Boozer v. Blake

• Citation: 245 Ala. 389,17 So.2d 152
• Decision Date: 24 February 1944
• Docket Number: 8 Div. 258.
• Parties: BOOZER et al. v. BLAKE et al.
• Court: Supreme Court of Alabama

17 So.2d 152

245 Ala. 389

BOOZER et al. v. BLAKE et al.

8 Div. 258.

Supreme Court of Alabama

February 24, 1944

Rehearing Denied March 23, 1944.

Appeal from Circuit Court, Colbert County; Chas. P. Almon Judge.

Carmichael & Polk, of Sheffield, for appellants.

Andrews & Almon, of Sheffield, for appellees.

FOSTER Justice.

The demurrer on this appeal presents the question of the sufficiency of a bill in equity, and the petition for mandamus presents the ruling of the court on a motion to strike parts of it for impertinence.

We will first consider the demurrer to the bill as last amended which was sustained by the court and the bill dismissed.

Briefly the bill is for the specific performance of a contract for the sale of all the capital stock in an Alabama corporation, known as Muscle Shoals White Lime Company, owned by the respondents Mrs. Emma B. Yourtree, J.H. Werner and W.C. Roberts, who are alleged to be closely related and are the stockholders of the Yourtree-Roberts Sand Company, an Illinois corporation, all of whom are made parties to the bill, but who have not appeared or made defense against it.

The contract is alleged to have been made on February 21, 1941, and it is set out in extenso in the bill. It is further alleged that later (June 28, 1941) a supplemental agreement was made changing some details in respect to the payment of the consideration. Neither contract specifies the date on which the sale is to be consummated. It stipulates the price at a sum in cash and deferred payments evidenced by notes, with certain payments starting February 10, 1942, pursuant to the modified contract. It alleges that the corporation owned a lime plant, machinery and equipment, office furniture and large real estate holdings described in full. That on August 25, 1941, the corporation by its president executed a deed of all of its assets to respondents Blake and Sockwell. They are alleged to have had actual knowledge, as well as constructive notice of complainant's purchase agreement. On July 18, 1941, that complainants notified Yourtree and Roberts Sand Company that they expected said company to deliver the stock of the lime company immediately upon securing a loan from R.F.C. That Blake and Sockwell to hinder complainants from getting the money from the R.F.C. on September 13, 1941, notified it that they had bought all the physical properties of the lime company. But that on September 21, 1941, complainants notified respondents of their readiness to execute the notes and pay the balance of the purchase price, upon delivery of stock to a certain bank with title to the physical property free from liens and approved by the R.F.C., as vested in said corporators.

And that in a further effort to pay the balance, they executed the notes and deposited the same and the cash as the contract provided, in another bank, the date not given, to be delivered to respondents upon delivery to the bank of the capital stock of the lime company with a showing that its assets were free from encumbrances as agreed upon, and so notified respondents by U.S. mail, postage prepaid.

It sought in addition to specific performance, offering to do equity, to have the deed to Blake and Sockwell declared void and of no effect, and for general relief.

The bill as amended in several features alleges that complainants offer to do equity and are ready, willing and able to comply with their part of the contract.

The respondents Blake and Sockwell demurred to the bill, and made separate motions to strike certain parts as impertinent. The court sustained both the motion and demurrer, and dismissed the bill. The appeal is from the ruling on demurrer, and the petition for mandamus relates to the ruling on the motion as we have before stated.

The demurrer to the bill as a whole is in substance that there is no equity, and that it does not appear that complainants offered to perform in a reasonable time. They also demur to that aspect of the bill which seeks to have the deed to them vacated on the ground of no equity; a plain and adequate remedy at law; that complainants were not owners of the stock when these respondents purchased the property; and have no right to question the deed; that the contract did not restrict a sale of the physical assets of the lime company; that complainants did not offer to comply in a reasonable time; that the bill does not show that the stockholders did not authorize the sale of the assets; or that complainants ever had any right to vote the stock.

Blake and Sockwell may, as well as the respondents who agreed to sell to complainants, question by demurrer the sufficiency of the bill in so far as it seeks specific performance. They are substituted for them, and in a sense stand in their shoes. If no such equity is shown, that status enures to the benefit of Blake and Sockwell.

A bill for specific performance of a contract to sell shares of stock in a corporation invokes the equity powers of the court and is not without equity. 17 Ala.Dig., Specific Performance, p. 585, k70; General Securities Corp. v. Welton, 223 Ala. 299, 135 So. 329; Henry L. Doherty & Co. v. Rice, 5 Cir., 186 F. 204, by Jones, Federal Dist. Judge.

The argument is made that the court in granting specific performance does not ordinarily supervise a performance which requires installment payments, and will often deny relief when it cannot dispose of the matter in controversy "by a decree capable of present performance." This is an equitable principle which has to be considered in granting relief. The court may as a condition to relief finally dispose of the matter by requiring such terms as need no supervision extending if need be to a cash payment in full. Henderson v. Coon, 244 Ala. 324, 13 So.2d 564 (1 and 2). But often the purchaser is entitled to specific performance pursuant to his contract to pay a sum in cash and the execution of his note for the balance. Cay v. Ferrell, 239 Ala. 297(6), 195 So. 224; Matthews v. Bartee, 209 Ala. 25, 95 So. 289.

The bill here offers to do equity, and alleges a willingness and ability to pay the balance of the purchase money. The offers to comply prior to the filing of the bill were not necessary to give it equity, and their failure to specify a compliance in exact terms as the contract provided do not justify a decree sustaining a demurrer. Ashurst v. Peck, 101 Ala. 499(5), 14 So. 541; Mitchell v. Walker, 235 Ala. 458, 179 So. 633; Asbury v. Cochran, 243 Ala. 281, 9 So.2d 887.

It is also noted as appellee argues that the appellants did not sign the contract set out. The bill alleges that complainants purchased the property, which could be sustained by a verbal acceptance. It was not required to be in writing. The terms of the writing describe a purchase, not an option to purchase.

It is therefore apparent that the bill is not subject to demurrer for want of equity. Was his right lost by delay?

When time of performance is not an essence of the contract, especially when no time is specified, the seller cannot in general deny specific performance of a contract to sell, for delay by the purchaser in offering to perform, until he shall have called on the purchaser to perform and a reasonable time thereafter elapses and the purchaser has failed to do so after such notice and demand. Bay Minette Land Co. v. Stapleton, 224 Ala. 175(3), 139 So. 342; Dominey v. Johnson-Brown Co., 219 Ala. 666, 123 So. 52(2); McFadden v. Henderson, 128 Ala. 221, 29 So. 640, and cases cited in them.

We need not now consider laches or staleness of demand as affecting that situation.

If there has been a rescission on the basis of the foregoing principle, it is defensive and need not be denied in the bill.

The execution of the contract to sell vested in the purchaser an equitable interest in and to the stock, subject to its performance, as stipulated. Bay Minette Land Co. v. Stapleton, 224 Ala. 175, 139 So. 342; 19 Ala.Dig., Vendor and Purchaser, p. 181 k54; Henry L. Doherty & Co. v. Rice, supra (9).

A private corporation may not sell all of its property except as it may be ratified by a vote of the holders of four-fifths in value of the capital stock of such corporation at a stockholders' meeting called to consider the matter. Title 10, section 91, Code of 1940, section 7036, Code of 1923.

It follows that the sellers of the stock who thereby assumed the status of trustees for complainants of it had no right to vote that stock so as to impair its value and destroy its business by a sale of all the assets of the corporation under the statute, supra, to one who had notice of complainants' equity. Compare Henry L. Doherty & Co. v. Rice, supra.

So that indulging the presumption against complainants that the sale was ratified by the stockholders as they appeared on...