Court Opinion

ID: 9827732
Source: CourtListenerOpinion
Date Created: 2023-09-01 17:48:35.548333+00
Date Added: 2024-06-11T07:42:35.511140
License: Public Domain

On Motion for Rehearing.
[6] The appellants insist that we overlooked the fact that the judgment rendered in the court below foreclosed the lien on a third tract of land not owned by the Oity Electric Light & Waterworks' Company at the time the mortgage given to secure the bonds was executed. In the original opinion disposing of this feature of the controversy, we noticed only the objection directed against the action of the court in foreclosing the lien upon what is known as the “Hobbs lot,” consisting of iy2 acres. The only assignment of error in which any objection to the foreclosure of the lien upon after-acquired property is made consists of the following: “The court erred in permitting plaintiffs’ counsel to read to the jury a deed executed by W. H. McCowan to said City Electric Light & Waterworks Company, dated September 29, 1899, conveying to said company X% acres of the Hobbs survey, when defendants’ counsel objected to said evidence because said land is not embraced in. said trust deed and was purchased after the date of the same,” etc. It will be observed that
no reference is here made to what is now designated as the “Myriek lot” and which it is claimed was overlooked. The authority of the court to foreclose on the Myriek lot was not discussed, because the question was not called to our attention in any assignment of error. Under the record as presented, we consider any further objection besides that mentioned as having been waived.
[7, 8] Appellants . again, urge their objection to the validity of the transfer by which the bonds were acquired by the members of the board of directors of the old corporation. An investigation of the record shows that 12 out of the 22 bonds disposed of by that transaction were taken by parties who were not members of this board of directors. Therefore, whatever may be said regarding the right of the directors themselves to in that manner acquire ownership of the bonds, no such objection can be urged against the transaction in so far as it affected the bonds acquired by parties who were not directors. There was no fiduciary relation existing between those parties and the company which could be Invoked for setting aside the sale to them. As to these the directors might consent to waive a foreclosure by the creditor bank, and permit such purchasers to take a valid title secured by the lien. These purchasers were parties to this suit, being joined with those directors who were holders of the bonds, and were entitled to have their liens foreclosed in this action. Hence if as creditors and lienholders they had enforceable rights, it was the duty of the court, upon a trial below, to grant the proper relief, even though in the same action liens were claimed by the directors which could not be enforced.
[9] The judgment is attacked as an entirety, no effort being made to separate the rights of these different creditors, or distinguish between the rights of the creditors who were not directors and those who were. The testimony’shows that the property in controversy was not worth more than $6,000 or $7,000. This would be sufficient to cover little, if any, more than the principal and interest due upon the $6,000 of bonds held by creditors who were not directors, and the costs of suit. It follows that, even if we should accept the appellants’ view of the law as applicable to the dealings of the directors themselves with the corporation, the judgment should not be disturbed.
The motion is overruled.