Court Opinion

ID: 3412501
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:30:18.17982+00
Date Added: 2024-06-11T14:03:21.618227
License: Public Domain

I concur in the conclusion stated by Justice Budge, as well as in his reason for that conclusion. But I also concur in the reason advanced by Justice Givens for his concurrence. This fact, as well as the fact that my vote is determinative of this case, impels me to submit a brief statement of my reasons for my conclusion.
On and prior to June 13, 1942, the respondent Baltimore Trust owned and was engaged in developing a group of mining claims in Blaine County, Idaho. Adjoining this group of claims, John Edwards, now deceased, and Mary Edwards, then his wife, and now the appellant herein, owned a half interest in a group of mining claims, named Lucky Coin Nos. 1 to 7, inclusive. In the judgment of the Trustees of the respondent trust, the development work by them planned made it desirable that the trust should own the Edwardses' interest in the Lucky Coin group of claims. Negotiations for the acquisition of such interest resulted in the execution and delivery of the proper deed by the Edwardses to the trust on June 13, 1942. The trust thereupon proceeded with its development work, including therein a tunnel through the Lucky Coin group, being part of the work planned to develop the combined groups as a unit, or one mine. Mr. Edwards, who was a practical miner of many years experience, visited and inspected the work being done and not only expressed satisfaction therewith but urged continuance thereof, which the respondent did. However, though the respondent in the prosecution of said work expended between twenty-two and twenty-five thousand dollars, no ore in paying quantities was found.
The failure to strike ore was, no doubt, a great disappointment to Mr. Edwards, who, like all of the old time prospectors, had great faith in his property, and frequently expressed his opinion that an extension of a few feet of the tunnel would strike a lode and uncover a "big mine." Whether it was this failure to discover ore, or whether some other motive actuated Mr. Edwards, he became dissatisfied *Page 650 
and demanded the return of the property, and on March 25, 1943, he and his wife instituted this action seeking a cancellation of the deed by which they had transferred their interest in the mining claims to the respondent trust.
In their complaint they allege as grounds for the cancellation of said deed that the same was obtained by fraud, and that the Baltimore Trust was in reality a corporation, but that it had not complied with certain acts by statute required of corporations, such failure to comply with such statutes amounting, in one instance, to a misdemeanor, by reason of which noncompliance the plaintiffs contended and do now contend that the trust was not qualified to take the title to real property, and that the said deed was and is null and void.
While the action was pending, Mr. Edwards died, and the action was prosecuted by Mrs. Edwards, as administratrix as well as in her individual capacity. The trial court, on conflicting evidence, held the same insufficient to show fraud, and also found against the plaintiff, appellant here, under her contention that the respondent trust was and is, in law, a corporation. The latter contention, therefore, presents the main question upon this appeal. In my opinion appellant's contention ignores the previous holding of this court, and is unsound in reason.
I shall not attempt to analyze many of the almost innumerable cases which have passed upon the question of the validity of business trusts of the nature of the respondent herein, which trusts are sometimes referred to as Massachusetts trusts.
Let it be admitted that there are cases which support the contention made by appellant, that under constitutional and statutory provisions similar or like Section 16 of Article 11 of our constitution, and Section 29-101 of our Code Annotated, common law trusts of the nature of the respondent are either classified for all purposes as corporations, or are entirely prohibited. Among such cases are Reilly v. Clyne (Ariz.),234 P. 35, the Washington cases of Ex rel Range v. Hunkle, 219 P. 41, State ex rel Colvin v. Paine, 243 P. 2, and Haynes v.Central Business Property Co., 249 P. 1057, which cases are cited and greatly relied upon by counsel for appellant in their brief. *Page 651 
Counsel for appellant also cite the case of Hamilton v. Young
(Kan.), 225 P. 1045. The Kansas constitutional provision on the subject is almost verbatim with our Section 16 of Article 11 of the constitution. Though holding, in conformity with a former opinion, that the trust then involved was a corporation, the court says:
"Classification of the association as a corporation does not mean, of course, that it is to be treated in all respects and for all purposes as though it had obtained a charter in the regular way. The constitution grants no corporate privilege, but classification of certain associations with corporations requires that, so far as corporate analogy may be lawfully indulged, those associations are to be deemed corporations."
Later in the opinion the court quotes from its previous case ofHarris v. Oil Co., 204 P. 754, the following:
" 'It is quite obvious that the purpose was not to embody in the Constitution the ordinary definition of the word corporations but to give to that word as used in the article of which the provision was a part a special and enlarged meaning. The kind of association there described is by the terms of the section itself authorized to sue and be sued. The definition so adopted is not necessarily to be applied to the word corporation wherever it is used in the statute; but where the subject matter makes it pertinent and within the reason of the legislation that is the natural course.' "
And the court's conclusion is a clear recognition of the trust as an entity, and as being sui juris, as well as sui generis.
See, also, Hodgkiss v. Northland Petroleum Consol. (Mont.),67 P.2d 811.
Beginning on page 22 of 156 A.L.R. there is an interesting discussion of the origin, nature and uses of business trusts of the kind involved in the case at bar, together with a collection of cases on both sides of the question of the legal status of such trusts. On page 32 of the volume referred to, the annotator, referring to an article on the subject in 23 Columbia L. Rev. 423, says that
"Instead of trying to squeeze such trusts into an existing *Page 652 
category, the courts should recognize them as a distinct type of business organization,"
and on pages 35 to 38 of the annotation, there is a collection of cases from jurisdictions in which such business trusts are held not to be corporations. Among such jurisdictions, and because of the case of State v. Cosgrove, 36 Idaho 278,210 P. 393, Idaho is classified as committed to the doctrine that
"A Massachusetts or business trust is not a corporation."
On page 37 of the annotation, the author quotes from the Cosgrove case the following:
"A corporation is an artificial being, a trust is no being at all. A corporation is composed of individuals who subsist as a body politic under a special denomination. A trust is an estate, the equitable title to which is held by individuals who bear no contractual relation between themselves, nor is it essential that the trust be given a special denomination. The stockholders and directors generally are not liable for debts of a corporation, while the equitable owners and trustees of a trust may be liable for obligations incurred in connection with the trust property, unless their liability is limited by special contract."
The Cosgrove case was decided in November, 1922. Theretofore, this court in Spotswood v. Morris, 12 Idaho 360, 85 P. 1094, 6 L.R.A. (N.S.) 665, decided in June, 1906, had held a similar business trust not to be a corporation. In the latter case the court specifically held that the term corporation as used in Section 16 of Article 11 of the constitution does not apply to corporations in general but only as it is used in said section. In other words, that such trusts may in many instances be subject to the regulations prescribed by that article of the constitution for corporations in general. The determination in the Cosgrove case is consistent with that pronouncement, in that, though the court held the trust involved not to be a corporation, it nevertheless held it to be subject to the requirements of the Blue Sky Law.
Should these two cases, clear, logical and definite as they are, now be overruled? I submit that this should be done only if urgent reasons compel such action. Undoubtedly many investments have been made, many new enterprises *Page 653 
inaugurated, and many rights acquired, in reliance upon the law as announced in these cases from this court. That the respondent trust was organized because of such reliance is self-evident. One of the great, perhaps the greatest, desideratum in the law is certainty, and stability. There can be no stability in the law if the courts today undo what they did yesterday.
"The fundamental conception of a judicial body is that of one hedged about by precedents which are binding on the Court without regard to the personality of its members.
"Provisions of the constitution and the law which are unchanged by any amendment cannot mean one thing today and the opposite tomorrow, if this is to be a government of laws and not of men."
                                      D.A. Simmons Ex-Pres., Am. Bar Assn.
In the case at bar there is not only no amendment of our constitution or of the statute which would nullify the enunciations in the Spotswood and the Cosgrove cases, but, as pointed out by Justice Givens, subdivision 14 of Section29-101, I.C.A., enacted subsequent to the time of the decision in the said cases, is a distinct recognition of the legal entity of these business trusts.
I therefore concur in the affirmance of the trial court's judgment.