court was directed to retry the case, and, upon the plaintiff's proving the controverted allegations of the complaint, to enter judgment pursuant to the award of the commissioners. In a counter affidavit in support of the award, J. L. Beaman, one of the commissioners, makes this statement: That shortly after their appointment and qualification, he and Anderson (the other commissioner) viewed the premises, and he formed an impression and opinion, derived from his knowledge of values in that locality both immediately before and immediately after the construction of the C street viaduct, of the damages sustained by the premises de scribed in the complaint; that his judgment was not in accord with the judgment of Anderson, also formed at that time, but was considerably higher; that he and Anderson then and there agreed that they would, either together or individually, prosecute inquiries, and get statements from parties whom they considered to be posted in values in the locality where said premises were situate immediately before and after the construction of said viaduct, for the purpose of correcting or modifying their judgments formed after viewing the premises, and ascertaining whether they could reach an agreement as to the damages sustained, for the purpose of making the award; that the information obtained by each individually should be communicated to the other, and considered in their joint meetings, and that he communicated to Anderson whatever information he had obtained in the prosecution of such inquiries, and that Anderson communicated information obtained by him individually, and that the whole mass of information so obtained was considered at their joint meetings as such commissioners; that the opinion of the affiant, formed shortly after viewing the premises, and before prosecuting inquiries for further information and obtaining statements as aforesaid, was based upon special and general knowledge of real estate in South Pueblo, in said locality, at and immediately after the construction of said viaduct; that the information and statements obtained either by himself or said Anderson did not serve to modify or change his judgment, formed shortly after viewing the premises, as to the damages sustained by the premises. An affidavit in substance the same was filed by Anderson, the other commissioner.

G. W. Collins, Charles Gast, and M. J. Galligan, for appellant. Waldron & Devine, for appellee.

STEELE, J. (after stating the facts). We will consider but two assignments of error: (1) That the court erred in overruling the demurrer to the plaintiff's complaint; (2) that the court erred in refusing to set aside the award of the commissioners.

The complaint states that the company plaintiff has for its object buying, selling,

and improving real estate in the state of Colorado. This court held in Insurance Co. v. McClelland, 9 Colo. 11, 9 Pac. 771, 59 Am. Rep. 134, that: "Private corporations are creatures of statute, and derive their powers solely therefrom. Upon weighty considerations of public policy, and of private equity as well, the principle has been universally recognized that the charters or general laws through which these corporations derive their existence absolutely control their action; that a contract made or an act done by them which is not in any manner authorized by some express provision of the charter or law of incorporation, or which may not be clearly implied therefrom, is ultra vires; and that such usurpation of power may be relied upon as a complete defense to a suit growing out of the unauthorized act or contract." The purchase of a claim for damages is not within the power of this corporation, as shown by its articles of incorporation; nor was there any allegation in the complaint showing the necessity for the purchase in the pursuit of its business, nor was proof of such necessity offered. No damages accrued to the plaintiff after it purchased the property, but its claim to damages is based solely upon the assignment from E. W. Shutt, which was made some time after the sale of the lots. Such dealing in litigation is entirely foreign to the objects of its creation, and it is at least doubtful whether claims of this kind against municipalities of the state can be made the subject of bargain and sale by corporations organized under our statutes. The plaintiff was not entitled to judgment for damages to lots 23 and 24, because these lots are not included in the assignment from E. W. Shutt. The commissioners appointed by the court were not appointed pursuant to the statute. They constituted, however, a judicial body when appointed, and their conduct must be controlled by the same rules which control the conduct of juries and other bodies of like character. The affidavits filed in support of the motion to set aside the award allege that the commissioners took the ex parte statements of many persons concerning the damages to be assessed against the city, without notice to the city, and that the persons whose statements were received were not required to be sworn; that the statements were not taken by the commissioners as a body, but were taken by them individually. The statements of the commissioners, made in the form of an affidavit, virtually admit the facts stated in the affidavits in support of the motion to set aside the award. It is highly improper for commissioners to receive evidence without notice to the parties, or to receive as evidence the opinions of persons not sworn as witnesses; but in this case the commissioners not only took the opinions of persons not sworn, but took those opinions at second hand. Such conduct must result in setting aside the award. The city of Pueblo, if the commissioners

were unable to agree upon the amount of damages without the examination of witnesses, was entitled to be notified, in order that it might have an opportunity to present witnesses in support of its contention as to the amount of damages. In the following cases it has been held that what will be misconduct on the part of a juror will, as a general rule, be such on the part of an arbitrator; that it is gross misconduct to seek evidence, or the opinions of others, in regard to the case, or anything material to its decision, in the absence of the defeated party; that the arbitrator may not, on his own responsibility, hear statements concerning the matter in controversy; and that, if evidence is taken by the arbitrator in the absence of the defeated party, without notice to him, the award is void. Towing Co. v. Taylor, 126 IL 250, 18 N. E. 663; Shively v. Knoblock (Ind. App.) 35 N. E. 1028; Moshier v. Shear, 102 Ill. 169, 40 Am. Rep. 573; Curtis v. City of Sacramento (Cal.) 28 Pac. 108; Elmendorf v. Harris, 23 Wend. 628, 35 Am. Dec. 587; Emery v. Owings, 7 Gill, 488, 48 Am. Dec. 580; Wood v. Helme, 14 R. I. 325. Counsel for appellee claim that "the judg ment and opinion of the court of appeals is now binding as the 'law of the case,' because such opinion or judgment was not excepted to, nor is there any assignment of error contained in the record questioning the correctness or legality thereof." Exceptions are not required to be taken in cases brought directly from the court of appeals to this court, and there can be no good reason for requiring exceptions to a judgment of the court of appeals which directs a new trial. The city, in this case, could not take an appeal from the judgment of the court of appeals, and it was not until judgment in a sum in excess of $2,500 was rendered against It that its right to appeal to this court accrued. The city now asks this court to review the judgment of the district court rendered against it. This is a right the defendant has, and it becomes our duty to review it, and to reverse it if we do not agree with the district court, notwithstanding the fact that the court of appeals may have, in the same litigation, rendered a decision at variance with our views; nor is the right or duty affected in any way by the failure of the city to take exceptions to or assign error upon the judgment of the court of appeals.

For the reasons assigned, the cause is reversed and remanded. Reversed.

suit, between which and the commencement of the creditor's action the attached property is sold by the debtor to one afterwards intervening in the creditor's action, such creditor cannot claim, as against the intervening purchaser, the protection of the statute authorizing the consolidation of causes, and providing for the distribution of the property sequestered among the attaching creditors.

2. As against an intervening claimant in a garnishment of personal property, a telegram sent by the garnishee, by which, in consideration of possession, it agreed to hold the property in behalf of certain of the principal defendant's creditors, who had before unlawfully taken it into possession, is inadmissible, espe cially as such creditors had afterwards, by their acts, repudiated the claimed agency, and later were paid in full.

3. Though the best proof of the adoption of a resolution by a board of directors is the record thereof, in the absence of such record it may be proved by the persons who attended the meeting at which the resolutions were passed.

4. The rule that, to render the sale of personal property valid against the seller's creditors, it must be accompanied by an imme diate, open, notorious, and continued change of possession, has no application where, prior to the sale, the seller has bailed the property to a third person, and the bailee has taken open and notorious possession thereof; but in such case a direction by the purchaser to the bailee to hold the property for him is sufficient.

5. On the first trial of the issues between an intervening claimant and garnishing creditors the court below found that there had been no sale to the intervener by the debtor. The court of appeals reversed this finding, holding, on the evidence, that there was sale. On the second trial the intervener's evidence was the same as before, and, though the plaintiff introduced slight additional evidence bearing on the question of sale, it did not contradict the intervener's evidence. Held, that a finding by the trial court that, in view of the additional evidence offered, it did not feel called upon to follow the decision of the appellate court, but would again hold that no sale was proven, being in contravention of the appellate court's holding, can have no weight with the supreme court on a later appeal.

6. A mining company, having purchased certain machinery, and finding itself insolvent, proposed to the seller to return the machinery in satisfaction of the debt. Pending the negotiations, the machinery was loaned to a third company. Letters passing between the insolvent company's director, authorized by an unrecorded resolution of the board of directors to consummate the deal, and the agent of the seller, showed that the seller accepted the proposition, and that its agent notified the bailee that the seller claimed the property. The selling company also telegraphed, and later wrote, to the bailee, directing it to hold the property for the seller. Held, that the evidence showed a sale from the insolvent company to the original seller, based on valuable consideration, and sufficient to vest title in the seller as against subsequently attaching creditors of the insolvent company.

Appeal from district court, Mineral county. Action by James H. Collins and others against the United Leasing Company, as principal defendant, and the Amethyst Mining Company, as garnishee, in which the Hendrie & Bolthoff Manufacturing Company intervened. From a judgment in favor of plaintiffs, intervener appeals. Reversed.

The United Leasing Company, a corporation doing business in Mineral county, bought from the Hendrie & Bolthoff Manufacturing

Company, for use in one of its mines, a Knowles compound pump, of the value of about $7,500. Realizing its failing condition, the directors of the leasing company, in December, 1895, authorized Eben Smith, a member of the board, to arrange with the manufacturing company to take the pump in satisfaction of its debt. Pursuant to this direction, Eben Smith, representing the leasing company, and E. B. Hendrie, rep.senting the manufacturing company, began negotiations. No agreement was reached until some time during the month of January, 1896. Pending these negotiations, certain mechanic's lien claimants took possession of the pump for the purpose of preventing its removal until they could obtain proper process. The Amethyst Mining Company borrowed the pump, but was not permitted to remove it until it agreed to hold it subject to the demands of the men who had taken it into their possession. The pump had not been used by the leasing company, but stood upon the premises of the leasing company unattached. When the Amethyst Company borrowed the pump, it was placed in one of the lower levels of the Amethyst property, and was in use at the time the plaintiff below began suit by attachment against the United Leasing Company. E. J. Hatcher began suit by attachment against the United Leasing Company January 23, 1896. The plaintiffs began suit against the same company February 1, 1896. Garnishment summons was served on the Amethyst Company in the Hatcher suit on January 23, and in the suit of plaintiffs on February 1, 1896. The Amethyst Company, as garnishee, answered in each of the cases mentioned as follows: "The Amethyst Mining Company has in its possession one Knowles compound pump, which it received from the defendant company, but which the Amethyst Mining Company is informed is the property of the Hendrie & Bolthoff Manufacturing Company of Denver." The answer was traversed in due time. and the manufacturing company was ordered to appear "and show what title, if any, it has in and to the said pump referred to in the said answer of the Amethyst Mining Company, garnishee." In response to the order and summons, the manufacturing company filed its petition of intervention, claiming the property by virtue of the agreement mentioned with the United Leasing Company, and alleging that the property was turned over to the Amethyst Company on the 25th of January, 1896, and that ever since the 25th of January, 1896, the said property was held by the Amethyst Company for and on account of the interveners. To this petition an answer was filed by the plaintiffs, which put in issue the alleged agreement between the manufacturing company and the leasing company and the allegation that the Amethyst Company held the pump for the manufacturing company, and alleged that the Amethyst Company held the pump in ques

The

tion subject to the claim of plaintiffs, and that the alleged agreement between the manufacturing company and the leasing company was void, because not followed by an immediate change of possession. The intervener moved to quash the writ of garnishment because the property, being capable of manual delivery, was not the subject of garnishment. The motion was overruled. cause was tried by the court, and judgment rendered against the intervener. An appeal was taken to the court of appeals. That court reversed the judgment, holding that the evidence showed a sale to the manufacturing company. Upon the second trial the intervener offered no additional evidence, and the evidence concerning the sale offered by the plaintiff, in addition to that offered at the first trial, does not contradict the evidence of the intervener. The evidence of the sale from the leasing company to the manufacturing company is mainly documentary, consisting of telegrams and letters passing to and from the representatives of the respective companies. Eben Smith called upon E. B. Hendrie, and offered to return the pump in settlement of the debt. This was at first refused, after the pump had been taken by the Amethyst Company. January 25, 1895, the manufacturing company telegraphed the Amethyst Company as follows: "Please remember that you are holding that compound pump for us. It is our property." Prior to this time Smith had directed the manager of the Amethyst Company to hold the pump subject to the order of the manufacturing company. No record of the resolution authorizing Smith to return the pump to the manufacturing company was ever made by the directors of the leasing company. The second trial resulted in a judgment for the plaintiffs and against the intervener. From this judgment the intervener appealed to the court of appeals, and the cause was transferred to this court.

R. D. Thompson, for appellant. Albert L. Moses, for appellees.

STEELE, J. (after stating the facts). The intervener assigns as error the rulings of the court in denying the motion to quash the garnishment summons, in overruling the objection to the introduction of testimony concerning the Hatcher suits in the United States court, in overruling the objection of the intervener to the introduction of testimony concerning the orders of court making distribution among the attaching creditors of the funds realized from the sale of the pump, and in dismissing the petition of the intervener. We are not willing to pass upon the question raised by the first assignment of error, because it does not appear to have been fully presented, and, although it might be a controlling question in this case, it is not necessary to determine it, and we feel that the question is of so great importance that we should await an exhaustive argument upon

the subject before rendering an opinion. The court erred in allowing evidence concerning the distribution among the attaching creditors of the funds realized from the sale of the pump. The question to be decided in this case is whether or not, prior to the attachment of the plaintiffs, the Hendrie & Bolthoff Company had taken possession of the pump under a contract with the United Leasing Company to accept it in satisfaction of its debt, and it is immaterial what became of funds in other suits. It is scarcely necessary to cite authorities to the proposition that a sale may be made of property in the possession of a sheriff, subject to any lien existing at the time of the sale. And if there was a valid sale of this pump prior to the time of the plaintiffs' attachment and subsequent to the time of the Hatcher attachment, it was subject to the lien of the Hatcher attachment only; and the statute which authorizes the consolidation of cases, and provides for the distribution of the property sequestered among the attaching creditors, does not prevent the sale of property after the first attachment, although such sale may have the effect of defeating subsequent attaching creditors.

The foregoing statement expresses the view of the writer. The other members of the court do not desire to venture an opinion upon the subject, but do concur in the judgment of the court in other respects. They are of opinion that the plaintiffs, not having been made parties plaintiff in the Hatcher suit, cannot invoke the protection of the statute.

The court permitted the following telegram to be introduced over the objection of the intervener: "January 15, 1896. To I. N. May, Supt. Amethyst Mine, Creede: If there is any trouble about getting the pump, tell the men we only want to borrow it, and will return it, and guaranty to hold it subject to their interests. Don't try to take it by force." The attorney for certain of the creditors indorsed the telegram as follows: "In my opinion, this guaranty of the Amethyst Mining Company, made by its managing director, is sufficient assurance for the men on the United properties. I advise that Mr. May be allowed to take this pump, giving his receipt therefor, and turning over this telegram to Mr. Armstrong as evidence." We think the court erred in overruling the objection to this evidence. The creditors had not legally taken possession of the property. They had not commenced suits to enforce their claims. It is true that complaints were being prepared, but no step at this time had been taken by the creditors for the purpose of taking possession of the property of the United Leasing Company, and the possession which the men had must be considered as unlawful. The miners, themselves have all been paid in full and the leader of the men is the person who resisted the taking of the pump. In no event can the telegram in question, or the declaration mentioned in the telegram, affect

the rights of the manufacturing company; and, if there is any claim to the property by the men because of this telegram, it is not against the intervener. And, besides, subsequent to the delivery of the property to the Amethyst Company, these creditors caused garnishment process to be issued and served, and traversed the answer of the garnishee,— actions entirely inconsistent with the claim that the Amethyst Company held the pump as their agent. In support of the ruling of the court, counsel for the plaintiffs (appellees here) insist that there was no resolution of the board of directors of the leasing company authorizing the transfer of the property to the manufacturing company. It is true that no record of the company appears containing the resolution, but the directors of the company testified that such resolution was adopted, and that Mr. Eben Smith, one of the directors, was authorized to make the transfer of the pump to the manufacturing company. It is further testified that at the time of the organization of the company Mr. Smith was authorized to transact all the business connected with the management of the company, and that such authority was never revoked. While the best proof of the adoption of a resolution by a board of directors is the record of it, in the absence of a record it is entirely competent to prove the resolution by the persons who attended the meeting at which the resolution was passed. The rights of third parties cannot be injuriously affected by the failure of the directors of a corporation to properly record the resolutions of the board.

It is next urged by counsel that our statute of frauds requires that there shall be immediate delivery, followed by an actual and continued change of possession, and he cites several decisions of this court in support of his contention. There is no doubt that when one undertakes to change the possession of personal property the change must be open and notorious, so that the public may know that a change of possession has taken place; and that unless there has, as between the vendor and vendee, been such immediate and open and notorious change of possession, creditors of the vendor may attach the property, or it may be taken on execution. But this does not apply where the property has been placed by the vendor in the possession of a third person, if the possession of the third person is open and notorious and exclusive. In this case the leasing company delivered to the Amethyst Company the pump in question. and it was taken by the Amethyst Company away from the property of the United mines, and placed below the surface in one of the Amethyst mines. The possession of the Amethyst Company was exclusive of the United Leasing Company. As between these two there was a perfect change of possession, and all that was necessary to convey title from the owner of the property was for the owner to sell and the vendee to accept. Manufac