Alabama Nat. Bank v. O'Neil

• Decision Date: 24 January 1901
• Court: Alabama Supreme Court
• Parties: ALABAMA NAT. BANK v. O'NEIL.

29 So. 688

128 Ala. 192

ALABAMA NAT. BANK v. O'NEIL.

Supreme Court of Alabama

January 24, 1901

Appeal from chancery court, Jefferson county; John C. Carmichael Chancellor.

Action by Charles A. O'Neil against the Alabama National Bank. Judgment for plaintiff, and defendant appeals. Affirmed.

John W Tomlinson and Benners & Benners, for appellant.

HARALSON J.

The Little Warrior Coal Company, a body corporate, executed to the complainant, Charles A. O'Neil, in February, 1895, a deed of assignment to its properties, including its choses in action, for the benefit of its creditors. O'Neil filed this bill against the coal company and the Alabama National Bank and others, creditors of said coal company, for instructions of the court in the settlement of his trust. The only part of the bill relating to the question involved on this appeal, refers to a claim of the Alabama National Bank against said coal company. J. D. Hooper was the secretary and treasurer of said company, and on the 25th March, 1892, he borrowed from said bank for said company, the sum of $1,000 for which he gave the note of the company by him as secretary and treasurer, which was renewed from time to time, the last time, on February 10, 1894, for $1,125. To secure the payment of this note, said Hooper, as secretary and treasurer of said company, on May 18, 1893, transferred to said bank a claim of said coal company on the Central Railroad & Banking Company of Georgia for $1,170. This claim was collected by an attorney in Georgia, and the parties jointly petitioned the chancery court to allow the fund, less attorney's fees, to be paid to the register and held by him, to await the decree of the court, adjudging to which of the parties said fund belonged,-the bank claiming that it belonged to it, under its alleged transfer from said coal company, and the company contending that the claim of the bank is invalid. The court rendered a decree according to the request of the petitioners, and ordered the register, when the fund came into his hands, to hold a reference and ascertain and report what, if any, claim the bank had against said coal company; what, if any, transfer the bank had to the claim of said coal company against the Central Railroad & Banking Company of Georgia, and to the fund realized from said claim; whether the same belonged to the bank or to the coal company or its assignee, etc. The register executed his reference, and reported to the court, that the said bank had a just claim against said coal company, if not upon the said promissory note of $1,125, with interest, then for money had and received by the coal company from said bank and used by the said company, in the sum of $985, with interest from March 25, 1892; that the bank had no legal and valid transfer of said claim, nor any other claim to the funds realized therefrom, greater than other creditors of said company had thereto; that the treasurer of the company undertook to transfer to the bank, the company's claim against the said railroad company, when he had in fact and in law no such authority; that the burden of proving a legal and valid transfer of this claim or the subsequent ratification of the board of directors or the stockholders of the coal company of any invalid transfer, rested upon the bank, the party asserting said transfer, and the weight of the testimony did not sustain this burden, nor support the contention of the bank, that said transfer was subsequently ratified.

The bank filed several written exceptions to the confirmation of the report of the register. These exceptions were held by the court not to be well taken and were overruled, and the report was in all things ratified and confirmed, etc.; and from that decree this appeal is prosecuted.

1. Mr Cook lays down the doctrine, that "all contracts of a corporation are to be...