International Kaolin Co. v. Vause
International Kaolin Co. v. Vause
Opinion of the Court
—The appellee, 'hereinafter referred to as the complainant, as trustee for the bond-holders secured by a mortgage trust executed by the International Kaolin Company, a corporation, filed his bill for the foreclosure of such mortgage against the appellants, hereinafter referred to as the defendants, in the Circuit Court of Lake county. None of the defendants to the bill interposed any defense except the defendant, Frank B. Colton, as trustee, who demurred to the original bill, and upon his demurrer being overruled, answered said bill, incorporating in his answer a plea setting up. failure to make a necessary party defendant. Various motions were made by the same defendant to dismiss the original and amended bill, and to dismiss the cause, all of which motions w'ere denied, and from these interlocutory rulings, overruling the defendant, Colton’s, demurrer to the original bill, and denying his various motions to dismiss the original and amended bills and to> dismiss the cause, all of said defendants have taken their appeal to this court, assigning said interlocutory orders as error,' there being four assignments of error.
The third of these assignments challenges the correctness of the court’s order overruling the defendant, Colton’s demurrer to the original bill. The grounds of this demurrer are in substance as follows:
ist. No equity in the bill.
2nd. That the mortgage, sought to' be foreclosed is not properly witnessed.
3rd. That said mortgage is. not properly acknowledged.
4th. That it does not appear that said mortgage was entitled to be recorded in the public records.
5th. That it does not appear that the interest of this defendant is subject to any rights the complainant ma}*- have.
*645 6th. That in the absence of proper acknowledgment 'jnd record of said mortgage sought to be foreclosed it is ■ necessary for complainant to allege actual notice to subsequent incumbrancers of the existence of the same.
7th. That the allegation in the bill that the interest of this defendant has accrued subsequent to the lien of the mortgage sought to be foreclosed, and is inferior thereto, is an insufficient allegation without alleging or' showing actual or constructive notice of the mortgage sought to be foreclosed.
8th. That it does not appear that the complainant is entitled to maintain this suit.
The court below made the proper order in overruling the said demurrer to the original bill. That -there Í9 equity in the bill is fully substantiated by a bare reading thereof.
The grounds of the demurrer most earnestly contended for here are those questioning the form of the execution, -witnessing and proof for record of the mortgage sought to be foreclosed, but there is no merit in the contentions of the appellant in- these respects. Incorporated in the body of the mortgage itself made an exhibit to -the bill in the form of preambles are the resolutions adopted by the stockholders of the corporate mortgagor authorizing its board of directors to issue the bonds in question to be secured by a trust deed or mortgage of all of its properties and franchise in such manner and on such terms and conditions as to the said board of directors shall seem necessary, and directing that such mortgage shall be duly executed in the name of said company by its president and sealed with its corporate seal attested by its secretary, as may be determined by said board of directors; also incorporated therein are the resolutions adopted by the board of directors of said corporate mortgagor directing and providing for the
“In witness whereof, the parties hereto have caused their respective corporate names to be hereunto Subscribed by their respective presidents, thereto duly author*647 ized, and their respective corporate seals to be hereto affixed and attested by their respective secretaries, on the day and year first above written.
(Corporate) International Kaolin Company,
(Seal) Charles D. Haines, president.
Attest: Stephen J. Brown, secretary.
(Corporate) City Trust Company of New York
(Seal) by J. R. Curran, Pt.
Attest: W. W. Ley, Secy.
(As to City Trust Co.)
(W. J. Eck )
(W. Smith )
In presence of: as to' International Kaolin Company and the signature of Charles D. Haines as president and Stephen J. Brown as secretary.
H. MoGonegal Geo. F. Bentley.”
And the proof of such mortgages for record is as follows:
‘'State of .New York County of New York. SS
On the first day of August in the year , one thousand nine hundred and two, before me personally came Charles D. Haines, to me known, who being by me duly sworn, did depose and say that he then resided' at. Kinderhook, Columbia county, New Ybrk; that he was then president of the International Kaolin Company, one of the two corporations 'described in and whidi executed the foregoing instrument; that he knew the seal of said corporation; that the seal affixed to said instrument was the said corporate seal; that it was so affixed by order of the board of directors of said corporation, and that he signed Jus name thereto by like order.
(Notary’s of-) Geo. F. Bentley, .
(ficial Seal.) Notary Public New York Co.”
The proof of the execution of such mortgage made by the president of the City Trust Company of New York, trustee, named ■ in such trust mortgage in acceptance of the trust herein created is in identically the same form.
In so far as the objection to the form of the attestation of this instrument by the witness thereto' is concerned, our statute, section 2459 General- Statutes of 1906 fsection 1955 revised statutes) provides as follows: “Any corporation may convey lands by deed sealed with its common seal -and signed in its name by the president or chief executive officer of the corporation.” Under this provision of our law it would seem that the deeds of corporations are not required to be witnessed by subscribing witnesses, but that our statute recognizes the doctrine universally obtaining, that corporations in such matters speak and act through their corporate seal. But however this may be, we think that the mortgage in question is not only validly executed, but that it is properly-attested by witnesses, if witnesses thereto are necessary +o its validity, and we think, too, that it is properly proven for record to entitle it to be recorded in the public records of this state. The following cases will be found to establish the rule here that it is not the policy of
The defendant Frank B Colton filed an answer to the original bill in which, he incorporated a plea alleging a failure to make a necessary party defendant to the bill. The complainant, after this answer and plea were filed, without leave of the pourt being first granted, filed amendments to his original bill, and upon the failure of the defendant Colton to answer, demur or plead to this amended bill the complainant caused decree pro confesso to be entered against him, procured the appointment of a master to take testimony, and upofe the filing- of the master's report obtained ex parte from the judge a final decree of foreclosure against all the defendants as prayed.
The appellee, the complainant below, assigns as error il.-p order of the court vacating the final decree and decree pro confesso as to the defendant Colton. There was no error here. Rule 42 of Equity rules provides that after
No error appearing, the orders appealed from in said cause are hereby affirmed at the cost of the appellant Frank B. Colton, and the cause is remanded for such further proceedings as shall be consonant with equity practice.
Shackleford, C. J., Cockrell, Whitfield, and
Parkhill, JJ., concur;
Hocker-, J. did not participate.
Reference
- Full Case Name
- International Kaolin Company, a corporation, City Trust Company of New York, a corporation, Atlantic Kaolin Company, a corporation, James H. Harlow and George R. Harlow, partners, James H. Harlow & Company, Wheeling Corrugating Company, a corporation, Joseph B. Cottrell, H. W. Mills, J. B. Cottrell Jr., G. H. Pantley Jr., S. A. McEaddy, S. W. Joyner, J. B. Phares, J. S. Warner and Frank B. Colton, Trustee v. Francis Vause, Trustee
- Cited By
- 17 cases
- Status
- Published
- Syllabus
- Corporations—Execution op Mortgage by—Interest of Defendant How Alleged In Bill—Equity Practice—Extending Time for Pleadings—Vacating Decree Pro-. Conpesso. x. Under the provisions of section 2459, General Statutes of 1906, (section 195 s> Revised Statutes of 1892) whether it is necessary to their validity that the deeds of corporations conveying land shall be witnessed by subscribing witnesses, Queret 2. A trust deed or mortgage executed, attested and proven for record by two corporations in the State of New York in the following form: “In witness whereof the parties hereto have caused their respective corporate names to be hereunto subscribed by their respective presidents, thereto duly authorized, and their respective corporate seals tobe hereto affixed and attestedby their respective secretaries on the day and year first above written. (Corporate) International Kaolin Company, (' Seal ) Charles D. Haines, President. Attest: Stephen J. Brown, Secretary. (Corporate) . City Trust Company of New York, ( seal ) By J. R. Curran, President. Attest: W. W. Lee, Secretary. As to City Trust Company, W. J. Eck, W. Smith. In presence of: as to International Kaolin Company and the signature of Charles D. Haines, as President and Stephen J. Brown, as Secretary. H. McGonegal, Geo. F. Bentley, State of New York, County of New York. On the first day of August in the year one thousand nine hundred and two, before me personally came Charles D. Haines, to me known, who being by me duly sworn, did depose and say that he then resided at Kinderbrook, Columbia County, New York; that he was then president of the International Kaolin Company, one of the* two corporations described in and which executed the foregoing instrument; that he knew the seal of said corporation; that the seal affixed to said intsrument was the said corporate seal; that it was so affixed by order of the board of directors of said corpora tion, and that he signed his name thereto by like order. Notary’s offi-) Geo. F. Bentley, ( cial Seal ) Notary Public New York County. Then follows a certificate under the hand and official seal of the clerk of the county of New York and of the Supreme Court for said county, which is a court of record, attesting that the said Notary Geo. F. Bentley was a dulv commissioned and sworn Notary Public in and for said State and county and as such duly authorized to take such acknowledgments, and that he was well acquainted with the signature of such Notary and that the signature to such certificate he believed to be the genuine signature of such Notary. Then follows the proof of the execution of' such mortgage by the City Trust Company of New York Trustee in acceptance of the trust therein created, in identically the same form: Held, That saidmortgage was validly executed, attested and witnessed, if witnesses thereto be necessary, and proven for record substantially in compliance with the requirements of our statutes; and that such proof thereof lawfully entitled it to record in this State. 3. It is not the policy of our law to nullify records wherever substance is found. Clerical errors and technical ommissions should be disregarded, and a substantial compliance with the statute should be held tobesufficient. The instrument acknowledged may be resorted to in aid of both the execution and acknowledgment thereof. And a liberal construction should be applied in fayor of sustaining the proof of the execution of deeds and other instruments required to. be proven for record. , 4. The recording of a deed is equivalent to a formal delivery thereof, in the absence of any showing of fraud on the grantor. 5. An allegation in a bill for closure of a mortgage to the effect; that the interest of a defendant named therein, if any, has accrued subsequently to the mortgage and is subject to the lien thereof, sufficiently shows that such defendant is a proper party, and is not demurrable as stating no cause of action against him. 6. Trial courts are vested with a wide discretion in the matter of extension of the rule-prescribed times for filing pleadings, and no exercise of such discretion will be.interfered with by an appellate court unless it is a plain abuse thereof to the unjustifiable detriment of the party or parties. 7. Aftera defendant to a billhas filed an answer thereto, the complainant cannot, under our Equity Rule No. 42, amend his bill without obtaining an order from the judge granting leave to amend. If in such case he amends his bill without such order from the ¿judge, a decree pro confesso and final decree against such defendant is not authorized upon his failure to answer the bill as so amended , and there is no error in vacting a decree pro confesso and- final decree entered under such circumstances.