeal ordered to be dismissed without prejudice. On the 8th day of October following the appellant, having given to the appellee notice of his intention, entered a motion before this court to set aside the order dismissing the appeal and to reinstate the case upon the docket, and the case was submitted upon the motion. An examination of the record develops the fact that the appellee has never been summoned upon the appeal, and the case was not properly on the docket for hearing at its not properly on the docket for hearing at its calling on the 28th day of September, and that on the 21st day of September, preceding its dismissal, an alias summons had been issued for services upon the appellee. Rule 3 of the court, so far as it is pertinent to the matter in hand, is as follows: "That in all cases of appeals hereafter filed * * it shall be the duty of the appellant to file his brief twenty days prior to the date the case is set for hearing, * * and a failure to do so by the appellant shall cause a dismissal of the appeal without prejudice," etc. At the time the motion to dismiss the appeal was sustained, the attention of the court was not called to the fact that the appellee had never been summoned, nor had ever entered its appearance, and that the case was not properly on the docket for hearing, within the meaning of rule 3 of this court. The order dismissing the appeal is therefore set aside, and the case is ordered to be reinstated upon the docket. page where they commenced, "Order made May 7, 1914," and where the only order on that day filing of plaintiff's reply, it could not be said was one made, prior to the trial, reciting the that any order referred to or identified the instructions so copied into the record, so that they could not be considered. 616.] [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 2174-2178; Dec. Dig. 2. SALES 52-ACTION FOR PRICE-SUFFICIENCY OF EVIDENCE. In an action for the price of a car load of cotton seed, defended on the ground that defendant had never bought or agreed to pay for it, but had received it, with others, found it worthless, and refused to pay for it, evidence held to sustain a verdict for plaintiff. [Ed. Note.-For other cases, see Sales, Cent. Dig. §§ 118-144, 1045; Dec. Dig. 52.] Appeal from Circuit Court, Fulton County. Action by C. T. Bondurant against the Cotton Seed Products Company, in which de fendant counterclaimed. Judgment for plaintiff, and defendant appeals. Affirmed. Hendrick & Nichols, of Paducah, and Burnett & Burnett, of Louisville, for appellant. W. J. Webb, of Mayfield, for appellee. TURNER, J. Appellee instituted this action against appellant for the price of a car load of cotton seed. It is the contention of the appellee that appellant's agent, on or about the 23d of January, 1913, entered into a contract with him by which it bought from him five car loads of cotton seed at an agreed price, after an inspection of the seed; the appellant's agent at the time knowing that a part of the seed, about one car load, was not of as good quality as the balance of the seed. Appellant claims that it did not buy the seed at that time, but received the five car loads of seed, and paid for the four car loads of good merchantable seed, but that the car load for which it refused to pay was bought or agreed to pay for the same. practically worthless, and that it never Its it set up certain other and older transactions answer was made a counterclaim, wherein between the parties, and alleged that it had overpaid appellee in such transactions about $205, for which it prayed judgment. The allegations of the counterclaim were denied, and upon a trial the jury found for the plain tiff for the car load of seed at the contract price, and against appellant on the counterclaim. On this appeal only two reasons are given COTTON SEED PRODUCTS CO. v. BON- for reversal: (1) Because the court erred in DURANT. (Court of Appeals of Kentucky. Nov. 12, 1915.) 1. APPEAL AND ERROR 616-RECORD-BILL OF EXCEPTIONS-INSTRUCTIONS. giving instruction No. 2 to the jury, based upon the allegations of the counterclaim; and (2) because the verdict of the jury is flagrantly against the weight of the evidence. Where a transcript of the evidence and the [1] A transcript of the evidence, together rulings thereon, not embracing the instructions, with the rulings of the court upon the ad was filed as a bill of exceptions, and what purported to be the instructions were copied in the mission and rejection of testimony, transcribrecord, with the clerk's note, at the top of the ed by the official stenographer and approved by the court, is filed in the record as a bill of exceptions; but in this bill of exceptions the instructions are not embraced. What purport to be the instructions given by the court are copied in the record, and at the top of the page where they begin is an annotation in brackets, evidently made by the clerk, which says, "Order made May 7, 1914, continued;" there being no styling of the case, and nothing further to indicate that they were embraced or referred to in any order of the court. The only order of the court made on May 7, 1914, which we have found, is one made prior to the trial, which was held on that day, reciting the fact that the plaintiff had filed his reply, and that is copied in the record several pages in advance of the place where the supposed instructions are copied. With the record in this condition we are unable to see that there was any order of the court referring to or identifying the instructions which the clerk has copied in the record; and there being no identification of them, either by bill of exceptions or order, they cannot be considered. Weddington v. White, 148 Ky. 671, 147 S. W. 17; Madden v. Meehan, 151 Ky. 220, 151 S. W. 681; Civil Code, § 335, and notes. [2] The contention that the verdict is flagrantly against the weight of the evidence. even if it can be considered upon an appeal 2. CRIMINAL LAW 1213-CRUEL AND UNUSUAL PUNISHMENTS-STATUTES. Ky. St. 1201c, prescribing for theft of poultry of the value of $2 or more imprisonment in the penitentiary for not less than one or more than five years, is not in violation of Const. art. 17, prohibiting the infliction of cruel punishin legislative discretion, and as the purpose is to ments, for the necessity of the punishment rests discourage the act, it cannot be held cruel because graver crimes are no more severely punished. Law, Cent. Dig. §§ 3304-3309; Dec. Dig. [Ed. Note.-For other cases, see Criminal 1213.] Appeal from Circuit Court, Bullitt County. Ed Fry and others were convicted of larceny, and they appeal. Affirmed. Chas. Carroll, of Louisville, T. C. Carroll, of Shepherdsville, Ben Chapeze, of Louisville, and J. R. Zimmerman, of Shepherdsville, for appellants. James Garnett, Atty. Gen., and Overton S. Hogan, Asst. Atty. Gen., for the Commonwealth. HANNAH, J. The appellants were tried under an indictment returned against them in the Bullitt circuit court, and found guilty of the offense of stealing ducks of the value Their punishment was fixed of $2 or more. by the jury at not less than one nor more than two years in the penitentiary. They appeal. [1] 1. The prosecution is under the Act of where the instructions are not in the record, March 17, 1904, section 1201c, Kentucky Statcannot be sustained. The plaintiff explicit-utes, which provides that if any person shall ly testified that the defendant's agent inspected the seed, knew that one car load of it was not of the best quality, and called attention to that at the time, and bought the whole five car loads at the contract price with this knowledge. This evidence is corroborated, in a measure, by the fact that the five car loads of seed were received by appellant, and that the car load of defective. seed was actually paid for by it. The jury were the judges of the weight to be given to the evidence, and this court will not set aside its verdict, where there is evidence to base it upon, even though the preponderance of the evidence may have been on the other side. Judgment affirmed. FRY et al. v. COMMONWEALTH. (Court of Appeals of Kentucky. Nov. 11, 1915.) 1. STATUTES 118 - VALIDITY TITLE OF Аст. Act March 17, 1904 (Laws 1904, c. 29; Ky. St. § 1201c) entitled "An act to regulate crime and fix the punishment thereof," which provides that if any person shall steal poultry he shall be confined in the penitentiary, etc., is not in violation of Const. § 51, declaring that no laws shall relate to more than one subject, which shall be expressed in their titles; the provisions of the statute being germane to the title. [Ed. Note. For other cases, see Statutes, Cent. Dig. §§ 158-160; Dec. Dig. 118.] steal chickens, turkeys, ducks or other fowls of the value of $2 or more, he shall be confined in the penitentiary not less than one nor more than five years. The title of this act is "An act to regulate crime and fix the punishment therefor." It is contended by appellants that this title contravenes section 51 law enacted by the General Assembly shall of the Constitution, which provides that no relate to more than one subject, and that shall be expressed in the title. In Bowman V. Hamlett, 159 Ky. 184, 166 S. W. 1008, the court said: "This section of the Constitution has always been liberally construed, all doubts being resolved in favor of the validity of the legislative action. The purpose of this constitutional provision is the prevention of surreptitious legislation; as said in Cooley on Constitutional Limitations, "To prevent surprise or fraud upon the Legislature by means of provisions in bills, of which the titles gave no intimation, and which might, therefore, be overlooked and carelessly or unintentionally adopted.' So, having in mind the purpose of this provision, and the evil against which it is aimed, before any act of the General Assembly should be nullified by the act is not expressed in the title by reason this court upon the ground that the subject of of a variance between the title and the body of the act, it should be made to appear, and the court should be satisfied, that the variance complained of is such as to bring it within the range of the evils sought to be guarded against, and such as to justify its condemnation upon and such as to justify its condemnation upon that ground alone." It has many times been held by this court that there is a sufficient compliance with |