Court Opinion

ID: 3412499
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:30:18.167941+00
Date Added: 2024-06-11T14:03:21.621906
License: Public Domain

Sometime prior to June 13, 1942, the record does not disclose just when, defendants and respondents V.C. Belknap and G.P. Williams executed and filed in the office of the County Recorder of Blaine County, Idaho, a declaration of trust. It appears from the record the initial purpose of the trust was
"the acquisition of certain written options and leases covering the Baltimore patented lode mining claim and other mining claims in Blaine County Idaho as given by A.W. Ensign as acting receiver of the Baltimore and Victoria Mining Company, and by Charles Rathke and Hilda M. Rathke and Mrs. Annie M. Kelley, to G.P. Williams, and to exchange the units of this trust for the said options and leases. The trust then shall carry on operations and development under said leases and options and shall immediately, *Page 654 
for the purpose of development, sell units of this trust.
"This trust shall, however, have the following additional purposes and powers, for it is organized for the general objects of purchasing, locating, leasing or otherwise acquiring mines, mining claims, mining rights, water rights, and lands and interest therein, and the exploration, prospecting, working, developing of the said claims, rights and properties the carrying on of the business of mining in all of its branches, and to that end the acquiring, owning, operating, improving, developing, selling, leasing and conveying of mining claims and lands or any rights, titles, interests, or privileges therein; to mine and prepare for market all metal and mineral substances of all kinds, and to carry on any other operations or business which may seem necessary, convenient or incidental to any of the objects of the company, including the buying, selling, manufacturing of and dealing in minerals, plants, machinery, implements, conveyances, provisions and things capable of being used in connection with the mining or other operations of this trust; and, in general, to carry on any other business in connection therewith, whether mining, milling, manufacturing or otherwise, which may be necessary, profitable or convenient in connection with any of the above purpose within the State of Idaho."
June 13, 1942, John Edwards and Mary Edwards, husband and wife, of Blaine County, Idaho, executed and delivered to the Baltimore Trust, for a recited consideration of $1.00, "and other consideration," an undivided one-half interest in and to a certain group of lode mining claims located in Blaine County, Idaho, called the Lucky Coin Group. At the time of the execution of the deed, John Edwards was about eighty-five years of age, and Mary Edwards, his wife, was about seventy-two years of age.
March 25, 1943, John Edwards and Mary Edwards commenced this suit against defendants-respondents Belknap and Williams for the purpose of having the said deed cancelled and set aside and the property therein described quieted in them. May 14, 1943, defendants and respondents answered the complaint so filed by John and Mary Edwards, denying the material allegations thereof.
John Edwards died April 7, 1943. September 11, 1944, *Page 655 
by written stipulation, Mary Edwards, administratrix of the estate of John Edwards, then deceased, was substituted as one of the plaintiffs in the suit. The cause was tried September 11, 1944, by the court, sitting without a jury.
December 6, 1944, findings of fact and conclusions of law were made and filed in favor of defendants and respondents and against appellants, and on the same day decree was entered thereon. The appeal to this court is from the decree.
At the outset it should be pointed out: First, appellants do not attack the findings of the trial court to the effect that defendants and respondents were not guilty of fraud in obtaining the execution and delivery of the deed from the Edwardses to Baltimore Trust, explaining the adverse findings of the trial court on appellants' charge of fraud were due to the death of John Edwards prior to the trial of the cause, and consequent loss of his testimony concerning that charge. Second, that plaintiffs and appellants alleged in their complaint:
"The plaintiffs hereby tender to the defendants the said certificate (referring to the above mentioned trust certificate) of stock in said Baltimore Trust and offer to place the defendants in statu quo, and to do such equity in the premises as the court may direct."
Third, that the trial court found:
"That as the sole consideration for the execution and delivery of the said deed, there was delivered by the said G.P. Williams, as one of the trustees of the Baltimore Trust, a certificate in said Trust for two units thereof. . ."
"There has been no income or other return paid to the said John Edwards or the plaintiff, Mary Edwards, from the said units as represented by said Certificate No. 53 of the Baltimore Trust, but that said certificate and the units represented thereby were not at said times and are not now valueless."
Appellants also alleged in substance:
That the Baltimore Trust was, as a matter of law, a corporation, but that it was not incorporated under the laws of the State of Idaho, or elsewhere; that it had not *Page 656 
filed articles of incorporation in the office of the Secretary of State; that no corporate charter had ever been issued to it; that it had never been authorized to do business in the state as a corporation; that, therefore, the deed executed and delivered to it was null and void.
Respondents, among other things, alleged in their answer and contend on this appeal, in substance: that appellants were aware the Baltimore Trust had made large expenditures in development of the Lucky Coin Group under the deed to it, and "That by reason of their knowledge, of acquiescence and encouragement in the doing of development work upon the said Lucky Coin Group under said deed, the plaintiffs (appellants) have been and are estopped from claiming that the said deed is null and void."
In Little v. Bergdahl Oil Co., 60 Idaho 662, 673,95 P.2d 833, in harmony with the great weight of judicial opinion, this court held:
"To constitute an estoppel it must be shown there was a false representation or concealment of a material fact; that it was made with knowledge, either actual or constructive, of the facts; that the party to whom the false representation was made was without knowledge or the means of acquiring knowledge of the real facts; that the false representation was made with the intention that it should be acted upon and the party to whom it was made must have relied on or acted upon it to his prejudice."
While there is evidence Mr. Edwards visited the mine and expressed satisfaction with the development work and urged that it be continued, still and nevertheless, tested by the above quoted rule, that does not constitute an estoppel. Moreover, there is not even a hint in the record that Edwards made any kind of a representation to induce the so-called "Trust" to spend any money whatever in the development of the Lucky Coin Group, or to induce the "Trust" to continue the work of development after it had been commenced. Nor is there any evidence that Edwards concealed any fact, material or otherwise, from the "Trust." Nor has any case been cited nor can any case be found holding that a disappointment, no matter how "great," constitutes estoppel.
Appellant contends the so-called "Baltimore Trust" *Page 657 
having exercised the rights and privileges of a corporation without taking any steps whatever to incorporate, is prohibited under Subdivision 4 of Section 29-108, I.C.A. from either holding the real property conveyed to it or making a defense in this suit involving that property.
State v. Cosgrove, 36 Idaho 278, 210 P. 393, relied upon by respondents, is not in point. In that case, it appears a Montana common law trust came into the State of Idaho by and through an agent, one T.B. Cosgrove, and sold one of its units to J.D. Chisholm, without first having secured a permit under and as required by our "Blue Sky" law, and that following the sale the Montana common law trust (called "Montana Syndicate"), was informed against and prosecuted in the district court in and for Shoshone County. It further appears the Montana common law trust demurred to the information on certain grounds, not material here, and that the trial court sustained the demurrers. The State thereupon appealed to this court and on appeal a majority held the information was sufficient and reversed the trial court. An examination of that case makes it clear the decisive question presented to the court for decision was simply as to whether the information was, or was not, sufficient as against the demurrers.
Nor is Spotswood v. Morris, 12 Idaho 360, 398, 399,85 P. 1094, also relied upon by respondents, in point. That was an action to recover a commission for allegedly procuring a purchaser for certain real estate. Briefly, one Benjamin F. Morris (the owner of 2720.80 acres of land located in Idaho County) joined one Dernham and others in a syndicate to purchase said lands from him and re-sell the same and divide the profits. Plaintiffs and respondents claimed the above mentioned lands had been listed with them for sale and that they had found a purchaser and brought an action to recover a commission, the decisive question being as to whether the realtors had found a purchaser and were, therefore, entitled to recover a commission. After discussing corporations, partnerships and joint stock companies or associations, the court reviewed the evidence and correspondence at great length, and then said:
"To recapitulate: Mulhall, the purchaser, had in April, 1902, received a letter from B.F. Morris containing a circular *Page 658 
list of land, which list called the particular attention of Mulhall to the Denver Townsite Company land, and in response thereto, he left his home in Sioux City, Iowa, and traveled about two thousand miles on his way to inspect said land, and went into the office of the respondents at Moscow, Idaho, to make inquiry in regard to an uncle whom he had not heard from for years, and while there informed the respondents of his mission to see B.F. Morris and inspect said land. Respondents thereupon informed him that they were well acquainted with Morris and would give him a letter of introduction to him, which they did. Can it be contended with any reason under that state of facts that respondents procured Mulhall as a purchaser? He had concluded to go and inspect said land more than a month before he met respondents, having had his attention called to it by B.F. Morris, and had proceeded about two thousand miles on his way to see the land before he accidentally, or incidentally, met respondents.
"Those are the undisputed facts. Respondents were informed by Mulhall that he was on his way to see said land. The giving of said letter of introduction was a work of supererogation, and for the evident purpose of laying the foundation for a commission.
"The respondents had no more right to appropriate as their own a purchaser found by appellants than appellants had to appropriate one found by respondents, provided the land had been listed with them. There must be a little honor between real estate agents. If Mulhall's attention had been called to this land by respondents, no court would permit appellants to appropriate him as their own purchaser neither will respondents be permitted to claim as their purchaser one procured by appellants (provided the sale was not brought about by the efforts of respondents).
"Mulhall evidently was a keen, shrewd man — a real estate agent — and his letter of July 8th indicates to me that he had concluded to purchase said land, and the letter of respondents of July 14th to him did not influence him to make the purchase. It is sufficient to say that Mulhall was a purchaser procured by Morris, now deceased, and not by respondents."
In the instant case, the "Trust" did not file articles of incorporation, or, for that matter, make any attempt to *Page 659 
incorporate. It studiously avoided that. It, nevertheless, exercised the powers and enjoyed the privileges of a corporation. Where (which is not the fact here) articles of incorporation are actually filed and a certificate of incorporation issues, given a statutory ground, or grounds, the Attorney General may bring an action to annul, vacate or forfeit the articles of incorporation and franchise of an offending corporation. (Sec. 29-157, I.C.A.). But that, of course, could not affect the right of appellants to plead and rely upon Subdivision 4 of Section 29-108, supra.
There is no connection between Subdivision 4 of Section29-108, I.C.A., and Sections 25-1616 and 25-1619, I.C.A. Subdivision 4, supra, of course, applies to the matter of holding real property or making a defense in a civil action involving real property conveyed to a corporation, where, as here, the powers and privileges of a corporation are exercised either before completing incorporation or taking any steps to incorporate. Section 25-1616, supra, makes it the duty of either a foreign or domestic mining corporation, as well as mining associations, to file a report during the month of June of each year, and Section 25-1619, supra, makes it a misdemeanor to fail to file the report. Each, Subdivision 4, supra, on the one hand, and said sections on the other, apply to wholly different matters and neither Subdivision 4 nor said sections affect the other in any way. So that Subdivision 4, supra, can and should be applied in the case at bar without regard to either of the above mentioned sections.
Finally, conceding for the purpose of argument, but for that purpose only, that respondent is, as a matter of law, a trust, does that give it the right to exercise the powers and enjoy the privileges of a corporation, and at the same time avoid the consequences of that conduct? If so, and that is what the majority, in effect, holds, why incorporate?
I am authorized to say that Mr. Justice Miller concurs in this dissenting opinion. *Page 660