Central Land Co. v. Sullivan
| Decision Date | 02 July 1907 |
| Citation | 44 So. 644,152 Ala. 360 |
| Parties | CENTRAL LAND CO. ET AL. v. SULLIVAN. |
| Court | Alabama Supreme Court |
Appeal from City Court of Birmingham; C. W. Ferguson, Judge.
Bill by C. B. Sullivan, trustee, against Central Land Company of Birmingham and others. From a decree overruling demurrers to the bill and a motion to dismiss, defendants appeal. Affirmed.
This bill is exhibited by C. B. Sullivan, as trustee under a deed of assignment made by M. Tabler, against the Central Land Company of Birmingham, a corporation, and the stockholders thereof. Tabler owned 12 shares of the stock of said corporation, which shares are conveyed in the deed of assignment made for the benefit of his creditors. The purpose of the bill is to have the property of the corporation sold and the proceeds distributed among the several owners of the stock of the concern. The corporation was organized on the 9th day of February, 1887, under the general laws of Alabama. Its general purpose and the nature of the business proposed was to buy, sell, and lease land; to improve such land as it might acquire by surveying and laying off the same into lots parks, alleys, and streets; to loan, invest, or reinvest any of its moneys or effects, etc. In short, it was to be, as its name imports, a land company, buying, selling, and improving real estate, and plotting it into ground lots. The bill shows that its capital stock was fixed at $240,000, all of which was subscribed for, and it is alleged that according to the report of the commissioners all of said stock was paid for in full by the subscribers and certificates of shares were issued to them in proportion to the amount subscribed. It further appears from the allegation of the bill that, after the payment into the treasury of the corporation of the subscription to the capital stock, the company purchased from one Harvey, one of the incorporators, for a recited consideration of $240,000, certain real estate in the extreme western limits of the city of Birmingham. It is alleged that the real consideration paid for said real estate was $80,000. It is also averred that Harvey purchased said real estate from the Birmingham Rolling Mills for $80,000; that in making said purchase he acted as the agent of the incorporators of the Central Land Company, and paid for the same with the money of the subscribers to the capital stock of the said corporation, and the conveyance of the real estate by Harvey to the corporation was made to pay the subscription to the capital stock; that said stock was issued by said corporation largely in excess of the value of said property; and that such excessive issue of stock was made without consideration and is void. It is then averred that said real estate is the only property ever acquired by the said Central Land Company that the land has on it a number of small tenement houses which for many years have been inhabited by negroes who work in the furnaces and mills near by; that the said corporation has never transacted any business, except to collect the rent from said tenement houses when the same were rented, to pay the taxes on the property, and keep the houses in partial repair. It is then expressly averred that for the past 15 years the corporation has ceased to carry on any business except as above stated, that the corporation has no officer or agent residing in the state of Alabama, and that for more than 5 years last past it has failed to hold a meeting of its stockholders and transact the business for which it was organized. It is then alleged that the corporation has ceased to be a going concern; that, while it owes no debts, the rents and income from its property are barely sufficient to pay the taxes on the same, the insurance on the houses, and the necessary repairs, and that this condition of the affairs of the corporation has existed for many years; that the stockholders have received no dividend of any importance except when, a few years ago, a number of the houses on the property were destroyed by fire, and the insurance on them was collected and distributed among the stockholders. It is averred that the property was purchased during a time when prices for real estate were inflated; that the shareholders in organizing the corporation and purchasing the real estate, had in mind a plan to sell the same at a great profit to themselves, but that the purpose failed entirely; that the boom during which the purchase was made collapsed, and the value of the land so decreased that they have never been worth to the incorporators the amount paid for them, and the great sum of money which they subscribed with which to purchase said land has for nearly 20 years yielded practically no income. It is further alleged that the stock has no market price, and that it cannot be disposed of at...
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