Bibb v. Hall

• Decision Date: 17 May 1893
• Citation: 101 Ala. 79,14 So. 98
• Parties: BIBB v. HALL ET AL.
• Court: Alabama Supreme Court

14 So. 98

101 Ala. 79

BIBB v. HALL ET AL.

Supreme Court of Alabama

May 17, 1893

Appeal from circuit court, Montgomery county; J. M. Chilton, Special Judge.

Action by Hall & Farley against W. C. Bibb, Jr., on a promissory note executed to the Alabama Terminal & Improvement Company and transferred to plaintiffs. From a judgment in favor of plaintiffs, defendant appeals. Affirmed.

Brickell Semple & Gunter, for appellant.

Tompskins & Troy and Roquemore & White, for appellees.

HARALSON J.

1. If there is a special finding of facts in the lower court, as was the case here, at the request of one of the parties, the supreme court must, on appeal, examine and determine whether the facts are sufficient to support the judgment. Code, § 2743. It must find directly and affirmatively every issue in fact essential to the right of recovery, or judgment on it cannot be pronounced, and it cannot be aided by intendment or by reference to extrinsic facts. Betancourt v Eberlein, 71 Ala. 461; Quillman v. Gurley, 85 Ala. 594, 5 So. 345.

2. Then, what are the issues of fact in this case essential to recovery? The note sued on was dated July 21, 1887, and reads: "I promise to pay to the Alabama Midland Railway Company, as now chartered under the general railroad laws of the state of Alabama, or any amendment that may hereafter be made, either by general law or by act of the legislature, its order or assigns, five hundred dollars, at the banking house of the First National Bank of Montgomery, Alabama, to be paid in cash, on demand, at the maturity of the note; this amount being the total of my subscription to the capital stock of the Alabama Midland Railway Company. It is agreed that said amount, to wit, $500, matures, and becomes due and payable whenever the board of directors of said company shall decide that the Alabama Midland Railway Company has been finished, to a point within a mile from the center of the city of Montgomery, from one or the other of its terminal points, and that said road is of standard gauge, laid with steel rail. Publication of said decision of said board of directors, to be made in one of the daily papers of the city of Montgomery, Alabama, shall be final and conclusive notice to me of the same. It is hereby agreed and made part of this contract that if the said Alabama Midland Railway Company should fail to complete the work, necessary to make this obligation binding, by the first day of October, 1890, then this instrument is null and void." The finding shows that "on the 7th day of May, 1887, the defendant subscribed $500 to the capital stock of the Alabama Midland Railway Company. The conditions attached to the subscription were that the amount was to be paid when the railroad 'is built, furnished, and equipped to this city, [Montgomery,] from either one or the other of its terminal points, and a line is perfected to Jacksonville and Savannah, Ga.' Upon the payment of the sum above stated, the Alabama Midland Railway Company shall issue to each subscriber 2/3 of the amount subscribed for its own capital stock, and 1/3/ of such amount of the capital stock of the Alabama Terminal & Improvement Company, which last company is formed to build said railroad." The finding states the fact that the board of directors of each of said corporations had decided and advertised the fact, in all respects as required by the conditions of said subscription and said note, that said railroad had been built and equipped in the manner and within the time prescribed in said subscription and note.

3. The defendant's pleas were, in substance, that the plaintiffs are not the parties interested in the instrument sued on; that the note is not the property of the plaintiffs, and that it is the property of the Alabama Terminal & Improvement Company, a corporation under the laws of Alabama; want and failure of consideration of the instrument sued on; that both companies were fraudulently organized, by means of false certificates of organization; and that this was concealed from defendant, and he was deceived, and intentionally defrauded into making the contract to subscribe for the stock. The errors assigned are that the facts found by the special judge sustain these pleas, and do not sustain the judgment rendered. We have referred above to the finding of the special judge as to the compliance by the corporations with the conditions of the subscription and note touching the manner and time of the completion of the railroad. No point is made in the argument of counsel on the sufficiency of the findings to sustain the judgment on this branch of the case.

4. Let us refer, in the first place, to the ownership of the note sued on by the plaintiffs. As touching the same, the special finding ascertained that the general purpose of the Alabama Terminal & Improvement Company, as shown by its declaration for incorporation, was to build and equip railroads and railways, under contract for and with other parties; that the Alabama Midland Railway Company received from numerous persons, including the defendant, their notes for subscription to its capital stock, and that these notes afterwards became the property of the Alabama Terminal &amp Improvement Company; that the Farley National Bank, a corporation organized under the national banking laws, and located at Montgomery, Ala., opened an account with the Alabama Terminal & Improvement Company, at the request of the company, by J. W. Woolfolk; that in the course of the dealings between the bank and the company, the latter became indebted to the bank, on account of money advanced to it, in the sum of about $150,000; that this indebtedness arose by the discount by the bank of the notes and drafts executed in the name of the company, by its president, Woolfolk; that the proceeds of such notes and drafts were placed by the bank, on its books, to the credit of the company, and were checked against by said Woolfolk, as president; that some of the money checked out was applied by Woolfolk to the payment of obligations of the Alabama Terminal & Improvement Company, and some was applied by him to the expense of constructing the Montgomery, Tuscaloosa & Memphis Railway; that the Alabama Terminal & Improvement Company paid back to the bank about $18,000, leaving a balance due of about $130,000, which has never been paid; that J. W. Woolfolk, as president, on the _____ day of July, 1892, executed to the Farley National Bank an instrument in writing, transferring to said bank, as collateral security for a large sum then due, (and which sum has not been paid,) a large number of the notes of subscription to its capital stock and to the capital stock of the said Midland Railway Company, then owned by the Alabama Terminal & Improvement Company, including the note of defendant; that the said transfer was made subject to the rights of the Metropolitan Trust Company of New York, which then held said notes for the purposes of security, under a contract with the Alabama Terminal & Improvement Company; that in August, 1891, the Farley National Bank failed, and was placed in the hands of a receiver by the comptroller of the currency; that, while suspended, to wit, in February, 1892, said trust company turned said notes over to L. B. Farley for said receiver, its claim to said securities being released; that subsequently the capital of the bank was made good, the receiver withdrawn, and the bank was authorized, under the national banking acts, to resume business; that on the 23d of February, 1892, the board of directors of the Farley National Bank (which had then resumed business) passed resolutions authorizing the transfer of said notes and securities to J. L. Hall and L. B. Farley, as trustees, and the same were so transferred, the same day, by H. D. Herron, the agent of the bank, thereto authorized, amounting to about $333,000; that all the indebtedness of the Alabama Terminal & Improvement Company, for the security of which the said transfer of said securities as collateral was made, (subject to certain credits,) was transferred, with the collaterals, to the plaintiffs; but the sum of $30,000 of the original indebtedness (credited thereon as hereafter shown) was retained and is still held by the Farley National Bank, while all the securities were transferred to the plaintiffs, to collect, and apply to the payment of the whole indebtedness, including that portion retained by the Farley National Bank, as shown by the transfer by said bank to the plaintiffs. The written transfer, attached as a part of the finding, recited that suit has been brought by the bank against the Alabama Terminal & Improvement Company upon said notes and other evidences of debt, which suit is now pending; and, since said suit has been brought, the said company has paid the bank $10,000 in cash, and has executed its three bills for the sum of $10,000 each, bearing date _____ February, 1892, and payable 60 days, 90 days, and 4 months after date, respectively, which sum, amounting to $40,000, together with $3,700.14, to which the company was entitled as a credit, being applied as credits to the ascertained balance due by said company to the bank, viz. $151,008.99, left a balance of $107,308.85 due by said company to the bank, which balance, together with all of said notes and securities, the board of directors of the bank transferred, assigned, and set over to the plaintiffs, as trustees, for the purposes specified in the resolutions of transfer, and authorized and empowered Henry D. Herron, for and in the name of the bank, to execute a written instrument, necessary and proper, for the purpose of transferring the said indebtedness and the said collaterals to secure the same to the plaintiffs, which he did. The amount of the indebtedness did not include the...