Donaldson v. Thousand Springs Power Co.

MORGAN, J.,

Concurring. — The facts alleged in the complaint necessary to a correct understanding of the principal issue of law presented in this case are: That on May 26, 1911, the Thousand Springs Power Company, an Arizona corporation, hereinafter called the power company, made, executed and delivered to Frank N. Bancroft its power of attorney attempting to authorize him to take title in his name, but for its use and benefit, to the property here in controversy, and on June 1, 1911, he took a deed thereto from the ■Thousand Springs Land & Transportation Company, Limited, an Idaho corporation, hereinafter called the transportation company, and executed a declaration of trust wherein it was stated that the property had been deeded to him, pursuant to the power of attorney, for the use and benefit of the power company. On November 13, 1911, the power company conformed to the laws of Idaho so as to entitle it to transact business and tó take and hold title to real property in this state. On December 16, 1911, Bancroft made, executed and delivered to the power company a deed whereby he sought to convey the property to it. On or about January 27, 1912, the Salt Lake Security & Trust Company, a Utah corporation,. received from the power company a deed of trust attempting to convey the property to it in order to secure the payment of a bond issue. On June 30, 1913, appellant herein recovered judgment against the transportation company, which is yet unsatisfied, and a transcript of which was, on December, 1911, filed in the office of the county recorder of Gooding county, wherein the property is situated.

It is sought by this action to procure the .cancelation of the deeds above mentioned, in order that the property in *753question may be sold upon execution and the proceeds thereof be applied in payment of appellant’s judgment.

The learned author of the foregoing opinion appears to have proceeded upon the theory that the question involved in this ease is: Has the power company a good title? As I understand the question here presented it is: Has the transportation company any interest, of value, in the property which may be subjected to the satisfaction of the claim of its judgment creditor?

In considering that question we must not confuse the deed, which is but evidence of title, with title itself, and we must bear in mind, at all times, that when a deed is taken by a trustee in his own name, equitable title is thereby vested in his cestui que trust. With this elementary principle of law in mind the application of that portion of see. 2792, Eev. Codes, which has a direct bearing upon the case ought not to be difficult. It is as follows: “Such corporation cannot take or hold title to any realty within this state prior to making such filings, and any pretended deed or conveyance of real estate to such corporation prior to such filings shall be absolutely null and void.”

It was the manifest purpose of the legislature, in the enactment of that statute, to prohibit foreign corporations from transacting business and from taking or holding title to real property within the state of Idaho prior to filing their articles of incorporation, designating agents upon whom process may be served, and paying the fees required by law, and one of the penalties for their failure so to do is that ‘ ‘ any pretended deed or conveyance to such corporation prior to such filings shall be absolutely null and void.”

The conclusion is inevitable that the power of attorney from the power company to Bancroft and the deed, for its use and benefit, to him, by the transportation company, and his declaration of trust constitute but one transaction, which amounts to a subterfuge and an effort to do indirectly what the law does not permit directly to be done, to wit, the conveyance of title to real estate to a foreign corporation which has not conformed to the law. Any other construc*754tion of the statute would invite and encourage its violation, by indirection, and render this perfectly plain legislative enactment meaningless.

(January 26, 1917.) Foreign Corporations — Agents—Trustees. 1. See. 10 of art. 11 of the constitution and see. 2792, Rev. Codes, as amended, 1915 Sess. Laws, p. 270, prohibits the taking of title by an agent of a foreign corporation in his own name for and on behalf of such corporation, or a trustee appointed by such corporation for that purpose, as effectively as it prohibits the corporation itself from taking such title.

It seems to me to be entirely clear that the power of attorney, the declaration of trust, the deed to Bancroft and that from him to the power company are void, and that the legal title remains in the transportation company.

It appears that the transportation company has been paid in full for the property and that the power company has, prior to the entry of the judgment in favor of appellant which forms the basis of this action, fully conformed to the laws of this state, and that, ever since having so conformed, it has been and now is empowered to take and hold title to feal estate in Idaho. In other words, before appellant’s claim attached as a lien to the property, the transportation company had divested itself of its interest in it and the power company had placed itself in position to receive title and, having paid the purchase price in full, became the equitable owner.

The transportation company, having received the purchase price, its relation to the property is that of the holder of the naked, legal title, in trust for the purchaser, and it is divested of all equitable interest, so that it has nothing therein of value to be sold in satisfaction of appellant’s judgment. I therefore concur in the conclusion that the judgment of the trial court should be affirmed.