(38 Idaho, 664, 224 Pac. 435.) an insolvent corporation who takes an illegal preference to himself and through that illegal preference takes the property and converts it to his own use so that the specific property cannot be followed. Union Coal Co. v. Wooley, 54 Okla. 391, 19 A.L.R. 312, 154 Pac. 62; Nix v. Miller, 26 Colo. 203, 57 Pac. 1084; Darcy v. Brooklyn & N. Y. Ferry Co. 196 N. Y. 99, 26 L.R.A. (N.S.) 267, 134 Am. St. Rep. 827, 89 N. E. 461; 14a C. J. 187, 188. A director who seeks to obtain an unjust and unlawful preference will be held to account for the value of the entire property wrongfully appropriated by him. Watrous v. Hilliard, 38 Colo. 255, 88 Pac. 186. William A. Lee, J., delivered the opinion of the court: Appeal-waiver of misjoinder, The amended complaint in this action states two causes of action in a single count, but no objection to this misjoinder appears to have been taken by any of the defendants. One cause of action is against the Modern Packing Company, a domestic corporation, and appellant, Henry Jones, Perry Jones, John F. Hansen, and W. P. Guthrie, in their official capacity as trustees of the defendant company. The corporation became defunct for a failure to pay the Corporations- annual license taxes, and the directors were made parties defendants as provided by Comp. Stat. § 4790. This cause of action is upon the promissory note set forth in the complaint, executed by defendant corporation to the respondent, Nelson, June 10, 1916, in the principal sum of $2,221.75. The other cause of action is against appellant, Henry Jones, in his individual capacity, and is based upon the averments that, while he was president, director, and general manager of this corporation, and knowing it to be insolvent, he as such official, with its secretary, executed to himself a promissory note for $5,177.65, on February 11, 1918, due in six months, and a chattel mortgage to secure the same upon all of the then remaining property of the company, consisting of its furniture, fixtures, and the retail butcher shop in Twin Falls; that in July, 1918, following the execution of this note and mortgage, appellant caused the mortgage to be foreclosed by affidavit, and said property to be sold to himself at such sale for $6,618.36, and his note and mortgage against the company to be fully satisfied. This cause of action is against appellant individually. It is based upon the execution of this note and mortgage to himself, and the subsequent sale of all the property of this insolvent and defunct corporation under the foreclosure proceedings, upon the ground that such proceedings were unlawful and void against respondent, a creditor of the corporation. Prior to the execution of this note and mortgage, a fire had destroyed the company's packing house, and appellant had taken a mortgage upon all its real estate, in consideration of his having paid an indebtedness to a creditor of the company apparently equal in amount to the value of this real estate. About the validity of this transaction no question is raised in this action. The cause was tried by the court with a jury, which made special findings of fact upon interrogatories submitted, wherein it found that the company was insolvent at the time appellant took this note and chattel mortgage; that the appellant, with the other officers who had control of the company's affairs at the time. of the execution of this instrument, knew that it was insolvent; and the jury found the value of the property included in the chattel mortgage given by appellant to be $1,000. The court adopted the findings of the jury, and made additional findings to the effect that the company was a domestic corporation, with its principal place of business at Twin Falls, Idaho; that it forfeited its right to do business in December, 1918, for a failure to pay the license tax to the state; that at the time of such forfeiture appellant, Perry Jones, John F. Hansen, and W. P. Guthrie were its directors; that on June 10, 1916, it executed the note and mortgage sued on in this action to respondent, no part of which had been paid; that on February 11, 1918, this company, through its said officers, executed to and delivered to appellant a chattel mortgage on all of its personal property; and that appellant thereafter foreclosed said mortgage by affidavit and sale, and thereby appropriated all of the company's personal property to his own use. The court also finds that $150 is a reasonable attorney's fee in this action. As a conclusion of law from such findings, the court holds that respondent is entitled to judgment against the company, the appellant, Perry Jones, John F. Hansen, and W. P. Guthrie, as trustees, for the principal sum of $3,423.46, and that appellant is personally liable to respondent, and respondent is entitled to judgment against him, for $1,000, the value of such personal property, together with interest, costs, and $150 attorneys' fees, making a total of $1,420, for which judgment was entered against appellant. From this personal judgment against him appellant appeals to this court, and assigns as error: (1) That the complaint does not state facts sufficient to constitute a cause of action; (2) that the evidence does not support the judgment; (3) that the court erred in its conclusion that respondent was entitled to a judgment against appellant in the sum found; (4) that the findings and conclusions do not support the judgment; (5) that it is contradictory, uncertain, and indefinite; (6) that the court erred in taxing an attorney's fee against appellant; (7) that there is no evidence to sustain the judgment, for the reason that there is no showing of fraudulent intent or purpose on the part of the company or its officers or agents. It will be observed that the controlling question presented by this appeal is whether the president of an insolvent corporation, who was also a director and general manager, can obtain a preference to himself out of the assets of the company in the manner here attemped to be done. Appellant argues that the complaint fails to state a cause of action, for the reason that there are no particular facts or representations alleged constituting the collusion or fraud, and cites Wilson v. Baker Clothing Co. 25 Idaho, 373, 50 L.R.A. (N.S.) 239, 137 Pac. 896. This case correctly states the rule of law applicable to the facts there under consideration, but we think it has no application to the facts presented by this record. Appellant further contends that an insolvent corporation is not prohibited by any law of this state from preferring certain creditors over others in the due course of business, where such preference is not collusively or fraudulently made, and relies upon the same authority, and also upon Pettengill v. Blackman, 30 Idaho, 241, 164 Pac. 358, wherein it is said that, if there is a debt and a transfer of property for an adequate consideration in payment of the same, no collusion or fraud in its legal sense can be predicated upon such transaction. It It is further contended that respondent had been president of this company, and during his incumbency had loaned the money for which this note was in part given, and that he was still a director. It appears, however, that respondent has not taken any part in the company's affairs for a long time prior to taking this note, or to the execution of the mortgage given appellant. may be conceded that generally in an action for deceit or fraud the facts constituting the same must be specifically alleged and proven. But this rule has no application to the case of an officer of a corporation obtaining a preference for himself by appropriating to his own use the assets of his com- Evidencepany, to the injury necessity of of its other cred- proving fraud. itors. Such acts are fraudulent and (38 Idaho, 664, 224 Pac. 435.) void in law, irrespective of the intent of such officer. Corporationsfunds as trust. In Riley v. Callahan, 28 Idaho, 525, 155 Pac. 665, it is said that the directors and officers of a corporation hold the funds in trust, and any attempt on their part to divert the use of such funds to their personal profit or interest is a violation of the trust imposed by virtue of their office. See also Weil v. Defenbach, 31 Idaho, 258 and cases cited on page 262, 170 Pac. 103; Chicago, M. & St. P. R. Co. v. Third Nat. Bank, 134 U. S. 276, 33 L. ed. 900, 10 Sup. Ct. Rep. 550; Chicago, R. I. & P. R. Co. v. Howard, 7 Wall. 410, 19 L. ed. 117; Curran v. Arkansas, 15 How. 304, 14 L. ed. 705; Nix v. Miller, 26 Colo. 203, 57 Pac. 1084; Union Coal Co. v. Wooley, 54 Okla. 391, 19 A.L.R. 312, 154 Pac. 62. Comp. Stat. § 4715, prohibits the directors of a corporation from declaring any dividends except from surplus profits, or from withdrawing or paying to any stockholder any part of the capital stock, or reducing the same, except as therein provided. It makes such officers liable in their individual capacity, jointly and severally, to the corporation or any of its creditors, in the event of a dissolution, to the full amount of the capital stock so divided, withdrawn, paid out, or reduced. In Chadwick v. Holm, 31 Idaho, 252, 170 Pac. 87, it is held that, where, with the consent of the stockholders, a corporation, through its directors, transfers all of the corporate property to another corporation, and takes in payment bonds of the latter corporation, and such bonds are allotted among the stockholders in proportion to their shares in the original company, the directors will be liable as tort-feasors for any loss occasioned by the negligence of the directors in delivering to the stockholders their allotment of such bonds. It is held that the statute was enacted for the benefit of creditors, and of those who engage in business with corporations on the assumption that their capital cannot be impaired. In the instant case, the president, who is also the general manager and director of a corporation, as such officer, caused the corporation to enter into a contract with himself in his individual capacity, by which all of the then remaining assets of the corporation were transferred to him to discharge its obligation to him. Even though such obligation is founded on a valid consideration, such as the advancement of money, which appears to be conceded in this case, his subsequent sale of this property under foreclosure proceedings and his purchase of the same at the sale was in legal effect an unlawful conversion of this proper -mortgage to ty to his own use, officer-validity. As already indicated, the action against the corporation and its trustees, who became liable in their official capacity as such because of the forfeiture of the corporation charter for failure to pay the license fee, is an action upon contract-in this case the promissory note set forth in the complaint. The action against appellant individually is tortious in character, and, there being no provision for the recovery of an attorney's fee in an action of this kind, the finding and holding of the trial court that respondent was entitled to the attorney's fee of $150 has no support in the record, and cannot be allowed. Appellant in the trial below might have required respondent to elect upon which cause of action he would proceed, or to separately state the two causes of action, but, having neglected to do so, we think he waived his right to do so after judgment. However, the fact that the first cause of action is upon a promissory note with an attorney's fee clause would not extend such provision to the second cause of action, sounding in tort. Where the president and general manager of a corporation wrongfully converts the assets of his company to his own use by taking a mortgage upon the same and foreclosing such mortgage, and bids in the property at the foreclosure sale, he would ordinarily be liable to injured creditors to the full extent of the price for which such property was sold at the foreclosure sale. In the instant case, however, the question as to the value of this property wrongfully taken by appellant was submitted by special interrogatories to the jury, which found its value to be $1,000. No exception being taken by either party to this finding as to the value of this property, and it having been adopted by the court as a basis for the judgment subsequently entered, such finding will not be disturbed upon this appeal. It results from what has been said that respondent's judgment against appellant should be affirmed in the amount of $1,000, with interest thereon and costs, as found by the trial court, but the attorney's fee in the sum of $150 should be stricken therefrom. The cause is remanded, with instructions to enter a judgment in accordance with the views here expressed. Costs to respondent. McCarthy, Ch. J., and Budge and Wm. E. Lee, JJ., concur. ANNOTATION. Right of corporation to prefer creditors. I. Introductory, 90. 1. View that preference may 2. View that preference may II. b, 3-continued. (b) View that preference may not be given, 92. [No later decisions herein.] c. To stockholder: 1. View that preference may be given, 93. [No later decisions herein.] 2. View that preference may not be given, 93. [No later decisions herein.] d. Statute permitting preference, 93. [No later decisions herein.] e. Statute prohibiting preference: 5. Minnesota statute, 93. 6. New Jersey statutes, 93. 7. New York statutes, 93. 8. North Carolina statute, 93 9. English statute, 93. 10. Canadian statutes, 93. III. Preference by solvent corporation. 94. supplemental to an earlier note on the same topic in 19 A.L.R. 320. As to right of insolvent corporation to secure officers, directors, or stockholders for a contemporaneous loan to the corporation, see annotation in 5 A.L.R. 561, and 19 A.L.R. 1087, supplemented by the annotation following Terhune v. Weise, post, 101. II. Preference by insolvent corporation. a. To general creditor. 1. View that preference may be given. (Supplementing annotation in 19 A.L.R. 321.) The rule set out in the earlier note was declared by the court in Cosmopolitan Trust Co. v. S. L. Agoos Tanning Co. (1923) 245 Mass. 69, 139 N. E. 806, as follows: "In the absence of any inhibition statute, a debtor commits no fraud by appropriating his property to the satisfaction of one or more of his creditors to the exclusion of all others. Knowledge by both the debtor and the preferred creditors is of no weight in this connection. The only limitation on such transactions is that there can be no secret trust for the benefit of the debtor. Subject to that qualification, it is settled at common law that a debtor has a right to prefer one or more of his creditors over others. . . . A corporation stands on the same footing in this particular as does an individual, and a bank differs in no respect from other corporations." 2. View that preference may not be given. (a) View stated. (Supplementing annotation in 19 A.L.R. 328.) In jurisdictions where the assets of an insolvent corporation are deemed a trust fund for creditors, an insolvent corporation cannot prefer one creditor over another. Re Lamie Chemical Co. (1924) 296 Fed. 24; Rosling v. C. E. Evans Co. (1923) 123 Wash. 93, 212 Pac. 151; Woods v. Metropolitan Nat. Bank (1923) 126 Wash. 346, 218 Pac. 266; Terhune v. Weise (Wash.) post, 101; Child v. Western Lumber Exch. (1925) Wash., 233 Pac. 324. See also Re Elliott-O'Brien Co. (1922) 284 Fed. 507; Lung v. Washington Grocery Co. (1923) 126 Wash. 406, 218 Pac. 207, 22 Pac. 902. When a corporation becomes insolvent or in a failing condition, the officers and directors represent not only the stockholders, but also the general creditors, as trustees by reason of the insolvency, and they cannot thereafter prefer themselves or any other creditors. Re Lamie Chemical Co. (Fed.) supra. The rule in Washington was stated by the court in Woods v. Metropolitan Nat. Bank (1923) 126 Wash. 346, 218 Pac. 266, as follows: "This court has adhered to the doctrine that an insolvent corporation may not prefer its creditors; that, although an individual creditor may do so, even to the exhaustion of his property, the right does not exist in a corporation; that its property on insolvency becomes a trust fund for the benefit of all of its creditors, to be equally and ratably. distributed among them." It appeared that an insolvent corporation, prior to going into the hands of a receiver, paid off a promissory note held by the defendant bank. Subsequently, the plaintiff, appointed receiver, brought action to recover the amount, on the ground that it constituted a preference. It was held that the payment amounted to an unlawful preference, and should be recovered to be ratably distributed among the various creditors. In Rosling v. C. E. Evans Co. (1923) 123 Wash. 93, 212 Pac. 151, it was said that the assets of an insolvent corporation (not able to pay its debts in due course of business) constituted a trust fund for creditors, all of whom should share ratably, and that such a corporation had no power to prefer a particular creditor. The holding in Lung v. Washington Grocery Co. (Wash.) supra, was to the effect that the burden was on a creditor who had received an assignment from an insolvent corporation as security for an indebtedness, to show that the property received was not an undue proportion and consequently an unlawful preference. (b) Exception to view. (Supplementing annotation in 19 A.L.R. 333.) In some jurisdictions where as a |