Hagood v. Smith
| Decision Date | 30 June 1909 |
| Citation | 50 So. 374,162 Ala. 512 |
| Parties | HAGOOD v. SMITH ET AL. |
| Court | Alabama Supreme Court |
Appeal from Chancery Court, Jefferson County; Alfred H. Benners Chancellor.
Suit by Rufus H. Hagood against Thomas S. Smith and another. From a decree dismissing the bill, plaintiff appeals. Affirmed.
W. C Ward, for appellant.
Frank S. White & Sons, Tillman, Grubb, Bradley & Morrow, and M. M Baldwin, for appellees.
This was a bill filed by Rufus H. Hagood, as the owner of stock in a private corporation, against the corporation and Thomas S Smith, who is alleged to be the secretary and treasurer of the corporation, to compel an accounting by Smith of certain moneys alleged to have been received by him from the sale of certain lands owned by the corporation, and which the corporation authorized him to sell. Upon the final submission of the cause on bill and answer, motion to dismiss the bill for the want of equity was made, and upon the proof the chancellor decreed that the complainant was not entitled to relief, and dismissed the bill.
Ordinarily actions must be brought in the name of the corporation for the redress of wrongs committed against it, or for money due to it by its officers or by other persons; or, to put the proposition differently, before a stockholder can maintain a suit in his own name against the corporation of which he is a member and an officer of such corporation for money belonging to the corporation and which has been converted to the officer's use, he must show that he has done all in his power to obtain, within the corporation itself, redress of the wrongs complained of, that he has made an honest effort to get the governing body of the corporation to remedy the wrong, and, failing with them, that he then applied to the stockholders as a body to take action towards redressing the grievances complained of, without avail. Montgomery, etc., Co. v. Lahey, 121 Ala. 131, 25 So. 1006; Montgomery Traction Co. v. Harmon, 140 Ala. 505, 37 So. 371; Tillis v. Brown, 154 Ala. 403, 45 So. 589, and cases there cited.
The bill explicitly avers an application by the complainant to the directory of the corporation, and a refusal by that board to act, and it may be conceded that the proof supports these allegations. The bill then undertakes to aver an excuse for not applying to the stockholders; but the court is of the opinion that the averments in this respect would be subject to the...
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