Dimmick v. Stokes

• Decision Date: 05 February 1907
• Parties: DIMMICK ET AL. v. STOKES.
• Court: Alabama Supreme Court

43 So. 854

151 Ala. 150

DIMMICK ET AL. v. STOKES.

Supreme Court of Alabama

February 5, 1907

Rehearing Denied May 14, 1907.

Appeal from Chancery Court, Montgomery County; W. L. Parks Chancellor.

Suit by M. C. Stokes against J. W. Dimmick and others. From a judgment in favor of plaintiff, defendants appeal. Reversed and rendered.

This is a bill exhibited by Matthew C. Stokes against Albert F Wilson, J. W. Dimmick, and J. P. Dimmick, seeking an injunction to restrain Albert F. Wilson from acting as president of the Alabama Central Railroad, or as director, or in any way interfering with the corporation or its affairs. It also prays that the three above-named defendants be enjoined and restrained from holding a meeting of the stockholders of said corporation under the call made by said Wilson, and that they be restrained and enjoined from interfering with orator in the discharge of his duties as general manager of the corporation under any claim that orator has been removed from office by virtue of any proceeding heretofore had or that may be hereafter had by the board of directors; that the court will declare that the election of Wilson as director and president of the corporation was illegal, and that he derived no powers therefrom; that the court will further decree that the attempted removal of orator by or under authority of said board of directors was invalid; that the corporation be reorganized, and the attempted action of the board of directors in respect to the election of Wilson be rescinded. The facts made by the bill are, briefly, that orator had a contract with Smith, by which Smith agreed to sell orator certain timber for a consideration recited in the contract giving orator 21 years in which to cut said timber, upon condition that he should build and have in operation within 2 years from the date of the contract a railroad extending from Booth, a station on the Mobile & Ohio Railroad for a distance of about five miles, to the plantation of Smith. Orator had the Alabama Central Railway Company incorporated with a view of constructing said road, and acquired other timber tracts adjacent to the Smith property. Orator associated Charles H Scott and Gaston Scott with him, and they began the construction of the road; but afterwards orator bought the shares of said stock for the sum of $18,699.61, for which J W. Dimmick advanced him the money, for which orator transferred to Dimmick 166 2/3 shares, as provided for in the agreement made an exhibit to the bill. It alleges a contract with the Mobile & Ohio Railroad, with a lease of some secondhand rails, with a right to purchase, which rails were furnished under agreement, and that Dimmick advanced from time to time funds to the construction of said railroad in the amount of $35,000 or $40,000; also alleged a contract with the Mobile & Ohio for the lease of an engine and passenger coach at a rental of $7 per day. The bill also sets up the charter of the Alabama Central, in which it is provided that there should be three directors chosen annually by the stockholders. It avers orator's election as general manager. It also avers the election of Dimmick as president, and J. P. Dimmick as treasurer and vice president. It alleges, also, the resignation of Dimmick and the election of Albert Wilson in his stead, but alleges that said Wilson was ineligible to the office on account of not being a stockholder and director in said company at the time of his election. The part of the agreement relative to the general manager, and which is made the basis for a specific performance, is in these words: "It is further agreed between the parties hereto that the party of the first part is to be the general manager of the said Alabama Central Railway, subject to the approval of the stockholders." This contract was signed: "M. C. Stokes. J. W Dimmick." Motion was made to dismiss the bill for want of equity, and demurrers were interposed thereto raising the want of mutuality in the contract sought to be enforced, and motion was made to dissolve the...