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Section 561 of the Civil Code constitutes the directors of a corporation dissolved for any reason trustees for the creditors and shareholders, with full power to wind up its affairs, unless some other person be appointed for that purpose. No exception is made in case of insolvency. The intention of the legislature seems to have been to provide the most inexpensive and expeditious way for the administration of the affairs of a defunct corporation by confiding them to the hands of those who are best acquainted with them, and have a direct personal interest in preserving and appropriating the assets to their legitimate purposes, subject to an accounting or removal by a court of equity at the instance of a shareholder or creditor whose rights are jeopardized or betrayed. Havemeyer v. Superior Court, 84 Cal. 327, 24 Pac. 121, 10 L. R. A. 627, 18 Am. St. Rep. 192. In no case, however, will a court resort to a removal of a statutory receiver, and appoint one in his stead, until it is made to appear that the person complaining has been, or is about to be, injured by an unwarranted procedure on his part. In this case, as we have seen, the association was not insolvent. principal of the contributing shareholders was not impaired in any way at the time of the dissolution, and it is not claimed that the assets have been mismanaged, or in any way misappropriated, by the trustees. True, as has already been stated, their action in attempting to mature the shares of the borrowing shareholders was and is unauthorized; but their course in this particular has not resulted in loss, nor has it in any way injured plaintiff. Indeed, the holders of shares of Series C who paid their interest and dues after the dissolution, thus making a conventional arrangement with the trustees, received all the advantages they would have received if there had been no dissolution. Instead of ascertaining the balance due from himself, and tendering it to the trustees, thus securing his release, or, which would have been better, demanding an accounting of them, and thus speeding them in the administration of their trust, he took advantage of the indulgence extended to him by them, and, when they refused to release him from his just obligations to the other shareholders, he sought to further delay and confuse matters and incur expense by insisting that they should be declared unworthy of confidence, and a receiver be appointed in their stead. Their acts, though unauthorized, have not injured him. He therefore has no sufficient ground upon which to urge the court to discredit them. The appointment of a receiver was properly refused. Let the judgment and order be reversed, and the cause be remanded, with directions to proceed in accordance with the views herein expressed. Reversed and remanded.

PIGOTT, J., concurs.

MILBURN, J. I concur in the judgment of reversal, and with the conclusions and reasoning of the CHIEF JUSTICE as to all matters except as to the premiums. There seems to be no contention between the parties as to the district court's finding that the plaintiff was entitled to a credit for unearned premiums or "bonus," but as to its correctness I am not sure. If the company had failed to do its part of the contract, or if it had agreed to let the plaintiff pay up before the end of the life of the concern, then we should have a different case from the one at bar; but when the borrower gives a bonus for the use of the money, to be paid back in installments during a term limited, as he contemplates, by the life of the association, I cannot see why, at the end of such life, he should have a special credit upon his mortgage debt for any alleged unearned part of the bonus. In the auction sale of the money to the borrower, he, knowing the term of the company's life, made his bid proportionately large or small. I cannot see how he can get any credit for any alleged unearned part, except indirectly, and so far as all the bonus went to swell the value of his stock with all the other stock, the value of the stock going to wipe out his mortgages.

(25 Mont. 439)

BOUCHER v. BARSALOU. (Supreme Court of Montana. July 8, 1901.) PLEADING

UNLAWFUL DETAINER

INCONSISTENCY-FINDINGS-DISPOSITION OF CAUSE QUIETING TITLE.

1. A complaint to recover land alleged that defendant unlawfully withheld the same, and that the relation of landlord and tenant existed between the parties, which defendant denied, and alleged that plaintiff's grantor held the property as trustee to secure certain indebtedness due him from defendant, and not as owner, of which fact plaintiff had knowledge, and defendant demanded to be decreed the owner of the premises. On plaintiff's motion the equitable defense was tried first, resulting in a finding that plaintiff had no knowledge of the equities existing between defendant and plaintiff's grantor, and that the relation between the latter parties was that of trustee and cestui que trust, as alleged by defendant. Held, that it was error to refuse to dismiss plaintiff's complaint, since the relation of landlord and tenant, as alleged by the plaintiff, was inconsistent with the facts already found.

2. The action cannot be maintained as a suit to quiet title, since the necessary averment of ownership on the part of plaintiff does not appear, and the case was not tried on that theory. Appeal from district court, Silver Bow county; John Lindsay, Judge.

Action by Frank Boucher against Joseph Barsalou. From a judgment in favor of plaintiff, defendant appeals. Reversed.

Robt. McBride, for appellant. McHatton & Cotter, for respondent.

MILBURN, J. This cause is on appeal from the judgment entered in favor of the plaintiff. The plaintiff filed his complaint

in unlawful detainer, setting up that the defendant unlawfully withheld from his possession certain real estate, and averring that the relation of landlord and tenant existed between the parties, in that the defendant had been the tenant of his former landlord, one Ayotte, the latter having conveyed said property for a good and valuable consideration and in fee simple to the plaintiff; and that the plaintiff had given the necessary notice to the defendant to quit said premises. The defendant denied each and every allegation of the complaint, except that he admitted that he was during all the time named in possession, and was, and had been for more than 10 years last past, the owner of and entitled to the possession of said property. He unnecessarily, but fully, set out as affirmative matter in his answer an equitable defense, to wit, that the said Ayotte, at the time that he conveyed the said property to the plaintiff, held the property by deed from him, the said defendant, as security for certain moneys due by defendant to Ayotte; and that the plaintiff, at the time that he took the title from Ayotte, was fully cognizant of the relation existing between Ayotte and defendant. He further alleged that the transfer from Ayotte was fraudulent, and made in collusion with Boucher to defraud him, the defendant; and that all the money, the payment of which was secured by the said deed, had been repaid by defendant to Ayotte; and that he (defendant), was entitled to a reconveyance to him of said property. Defendant demanded, in his answer, that plaintiff take nothing by the action, and that he (defendant) be decreed to be the owner of the premises. The plaintiff, in his reply, denied the affirmative allegations of the answer, and prayed that his right and title to the ownership of said property be quieted. The cause came on for trial. Upon the motion of the plaintiff, and by order of the court, the equitable defense was tried to the court with a jury, before entering upon the case of plaintiff. The jury made its findings adversely to the defendant as to his equitable defense, and the court adopted the same, and found, among other things, that the plaintiff had no knowledge of the equities existing between the defendant and said Ayotte, and that the relations between the defendant and Ayotte were as alleged by the defendant; thus, in effect, declaring that the relation of landlord and tenant had never existed between Ayotte and the defendant, or between the plaintiff and the defendant. Thereupon the court proceeded to try the original case of the plaintiff on his complaint in unlawful detainer before a jury, and, the first witness having been sworn for the plaintiff, the defendant objected to the introduction of any evidence on the part of the plaintiff, and asked for a judg ment of dismissal upon the following grounds: That "this action is brought under the laws of the state of Montana relative to unlaw

ful detainer by a tenant of real property. The allegations in the complaint are: 'That on or about the 1st day of February, 1897, one Sam Ayotte was the owner in fee simple of the premises known and designated as the premises at No. 520 West Granite street, together with the premises in the rear of said number, in the city of Butte, county of Silver Bow, state of Montana, together with the dwelling houses and appurtenances thereto belonging. That on said last-mentioned date, and for some time prior thereto, the said defendant, Joseph Barsalou, was in possession of said premises, as the tenant of said Sam Ayotte, under a monthly tenancy of $10 per month, payable monthly in advance. That on the 20th day of February, 1897, the said Sam Ayotte conveyed to the plaintiff herein the premises above described, and said plaintiff, as the grantee and successor in interest of said Sam Ayotte, by his agent, notified the defendant of his having bought and purchased the said above-described real property from said Sam Ayotte; and the defendant herein was notified by said agent of plaintiff that his rent thereafter and from that time would be $12.50 per month, payable monthly in advance. That said defendant, after said notification as aforesaid by the agent of said plaintiff, continued and remained in possession of the said premises as the tenant of said plaintiff, holding over under the terms of the verbal lease and agreement made by him with his former landlord, Sam Ayotte, the grantor of the plaintiff herein, and said defendant is now in possession of the said premises, and still continues to hold and occupy the same. That, pursuant to the terms of said verbal lease and agreement made by this defendant with said Sam Ayotte, there became and was due to the plaintiff, as the grantee and successor in interest of said Sam Ayotte, and as the landlord of this defendant, as rent for the above described and leased house and premises, on the 20th day of February, 1897, the sum of $12.50.' The only claim that the plaintiff in this case makes to be considered the landlord of this defendant is the claim that there was a verbal lease between Samuel Ayotte and Joseph Barsalou, whereby Barsalou had agreed to pay rent to the said Ayotte, and Mr. Boucher, as the successor in interest of Ayotte, claims to be the landlord of said Barsalou. He does not claim to be the landlord by any agreement between himself and Barsalou. Now, in this case the court has already found, upon the equitable issues, that the relation existing between Samuel Ayotte and Joseph Barsalou at all times mentioned in the complaint was the relation of trustee and cestui que trust, and not the relation of landlord and tenant. Now, the equitable title belonging to Barsalou and the naked legal title to Ayotte, at any time prior to the time of the alleged conveyance of the property by Ayotte to Boucher Mr. Barsalou would have the right to

demand and compel a reconveyance of the property to him. Therefore the relation of landlord and tenant is absolutely inconsistent with the facts already found, and therefore we object to any testimony under the pleadings." Whereupon the court ruled as follows: "My view of this matter is in accordance with the contention of counsel for defendant, and that to proceed with the trial of this case, in view of the findings of the court, would be improper and inconsistent; and the objection will be sustained, and the jury are discharged." To this ruling of the court plaintiff excepted. Thereupon the court caused to be entered upon the court's record the following order, to wit: "And the defendant objected to the introduction of any and all testimony on the part of plaintin, and also moved the court to dismiss the action, and for judgment for his costs. Said objection and motion are argued by counsel, and said objection to the introduction of any testimony is by the court sustained, to which ruling counsel for plaintiff duly excepts, and the jury are discharged from further service." Thereafter, and on the next day, the court made the following order: "This day the motion of defendant that the action be dismissed and for judgment for costs, heretofore argued, is by the court overruled; to which ruling counsel for defendant duly excepts." On the same day the court signed and there is filed, a judgment in favor of the plaintiff and against the defendant for the ownership of the property described in plaintiff's complaint, and for plaintiff's costs of suit.

The proceedings, as presented on the record, are anomalous, and without precedent, so far as we know. It is apparent from the argument used by the defendant in his objection to the introduction of evidence, and from the remarks of the court and his ruling on the objection, that up to the time of the court's order sustaining the said objection, the case had not been tried upon the theory that it was a suit to quiet title. Nowhere in the pleadings of the plaintiff is there any allegation of ownership on the part of the plaintiff. The principal point saved in the exceptions and treated by the several counsel in their briefs is error of the court in entering the said judgment for plaintiff. When the court held that by laches on the part of the defendant he could not maintain his equitable defense, and, in effect, found that the relation of landlord and tenant did not exist between the plaintiff and the defendant, and declined to allow any evidence to be introduced on the part of the plaintiff in support of his complaint, the duty of the court was to dismiss the action at the costs of the plaintiff. Without passing upon the point contended for by plaintiff's counsel, to wit, that a suit to quiet title can be maintained, tried, and adjudicated on the issues raised in the equitable defense to a suit in unlawful detainer, sumice it to say that the

necessary averment of ownership on the part of the plaintiff does not appear in the pleadings; and, further, that the case was not tried upon the theory that it was in any wise a cause to quiet title in the plaintiff. As we have said before, the proceedings are anomalous, and the action of the court, under the circumstances as set forth in this opinion, was error. The judgment of the court is reversed, and the cause remanded. Reversed and remanded.

BRANTLY, C. J., and PIGOTT, J., con

cur.

(23 Utah, 586) YOUNG v. CONSOLIDATED IMPLEMENT CO.

(Supreme Court of Utah. June 20, 1901.) LANDLORD AND TENANT- IMPROVEMENTS REMOVAL-SPECIFIC PERFORMANCE-EVI

DENCE-ADMISSIBILITY-PLEADING.

1. A lease provided that the tenant could put up such additional improvements as it might consider advisable, and remove the same at the expiration of the lease. It was mutually agreed that the lease should be extended, with the right in the lessee to occupy the premises from month to month, each party to give a reasonable notice of a desire to terminate the tenancy. Held, that the extension of the terms and conditions of the lease included the right of the lessee to remove improvements placed thereon by him.

2. The fact that the lessee vacated the premises without removing the improvements will not preclude their subsequent removal, where before the vacation the lessor and lessee enter ed into negotiations for the purchase or rental of the improvements by the former, and the lessor requested the lessee not to remove them until an understanding could be reached, and such negotiations were still pending when the lessor commenced this suit to quiet title.

3. Such lessee was entitled to recover the improvements placed on the premises by him in an action by the lessor to quiet title.

4. Where, in an action by a lessor to quiet title, after vacation of the leased premises, the lessee claims the ownership of certain improvements and the right to remove them under the lease, the question of the value of the improvements is not raised by the pleading.

Appeal from district court, Salt Lake county; Ogden Hiles, Judge.

Suit to quiet title by Hattie H. Young against the Consolidated Implement Company. From a judgment in favor of defendant, plaintiff appeals. Affirmed.

On the 27th day of March, 1891, plaintiff, Young, being the owner of certain real estate, consisting of 50 feet by 11 rods on State street, in Salt Lake City, entered into a written agreement whereby she leased it to the defendant company for a term commenc. ing on the 1st day of May, 1891, to and including the 1st day of January, 1898, for a monthly rental of $150 per month, to be paid in advance on the 1st day of each month. By the terms of the lease, it was agreed that the defendant company should have the privilege of putting up such additional buildings, sheds, and improvements on the land as it might consider necessary for the conduct of its business during the continuance

of the lease, and pay all taxes assessed against it, and at the expiration of the lease remove all such buildings, sheds, and improvements without let or hindrance from the plaintiff. At the time of the lease there was an old building standing on the north 26 feet of the premises, built of adobe, which was called the "Blacksmith Shop," in the south part of which there were four windows, and a stairway leading to the second story, on the outside. The defendant company, on the 1st day of May, 1891, entered into possession of the said premises under its lease, and built a building over the south 24 feet of land by constructing a wall in front, and also a wall in the rear about 70 feet, parallel with the front wall, and also built against the adobe wall of the building on the south 50 feet, which was then leased by the defendant, and which was owned by Dunbar. The north side of the building was the adobe wall of the blacksmith shop. This structure was roofed, and inclosed by the defendant, the joists supporting the roof being attached to the adobe wall. During the terms of the lease the rental agreed to be paid was reduced, by consent, to $125 per monta. In December, 1897, and prior to the expiration of the lease, it was agreed between the parties that until different arrangements were entered into the lease should be extended beyond January 1, 1898, and that the defendant company might remain in possession of said premises, in accordance with the terms, covenants, and agreements of the written lease under which they occupied the same, from month to month, at the same monthly rental that had been paid, and that either party was to give the other a reasonable notice of their desire to terminate the lease. Respondent company continued to hold possession of the premises and pay the rent under the extension of the original lease from January 1, 1898, until February 28, 1900. It also appears that on January 28, 1898, the defendant company wrote to the plaintiff respecting its rights under the lease to remove the buildings it had erected at a cost of $3.680, and offered to sell the same for $1,000, and apply the rent upon its payment at a reduced rental. On February 3, 1898, Mr. Young discussed the matter of the purchase of the improvements, but said he did not have the money to purchase them, but made no claim to the same, and said the defendant company could remain in possession of the premises under the old lease at $125 per mouth, each to give notice of its termination. On August 7, 1899, defendant's manager again wrote plaintiff concerning the improvements and the sale of them. Plaintiff replied that defendant had better write to Mr. Young concerning the matter, which was done, but no reply was received. In January, 1900, defendant's agent had a talk with Mr. Rossiter, plaintiff's authorized agent, with reference to the sale of the improvements, or, if the premises were rented to others, to allow

65 P.-46

each party a share of the rental. Mr. Rossiter said he would submit the matter to Young, and said he thought some arrangement could be made, and requested that defendant make no effort to remove the improvements. In January, 1900, Mr. Rossiter informed defendant company, through its secretary, at a time when they were discussing the sale of the improvements, that when the defendant company vacated the premises he would communicate with Mr. Young, and that undoubtedly some arrangements would be made either to purchase or rent them, and divide the income, and that the defendant company should make no arrangements to remove the improvements. On the 28th of February, 1900, Mr. Rossiter requested defendant's officers not to disturb the improvements. The defendant company vacated the premises on the 28th day of February, 1900. On March 1, 1900, defendant company again wrote Rossiter, claiming the improvements, with a right to remove them, and suggesting ac amicable arrangement. Rossiter saw Snow the same day, and requested that nothing be done towards removing the improvements until he could write to Mr. Young, who was in New York. Rossiter also spoke of renting the property for a saloon, and asked his opinion concerning it. on March 31, 1900, defendant's manager again wrote Rossiter, saying, if no arrangements could be made, he would remove the improvements on the following Monday. On April 2, 1900, Rossiter said to Snow that he had not yet heard from Young, and requested him not to take any steps to disturb the property. and he would arrange with his attorney for a conference. On April 3, 1900, this proceeding to quiet title was commenced, and an injunction served. A showing was made on the part of the defendant that the reason the company did not take away the improvements before it vacated the premises was because of the negotiations pending for a settlement of the claim, and because Rossiter, plaintiff's agent, had requested it not to remove them until Mr. Young could be heard from, and that it relied upon the request being made in good faith. The plaintiff, in rebuttal, gave testimony tending to show its possession since the 28th of February, 1900, and that it had improved the property. timony was given tending to show that in December, 1899, notice was given to the defendant company that it should not remove any of the improvements on the property. Defendant gave notice that it would vacate the property on February 28, 1900. In January, Rossiter notified defendant not to remove any of the improvements, and in February, 1900, Rossiter says he notified defendant not to remove the property, but that he did not know at that time that the lease gave the defendant a right to remove the improvements, or that it claimed any interest in them. Other portions of the defendant's testimony were disputed. It also

les

appears that defendant Moritz had rented the premises from plaintiff, with notice of the facts herein, but he did not appear, and was in default. Upon the findings made a decree was entered granting the defendant company the right to take and remové the improvements in question, and all parties were enjoined from interfering therewith. From this decree the plaintiff appealed.

Young & Moyle, for appellant. Stephens & Smith, for respondent.

After stating the facts as above, MINER, C. J., delivered the opinion of the court:

This case presents several important questions, and they have been presented in a manner that is very creditable to the counsel representing the respective litigants. The appellant insists that the court erred in holding that the improvements belonged to the respondent company, and claims that, admitting a new verbal lease was entered into at the expiration of the first, with the same conditions except as to time, the rental being payable from month to month until notice was given, then the respondent lost all claim it had to the improvements under the written lease, which expired January 1, 1898. It must be conceded that the tenant had the right to remove the improvements it placed upon the property, under the conditions of the lease, during or before the expiration of the same. The lease provides that the lessee "shall have the privilege of putting up such additional buildings, sheds, and improvements as it may consider necessary for the conduct of its business during the continuance of this lease, and pay all taxes that may be assessed against the same, and at the expiration of this lease may remove all buildings, sheds, and improvements from said premises, without let or hindrance from the party of the first part." The lease was extended by the parties in December, 1897, and before its expiration it was agreed between them, and the court found, that "it was mutually agreed by the plaintiff and the defendant company that said lease should be extended beyond the term for which it was originally entered into, to wit, January 1, 1898, and that the defendant company might continue in possession under and in accordance with the terms and covenants of said lease, paying the same rental that had been paid under the same, and occupy the premises from month to month, each party to give the other a reasonable notice of the desire to terminate the tenancy." The requirement that the tenant shall remove the erections during his term, or at least before it surrendered its possession, is based upon the rule of public policy, and for the protection of the landlord, which is that the tenant shall not be suffered, after he surrenders the premises, to enter upon the possession of the landlord of a succeeding tenant. and remove the fixtures, which he might

have taken away before the end of his term. This rule is based upon the regard had for the rights of succeeding interests. Why the right of the tenant should be lost when he, instead of surrendering the possession, takes an extension and renewal of the former lease, with a right to continue in possession under and in accordance with its terms and conditions, except as to time, is not apparent. No reason growing out of sound public policy can sustain a doctrine of that nature. On the contrary, the reason which saved the tenant his right to take the fixtures during the operation of the lease is quite as effective and influential to save them to him on a renewal of what was his before. As said by Judge Cooley in Kerr v. Kingsbury, 39 Mich. 154, 33 Am. Rep. 365: "What could possibly be more absurd than a rule of law which should, in effect, say to the tenant who is about to obtain a renewal: 'If you will be at the expense and trouble, and incur the loss, of removing your erections during the term, and of afterwards bringing them back again, they shall be yours; otherwise, you will be deemed to abandon them to your landlord.'" The agreement entered into did not amount to the making of a new lease merely, but was an extension of the terms and conditions of the written lease for a longer period of time, including the right, under its conditions, to remove the improvements thereon during or at the expiration of its term, as evidenced by the extension. 13 Am. & Eng. Enc. Law, 651; Macdonough v. Starbird, 105 Cal. 15, 38 Pac. 510; Estabrook v. Hughes, 8 Neb. 496, 1 N. W. 132; Ross v. Campbell, 9 Colo. App. 38. 47 Pac. 465; Wright v. Macdonnell, 88 Tex. 140, 30 S. W. 907; Kerr v. Kingsbury, 39 Mich. 150, 33 Am. Rep. 362; Davis v. Moss, 38 Pa. 346; McCracken v. Hall, 7 Ind. 30. It was competent for the parties to give the improvements the legal character of realty or personalty, and the law will enforce their contract. In the present case the parties consented to the erection, and treated the improvements as personal property, with a right in the lessee to remove the same at the end of the term of the lease. Cooley, Torts, p. 503; Myrick v. Bill (Dak.) 17 N. W. 268; 13 Am. & Eng. Enc. Law, 655; Wiggins Ferry Co. v. Ohio & M. R. Co., 142 U. S. 416, 12 Sup. Ct. 188, 35 L. Ed. 1055.

Many authorities hold that where a new lease is entered into with the same terms as the former, and the rights of the tenant are not reserved, the right to remove the fixtures under the former is gone, unless exercised during the life of the first. This rule is urged by the appellant. Loughran v. Ross, 45 N. Y. 792, 6 Am. Rep. 173. As we have seen, the facts found and proved do not bring this case within the above rule. The findings are that the old lease was extended together with such rights as respondent held under it to remove the improvements.

2. Appellant contends that the respondent

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