Crow v. Florence Ice & Coal Co.

• Decision Date: 18 May 1905
• Citation: 143 Ala. 541,39 So. 401
• Parties: CROW v. FLORENCE ICE & COAL CO. ET AL.
• Court: Alabama Supreme Court

39 So. 401

143 Ala. 541

CROW v. FLORENCE ICE & COAL CO. ET AL.

Supreme Court of Alabama

May 18, 1905

Appeal from Chancery Court, Lauderdale County; W. H. Simpson Chancellor.

"To be officially reported."

Suit by Thomas W. Crow against the Florence Ice & Coal Company and others. From a decree sustaining a demurrer to the bill complainant appeals. Affirmed.

Emmet O'Neal, for appellant.

Paul Hodges and John T. Ashcraft, for appellees.

DENSON J.

The bill in this case was filed by Thomas W. Crow in his individual capacity as a stockholder in the Florence Ice &amp Coal Company, a corporation, against the said corporation Henry J. Moore, Walter D. Moore, John T. Ashcraft, F. E. Wright, Emmet O'Neal, and James M. Crow. One of the purposes of the bill is to have the court declare the issuance of 40 shares of stock in said corporation to F. E. Wright on the 9th day of January, 1903, fictitious and void, and that the certificate of said stock be surrendered and canceled. Another purpose is to have the election of Henry J. Moore, Walter D. Moore, and Thomas W. Crow (complainant) as directors of said corporation at a stockholders' meeting presided over by Walter D. Moore on the night of the 4th of November, 1903, declared illegal and void, and to have the election of Henry J. Moore as president and Walter D. Moore as secretary and treasurer of said corporation, by Henry J. Moore and Walter D. Moore, claiming to be directors, declared illegal and void, and to have the court decree that complainant, Emmet O'Neal, and James M. Crow are the directors of said corporation, and that complainant is the president and James M. Crow is the secretary and treasurer of said corporation. All the respondents except Emmet O'Neal and James M. Crow joined in a demurrer to the bill, assigning 20 grounds or causes of demurrer. The chancellor sustained the demurrer upon all the grounds except the fourteenth, fifteenth, seventeenth, eighteenth, nineteenth, and twentieth. The appeal was taken from the decree by the complainant, and he has assigned as error the decree sustaining the grounds of demurrer as above indicated.

It has been frequently held by this court that "a court of equity will not primarily take jurisdiction to determine the legality of an election of directors of a corporation, or to remove a director who is in possession of the office. The court will inquire into the regularity of the election, or the right of the person to the office, only when the question arises incidently and collaterally in a suit of which the court has rightful jurisdiction and the grant of relief depends upon its decision." Nathan v. Tompkins, 82 Ala. 437, 2 So. 747; Moses v. Thompkins, 84 Ala. 613, 4 So. 763; Perry v. Tuskaloosa Cotton Oil Mill Co., 93 Ala. 364, 9 So. 217; Elliott v. Sibley, 101 Ala. 344, 13 So. 500. In the last case cited, this principle was based, not so much upon the doctrine of multifariousness, as upon a want of equity in the bill in this respect.

Equity jurisdiction to declare the issuance of fictitious stock in a corporation void, and to have the certificates representing such stock canceled, cannot be questioned. The question to be determined, then, is whether or not the relief prayed for with respect to having the issuance of the stock declared fictitious and void depends upon a decision of the regularity vel non of the election of the directors and officers of the corporation. It is shown by the averments in the bill that the alleged fictitious stock was issued and signed by the legal officers of the corporation on the 9th day of January 1903, and that the election of the board of directors whose title to the office is attacked was held on the night of the 4th of November, 1903. Under this state of the case we fail to discover that the validity of the issuance of the stock could in any wise depend upon the legality or regularity of the election of the directors and officers of the corporation at an election held nearly nine months after the issuance of the stock. It may be that a decree by the court declaring that the issuance of the stock was fictitious and void would affect the validity of the election of the directors in such way as to put a proper person in position to institute proper proceedings to have the question judicially determined. But this, even if it could have been held to have arisen incidentally, could not of itself impart to the chancery court jurisdiction to determine the question, in the absence of the further condition that the relief prayed for in respect to having the issuance of the stock declared fictitious and void depended upon a decision of the validity vel non of the election of the directors. In this view of the case the bill was without equity, and the seventh, eighth, eleventh, and sixteenth grounds of demurrer, which...