Court Opinion

ID: 5168422
Source: CourtListenerOpinion
Date Created: 2022-01-02 04:50:41.94474+00
Date Added: 2024-06-11T08:25:57.276487
License: Public Domain

MORGAN, C. J.
(After Stating the Facts). — In the view we take of this case, there is no necessity of determining whether the trust deed given to the First National Bank of Hailey can be foreclosed by notice and sale, as was done in this case, or whether it must be foreclosed by suit, as seems to be required by sections 4530 and 4533 of the Revised Laws of Idaho. I may say, however, that this court has repeatedly decided that a deed absolute on its face, and a contemporaneous contract foi reconveyance upon payment of amount due grantee — that is, *7an article of defeasance — although, in a separate paper, constituted a mortgage, and must be foreclosed, as by section 4520 et seq. is required. (First Nat. Bank v. Williams, 2 Idaho, 670, 23 Pac. 552; Kelley v. Leachman, 3 Idaho, 392, 29 Pac. 849, and eases there cited; Wilson v. Thompson, 4 Idaho, 678, 43 Pac. 557.) If a deed absolute, with a contract of defeasance on a separate paper, is a mortgage, upon what ground can it be said that a trust deed, which repeatedly recites that it is given to secure an indebtedness, with a clause of defeasance in the instrument itself, is not a mortgage? Notwithstanding the authorities that are and may be cited to sustain the contrary doctrine, I am constrained to say that this court cannot be a party to setting aside a plain and positive statute by judicial decision. Considerable space in the brief of respondent is occupied in showing, by argument and authority, that one member of a mining partnership may buy out the interest of his copart-ner in the property with his own money, and hold, retain, and cwn it in his own right, and the mining partnership continue in ihe management and working of the mine. There can be no doubt of the correctness of this proposition. This court has so decided, substantially, in the case of Hawkins v. Mining Go., 3 Idaho, 241, 28 Pac. 433; but to claim that, therefore, one partner has the right to use the partnership funds on his own motion, without authority of the other partners, to purchase an outstanding mortgage or trust deed given by his copartner upon the mining propertjq cause it to be foreclosed by notice and sale, to be bid in in the name of his agent, and then transferred to himself or to himself and another partner, and thereby obtain title in himself, is a non sequitur.
On September 22, 1888, Roberts, Venable, and Bryan agree, inter alia, that Roberts shall be paid $200 per month until the parties otherwise agree. In April, 1889, Venable, defendant herein, ordered Bryan to cease paying Roberts the $200 per month, which was accordingly done. Each of the parties, Bryan, Roberts and Venable, owned one-third interest in the property. Therefore each had equal authority in the management of the mine and its proceeds. Venable had no more authority to stop this payment, without agreement of the others, *8than Boberts alone would have had to order its beginning. (Hawkins v. Mining Co., supra.) That he was a larger creditor of the partnership than was Boberts gave him no more authority, in the absence of legal proceedings, than Boberts. The money due Boberts then accumulated until the purchase of this trust deed, which was July 20, 1889. On March 18, 1889, by direction of "Venable (as shown by the books kept by Venable with the mining partnership), the sum of $1,500 was sent to him from the proceeds of the mine. This was after the Stevenson indebtedness had been paid in full. Boberts then had as much right to direct Bryan to pay this money to him as had Venable to require it to be paid to himself. If it had been paid to Boberts, he could have taken up the trust deed. On June 20, 1889, Venable used this money to buy up the Boberts deed. At least, Venable charges the firm, Boberts, Bryan and Venable, with the money used to buy the trust deed. The account kept by Venable’s bookkeeper, by direction of Venable, and the latter’s testimony, shows it was so charged — $1,000 on June 29 and $558 on July 27, 1889. The mine then purchased the trust deed against Boberts, and the latter had as much right to control the funds of partnership as Venable. In our opinion, the funds of the partnership having purchased the trust deed, the title is held in trust for the benefit of Boberts or his grantee. Venable then directed Moore to foreclose the trust deed by notice and sale, bid the property in, and afterward transfer it to himself and George V. Bryan, the mining partner; all of which with all due diligence, Moore obediently did. That the purchase of the trust deed was made with the money of the firm, and afterward foreclosed in the interest of Venable and by his direction, was apparently concealed from Boberts until the transaction was fully completed. Now this court is asked to approve of this method of acquiring the property of the mining partner. The court cannot be made a party to such proceeding. This court holds that, upon the showing made, the transfer to Bryan and Venable, respondents, of the mining property described in said deed, should be set aside and held for naught, and the interest therein attempted to be conveyed be decreed to be the property of the plaintiff herein.
(Jan. 24, 1898.)
The only question submitted to this court by the appellant is, “Can one partner take the funds of the partnership, go out and buy a deed of trust of the interest of his copartner, foreclose it secretly, bid it in, and hold title to the whole?” This question is sufficiently answered in the opinion. The order of the court below, overruling plaintiff’s motion for new trial, is reversed, and a new trial ordered upon the issues formed by the pleadings, costs awarded to appellant.
Huston and Sullivan, JJ., concur.