Dobbs Truss Co. v. Sutherland, 6 Div. 60

• Decision Date: 24 January 1952
• Docket Number: 6 Div. 60
• Citation: 56 So.2d 638,256 Ala. 581
• Parties: DOBBS TRUSS CO., Inc. v. SUTHERLAND.
• Court: Alabama Supreme Court

Page 638

56 So.2d 638

256 Ala. 581

DOBBS TRUSS CO., Inc. v. SUTHERLAND.

6 Div. 60.

Supreme Court of Alabama.

Jan. 24, 1952.

Taylor, Higgins, Windham & Perdue and Wade H. Morton, all of Birmingham, for appellant.

Jos. S. Mead, Birmingham, for appellee.

LIVINGSTON, Chief Justice.

Roy E. Sutherland, complainant, filed his bill of complaint in the court below against several respondents. One of the respondents, Dobbs Truss Company, Inc., filed a separate demurrer and upon a decree overruling the demurrer appealed to this court.

The bill alleges in substance the following facts: Respondent Dobbs Truss Company, Inc., was incorporated in Alabama in 1937 and was engaged in the business of manufacturing and selling trusses and abdominal supports. O. C. Dobbs, Sr., was the owner of a majority of the shares of the stock of said company, and controlled the company through the election of the Board of Directors and through the Board of Directors the officers of the company.

In 1938 Dobbs conveyed to the company by proper instrument for a valuable consideration the patents covering the trusses manufactured and sold by the company.

Complainant entered into three separate written contracts with the company in 1946 and 1947, in which complainant was given the exclusive franchise for the sale of the company's product in Mexico, parts of South America, and northern California. In each contract the company stated that it was the sole owner of the patent of the product, the 'Dobbs Truss.'

The contracts were breached by respondent Dobbs Truss Company, Inc., after complainant had performed his part of the contract, and were repudiated by the company. The damages suffered by complainant were also set out in the bill.

On March 29, 1948, complainant instituted suit in the Circuit Court of Jefferson County, at law, for the breach of contracts, claiming damages totaling $300,000.

On July 30, 1948, respondent O. C. Dobbs, Sr., filed suit in the same court claiming $28,171.42 in royalties due him on the trusses sold by The Dobbs Truss Company, Inc. The royalties were claimed under the terms of a written contract between Dobbs and the company made April 30, 1940. It was alleged that this suit was filed for 'the purpose of hindering and delaying complainant in the execution of any judgment he might obtain against the said respondent Dobbs Truss Company, Inc., and that to this end the said O. C. Dobbs, Sr., did conspire and connive with respondents Homer C. Dobbs and J. W. Dobbs.' It is further alleged that the said suit had no basis in fact, and the bill further set out that the patents under which Dobbs claimed in the suit were transferred to the said company in 1938 in consideration of the issuance to the siad Dobbs of a number of shares in the said company. It was averred upon information and belief that there was no contract between Dobbs and the said company for the payment of any royalties, that there was no sum due Dobbs from said company, and that the suit 'was fictitious and for the sole purpose of hindering, delaying and defrauding the complainant in the enforcing of his just claims.'

The bill then averred that by reason of the fact that O. C. Dobbs, Sr., was the owner of the majority of the capital stock of the Dobbs Truss Company, Inc., and by reason of certain statements appearing in the three contracts executed by and between complainant and the Dobbs Truss Company, Inc., of which O. C. Dobbs, Sr., had knowledge, O. C. Dobbs, Sr., was estopped from now claiming that the Dobbs Truss Company, Inc., did not own the patents in question.

On November 1, 1948, the Dobbs Truss Company, Inc., allowed a default judgment to be taken against it 'for the purpose of removing and concealing the assets and property of the said Dobbs Truss Company, Inc., and to hinder, delay and defraud complainant of his lawful suits.'

In order to satisfy the judgment levies were made upon both real and personal property of the Dobbs Truss Company, Inc., by the Sheriff, and the property so levied upon was subsequently sold by the Sheriff at an execution sale, and was purchased by O. C. Dobbs, Sr., for the sum of $40.74, which was greatly disproportionate to its real value. The bill alleges that 'in effect the acquisition of said property by said O. C. Dobbs, Sr., was without consideration and that in fact the said Dobbs Truss Company, Inc., voluntarily transferred said above described property to its principal stockholder, O. C. Dobbs, Sr., through the subterfuge of a fictitious and collusive suit.'

The bill avers that the property of the Dobbs Truss Company, Inc., which was levied upon and sold by the Sheriff's sale, constituted all or substantially all of the assets of the Dobbs Truss Company, Inc. which were subject to levy and sale to satisfy any judgment which complainant might secure against the Dobbs Truss Company, Inc. After the levy and sale, it is averred that the Dobbs Truss Company, Inc., was insolvent, and that 'if any property or chose in action remain in said Dobbs Truss Company, Inc., it is not nearly sufficient to satisfy the said indebtedness of said corporation to complainant.'

On March 23, 1949, O. C. Dobbs, Sr., John D. Higgins and Waldrop Windham joined together as corporators and formed the O. C. Dobbs Truss Manufacturing Company, Inc., to conduct the...