Dixie Lumber Co. v. Hellams

• Decision Date: 13 February 1919
• Docket Number: 1 Div. 42
• Citation: 80 So. 872,202 Ala. 488
• Court: Alabama Supreme Court
• Parties: DIXIE LUMBER CO. et al. v. HELLAMS.

80 So. 872

202 Ala. 488

DIXIE LUMBER CO. et al. v. HELLAMS.

1 Div. 42

Supreme Court of Alabama

February 13, 1919

Appeal from Circuit Court, Mobile County; Claude A. Grayson, Judge.

Suit by Lidia E. Hellams against the Dixie Lumber Company and others. Judgment for plaintiff, and defendants appeal. Reversed and rendered.

D.B Cobbs, of Mobile, for appellants.

Jesse F. Hogan, of Mobile, for appellee.

GARDNER J.

This suit was brought by appellee, a minority stockholder in the Dixie Lumber Company--a domestic corporation--to dissolve said corporation and sequester and distribute its assets among its stockholders, and for the appointment of a receiver to this end. The corporation and all of its stockholders were made parties to the suit.

The ownership of stock in the corporation was one of the contested issues in the cause--to which much argument has been addressed. But the conclusion which we have here reached renders a consideration of that question unnecessary, as assuming (without deciding) that complainant is still the owner of 25 shares of said corporate stock, we are of the opinion that a case for dissolution has not been made out. We will therefore treat only briefly this latter question.

The corporation was organized in 1904, with an authorized capital stock of $15,000, divided into 150 shares of the par value of $100, and was authorized to begin its business upon the subscription of $7,500 of said capital stock. There were three incorporators, who paid in cash $1,500, and conveyed some real estate valued at $3,000, thus constituting the $7,500 payment for one-half of the authorized stock. The corporation was organized for the purpose, among other things, of manufacturing, buying and selling lumber, and its products, *** contracting and building houses, *** manufacturing and dealing in all kinds of building materials." A planing mill was erected in the city of Mobile, and business was begun with the above-stated sum as its capital.

The first two years of operation proved successful, resulting in a profit of about $8,000, and the directors authorized a stock dividend of $7,500, which was issued to the original incorporators, and they were receipted by the treasurer for the balance of their subscription. It is in this manner that the full capital stock was paid.

The ownership of this stock in the course of time passed from the hands of the original incorporators, and, in 1908, J.C Mackinnon purchased some of the stock and became a director, as well as secretary and treasurer of the corporation. Later 50 additional shares of stock were purchased by the wife of said Mackinnon, who now admittedly owns or controls two-thirds of the stock of the corporation. There had been regular meetings of the stockholders and directors of the corporation, and the business had been in constant operation until May 1, 1915, when the planing mill, including the office and machinery, were destroyed by fire. No dividends have been paid since the stock dividend of 1906. At the time of the fire, respondent J.C. Mackinnon had charge of the operation of the business, and continued to look after its affairs after the fire--collecting the insurance, having the lumber which remained upon the yards sold, and an employé living near the mill to keep a watch upon the same. The testimony of said Mackinnon discloses that at this time there was much depression in the lumber business in Mobile, such as not to justify the rebuilding of the plant at that time; that it was necessary to seek another market, which existed in the north and west; and that he had made arrangements with the Mobile bank (with which he had been doing business) to secure a large line of credit for a profitable business in handling lumber in carload lots, and to that end had established a branch office in Chicago, and was engaged in working up this business when, on July 15, 1915, this action to dissolve the company was brought, the effect of which made it impossible to obtain credit and practically suspended the business for the time being. It further appears that at the time of the filing of the bill all the debts of the corporation had been paid, and it had some cash on hand; its assets, including the real estate, being of the estimated value of from $6,000 to $8,000.

The complainant in support of her suit relies very largely upon the fact that for several years no dividend had been paid and that an examination of the books which were preserved from the fire, as made by expert accountants, disclosed that under the management of said Mackinnon the business has lost money, and therefore, as he...