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alleged that McGee at that time had any creditors, nor that he was then in failing circumstances or insolvent, and that the property conveyed was all of the property possessed by him at that time-facts necessary to be alleged to make a case of constructive fraud. It is alleged that P. T. McGee was adjudged a bankrupt on December 1, 1904, in the District Court of the United States for the District of Oregon, and "that the debts which are the basis of said claims filed against said bankrupt estate were made and incurred at divers dates between the 1st day of January, 1897, and the 1st day of December, 1904"; but, while that allegation may be true, it does not follow therefrom that any of the debts presented and allowed were incurred or existed on or prior to March 1, 1898, the date of the first deed. There must be alleged and proven facts out of which a constructive fraud will arise by force of law, or facts constituting actual or expressed fraud. "And the rule is that the facts upon which fraud is predicated must be specifically pleaded.
A mere general averment of fraud is nothing
but the averment of a conclusion, and will
not suffice. It presents no issue for trial, and
is bad on demurrer. Such an averment not only renders the bill or complaint demurrable, but it will not even sustain a decree." Cyc. 734; Leasure v. Forquer, 27 Or. 334, 41 Pac. 665. To avoid a deed as to future creditors, constructive fraud will not be sufficient, but express fraud is essential. "If a creditor assails a conveyance made before the debt was contracted, he must as a rule allege and prove that the conveyance was made with the intent to put the property beyond the reach of creditors with whom the grantors intended to deal upon the faith of his owning the property transferred, and that upon that faith he did contract debts which he did not intend to pay" (20 Cyc. 738), or that "the transfer was made with a view of entering into some new and hazardous business, the risk of which the grantor intended to be cast upon the parties having dealings with him in the new business. Such conveyance is fraudulent as to subsequent creditors and may be attacked by them. However, a mere expectation of future indebtedness, or even an intent to contract debts, if it be only an intent, not coupled with a purpose to convey the property in order to keep it from being reached by the creditors, will not make the deed invalid as against such future creditor." 20 Cyc. 425.
We do not find such averments in the complaint, nor any evidence in the record tending to prove any of such requirements. The facts which we gather from the record are about as follows: For many years prior to March 1, 1898, the date of the first deed, P. T. McGee had been engaged in a general merchandise business at Myrtle Creek, with his son Hugh as an associate. In 1895 their store was destroyed by fire, at which time
they had a stock of goods estimated in value by them at about $20,000, all of which was destroyed. They had insurance to the amount of $8,000; but, payment being resisted, they compromised for $4,000 and received that amount. With this sum, to which was added $2,000 borrowed by P. T. McGee from the state school fund upon a mortgage of his and his wife's farm, they paid all of their debts and resumed business in a small way. Desiring to change the manner in which they had previously been doing their business, they incorporated the McGee Company on November 19, 1897, with a capital of $5.000; P. T. McGee, his wife, and son Hugh being the incorporators-the former being the main stockholder, while his wife and son had only a nominal interest. The stock of goods. store fixtures, and the lots described in the deed were turned in to the corporation in Payment for his interest in the stock; and to accomplish the transfer of the lots he and his wife, on March 1, 1898, made the first deed to the corporation which is assailed.
This deed was recorded on March 2, 1898. The store business was then conducted in the name of the corporation for some three or four years. On the 14th day of December, 1900. the corporation conveyed the lots by deed to James T. McGee, another son. This deed was acknowledged January 14, 1901, and was recorded January 17th following. The consideration expressed therein is the sum of $1,000, which the grantee swears he paid the corporation in money, by having loaned to it at some time previous thereto the sum of $200, and at another time $400, which amounts the corporation was owing him at the date of the making of the deed, and the balance of the consideration, namely $400, he paid the corporation at the time of receiving the deed. This testimony is corroborated by P. T. McGee, and we do not find anything in the record tending to rebut it. P. T. McGee continued to occupy the premises, living in one of the old buildings thereon, and renting and collecting and receiving the rent from the other buildings, giving the receipts, sometimes in his own name, and at other times in the name of James T. McGee, his
In one instance he executed a lease to another in his own name for a portion of the premises. The rents were used by P. T. McGee in making repairs and for his personal expenses; but for a short time James used and occupied a part of the premises for a blacksmith shop and built a shed or addition to one of the buildings, in which he stored for a time some farm machinery. James and his father both swear that the latter was allowed to occupy a portion of the premises, which had always been his home, and to manage and rent the remainder, and to keep the rents as an offset and exchange for the rent of the farm belonging to P. T. McGee and his wife, which James was living
upon without the payment of any other rent; and it also appears that James always paid the taxes upon the property in controversy. Some time after the conveyance by the corporation to James of these lots it ceased to do business, and P. T. McGee resumed business in his own name, and it was during that time that most of the debts now claimed against him were incurred. On the 9th day of November, 1904, he filed his voluntary peti- | tion in bankruptcy in the United States District Court of the District of Oregon. Plaintiff was appointed his trustee and qualified. Claims to the amount of about $1,500 were presented to the referee, and most of them were allowed; but of these none were incurred prior to March 1, 1898, the date of the insolvent's deed to the corporation, and the only debts which were incurred by McGee before January 21, 1901, the date on which he acknowledged for the corporation its deed to James, are as follows: The claim of the Acme Harvesting Company for $57, which was incurred September 29, 1900, and the claim of Edwin Weaver, dated January 3, 1901, already referred to as not having been ascertained and allowed by the referee in bankruptcy at the time of the commencement of this suit and at the time of the taking of the testimony. All of the remaining claims were incurred by McGee from one to three years after the date of the corporation deed to James. It also appears from the testimony that during all this time, and up to March 11, 1902, he owned his equity of redemption in the farm and four other lots in Myrtle Creek, which were of considerable value; for on that date he mortgaged them to Kate Miller to secure the sum of $200. So that it does not appear from the evidence that there were any facts from which a presumption of constructive fraud could arise, nor any tending to establish express fraud by McGee,
when making his deed to the corporation on March 2, 1898. So that, if the corporation was such a legal entity as to be capable of receiving and conveying title to another, plaintiff must fail, unless a case may be made of a reservation by P. T. McGee of some secret interest or title in the property in fraud of his creditors.
Plaintiff alleges and centends that the McGee Company was not legally organized as a corporation; that no stock was taken subscribed, and no officers were elected; and hence, he concludes, as a corporation it could not contract for or purchase or take the title to real property, nor could it convey the title to another. But plaintiff offers in evidence a certified copy of articles of incorporation of the McGee Company, which appear to have been properly executed on November 29, 1897, and were filed with the county clerk and recorded December 5, 1897, with power therein conferred upon the corporation, among other things, to run and operate a general
country merchandise store and to buy and sell real property. The offering of the certified copy of the articles of incorporation makes a prima facie case of the legal existence of such corporation and of its right to do the business mentioned in the articles. Sess. Laws 1905, p. 111. P. T. McGee swears that the corporation was fully organized, with a full complement of officers, and that it conducted a general merchandise business for several years. This, taken with the fact that the corporation executed, by Hugh McGee, as its president, and P. T. McGee, as its secretary, the deed conveying the premises to James, shows that it has attempted to do the business which it was authorized by its charter to do, and this established it at least as a corporation de facto, so that the legality of its organization cannot be inquired into in any action other than by the state. Marsters v. Umpqua Valley Oil Co. (Or.) 90 Pac. 151. And it is well settled that a conveyance of property to or by a corporation de facto will be binding and valid as against all parties except the state. Finch v. Ullman, 105 Mo. 255, 16 S. W. 863, 24 Am. St. Rep. 383. The corporation, then, having taken the title to the lots in question by the deed to P. T. McGee and wife, executed on March 1, 1898, free from any fraud of the grantor, its title would not be affected by any of his subsequent creditors, unless the conveyance is made with the intent to defraud future creditors; but, as we have already seen, there is no averment in the complaint that P. T. McGee, when he and his wife made the conveyance, intended to deal with these creditors in the future and to incur these
subsequent debts on the faith of his ownership of the property in question, nor is there any proof to that effect; nor is there any averment that when the conveyance was made he was about to engage in a hazardous
enterprise, and that it was made so as to
throw the burden of loss on his anticipated creditors, but the proof shows that, by conveying the property to the corporation and the business being thereafter conducted in the name of the corporation, the property was exposed to all the hazards of the business of the corporation, and hence it could not have been that such fraud was intended. The evidence, we think, shows quite clearly that, when James T. McGee took the title from the corporation by its conveyance, he paid the consideration expressed in the deed, and that there was no secret reservation of any interest therein by P. T. McGee. The explanation of the subsequent possession of the premises by P. T. McGee is sufficient to satisfactorily rebut any possible inference that might otherwise arise from such facts that P. T. McGee had retained a secret interest in the property.
For these reasons, it follows that the decree should be reversed, and one entered here dismissing the complaint.
(50 Or. 156)
BRATTAIN et al. v. CONN et al. (Supreme Court of Oregon. Aug. 27. 1907.) WATERS AND WATER COURSES-OBSTRUCTION OF FLOW-MAINTENANCE OF DAM.
Where complainants and their predecessors in interest for more than 20 years had asserted and exercised a right each year to construct and maintain, whenever necessary, a temporary dam or obstruction in the main channel of a river to divert water into a creek for irrigation purposes, without any intimation from defendants or their predecessors in interest that complainants' right to maintain the dam was questioned, complainants acquired a prescriptive right to maintain it, notwithstanding defendants clandestinely and without complainants' knowledge at various times forcibly destroyed the works so maintained.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 48, Waters and Water Courses, § 195.]
Appeal from Circuit Court, Lake County; Henry L. Benson, Judge.
Suit by T. J. Brattain and others against George Conn and another. From a judgment for complainants, defendants appeal.
C. A. Cogswell, for appellants. L. R. Webster and Joseph Simon, for respondents.
PER CURIAM. This suit is brought by T. J. Brattain and nine other landowners in the Chewaucan valley, for themselves and others similarly situated, to establish the right to maintain a temporary dam or obstruction in the Chewaucan river, at the head of Small creek, during low-water seasons, for the purpose of diverting a portion of the water of such river into Small creek for irrigation purposes, and to enjoin defendants from interfering with such right. The Chewaucan river is quite a large stream flowing northeasterly through the town of Paisley. Just above the town it divides, and one fork thereof, called "Small Creek," flows in a southeasterly direction, and from which plaintiffs irrigate about 2,000 acres of land. Prior to 1880, and while the 40-acre tract at the head of Small creek, and through which the main river flows, belonged to the state. plaintiffs or their predecessors in interest entered upon and improved Small creek, for the purpose of conducting water through it for irrigating purposes; and, as the natural flow was not sufficient for their needs during the low-water seasons, they constructed and maintained, each year during that time. a temporary dam in the main river for the purpose of diverting a portion of the water into Small creek, thus augmenting the natural flow thereof. While they were so using Small creek and maintaining their dam, the land was conveyed by the state to one Riggs, who subsequently sold it to Hanchett, who conveyed it to Drinkwater in August, 1882. From the time of the conveyance by the state to Riggs, in 1880, and up to 1886, plaintiffs used Small creek as a part of their irrigation system. and maintained the dam referred to without objection from the landowner, so far as the evidence discloses; but
in 1886, some question arising between them and Drinkwater, Brattain and others purchased the right to use the natural channel of Small creek from him as a conduit through which to convey water from the main channel of the river, through and across his lands, with the right to enter thereon for the purpose of enlarging or clearing the stream from obstructions and placing and maintaining headgates therein and such other work or works as may be found necessary to maintain and control the desired flow of water. A few days after making this conveyance to Brattain and his associates, Drinkwater conveyed the premises to Virgil Conn, who in October, 1889, sold and conveyed to defendant George Conn, who has ever since been the owner thereof. After
the Drinkwater deed, plaintiffs or their predecessors in interest continued to use Small creek and to maintain the dam in the main stream as before, without any expressed objections or protest from defendants or their predecessors in interest, until 1902, when defendants tore out the dam and by force prevented plaintiffs from rebuilding it, whereupon this suit was commenced. It resulted in a decree in favor of plaintiffs, and defendants appeal.
The only question involved is the right of plaintiffs to construct and maintain a temporary dam or obstruction in the Chewaucan river at the head of Small creek to increase the flow to 2.500 inches of water in such creek during the low-water seasons. They claim this right by virtue of a grant from Drinkwater and by prescription. The deed from Drinkwater to Brattain and his associates conveyed the use of Small creek as a conduit for water from the main channel, with the right to place and maintain a headgate therein, and "such other work or works as may be necessary to maintain and control the desired flow of water through said creek channel"; and it can be fairly argued, in view of the circumstances, this language was intended to, and did, include the right to construct a dam in the main river, as the grantees had theretofore done. But, however that may be, we think a prescriptive right to maintain such dam is shown by the testimony. It clearly appears that for more than 20 years the plaintiffs and their predecessors in interest have asserted and exercised the right each year to construct and maintain, whenever necessary, a temporary dam or obstruction in the main channel of the river to divert from 2,000 to 2,500 inches of water into Small creek for irrigation purposes, and without any intimation from defendants or their predecessors in interest that their right was questioned. It is true that defendant George Conn testifies that he often tore out and removed the dam, but there is no evidence that plaintiffs knew of this fact, or that it was done at a time when they needed the water. It was a clandestine and secret invasion of their rights, and we
do not understand that an entry by stealth and without the knowledge of the party in possession is sufficient to break the continuity necessary to constitute an adverse possession or to establish a right by prescription.
It is unnecessary for us to further review the testimony. It is sufficient that we have examined the record with care and find no reason why the decree of the court below should be disturbed.
(50 Or. 120)
DUTRO v. LADD et al.
(Supreme Court of Oregon. Aug. 27, 1907.) 1. PLEADING-ANSWER-DEFENSES.
Under B. & C. Comp. § 73, providing that an answer may contain any new matter constituting a defense, and section 74, that defendant may plead as many defenses as he has, defendants, sued on an account for legal services, having pleaded a general denial, were entitled also to plead limitations as an affirmative defense.
[Ed. Note. For cases in point, see Cent. Dig. vol. 39. Pleading, $$ 184-194.]
2. STATUTES CONSTRUCTION.
Where the sections of a statute involved are all included in the same act, they must be construed together, and such construction be given, if possible, that each section may be effective.
[Ed. Note. For cases in point, see Cent. Dig. vol. 44, Statutes, § 283.]
OF ACTION-FILING COMPLAINT SERVICE.
B. & C. Comp. § 6, provides that an action on contract must be brought within six years from the time the cause of action accrues. Section 51 provides that actions at law shall be commenced by filing a complaint with the clerk of the court, and that sections 14 and 15 shall only apply for the purpose of determining whether an action has been commenced within the time limited. Section 14 declares that an action shall be deemed commenced when the complaint is filed and the summons served, and section 15 provides that an attempt to commence an action shall be deemed equivalent to its com.nencement, when the complaint is filed and summons delivered with the intent that it shall be served by the sheriff or other officer of the county in which defendants or one of them usually or last resided, if such attempt be followed by the first publication of the summons or service within 60 days. Held, that where, in an action on an account, the complaint was filed and the summons delivered to the sheriff for service 2 days before the expiration of the statutory period, but no service was had or publication begun until 10 months thereafter, the action was barred. [Ed. Note.-For cases in point. see Cent. Dig. vol. 33, Limitation of Actions, § 530.]
Appeal from Circuit Court, Multnomah County; J. B. Cleland, Judge.
Action by Thomas C. Dutro against William M. Ladd and others, as executors of the estate of W. S. Ladd, deceased, and another. From a judgment for defendants, plaintiff appeals. Affirmed.
This is an action to recover $5.000, attorney fees, alleged to be due plaintiff from defendants for legal services furnished between
December 15, 1896, and May 9, 1898. The complaint was filed May 7, 1904, at which time a copy of the summons was placed in the hands of the sheriff, but not served until March 9, 1935, when personal service was had and the summons filed. Defendants an swered, denying the allegations of the complaint, and as an affirmative defense pleaded the statute of limitations. A reply being filed, placing the cause at issue, on June 28, 1905, a trial was had before a jury, resulting in a nonsuit. From a judgment thereon, plaintiff appeals.
C. M. Idleman, for appellant. S. B. Linthicum, for respondents.
KING, C. (after stating the facts). It is urged by counsel for plaintiff that defendant, by appearing and answering to the merits and denying the allegations of the complaint is not entitled to maintain his affirmative defense. It is settled that, where it does not appear from an inspection of the complaint that the remedy is barred, the same may be averred in the answer. Hawkins v. Donnerberg, 40 Or. 97, 66 Pac. 691, 908. B. & C. Comp. § 73, provides that the answer may contain any new matter constituting a defense; and section 74, that the defendant may set forth by answer as many defenses as he may have. While this cannot be done where it appears that the defense is clearly inconsistent, there is nothing inconsistent in the defendant asserting he owes the plaintiff nothing and at the same time averring that the claim sued on is barred by the statute. The object of the law on the subject is to prevent the assertion of stale claims, whether with or without merit, thereby avoiding the oppressive results which would otherwise often follow after witnesses are unavailable, or after unavoidable events have transpired precluding the assertion of what might have otherwise been a good defense. It would therefore not be in harmony with the reason and spirit of the law to hold the statute unavailable merely because it may be alleged in the answer that the claim is without merit. Defenses may be deemed inconsistent only when they are so contradictory to each other that one of them must necessarily be false. In this case, if the defendant did not owe plaintiff, yet, under the affirmative allegations in the answer, the statutory bar is urged against him; while, if the claim is in fact meritorious, such time has elapsed since plaintiff's rights thereto matured as to constitute a bar to his remedy. Both may be true, and, if so, defendant should be permitted to frame his answer accordingly. Snodgrass v. Andross, 19 Or. 236, 23 Pac. 969.
The next question for determination is as to whether, under the facts admitted by the pleadings, plaintiff's claim is barred under B. & C. Comp. § 6, which provides that an action upon a contract or liability, express or implied, must be brought within six years from the time the cause of action accrues.
It is admitted by the pleadings, in effect, that, while the complaint was filed 2 days before the expiration of the statutory period, the summons was not served nor filed until 10 months thereafter. It is provided by section 51 that "actions at law shall be commenced by filing a complaint with the clerk of the court, and the provisions of sections 14 and 15 shall only apply to this subject for the purpose of determining whether an action has been commenced within the time limited by the Code." It is also added that summons may be served on the defendant at any time thereafter. Section 14 states that an action shall be deemed commenced when the complaint is filed and the summons served; and in section 15 it is provided that an attempt to commence the action shall be deemed equivalent to its commencement, when the complaint was filed and summons delivered with the intention that it shall be actually served by the sheriff or other officer of the county in which the defendants or one of them usually or last resided; "but such an attempt shall be followed by the first publication of the summons or service thereof within 60 days." It is conceded here that no service in person or attempted publication of summons was made within that time, but argued by plaintiff's counsel that there is a distinction between the "limitation" of actions and "commencement" of actions; that sections 14 and 15 apply only for the purpose of determining whether the action has been commenced within the time limited by the Code, and designates the relations only that exist between the defendants, specifying the respective rights as between themselves; and that these sections in no manner place any restrictions on section 51. The sections of the statute alluded to are all included in an act entitled "A bill to provide a Code of Civil Procedure," adopted in 1862. Being included in the same act and adopted at the same time, they must necessarily be considered together, and such construction be given thereto, if possible, that all the provisions of each of the sections may be made effective. State v. McGuire, 24 Or. 366, 33 Pac. 666, 21 L. R. A. 478. We think, however, that the language is plain and unambiguous, leaving no room for construction; and when the language is clear we have no discretion but to adopt the meaning which it imports. Phelps v. Racey, 60 N. Y. 10, 19 Am. Rep. 140. Section 51 clearly states that sections 14 and 15 of B. & C. Comp. can apply only for the purpose of determining whether the action has been commenced within the time. prescribed by the Code, and not for any other purpose. In any other case it is manifest that the filing of a complaint is sufficient, and the summons may be filed as there stated, provided it be filed within the time limited, where the question arises as to whether the action is barred by section 6 of the statute, in which event it is expressly provided that the service must be made within 60 days from the filing of the complaint. It
being admitted the summons was not served, filed, or in any manner attempted to be served or filed, nor publication thereof attempted, until 6 years and 10 months after the cause of action matured, it necessarily follows that the action was not commenced within the time required. 1 Enc. Pl. & Pr. p. 136; Burns v. White Swan Mining Co., 35 Or. 305, 57 Pac. 637; Smith v. Day, 39 Or. 531, 64 Pac. 812, 65 Pac. 1055.
Other points are suggested in the record, but not urged here; nor do we deem them material.
The judgment of the court below should be affirmed.
WOLF v. CITY RY. CO.* (Supreme Court of Oregon. Aug. 20, 1907.) 1. TRIAL-WITHDRAWAL OF TESTIMONY.
Where the undisputed circumstances show the testimony of a witness cannot by any possibility be true, it is the duty of the court to withdraw such testimony from the jury. [Ed. Note. For cases in point, see Cent. Dig. vol. 46, Trial, § 334.]
2. STREET RAILROADS-INJURY TO PERSONS ON TRACK-ACTIONS-EVIDENCE-SUFFICIENCY.
In an action for the death of plaintiff's intestate, caused by his being struck by a street car, evidence examined, and that of a certain witness for plaintiff held not so opposed to all reasonable probabilities as to require its exclusion, as a matter of law, from the jury.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 44, Street Railroads, §§ 251-257.]
3. SAME CONTRIBUTORY NEGLIGENCE OF PERSON INJURED.
A person about to cross a street at a crossing is not bound to wait because a car is in sight; but if the car is at such a distance that he has time to cross, if it is run at the usual speed, it is not negligence, as a matter of law, to attempt to do so.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 44, Street Railroads, § 257.] 4. SAME-QUESTION FOR JURY.
Whether a speed of 26 or 29 miles an hour by a street car at a much-used crossing is reasonable is for the jury.
5. SAME-CARE REQUIRED IN OPERATION.
It is the duty of a street railway company, in operating its cars at street crossings, to use ordinary care to avoid injury, regardless of whether the rate of speed has been limited by statute or ordinance, or not.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 44, Street Railroads, § 172.]
That at the time a pedestrian was struck by a street car there were seven persons at or near the crossing authorized a finding that the street was much used. 7. SAME.
Principles of law governing the management of trains propelled by steam power and those propelled by electricity are not identical. [Ed. Note.-For cases in point, see Cent. Dig. vol. 44, Street Railroads, § 172.]
8. APPEAL-EXCESSIVE VERDICT-QUESTION OF
The refusal to set aside a verdict as excessive cannot be reviewed on appeal; the question being one of fact, and not of law.
[Ed. Note. For cases in point, see Cent. Dig. vol. 3, Appeal and Error, § 3864.]
Appeal from Circuit Court, Multnomah County: Alfred F. Sears, Jr., Judge.
* Rehearing denied October 22, 1907.