Bankers' Mortg. Bond Co. v. Rosenthal

• Decision Date: 27 October 1932
• Docket Number: 6 Div. 987.
• Citation: 145 So. 456,226 Ala. 135
• Court: Alabama Supreme Court
• Parties: BANKERS' MORTG. BOND CO. v. ROSENTHAL.

145 So. 456

226 Ala. 135

BANKERS' MORTG. BOND CO. v. ROSENTHAL.

6 Div. 987.

Supreme Court of Alabama

October 27, 1932

Rehearing Denied Jan. 27, 1933.

Appeal from Circuit Court, Jefferson County; Joe C. Hail, Judge.

Action for money had and received by Ida D. Rosenthal against the Bankers' Mortgage Bond Company. From a judgment for plaintiff, defendant appeals.

Reversed and remanded.

The following question was propounded by plaintiff to the witness Latady: "Did you find any record of the authorization in the office of the Judge of Probate of Jefferson County Alabama?" Objection being overrruled, the witness answered: "I examined the records in the office of the probate Judge of Jefferson County, Alabama, consisting of what is know as the Corporation Index. I found during the year 1929 no record index in the Corporation Index showing authorization for an increase of the common stocks of the Bankers Mortgage Bond Company." Defendant's motion to exclude this answer was overruled.

Excerpts 4 and 5 from the oral charge, to which exceptions were reserved, are as follows:

"4. The Court charges you, if you are reasonably satisfied from the evidence that at the time the plaintiff purchased this stock that that issue of the stock that he purchased before issuing had not been consented to by a majority of the stockholders as set out in the section I read to you and the certificate or notice of the new issue filed in the probate judge's office at that time, that stock would not be valid stock, and that would be in itself a wrong for which the plaintiff could recover any money he paid for such stock. The law further says that after a year's time, after a year had elapsed since the issuance of the stock, the stock then becomes, without the certificate good and valid stock."

"5. The Court charges you that at the time the stock must be good; when it was sold to the plaintiff in this case by the defendant, if the plaintiff did not know that it had not been certified to record at that time, and not knowing it had not been filed, that fact alone would be sufficient to rescind the contract."

The following charges were refused to defendant:

"4-A. The Court instructs the jury that if they are reasonably satisfied from all the evidence in the case that there was issued and delivered to the plaintiff the stock which she purchased under her subscription and paid for, and the plaintiff retained the possession of this stock at the time of the institution of the suit, then the plaintiff is not entitled to recover under the fourth count of plaintiff's complaint."

"8-A. The Court charges the jury that all prior or contemporaneous oral agreements or understandings between the plaintiff and the defendant, materially altering or varying, by adding to or subtracting from the written contract of subscription signed by the plaintiff, must be considered merged in said written contract and certificate."

"D. The Court charges the jury that, unless each of the jury is reasonably satisfied from the evidence in this case that plaintiff has established in evidence all of the material averments of one count of the complaint, you cannot find for plaintiff in this case."

"ff. The Court charges you, gentlemen of the jury, that more than one year having expired between the date of the issue of the stock to the plaintiff and the institution of this suit, that plaintiff is not entitled to recover in this action."

"hh. The Court charges you, gentlemen of the jury, under the evidence in this case the common stock having been issued more than one year prior to the institution of this suit, said common stock was at the date of the institution of this valid for all purposes as fully and to the same extent as if issued and authorized by due authority and pursuant to law."

"gg. The Court charges you, gentlemen of the jury, that even though you are reasonably satisfied from the evidence that the certificate authorizing the issuance of the common stock involved in this action had not been filed in the office of the Judge of Probate at the time of the issuance of such stock, and more than one year having expired from the date of the issuance of said stock to the date of the institution of this suit, said stock was at the date of the institution of said suit valid for all purposes as fully and to the same extent as if issued and authorized by due authority and pursuant to law."

"3-A. The Court instructs the jury that if at the time of the institution of this suit more than a year has elapsed since the issuance of the stock to plaintiff, then the stock purchased by the plaintiff was valid; and even though the certificate showing the increase in the capital stock had not been filed in the office of the Judge of Probate of Jefferson County at that time, the plaintiff would not be entitled to recover."

"7-A. The Court instructs the jury that there are two classes of stock involved in this suit-that is to say, preferred stock and common stock, and if the jury is reasonably satisfied from all the evidence in this case that the preferred stock purchased by plaintiff has been duly and legally authorized to be issued and the assets of the corporation securing said stock consisted of first mortgages on real estate then the plaintiff would not be entitled to recover for the sale of said preferred stock to her by the defendant."

The following charge was given at defendant's request: "kk. The Court charges you, gentlemen of the jury, that the evidence affirmatively shows that the preferred stock that was issued to the plaintiff was authorized by due authority and pursuant to law."

Coleman, Spain, Stewart & Davies, H. H. Grooms, and A. Leo Oberdorfer, all of Birmingham, for appellant.

Walter S. Smith and Albert A. Rosenthal, both of Birmingham, and Reese & Reese, of Selma, for appellee.

THOMAS J.

The submission was on motion and the merits.

There are many assignments of error that are submitted with a proper grouping of kindred propositions, and will be so considered by this court. Polytinsky v. Johnston, 211 Ala. 99, 99 So. 839; Southern Ry. Co. v. Cates, 211 Ala. 282, 100 So. 356; Sovereign Camp, W. O. W., v. Craft, 210 Ala. 683, 99 S.E. 167.

The trial was had on count 4 for money had for the use of plaintiff, and on pleas of the general issue, pleas 4 to 8, inclusive, for merger of agreement into subsequent written subscription, accord, and satisfaction, and the bar of limitations, as to issue of stock by corporations. Section 7014 of the Code.

We now consider the motion to substitute the receiver in this court and made for the first time here. It was made to appear, by the application for substitution in this court, that B. D. Speer was appointed receiver of the Bankers' Mortgage Bond Company, and by that decree placed in full charge and control of all of its properties and assets; that he was not a mere stakeholder, but the real party in interest in this cause and interested in the conduct of the suit, asks that there be order of substitution here, and that the case be continued in his name as such receiver.

A receiver who is not a mere stakeholder should be permitted or allowed, on due and proper application or motion and proof, to intervene, prosecute, and direct the proceedings in the cause to final judgment. Lacy, Terrell & Co. v. Rockett, 11 Ala. 1002, in the matter of intervention by trustee in bankruptcy; Kidd, Executrix, v. Josiah Morris & Co., 127 Ala. 393, 30 So. 508, declared the right of a special administrator to prosecute the appeal; Atlanta, B. & A. Railway Co. v. McGill, 194 Ala. 186, 69 So. 874, was of the right of a receiver to defend; Herndon v. Howard, 9 Wall. 664, 19 L.Ed. 809, the right of an assignee admitted as an appellant in the Supreme Court of the United States. See 34 Cyc. 430; 1 C.J. § 226, p. 144; 3 C.J. 1008, p. 103. Several cases are cited by appellee in her opposition to the right of intervention: Cobbs v. Vizard Inv. Co., 182 Ala. 372, 62 So. 730, Ann. Cas. 1915D, 801, where the power of prosecution held ample, and Coffey v. Gay, 191 Ala. 137, 67 So. 681, L. R. A. 1915D, 802, where the receiver litigated unsuccessfully in the court of his appointment and without consent sought to appeal.

These authorities are not decisive of the question now presented-the right of intervention in this court when the bankrupt took the appeal before adjudication and appointment of the receiver and petitioner here. In the case of W. C Sterrett, as Receiver, etc., v. Second National Bank of Cincinnati, Ohio, 248 U.S. 73, 39 S.Ct. 27, 63 L.Ed. 135, the question of jurisdiction under the appointment of a chancery receiver and statute held not to extend to the court of another jurisdiction. This is not the case before us. The right of a state court to proceed under jurisdiction that had attached, was the subject of Riehle, Receiver, etc., v. Margolies, 279 U.S. 218, 49 S.Ct. 310, 312, 73 L.Ed. 669, 672. Mr. Justice Brandeis declared: "The appointment of a receiver of a debtor's property by a federal court confers upon it, regardless of citizenship and of the amount in controversy, federal jurisdiction to decide all questions incident to the preservation, collection, and distribution of the assets. It may do this either in the original suit, Rouse v. Letcher, 156 U.S. 47, 49, 50, 39 L.Ed. 341, 342, 15 S.Ct. 266; or by ancillary proceedings, White v. Ewing, 159 U.S. 36, 40 L.Ed. 67, 15 S.Ct. 1018. Compare Kelley v. Gill, 245 U.S. 116, 119, 62 L.Ed. 185, 187, 38 S.Ct. 38. And it may, despite section 265 of the Judicial Code [U. S. C. Title 28, § 379 (28 USCA § 379)], issue under section 262 (28 USCA § 377), or otherwise, all writs necessary to protect from interference all property in its possession. Julian v. Central Trust Co., ...