a mere stranger, having no interest in the transaction to which the conversation related.

In further support of the alleged trust, the plaintiff introduced a letter from Emery, as follows:

"Park City, Utah, April 20, 1892. "R. C. Chambers, Esq., Salt Lake CityDear Sir: Inclosing draft 42,897, Richardson, cashier, on Wells, Fargo & Co., for $8,000, payable to your order. We completed the purchase of the Silver King yesterday, and paid them their money, and also declared a dividend for $10,000 to each fifth interest. You probably have more use for money than I have, so I send you the major portion. A. B. Emery.

"I may say that, if we are not obstructed, such dividends should hereafter be made monthly."

It is contended that this letter discloses a payment by Emery to the plaintiff on account of dividends received from the property in question. If this contention be correct, then Emery ought to have sent the plaintiff the whole of the dividend, and, in addition thereto, more than $3,000, because, in such event, be would have had profits and dividends in his hands, belonging to the plaintiff, to the amount of over $13,000. There is no intimation in the letter of any balance, and, when it is considered that the $8,000 was entered in plaintiff's own books as a loan to him from Emery, it is difficult to perceive how this letter can add much weight in plaintiff's behalf. Not only is it difficult, by careful perusal, to find, from the evidence in this case, any material facts or circumstances which corroborate or support the alleged admissions, but there appears to be much, in the conduct of both Emery and the plaintiff respecting the property in controversy, which is consistent with the theory that the $4,000 was advanced to Emery as a loan, and wholly inconsistent with the contention that it was sent to him as agent, and that the purchase of the Mayflower lease was made under the alleged agreement set up in the complaint for the joint benefit of Emery and the plaintiff. From the time of the purchase of the interest in the lease, to the date of his death, Emery appears to have exercised, not only exclusive ownership and control over the property in question, but also over the profits and dividends arising therefrom. His acts of ownership seem to have been precisely what would be expected of an actual and sole owner of property. He purchased the property in his own name, and afterwards had the certificates of stock, representing the number of shares of the capital stock of the Silver King Mining Company, to which his one-fifth interest in the property entitled him, made out to him alone, and up to the time of his death, on June 13, 1894, received over $110,000 in dividends; the last dividend having been received by him but a short time prior to his death, and appropriat

ed to his own use without making any accounting whatever to the plaintiff, or, so far as shown by the evidence, recognizing any interest therein but his own. There is evidence tending to show that he promptly applied the profits arising from the property in payment of the $4,000 which he had obtained from the plaintiff, making final payment thereon in March, 1890, and thereafter, as before, exercised dominion over the property. and received the dividends, and converted them as he saw fit. Nor does it appear that, at any time, he sought the advice or consent of the plaintiff in these business ventures. Clearly, such conduct indicates no intention on the part of Emery that the plaintiff should be equally interested with him in the property. nor does it indicate any admission that he was so interested, or that the purchase of the Mayflower lease was made with such intention, pursuant to the alleged agreement.

So the conduct of the plaintiff was consistent with the idea that the $4,000 was a loan. It does not appear that he ever exercised any dominion or ownership over the property, or over the dividends or profits, or that he ever demanded of Emery any share of the one-fifth interest in the Mayflower lease, or any division of the 24,800 shares of the capital stock of the Silver King Mining Company, or any accounting of the profits or dividends. He characterized the $4,000 advanced by him, in his books, as a loan, and the $1,000 received by him as a payment on a note, and showed a payment of the balance by Emery on March 18, 1890. On September 20, 1891, the plaintiff wrote Emery for money, promising to repay on demand, and in September and October of the same year borrowed from him and his associates $42,000, afterwards giving his note, payable on demand, without making any allusion that Emery had not accounted to him for any share of the dividends; and yet, if plaintiff's claim is well founded, there was then in Emery's hands, as shown by the evidence $8,792.48. So the plaintiff, in the presence of Emery, on July 5, 1893, executed his notes to Emery's associates for amounts aggregating $33,600, notwithstanding the fact that, if the plaintiff was equally interested with Emery in the property, there was due him from Emery, at that time, $22,307, exclusive of the $8,000 sent him April 20, 1892, and of $8,400, the one-fifth of the $42,000; and yet the plaintiff made no intimation, so far as appears from the record, that there was anything whatever due him from Emery, although it is apparent, from the evidence, that all the while the plaintiff was in need of money. To say the least, such conduct is extraordinary, and it would seem very difficult to reconcile it with the plaintiff's present claim that he is entitled to an interest in the property. It is true the witness Keith testified that, at the time these last-mentioned notes were given, Emery said he would not ask the plaintiff for a note, but would let it

go in the settlement. Conceding that this statement was made, it can add little strength to the plaintiff's case, because it would simply indicate that he considered himself entitled to receive a note, if he desired to demand one. Further review and discussion of the evidence would be useless, notwithstanding that other points thereon are presented by counsel. From a careful examination of the whole record it is impossible to conclude that the plaintiff has established a resulting trust by clear, satisfactory, and convincing evidence, whatever may have been his secret understanding and relation with Emery respecting the entire transaction. It may be possible that he had an interest in the property, and that the record does not reveal the real intentions of Emery and himself; but if such be, in reality, a fact, then the inability to show such fact on the trial of the cause must be attributed to the infirmity of the law, in a case where the mouth of one of the principal actors is closed by death, and of the other by statute; and, in such event, the unavoidable misfortune must be attributed to the plaintiff's own negligence. It is better that he who has been thus negligent in his business transactions should suffer loss than that the court should establish a precedent which would at once put in jeopardy the estates of all deceased persons, by rendering futile written instruments of conveyance, and permitting the title to real property to rest on the uncertain recollections of witnesses and hearsay evidence. Counsel have adverted to the effect that a decision in this case in favor of one party would have upon the integrity of the other. This is a question which cannot concern us. It is our duty to declare the law as we perceive it, and a failure to do so would render this court unworthy of the high trust reposed in it. Under the peculiar circumstances of this case, however, we disclaim any intention to cast reflections either upon the plaintiff or the deceased, or upon the good faith of the plaintiff in instituting this suit. To conclude, from the evidence in this case, that the plaintiff was entitled to the relief demanded would be to disregard every wellconsidered decision, in similar cases, which has come under our notice.

Counsel for the appellant further insist that the court made no express findings on the issues raised by the defense of laches and the statute of limitations, set up in the answer. In answer to this contention, it may be said that, after the court found that the alleged claim of the plaintiff never had any existence, in fact, it was not necessary to find that the plaintiff was guilty of laches; nor was it then necessary to find that a claim which had no valid existence was barred by the statute of limitations. If the plaintiff was never entitled to any portion of the property in dispute, he could not recover, regardless of the length of time which had elapsed since the purchase by Emery,

and hence the defense of the statute of limitations had become immaterial, and a failure to find expressly on all the facts involved in that defense was not error. Groome v. Ogden City Corp., 10 Utah, 54, 37 Pac. 90; Porter v. Woodward, 57 Cal. 535.

It is also insisted that the court erred in striking out the testimony of the witness Weber. The witness detailed a conversation which he had with Emery about stock of the Silver King Mining Company, but no reference was made to the plaintiff. We think the statements were too indefinite to aid the plaintiff's case, and therefore no prejudice could result from striking it out. Nor do we think the court erred in excluding from evidence three bonds, executed in the case of Ezra Thompson et al. v. David Keith et al., on which bonds the plaintiff was a surety; or in refusing to permit the plaintiff to show that he secured two of the other bondsmen. It is not clear how the plaintiff could have been injured by the exclusion of such testimony. The fact that he was a surety on the bonds in that case, and secured others, would have no tendency to prove that he is entitled to the relief which he seeks as against the estate of Emery. Nor do we think the court erred in sustaining defendant's objection to the question asked the plaintiff, as follows: "I will ask you if you have received any money as the result of Emery's interest in the Mayflower lease and the extensions thereof." Counsel for the plaintiff admitted, when the question was propounded, that whatever money the plaintiff had received on account of that interest he had received from Emery. The reference, therefore, was to a transaction equally within the knowledge of the witness and the deceased, and thus came within the inhibition of the statute found in Sess. Laws Utah 1894, c. 31, pp. 26, 27. So, likewise, the court properly refused to permit the plaintiff to testify whether or not he had ever had in his possession a note made by A. B. Emery, or whether, on the 22d of March, 1890, he had such a note in his possession, because equally within the knowledge of the witness and the deceased, and therefore within the provisions of the statute.

We have thus, at considerable length, referred to and reviewed all the material points raised in the record, and in deciding this case we have neither been unmindful of its great importance as affecting the security of titles to real property in this state, nor of the consideration which the rights of the parties in justice demand. We have carefully examined the record and the able briefs of counsel on both sides, and, upon such examination, our conclusion is that the learned judge before whom the case was tried rendered a fair and impartial decision, which cannot be disturbed without doing violence to the well-established legal principles which govern cases of this kind.

There is no reversible error shown by the record. The judgment is affirmed.

HIGGINS and STREET, District Judges,

concur.

(13 Utah, 423)

SALT LAKE HARDWARE CO. v. TINTIC MILLING CO. et al.

(Supreme Court of Utah. May 27, 1896.) STOCKHOLDERS-ACTION TO ENFORCE LIABILITYALLEGATION OF INSOLVENCY-SUFFICIENCY-NECESSITY OF RETURN NULLA BONA-PAYMENT FOR STOCK-WHAT CONSTITUTES.

1. Where a plaintiff obtains judgment against an insolvent corporation, whose stockholders have not paid their subscriptions to stock, and the complaint alleges the return of an execution nulla bona by a sheriff of the county other than where such defendant resides or has property, such return, of itself, is not sufficient allegation of insolvency of the corporation to justify proceedings in equity against stockholders of the corporation who have not paid their subscription to stock.

2. The law does not require to be done that which is fruitless, vain, or unnecessary. In the absence of a statute, the law does not require a plaintiff, in a proceeding in equity, to first obtain judgment, and have execution returned nulla bona against an insolvent corporation, as a prerequisite to commencing an action to reach unpaid subscriptions of stockholders. If a judgment has been obtained, then the return of the execution nulla bona is the best evidence of insolvency upon which to base such proceedings, but this does not preclude other evidence of the insolvency; and, whether a judgment has been obtained or not, it is permissible to allege in the complaint the fact of insolvency, and such other facts obtainable showing execution could not be collected, and thus avoid the expense and delay attending judgment and return of execution nulla bona in the first instance, and then the proper remedy may be pursued, with the same force and effect as if judgment had been obtained in the first instance, and execution had been returned unsatisfied. This course would be a short cut to reach a remedy, and is consistent with the rules of law.

3. In cases where the statute justifies the taking of property in payment for stock, if the property taken was worthless, shadowy, and unsubstantial in its nature, courts hold that there has been no payment at all, and in such cases stockholders are liable on such fraudulently obtained stock for unpaid subscriptions. Henderson v. Turngren, 35 Pac. 495, 9 Utah, 432, followed.

4. Complaint held sufficient, as stating a cause of action, although not a model for all

cases.

(Syllabus by the Court.)

Appeal from district court, Salt Lake county; S. A. Merritt, Judge.

Action by the Salt Lake Hardware Company against the Tintic Milling Company and others. From an order sustaining a demurrer to the complaint, plaintiff appeals. Reversed.

J. W. Judd, for appellant. S. McDowall and Brown, Henderson & King, for respond

ents.

MINER, J. Plaintiff alleges in its complaint, in substance: That in May, 1893, it recovered judgment against the defendant

company in the Third district court of Utah for $504.28. That execution was issued thereon on January 15, 1894, which execution went into the hands of the sheriff of Salt Lake county, and was by him returned as follows: "I hereby certify that, after careful and diligent search, I fail to find any property belonging to the within defendant the Tintic Milling Company, and I herewith return the within execution unsatisfied." That the defendant corporation was organized in May, 1892, with a nominal capital stock of $200,000, divided into 200.000 shares, of the par value of one dollar per share, and that the defendants other than the incorporation and the defendant Hyde, the president, constituted all the incorporators, who subscribed for all said stock, and that defendant Shettle subscribed for 171,000 shares thereof, and that said Shettle purported to convey to the said corporation in 1891 an agreement with the Mammoth Mining Company, together with certain rights and privileges belonging thereto, and all machinery and rights owned by Shettle in that certain mill situated in Tintic, Juab county, Utah, and that said mill and property was then in the possession of, and being worked by. Shettle, and also all the rights of said Shettle to any and all processes for the reduction and milling of ores, in full payment of and for 200,000 shares of capital stock in said (defendant) corporation; and further alleges, on information and belief, that said property, as above described, is, and was at the time when it was conveyed to said corporation, wholly useless and valueless, and that there was no consideration paid to the said incorporation for the capital stock subscribed by either or any of the incorporators, which defendant knew when said property was conveyed, and that it was valueless, and constituted no consideration, etc. That defendants fraudulently conspired together to defraud and defeat the creditors of said company out of their just claims by an apparent payment of their capital stock, which was not, and never was, paid. That none of the defendants ever paid to the company any of the capital stock subscribed for by them, and that said subscription price remains unpaid. That the corporation is insolvent, and has no property to pay said judgment and costs, except the unpaid stock subscribed for, which remains unpaid; and prays for a decree requiring the defendant corporation to make a call or assessment against defendants for sufficient amounts to pay said judgment, and for a judgment against each of the defendants other than the corporation. To this complaint defendants demurred, and alleged that the complaint does not state facts sufficient to constitute a cause of action against the defendants, or either of them. The demurrer was sustained. Plaintiff elected to stand upon the complaint, declined to an swer, and the complaint was dismissed. Plaintiff appealed to this court, and alleges

that the court erred in sustaining the demurrer and dismissing the complaint.

It appears from the complaint that the execution was placed in the hands of the sheriff of Salt Lake county, and that it was returned by him nulla bona. The execution was not placed in the hands of the sheriff of Juab county, where it is conceded the defendant resided, for collection; so that the return of the sheriff of Salt Lake county is not a sufficient return, showing the defendant corporation was insolvent, if taken by itself. To entitle the plaintiff to relief in equity, to obtain payment of his judgment from stockholders who have not paid their subscriptions to the stock, on the sole ground that he has exhausted his remedy at law against the corporation, he must show affirmatively, if the judgment is one upon which execution may issue to any county in the state, that he has issued execution to the sheriff of the county where the defendant had his residence, and where his property was located, which execution was returned unsatisfied, or show some legal excuse for not doing so. The personal liability of the stockholders for their unpaid subscriptions to the stock is secondary to that of the corporation, and does not accrue until the corporation assets have been exhausted, or clearly shown to have been insufficient to pay the judgment rendered against it, or that it has no property or assets, or, for some good cause alleged, it is made to appear reasonably certain that the plaintiff cannot collect his judgment against it. Reed v. Wheaton, 34 Am. Dec. 366; Screven v. Bostick, 16 Am. Dec. 664; Bank v. Griffith. 10 Paige, 520; 1 Beach, Priv. Corp. § 123; Henderson v. Turngren, 9 Utah, 432, 35 Pac. 495; Northwestern Iron Co. v. West Superior Iron & Steel Co. (Wis.) 63 N. W. 752. While this allegation, taken by itself, is clearly insufficient to justify the proceeding taken, yet it is alleged in the complaint that the said corporation is insolvent, and has no property to pay said judgment and costs due the plaintiff, except the unpaid stock subscriptions due from the defendants to the corporation; that payment has been demanded from each defendant, and refused; that the president refused to call the board of directors to make an assessment, and the board of directors have refused to take any steps, and refuse to pay plaintiff's debt; that defendants have never paid to the corporation any portion of their subscription to the capital stock; that the transfer of the contract, covering a mining deal, was, and was known to the defendants to be, fraudulent, and the property valueless, worthless, and without any consideration; that the stock was issued without being paid for,-and the defendants thus fraudulently conspired together to defraud creditors of the corporation by these and other means alleged.

While the allegation of the judgment and execution returned unsatisfied is considered

the best evidence of the insolvency and insufficiency of the corporate assets to pay its debts, yet it is not the only evidence upon which a court of equity will act, and failure to pursue this course may be supplied by other allegations that the principal is notoriously insolvent, and is unable to pay its debts. So it has been held that in actions by creditors to enforce the personal liability of stockholders, if it is clearly shown that the corporation is insolvent, and has no property with which to satisfy the plaintiff's demand; that it has made an assignment for the benefit of creditors, or has been adjudged a bankrupt; that it has ceased to exercise its functions, and is without property or funds with which to pay its debts,-are sufficient allegations upon which the proceeding can be maintained to enforce private liability against stockholders. 1 Beach, Priv. Corp. § 124; Bank v. Greene, 64 Iowa, 445, 17 N. W. 86; 20 N. W. 754; Knight v. Frost, 14 Mo. App. 331; Hodges v. Mining Co., 9 Or. 200; 1 Cook, Stock, Stockh. & Corp. Law, p. 67, § 46; Camden v. Stuart, 144 U. S. 104, 12 Sup. Ct. 585; Lloyd v. Preston, 146 U. S. 630, 13 Sup. Ct. 131. The law does not require to be done that which is fruitless, vain, or unnecessary. In the absence of a statute, it does not require a plaintiff, in a proceeding in equity, to first obtain a judgment, and have an execution returned thereon nulla bona against a corporation that is actually and publicly known to be insolvent, and without any means whatever with which to pay its debts, as a prerequisite to commencing an action against the stockholders, to reach unpaid subscriptions to its capital stock, unless the statute so requires. If a judgment has been obtained, then the return of an execution thereon nulla bona is the best evidence of the insolvency of the corporation; but this does not preclude other evidence of the insolvency, and, whether judgment has been obtained or not, it is permissible for the party to file his complaint, and allege the fact of the insolvency of the corporation, and such other facts as the case may admit of, showing that an execution could not be collected against it, and thus avoid the expense and delay attending a judgment and return of execution in the first instance, and then pursue his remedy, with the same force and effect as if judgment had been first obtained. This course would be a short cut to reach the remedy obtainable, and is entirely consistent with the rules of law, although there are some cases to the contrary. 1 Beach, Priv. Corp. § 124; Hodges v. Mining Co., 9 Or. 200; Walton v. Coe, 110 N. Y. 109, 17 N. E. 676; Morgan v. Lewis, 46 Ohio St. 1, 17 N. E. 558; Munger v. Jacobson, 99 Ill. 349; McDonnell v. Insurance Co. (Ala.) 5 South. 120; Manufacturing Co. v. Bradley, 105 U. S. 175. In the case of Henderson v. Turngren, 9 Utah, 432, 35 Pac. 495, the territorial court discussed and passed upon the question of the impropriety of forming bogus corpora. tions, and issuing stock without adequate pay

ment therefor. In cases where the statute justifies the taking of property in payment for stock, if the property which was taken in payment was practically worthless, and is shadowy and unsubstantial in its nature, courts have held that there has been no payment at all, and that the stockholders are liable on their stock for the unpaid subscriptions. 1 Cook, Stock, Stockh. & Corp. Law, p. 67, § 46; Camden v. Stuart, 144 U. S. 104, 12 Sup. Ct. 585; Lloyd v. Preston, 146 U. S. 630, 13 Sup. Ct. 131; Preston v. Railroad Co., 36 Fed. 54; Garrett v. Mining Co. (Mo. Sup.) 20 S. W. 965; Scovill v. Thayer, 105 U. S. 143. This complaint is not so full and certain in its allegations as it might have been, but, taken as a whole, sufficiently states a cause of action. 1 Cook, Stock, Stockh. & Corp. Law, p. 55, § 42.

The order of the district court sustaining the several demurrers of the defendants, and dismissing the complaint, is vacated and set aside, and the cause is remanded for further proceedings.

ZANE, C. J., and BARTCH, J., concur.

1. M., who was a sheriff, under a writ of attachment, levied upon, seized, and afterwards, under execution, sold, personal property which was in the possession of J., a stranger to the attachment proceedings. J. brought replevin to recover possession of the property, or the value thereof. In his answer, M. averred that he levied upon and seized the property under and by virtue of a writ of attachment, but failed to aver and prove that the attachment proceedings under which the writ was issued conformed to the statute in relation to attachments. Held, that J. was entitled to recover.

2. In replevin, the rule that, where a party to an action relies upon fraud, he must prove it, does not always apply. Where the plaintiff alleges ownership generally, and right of possession, without disclosing the origin of title, or stating facts showing it, the defendant may traverse the allegations of the complaint, and, under the issue thus formed, may prove that the plaintiff's title was founded in fraud, and introduce any evidence which tends to show that the plaintiff had neither title in the property, nor right of possession thereof.

3. It is necessary, in setting up an answer in justification of the act of the officer in seizing, under writ of attachment, property in the hands of, and claimed by, a third person, that the indebtedness, the writ of attachment, and the proceedings on which it was based, should be averred. The proceedings are ex parte, and no intendment in favor of their regularity can be indulged in.

4. A technical defect in a verdict must be objected to at the time of its rendition, to be available on appeal.

(Syllabus by the Court.)

Appeal from district court, Salt Lake county; S. A. Merritt, Judge.

Action by M. J. Jones against William McQueen. Judgment for plaintiff. Defendant appeals. Affirmed.

Jones & Schroeder, for appellant. Rawlins & Critchlow, for respondent.

BARTCH, J. The defendant in this case, as sheriff of Salt Lake county, under a writ of attachment, levied upon, seized, and afterwards, under execution, sold, certain personal property. The plaintiff, claiming to be the owner thereof, and that he was wrongfully deprived of its possession, brought this suit in replevin to recover its possession, or the value thereof. The jury found that he was the owner and entitled to the possession, and the value of the property, with accrued interest, to be $3,252.72. After judgment was entered in accordance with the verdict, and a motion for a new trial overruled, the defendant prosecuted his appeal to this court. The main question to be determined is whether, under the pleadings, as shown by the record, the court ered in its ruling on the admission of evidence relating to the subject of fraud. It appears that the property in question originally belonged to the Utah Paint & Oil Company, and that it was by that company transferred and delivered to the plaintiff, by deed of assignment for the benefit of its creditors, and was so in his possession, by virtue of said deed, at the time of the levy and seizure by the defendant. It further appears from the record that the writ of attachment in question was issued in a case in which the National Wall Paper Company was plaintiff, and the Utah Paint & Oil Company defendant, to recover a cer tain sum alleged to be due the National Wall Paper Company, and that the assignee of the defendant company, the plaintiff in the case at bar, was not a party to that suit. Under these circumstances the defendant, at the trial of this cause, offered evidence tending to show that at the time of making the assignment in question the Utah Paint & Oil Company had disposed of the property, to one Martha Ann Coombs, by chattel mortgage, and therefore had no interest therein; that the said mortgage was fraudulent and void as to creditors; and that the assignment was fraudulent, and made to defraud creditors. All of this evidence, under the objection of counsel for the plaintiff that the same was immaterial under the issues raised by the pleadings, was ruled out. The defendant then, to justify the levy and sale, offered the writs of attachment and execution, and the officer's return thereto, which were admitted, but no other evidence of the attachment proceedings was offered. Numerous offers were made to prove that the assignment under which the plaintiff proved title was fraud. ulent, all of which were rejected by the court.

Counsel for the appellant, while admitting that no fraud is alleged in the answer, insist that the court erred in excluding the proof offered, because the plaintiff alleged ownership generally, without disclosing any particular source of title, and the defend