Johns v. McLester

Decision Date07 April 1903
PartiesJOHNS v. MCLESTER ET AL.
CourtAlabama Supreme Court

Appeal from Chancery Court, Jefferson County; John C. Carmichael Chancellor.

Bill by Nannie S. McLester and others, on behalf of themselves and such others of the stockholders of the Woodlawn Cemetery Company as would make themselves parties to the suit, against L. W. Johns and the Woodlawn Cemetery Company to have a sale under a trust deed set aside. From a decree overruling a demurrer to the bill, respondent Johns appeals. Reversed.

It was averred in the bill that the complainants were bona fide stockholders of the Woodlawn Cemetery Company, a corporation organized under the laws of the state of Alabama; that on April 10, 1895, the Woodlawn Cemetery Company executed a deed of trust on all of its land for $4,500, to secure 9 notes of $500 each, with interest at 8 per cent., which notes were to become due 12 months after date; that of these notes L. W Johns took 5 of them, and one J. A. Van Hoose took 4 of them that interest was paid on said notes for one year, and, by agreement with the holders of the same, the notes were extended for one year further by the payment of interest. The bill then avers the following facts: The loan was authorized by the company, and interest was paid on the same for a year and an extension made for another year. On September 7, 1897 the trustee, R. A. McAdory, was instructed to advertise and sell the lands described in the deed of trust, and that he did so advertise the same. The defendant L. W. Johns had become the owner of the notes secured by the deed of trust, he having purchased four of the notes from J. A. Van Hoose, with the expressed understanding and agreement that he would stop the sale of the property and wait another year on the company. This he failed or refused to do, and ordered the trustee to make the sale under the deed of trust. The agreement to postpone the sale was part of the consideration paid for the notes sold to L. W. Johns. A meeting of the board of directors was called, and the president or secretary, or both, were authorized to negotiate a loan at the legal rate, and take up the notes held by Johns, and stop the sale. Complainants were not present at any of the meetings, and only learned of the facts connected with the transaction within a year prior to the filing of the bill in this cause. On the day the sale was advertised to take place, J. A. Van Hoose and W. R. Houghton, two of the stockholders of the company, took $4,900 in gold to A. C. Edwards, the secretary of the company, and offered to lend it to the company under the resolution that had been passed by the board of directors. Edwards refused to make the loan. They then took the gold to E. Erswell, president of the company, and demanded that he receive it and take up the Johns' notes, but Erswell refused to do it. They then offered the money to Johns, and he refused to take it. They then tried to get Erswell to receive it again, and he refused. The bill charges that Johns and Erswell conspired together to obtain possession of the property of the Woodlawn Company, and sets out the facts in full. The sale was made, and the property was purchased by L. W. Johns. After the sale, Erswell became the agent of Johns in selling and disposing of the property. He had all the books of the company, and refused to let the stockholders inspect them, and Erswell and the board of directors never took any steps towards redeeming the property, although the property of the Woodlawn Cemetery Company is worth greatly more than the amount required to redeem the same from the said L. W. Johns.

It was then averred in the bill that several of the stockholders of the Woodlawn Cemetery Company "frequently called upon the president and board of directors to take steps to pay off the indebtedness of the company, and prevent the said L. W. Johns from getting possession of the same, but nothing looking to that end was ever done"; that on October 17, 1899, J. A. Van Hoose addressed a communication to E. Erswell, president of the Woodlawn Cemetery Company, "demanding of him that he take steps to redeem the property of the Woodlawn Cemetery Company, and the said J. A. Van Hoose offered to loan said company the money to redeem said property, but the said Erswell paid no attention to said Van Hoose's communication, and took no steps whatever towards redeeming said property." A copy of this letter was attached as an exhibit to the bill. It was then further averred in the bill that said J. A. Van Hoose, "on behalf of the stockholders, made a demand on said secretary and board of directors of said company for the same purpose," copies of which letters were attached as exhibits to the bill; that these demands were completely ignored, and neither the president nor secretary nor board of directors took steps towards redeeming the property of said company.

It was then further averred in the bill that the sale was void and fraudulent on account of the collusion of Erswell and Johns and that their collusive conduct was an abuse of the power of sale contained in the mortgage, and a violation of their obligations to the obligor corporation, the Woodlawn Cemetery Company, and created a constructive trust on said property in the hands of the said L. W. Johns; that the said Johns, after obtaining possession of the property, furnished false and fictitious statements of improvements claimed to have been made by him, for the purpose of preventing the redemption of the said property. The bill then, after averring and setting out the facts showing that Johns and Erswell conspired together to get possession of the property of the Woodlawn Cemetery Company, avers a willingness on the part of the complainants to pay Johns whatever is owing him by the Woodlawn Cemetery...

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8 cases
  • American Life Ins. Co. v. Powell
    • United States
    • Alabama Supreme Court
    • November 11, 1954
    ...465, 28 So. 2; Louisville & N. R. Co. v. Neal, 128 Ala. 149, 29 So. 865; Moseley v. Collins, 133 Ala. 326, 32 So. 131; Johns v. McLester, 137 Ala. 283, 34 So. 174; Montgomery Traction Co. v. Harmon, 140 Ala. 505, 37 So. 371; Crow v. Florence Ice & Coal Co., 143 Ala. 541, 39 So. 401; Gray v.......
  • Woorhees v. Mason
    • United States
    • Illinois Supreme Court
    • June 9, 1910
    ...of Chicago v. Cameron, 120 Ill. 447, 11 N. E. 899;Bruschke v. Der Nord Chicago Schuetzen Verein, 145 Ill. 433, 34 N. E. 417;Johns v. McLester, 137 Ala. 283, 34 South. 174,97 Am. St. Rep. 27, and note on page 30. We think, therefore, the rule announced in Chicago Macaroni Manf. Co. v. Boggia......
  • Brannan v. Kelley, 12312.
    • United States
    • Indiana Appellate Court
    • June 5, 1925
    ...of his said pleading do not bring him within the rule governing the rights of equitable plaintiffs. See note to Johns v. McLester, 137 Ala. 283, 34 So. 174, 97 Am. St. Rep. 27. In the case of Hawes v. Oakland, 104 U. S. 450, 26 L. Ed. 827, a leading case on the question now under considerat......
  • Ross v. American Banana Co.
    • United States
    • Alabama Supreme Court
    • May 8, 1907
    ... ... 865; Bell v. Montgomery Light Co., 103 Ala. 275, 15 ... So. 569; Montgomery Light Co. v. Lahey, 121 Ala ... 131, 25 So. 1006; Johns v. McLester, 137 Ala. 283, ... 34 So. 174, 97 Am. St. Rep. 27 ... We find ... no error in the ruling of the chancellor, and his decree ... ...
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