for a special purpose, namely, to secure the debt owing by the company to the bank. In delivering the mortgage or trust deed for that purpose it in legal effect was the same as if the mortgage or trust deed had been executed and delivered for the express purpose of securing the bank debt. When this debt was subsequently taken up by plaintiff as administrator of the estate of T. J. Kurtz with the consent of the board of directors of the company, and at their solicitation, and the time of the payment of the bank debt was extended for six months, all of which was evidenced by the note for $16,341.44, the delivery of the mortgage and trust deed to plaintiff thenceforth constituted security for the debts mentioned in the resolutions, and the mortgage, in legal effect, was the same as if it had been executed and delivered for the purpose only of securing the debts aforesaid. This also answers the objection that the action was premature because no demand was made as provided in the bonds. The bonds never became of any effect whatever because never negotiated for any purpose.

Nor is the contenton that since the trust deed and bonds were delivered as collateral security they should have been sold as such security is usually sold of any force. Under the facts and circumstances of this case it is useless to discuss such a contention. The trust deed was in fact delivered to secure plaintiff's debt. The plaintiff had no right to negotiate the bonds of the company, and if he had it would have been a useless ceremony to offer the paper of an insolvent concern. Plaintiff did the only thing he could do, which was to bring an action in equity to foreclose the mortgage.

Nor can we see wherein the facts of this case bring it within the doctrine that insolvent corporations may not prefer the claims of officers or directors. We are of the opinion that the facts of this case bring it clearly within the rule laid down by this court in the cases of Wells Fargo & Co. v. Geo. M. Scott & Co., 18 Utah, 127, 55 Pac. 81, and National Bank of the Republic v. Geo. M. Scott & Co., 18 Utah, 400, 55 Pac. 374.

Nor is the contention that the company was in fact in

12

solvent at the time of the transactions complained of sustained by any proof whatever. True, it is contended that since the plaintiff alleged its insolvency when this action was commenced in 1907, and the court so found, that therefore we should assume that the company was insolvent at all times prior to that time. We think that the court's findings on that subject fairly reflect the evidence, and although we are urged to do so, there is no good reason shown why we should disturb the findings.

The contention by the trustee, C. D. Clark, that he was the only proper person to bring suit because he was appointed trustee in the trust deed and bonds, if not already answered by us, is determined adversely to his contention in the case of Stevens, etc., Co. v. Implement Co., 20 Utah, 267, 58 Pac. 843. If there is any distinction between the case at bar and the Stevens Case, supra, it is this, that in this case there is much stronger reason for holding that said C. D. Clark was not a necessary party to the action because in this case the instruments in which he was 13 designated as trustee never were actually negotiated nor delivered for the purpose for which they were originally issued but the trust deed subsequently became operative for a different purpose and with that purpose the trustee named therein never had any, nor was intended to have any, connection. In view of the circumstances of this case, Trustee Clark, for all legal and practical purposes, was eliminated from the transaction.

The judgment of the district court is affirmed with the exception of that part which declares the claim of $1500 evidenced by the note of December 22, 1906, a prior and paramount lien against the property mentioned in the trust deed or mortgage. For the purpose of correcting the error in that regard the case is remanded to the district court of Weber County with directions to modify the conclusions of law and the judgment to the effect that said sum of $1500 is not a prior and paramount lien against the mortgaged premises, but that such claim should be classed among the general claims against said corporation, and in winding up

its affairs and in distributing its assets among its creditors. said claim should prorate with all the other general claims. In all other things the judgment and decree of the district court is affirmed. Each party is required to pay his own costs on this appeal.

STRAUP, C. J., and MCCARTY, J., concur.

FRICK, J.

ON APPLICATION FOR REHEARING.

Counsel for all of the appellants join in a petition for a rehearing in which they strenously insist that we, in legal effect, have made a contract for the parties different from the one they themselves made, and that after making such a contract for them we have permitted one of the parties to pursue a remedy not contemplated by the contract as made. If counsel's assertion were correct, or if in our judgment there were any reasonable ground even upon which to base it, we should not hesitate to grant a rehearing. The whole contention is, however, based upon the resolution adopted by the board of directors of the company upon which respondent based his right to foreclose the mortgage referred to in the opinion. Counsel, in substance, now contend that the mortgage was originally given to secure certain bonds. to the amount of $50,000, due in ten years from August, 1905; that the mortgage was delivered to respondent as collateral security only to secure the payment of the sums of $14,921.90 and $1,419.54, aggregating the sum of $16,341.44, which became due and payable in six months from August 30, 1906; that neither by the terms of said bonds, nor of the mortgage, nor by reason of any other breach, any cause of action had accrued to respondent when this action was commenced, and hence that this action to foreclose was premature. In making this contention counsel entirely ignore the legal purport and effect of the resolution of the board of direc tors which authorized the execution of the note and delivery of the mortgage upon which this action is grounded. So

14

that there might be no misconception in this regard we, in the original opinion, quoted that portion of the resolution under which respondent claimed the right to foreclose the mortgage in question. We now, without quoting it again, merely call attention to the language used. The language is not, as contended by counsel, that the mortgage was to be delivered merely as collateral, but the language is that the mortgage was to be delivered as "security for the payment of said money." By "said money" is meant the $16,341.44 which was made payable in six months from the time said resolution was passed, and every act, word, and deed of the parties to said transaction, as shown by the evidence adduced at the trial, documentary and otherwise, indicate that the property described in the mortgage was intended as a pledge to secure the payment of respondent's claim, and that the respondent should have the usual statutory remedy in case of default of payment that all other mortgagees have under the terms of our statute. In view that the original bonds never were sold or negotiated no other conclusion than the one just stated is permissible. We cannot assume that the parties intended that the respondent should not enjoy the usual remedy to enforce the collection of his claim that all other mortgagees enjoy, when no such intention was indicated in the resolution or agree ment, and when a contrary intention is indicated by the language used in the resolution aforesaid. When the property described in the mortgage was in fact pledged to secure the payment of respondent's claim, and when that claim was past due, by what authoity can this court say that respondent shall be deprived of his legal remedy to enforce payment? We have always assumed that courts were instituted to enforce contracts and to apply the remedies provided. by law for their enforcement. This is all the district court did in this case, and this is all that we have approved in the original opinion. In our judgment there can be no doubt whatever that the board of directors of the company in delivering the mortgage to respondent intended that the property therein described should constitute security for

the payment of the $16,341.44, and that when that amount should become due and remain unpaid that respondent should have his remedy by the statutory action to foreclose said mortgage, and to sell the property therein described the same as he might have foreclosed any mortgage given to secure a debt under the statutes of this state.

It is also contended that we erred in apportioning costs. As we view the case, no other apportionment would reflect justice. There being no cause shown why a rehearing should be granted, the application should be, and it accordingly is, denied.

STRAUP, C. J., and MCCARTY, J., concur.

STATE v. GIBSON.

No. 2097. Decided March 25, 1910 (108 Pac. 349).

1. LARCENY-GRAND LARCENY. Comp. Laws 1907, sec. 4384, makes every person guilty of embezzlement punishable in the same manner prescribed for stealing property of the value of that embezzled, and section 4359 makes it grand larceny to steal property valued at more than fifty dollars, and section 4360 makes all other cases petit larceny. Accused was employed to solicit advertising contracts, and within about thirty-eight days collected $235 from various persons, and appropriated it to his own use; but fortyeight dollars was the largest amount collected from one person at one time. Held, that the taking of the $235 was one embezzlement committed by a series of connected transactions, so as to make accused punishable as for grand larceny. (Page 332.)

THORITY.

2. EMBEZZLEMENT-AUTHORITY OF AGENT-EFFECT OF EXCEEDING AUWhere accused demanded and received the money appropriated as his employer's agent, and it was paid in the discharge of obligations under advertising contracts which he had solicited for his employer, he was guilty of embezzlement, though he did not have authority to collect money due under such contracts. (Page 333.)

Appeal from District Court, Third District; Hon. T. B. Lewis, Judge.