Erwin Davis v. Flagstaff Silver Mining Company of Utah et al. sand or two pounds there, and make as much disturbance about that as a man in America would a million." It was right in the line of his business to know the powers of these stock corporations. The large dividends from the borrowed money increased the market value of the stocks, the public supposing that the company was doing a legitimate business, and paying dividends out of "profits." Such people "did not understand bulls and bears on the stock exchange." A shrewd manipulator of stocks could afford to run the risk of losing money loaned to a company to be used to pay dividends, when he knew that he could receive it all back, and much more, too, by the sudden rise in the price of the stocks. The evidence shows that the directors at that time were acting in entire harmony with the respondent, and willing always to comply with his wishes. The respondent did not propose to lose the money advanced, and hence the claims were put into the shape of "ore contracts." A change of shape did not change the substance, however. Being based upon fraudulent and void loans, they were necessarily also fraudulent and void. pay But let us assume that no loans ever were made, and that the ore contracts were original and not based upon prior transactions between the parties. The receipt of forward Lments for ores to be delivered in future, as specified in these contracts, was beyond the powers of the corporation. The company has no grant of authority to thus bulk its expected. productions and involve the company to its ruin by subsequent inability to comply with the terms of the contract. Money arising from such forward payments for ores, could not legally be used to pay dividends. Such money was not "profits arising from the business of the company." The money might be termed anticipated profits, but we nowhere find any authority for the company declaring dividends out of any profits except such as are realized out of the business"arising out of the business" of the company. And it is against public policy to allow corporations to thus deal so as Erwin Davis v. Flagstaff Silver Mining Company of Utah et al. to deceive and defraud the people. An unscrupulous directory or company might have no ores, and yet sell ore for ten, twenty or more years ahead of the production thereof, and use the money thus acquired in declaring one or two dividends of enormous size. Those knowing the inside workings of the company could sell off all their stocks at enormous profits, and leave the company bankrupted and in the hands of those who were deceived and defrauded into buying the stocks. Courts cannot look with any favor upon claims for such powers in corporations. These ore contracts were the basis of the alleged contract of December 13, 1873, "Exhibit A," upon which this action is brought. As the ore contracts were invalid, and not within the power of the corporation to make, it follows that no action of the company could give them vitality. Their recognition in this contract does not, therefore, give them validity. If it be admitted that the ore contracts were bona fide and binding, what is there in the nature of "Exhibit A” to warrant the statement that it gives a lien or security to respondent upon the company's properties in Utah, for the fulfillment of such ore contracts? It nowhere says that a lien is given, nor that a security is given. It nowhere says that anything is given to respondent, except the power to appoint an irrevocable agent of the company. The company had refused to give the property into respondent's hands as security or for any other purpose. It also refused to give him a mortgage. The company, therefore, never intended to give respondent a mortgage, nor to give him possession of the property. What did it intend to give? It simply intended to give him power to have an agent of his selection control the property of the company at the company's expense, and without the company having power to remove the agent or to help itself in any way. Take that power out of this contract and there is nothing left that did not exist before the contract was made. The obligation to deliver the ores existed before this contract was made, and if binding at all, it was Erwin Davis v. Flagstaff Silver Mining Company of Utah et al. just as binding before this contract was entered into as it was afterwards. No new powers or rights were given respecting the ores, except that of the irrevocable agency. To create an irrevocable agency, and to give the respondent the sole power of the removal of such agent and of appointing his successor, might be a lien, if valid; but the court below very properly said, that so far as the contract purports "to create an irrevocable agency" "it is not binding on the company." A corporation cannot by such agency, put beyond its reach, the power to do that for which it was brought into existence. This company was created to own and work mines and carry on smelting in Utah Territory. To create an agency to do this without the power to revoke the authority, and with such power put into the hands of a stranger, is to virtually dissolve the corporation. For it has no power to do that for which it was created. A corporation cannot yield up its life in any such indirect manner. If it be desirable that its business be wound up, the law points out a way for this to be done. Liens are of two kinds-liens at law and such as are recognized by courts of equity. A lien at law exists when the party has the right to the possession of the property of another until some existing claim upon it is extinguished. Make the agency revocable at the pleasure of the company, and there is nothing left in the contract to show that respondent had any right to possess the company's property for any purpose. A lien, as known in courts of equity, is used to denote merely a charge or incumbrance of one person upon the property of another, but not in possession. The agent was directed to deliver ores to respondent. But the right to the ores existed before this time, if at all. They were paid for, and respondent was entitled to them before this contract was made. The contract only adds a direction to its own agent to deliver them—and this agency itself is admitted to be within the power of the company to revoke, and there is no obligation in the contract to appoint another agent, but Erwin Davis v. Flagstaff Silver Mining Company of Utah et al. it is in express terms forbidden to do so. The whole contract, therefore, resolves itself back again simply into a recognition of the validity of the ore contracts, whilst such validity existed before this contract was executed. There was nothing in the nature of trust relation between respondent and the agent. If a trust existed, then respondent had the right to compel the company to make the appointment, and not only so, but such appointment must be satisfactory to the respondent. Yet we have seen that the agency sought to be created here, was revocable at the pleasure of the company, and there was express prohibition upon the company to appoint a successor. If we say that a trust relation existed, therefore, the court must make a new contract for the parties, and not such as they desired or intended. This contract," Exhibit A," was not one of mutuality. It was made to bind the company but not the respondent. He could ignore it at pleasure and sue on the ore contracts alone, but no such power of repudiation was granted to the company. Respondent could decline to receive the ores, but the company could not refuse to deliver them. And as we have seen, the company could not remove the agent of its own appointing, but the respondent could do so. There was no consideration for this contract, so far as the ores were concerned, and all of that part for which there was consideration, was settled and satisfied before this action was brought. We, for the reasons stated, do not think that respondent has a claim upon the company for the enforcement of this contract, "Exhibit A," sued upon, nor is he entitled to damages for its breach or non-fulfillment. The main feature of the judgment in this case is that of appointing a receiver. Everything else in it is made subservient to this one matter-is secondary to it. Our statute provides for the appointment of a receiver "by the court in which the action is pending, or by the judge thereof." There must be an action pending in which a Erwin Davis v. Flagstaff Silver Mining Company of Utah et al. receiver is asked to be appointed. Compiled Laws, 1870; Practice Act, § 145. If there be an action pending, the court is authorized to appoint receivers in three general classes of cases. It may appoint the receiver before judgment, to preserve the property until judgment. It may appoint one "after judgment to dispose of the property according to the judgment, or to preserve it during the pending of an appeal;" or, it may appoint "in such other cases as are in accordance with the practice of courts of equity jurisdiction." Compiled Laws 1870, p. 438. In the case at bar, the appointment is neither before judgment nor after judgment, in the sense contemplated by this section of the statute. It is not before judgment in the "action pending," because the judgment of which it is a part is the final judgment in the case. It is not after judgment, (1) for the purpose of preserving the property during appeal, because no appeal had been taken when the appointment was made, but the appeal was afterwards taken from the very judg ment itself appointing the receiver; (2) nor was it after judgment, in order "to dispose of the property according to the judgment." No judgment preceded the appointment requiring any property to be disposed of in any particular way. The appointment is not in aid of any prior judgment. Possibly it might be claimed that the judgment of which it is in aid, is part and parcel of the judgment in which the appointment of the receiver is made, and that the vital part of the decree was that granting relief to respondent, which the receiver was to carry out by disposing of the ore and paying the respondent. Perhaps a judgment for general or specific relief might be followed in the same entry by the appointment of a receiver to carry out such judgment by disposing of the property according to the judgment. But that is not this case. No general or special relief is granted to respondent in this decree, which the receiver is directed to carry out. He is directed to pay certain liens prior to those of respond ent. But there is no judgment in this case for such liens as |