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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. said company shall within sixty (60) days after
[Ed. Note.-For other cases, see Mortgages, such notice take up said bonds and pay thereCent. Dig. 88 13, 14; Dec. Dig. 12.]
for such price."
In the meantime the Johnsons were having Appeal from Circuit Court, Johnson County.
Consolidated actions by Leonard Johnson abstracts made, and Taylor and Lively proand another against the Yellow Chief Coal ceeded with the organization of the Yellow Company. Judgments for plaintiffs, and de- Chief Coal Company, which was tentatively fendant's trustee in bankruptcy appeals. Re- formed by the subscribing stockholders on versed.
the 1st of January, 1910. While so organized
the company took an assignment of the opH. R. Dysard, of Ashland, for appellant. tions executed to Taylor and Lively. On that C. B. Wheeler, of Ashland, and J. K. Wells, date the company executed and acknowledgof Paintsville, for appellees.
ed a mortgage or deed of trust to secure an
issue of first mortgage bonds of $500 each, NUNN, J. The appellees, Leonard and Charles Johnson, were plaintiffs below in all the lands upon which Taylor and Lively
aggregating $100,000. The mortgage covered separate actions. By an agreed order the ac- had secured options, including the lands of tions were consolidated and tried together. appellees. January 29, 1910, was the last of Separate judgments were rendered against the 60 days on which the option to purchase the Yellow Chief Coal Company, whereby might be exercised, and on that day the artiCharles Johnson recovered $5,625, and Leon
cles of incorporation of the Yellow Chief ard Johnson recovered $3,375. The court also adjudged a lien upon certain lands for Coal Company were filed for record in the the payment of each judgment, and ordered Johnson county court clerk's office, as well a sale of the lands for that purpose.
as the mortgage or deed of trust referred to.
Pending the action the coal company was adjudg. On the same day, the Johnsons executed and ing the action the coal company was adjudg. delivered their deeds to the company, which ed a bankrupt in the United States District delivered their deeds to the company, which Court for the Eastern District of Kentucky,
were then recorded, conveying the lands and the trustee, who intervened, brings this which they had theretofore optioned, and the appeal. Except in the amounts claimed, the consideration was paid therefor as stipulated actions of Leonard and Charles Johnson are
in the option, viz., one-third cash, and the balidentical.
ance by delivery of first mortgage, 20-year, In the year 1909 James M. Lively, of New
5 per cent. bonds; that is, a sufficient numYork, came to Johnson county and started ber of them at 80 cents on the dollar to equal negotiations with the appellees and others in amount the balance of the purchase price. for the purchase of coal lands on Bobbs The deeds, however, did not recite the whole branch, in that county. Upon his return to consideration or the manner of payment. New York the owners made a proposition in The consideration named was “the sum of the form of a letter agreeing to sell their $10 and other considerations in hand paid.” lands at $25 per acre, one-third to be paid It was the ordinary form of general warin cash, and the balance in one and two ranty deed, without reservations or limitayears. In November, 1909, Lively returned to tions of any kind, except an exclusion of Johnson county, in company with Henry Tay
two small surveys. No question about the lor, and, after further negotiations, procured, exclusions is involved in this controversy. on the 30th day of that month, separate
On the 11th of February, 1910, a certified writings or options from Charles and Leon- copy of the articles of incorporation were filard Johnson whereby Charles agreed to con- ed for record with the secretary of state. vey 300 acres, and Leonard agreed to convey On April 18, 1911, at a stockholder's meeting, 180 acres. The consideration was $25 per
a resolution was adopied ratifying the mortacre. The options recited that Taylor and gage and again declaring it to be the act and Lively were to organize a company, and the deed of the corporation. conveyances were to be made to that com
By the sale of bonds secured by the mortpany within 60 days. One-third of the con- / gage executed and recorded in the way alsideration was to be paid in cash when the ready explained the company procured funds conveyances were made, and the remaining with which to develop the property, and two-thirds "to be paid for in the first mort- which it commenced to do as soon as titles gage, 20-year, 5 per cent. sinking fund bonds were acquired. The appellees held their of said company, at the rate of 80 per cent. bonds and drew interest thereon semianon their par value." During the interval nually for two years. At that time it became the appellees agreed to furnish an abstract apparent that the company was in failing of title. The options also contained this circumstances. It was unable to pay about clause:
$5,000 which it owed for merchandise sup"It is further provided that the vendor shall plied by wholesalers to its mine commissary. have the option, at any time after the expiration In February, 1912, appellees filed their suits of eighteen (18) months from the delivery of against the Yellow Chief Coal Company, and such bonds, and before the expiration of twenty- averred that it was a corporation “duly or.
(to pany so organized at the price of ninety (90) )ganized and existing under and by virtue of
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, a lien by virtue of the mortgage, but assert they alleged that, when they made the con- that the Johnsons, have no purchase-money or tract and agreed to accept the bonds as there other prior lien, and plead that the Johnsons in stipulated, “the defendants [Lively and are estopped from asserting or claiming any Taylor) represented to plaintiff that the mort- lien for purchase money after having recited gage securing the same included only enough in the deed of conveyance that the considerabonds to cover the purchase money on this tion had been fully paid, and after having and other tracts adjoining it, bought by de-accepted the bonds of the company as payfendants as aforesaid, and upon this repre- ment. For the creditors it is said they exsentation, and believing it to be true, plain-| tended credit in good faith, and, in substance, tiff agreed to accept same under the terms the plea of the bondholders is relied upon. aforesaid.” They alleged that said represen- We are of the opinion that the court erred in tation was falsely made for the fraudulent rejecting the plea of the creditors and bondpurpose of cheating plaintiffs, for at that holders, and erred also in adjudging appeltime Taylor et al. intended to, and the com- lees a prior lien for purchase money. pany 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. 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
. and 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 ac
The 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. was then organized and existing, would pay contract which they signed contained no such
The option ed 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 plaintiff's part of a series, the whole number of which
These bonds were acand other landholders had not executed their aggregated $100,000. deeds 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 ofexcept the contract aforesaid, which was exe" fice of their attorney, and their attorney, a cuted 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 any sort. 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 187 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 re- Ky. Law Rep. 166, 34 Am. St. Rep. 242; cited that the consideration was fully paid, Hutchison, McChesney & Co. v. Ford, 9 Bush, and it was. The bonds accepted as part con- 318, 15 Am. Rep. 711. But the rule has no sideration were a vendable commodity, and application here; for the corporation did the option contract obligated the vendors to have such an estate in the land as could be accept them as part consideration, and they conveyed by mortgage. It was the owner by did accept them when they executed the assignment of the option contracts, and, as deed. Clearly, whatever cause of action they expressly held in the case of Bank of Louishave is upon the bonds, and their rights and ville v. Baumiester, supra, a contract for an remedies are the same as the other bondhold- option to purchase real estate at an agreed ers.
price within a specified time may be sold, as There is no merit in appellees' claim signed, or mortgaged. Section 2341, Kenfor rescission upon the plea that at the time tucky Statutes. When the contract was comthey made the deeds the corporation was not pleted, and the legal title taken, it inured duly or completely organized. The petition to the benefit of the mortgagees, who are the
. expressly alleged that it was duly organized bondholders in this case. for the purpose of taking over this land, and The judgment is reversed for proceedings the option contract stated that the company consistent with this opinion. 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 re
v. PRESTON et al. quired by law, and in 12 days thereafter record had been made of it in the office of the Court of Appeals of Kentucky. Nov. 11, 1915.) secretary of state. While it it true it accept
Appeal from Circuit Court, Johnson County.
Action by McClelland Preston and others ed the conveyance before the organization against the Yellow Chief Coal Company's truswas complete, yet, as between the parties to tee. Judgment for plaintiffs, and defendant apthe conveyance, it was valid. Miller v. Flem- peals. Reversed, with directions. ingsburg & Fox Springs Turnpike Co., 109 H. R. Dysard, of Ashland, for appellant. J. Ky. 475, 59 S. W. 512, 22 Ky. Law Rep. 1039; K. Wells, of Paintsville, for appellees. 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 On the authority of that case, the judgment faith." 3 Thompson on Corporations, § 2372. is reversed, with direction for proceedings in the
Section 566 of the Kentucky Statutes pro- lower court consistent with the opinion renvides:
dered in that case. "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 DOHERTY v. FIRST NAT. BANK. action against it; nor shall any person transacting business with such corporation, or sued (Court of Appeals of Kentucky. Nov. 10, 1915.) for injury done to its property, be permitted to APPEAL AND ERROR Om773_REQUISITES FOR rely upon such want of legal organization as a TRANSFER-DOCKET. defense.'
Although appellant on the last day took his  It has been repeatedly held by this appeal from a judgment of the district court, court that, where a person executes an ob- but did not file his brief 20 days before the date
set for hearing on the appeal, as required by rule ligation to a corporation, he cannot, in an ac-3 of the Court of Appeals (154 S. W. vii), and tion on it by the corporation, deny that such the appeal was dismissed, the dismissal was era corporation had an existence. Lail v. Mt. roneous, where the appellant had not summoned Sterling Coal Co., 13 Bush, 32; Jones v.
the appellee and the case was therefore never
properly docketed. Bank, 8 B. Mon, 122, 46 Am. Dec. 540. Nor
[Ed. Note.-For other cases, see Appeal and can he set up as defense that it had no pow-Error, Cent. Dig. $S 3104, 3108 3110; Dec. Dig. er 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 ty, Common Pleas Branch, First Division.
Appeal from Circuit Court, Jefferson CounRep. 493; Blitz v. Bank, 55 S. W. 697, 21
Action by Charles J. Doherty against the Ky. Law Rep. 1554; Oliver v. Louisville Realty Co., 156 Ky. 628, 161 S. W. 570, 51 First National Bank. On motion to set aside
order dismissing appeal and to reinstate case L. R. A. (N. S.) 293, Ann. Cas. 1915C, 565.
[5, 6] It is a general rule that a mortgage upon the docket. Motion granted. 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, Jof Louisville, for appellee.
. . .
HURT, J. The judgment appealed from page where they commenced, “Order made May was rendered April 14, 1913. On the 13th 7, 1914,” and where the only order on that day day of April, 1915, which was the last day filing of plaintiff's reply, it could not be said
was one made, prior to the trial, reciting the upon which an appeal from the judgment that any order referred to or identified the incould be granted by the clerk of this court, structions so copied into the record, so that he filed in the clerk's office of this court a they could not be considered. copy of the judgment and what purported to
[Ed. Note. For other cases, see Appeal and
Om be a transcript of the record
in the case, and Error, Cent. Dig. 2174-2178; Dec. Dig. En a statement, as required by section 739 of the 2. SALES O 52-ACTION FOR PRICE-SUFFI
Civil Code, and moved the clerk of this court
CIENCY OF EVIDENCE. to grant him an appeal. The appeal was In an action for the price of a car load of granted, as appears from the memorandum cotton seed, defended on the ground that defendmade by the clerk upon the transcript, and ant had never bought or agreed to pay for it, but
had received it, with others, found it worthless, a summons and copy issued to Jefferson and refused to pay for it, evidence held to suscounty, for the appellee. The case was set tain a verdict for plaintiff. upon the present September docket of this [Ed. Note.-For other cases, see Sales, Cent. court for the 28th day of September, 1915. Dig. $$ 118-144, 1045; Dec. Dig. Om 52.] On the last-named day the appellee filed a
Appeal from Circuit Court, Fulton County. motion to dismiss the appeal, because the ap
Action by C. T. Bondurant against the Cotpellant had failed to file his brief 20 days ton Seed Products Company, in which deprior to that date, as required by rule 3 of fendant counterclaimed. Judgment for plainthis court (154 S. W. vii). The motion was tiff, and defendant appeals. Affirmed. sustained, and the appeal ordered to be dismissed without prejudice. On the 8th day Hendrick & Nichols, of Paducah, and Burof October following the appellant, having nett & Burnett, of Louisville, for appellant. given to the appellee notice of his intention, W. J. Webb, of Mayfield, for appellee. entered a motion before this court to set aside the order dismissing the appeal and to reinstate the case upon the docket, and the tion against appellant for the price of a car
TURNER, J. Appellee instituted this accase was submitted upon the motion.
load of cotton seed. An examination of the record develops the the appellee that appellant's agent, on or
It is the contention of fact that the appellee has never been sum- about the 23d of January, 1913, entered into moned upon the appeal, and the case was not properly on the docket for hearing at its him five car loads of cotton seed at an agreed
a contract with him by which it bought froin calling on the 28th day of September, and that on the 21st day of September, preceding price, after an inspection of the seed; the its dismissal, an alias summons had been is. appellant's agent at the time knowing that sued for services upon the appellee. Rule 3. a part of the seed, about one car load, was of the court, so far as it is pertinent to the not of as good quality as the balance of the
seed. matter in hand, is as follows:
Appellant claims that it did not buy the “That in all cases of appeals hereafter filed
it shall be the duty of the appellant to seed at that time, but received the five car file his brief twenty days prior to the date the loads of seed, and paid for the four car case is set for hearing, * and a failure loads of good merchantable seed, but that to do so by the appellant shall cause a dismissal the car load for which it refused to pay was of the appeal without prejudice," etc. At the time the motion to dismiss the ap. bought or agreed to pay for the same.
practically worthless, and that it never
Its peal was sustained, the attention of the court was not called to the fact that the appellee it set up certain other and older transactions
answer was made a counterclaim, wherein had never been summoned, nor had ever en between the parties, and alleged that it had tered its appearance, and that the case was not properly on the docket for hearing, with- overpaid appellee in such transactions about
$205, for which it prayed judgment. The alin the meaning of rule 3 of this court.
The order dismissing the appeal is there- legations of the counterclaim were denied. fore set aside, and the case is ordered to be and upon a trial the jury found for the plain
tiff for the car load of seed at the contract reinstated upon the docket.
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.
giving instruction No. 2 to the jury, based (Court of Appeals of Kentucky. Nov. 12, 1915.) upon the allegations of the counterclaim;
is 1. APPEAL AND ERROR 616--RECORD-BILL and (2) because the verdict of the OF EXCEPTIONS-INSTRUCTIONS.
flagrantly against the weight of the evidence. Where a transcript of the evidence and the  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, 2. CRIMINAL LAW On 1213—CRUEL AND UNUof exceptions; but in this bill of exceptions
SUAL PUNISHMENTS/STATUTES. the instructions are not embraced.
Ky. St. § 12010, prescribing for theft of
poultry of the value of $2 or more imprisonment What purport to be the instructions given in the penitentiary for not less than one or more by the court are copied in the record, and than five years, is not in violation of Const. art. at the top of the page where they begin is an 17, prohibiting the infliction of cruel punishannotation in brackets, evidently made by in legislative discretion, and as the purpose is to
ments, for the necessity of the punishment rests the clerk, which says, "Order made May 7, discourage the act, it cannot be held cruel be1914, continued;" there being no styling of cause graver crimes are no more severely punthe case, and nothing further to indicate that
ished. they were embraced or referred to in any Law, Cent. Dig. $$ 3304-3309; Dec. Dig. Om
[Ed. Note. For other cases, see Criminal order of the court. The only order of the 1213.] court made on May 7, 1914, which we have
Appeal from Circuit Court, Bullitt County. found, is one made prior to the trial, which
Ed Fry and others were convicted of larwas held on that day, reciting the fact that the plaintiff had filed his reply, and that is
ceny, and they appeal. Affirmed. copied in the record several pages in advance
Chas. Carroll, of Louisville, T. C. Carroll, of the place where the supposed instructions of Shepherdsville, Ben Chapeze, of Louisville, are copied.
and J. R. Zimmerman, of Shepherdsville, With the record in this condition we are for appellants. James Garnett, Atty. Gen., unable to see that there was any order of the and Overton S. Hogan, Asst. Atty. Gen., for court referring to or identifying the instruc the Commonwealth. tions which the clerk has copied in the record; and there being no identification of HANNAH, J. The appellants were tried them, either by bill of exceptions or order, under an indictment returned against them they cannot be considered. Weddington v.
in the Bullitt circuit court, and found guilty White, 148 Ky. 671, 147 S. W. 17; Madden of the offense of stealing ducks of the value v. Meehan, 151 Ky. 220, 151 S. W. 681 ; Civil of $2 or more. Their punishment was fixed Code, $ 335, and notes.
by the jury at not less than one nor more  The contention that the verdict is than two years in the penitentiary. They flagrantly against the weight of the evidence, appeal. even if it can be considered upon an appeal
 1. The prosecution is under the Act of where the instructions are not in the record, March 17, 1904, section 12010, Kentucky Statcannot be sustained. The plaintiff explicit- utes, which provides that if any person shall ly testified that the defendant's agent in- steal chickens, turkeys, ducks or other fowls spected the seed, knew that one car load of of the value of $2 or more, he shall be conit was not of the best quality, and called at- fined in the penitentiary not less than one nor tention to that at the time, and bought the more than five years. The title of this act is whole five car loads at the contract price
"An act to regulate crime and fix the punish
ment therefor." with this knowledge. This evidence is cor
It is contended by appelroborated, in a measure, by the fact that the lants that this title contravenes section 51 five car loads of seed were received by ap- law enacted by the General Assembly shall
of the Constitution, which provides that no pellant, and that the car load of defective relate to more than one subject, and that seed was actually paid for by it.
The jury were the judges of the weight to shall be expressed in the title. In Bowman be given to the evidence, and this court will v. Hamlett, 159 Ky. 184, 166 S. W. 1008, the not set aside its verdict, where there is evi
“This section of the Constitution has always dence to base it upon, even though the pre- been liberally construed, all doubts being reponderance of the evidence may have been solved in favor of the validity of the legislative on the other side.
action. The purpose of this constitutional pro
vision is the prevention of surreptitious legislaJudgment affirmed.
tion; 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 careFRY et al. v. COMMONWEALTH.
lessly or unintentionally adopted.' So, having (Court of Appeals of Kentucky. Nov. 11, 1915.) in mind the purpose of this provision, and the 1. STATUTES 118 - VALIDITY TITLE OF
evil against which it is aimed, before any act Аст.
of the General Assembly should be nullified by Act March 17, 1904 (Laws 1904, c. 29; the act is not expressed in the title by reason
this court upon the ground that the subject of crime and fix the punishment thereof," which of a variance between the title and the body of provides that if any person shall steal poultry the act, it should be made to appear, and the he shall be confined in the penitentiary, etc., is court should be satisfied, that the variance comnot in violation of Const. § 51, declaring' that no plained of is such as to bring it within the laws shall relate to more than one subject, which range of the evils sought to be guarded against, shall be expressed in their titles; the provisions and such as to justify its condemnation upon of the statute being germane to the title. [Ed. Note.-For other cases, see Statutes,
It has many times been held by this court Cent. Dig. $$ 158-160; Dec. Dig. 118.] that there is a sufficient compliance with