Hillcrest Land Co. v. Foshee

• Decision Date: 07 November 1914
• Docket Number: 107
• Citation: 66 So. 478,189 Ala. 217
• Parties: HILLCREST LAND CO. v. FOSHEE.
• Court: Alabama Supreme Court

66 So. 478

189 Ala. 217

HILLCREST LAND CO. v. FOSHEE.

No. 107

Supreme Court of Alabama

November 7, 1914

Appeal from City Court of Montgomery; Gaston Gunter, Judge.

Bill by Ella Downing Foshee against the Hillcrest Land Company. Decree for complainant, and defendant appeals. Affirmed.

Rushton Williams & Crenshaw, of Montgomery, for appellant.

Steiner Crum & Weil and Charles L. Harold, all of Montgomery, for appellee.

PER CURIAM.

Appellee filed this bill to foreclose a mortgage executed by appellant company to secure a loan of money. Appellant defended on two propositions:

1. That its mortgage deed was void for the reason that in its execution there had been a failure to comply with that part of section 3481 of the Code which provides that the real property of a corporation shall not be mortgaged except by the consent of the persons holding the larger amount in value of the capital stock of the corporation present and voting in person or by proxy at a meeting of the stockholders called for that purpose, or at a regular meeting. This provision of the statute and other similar constitutional and statutory prescriptions are made for the benefit of shareholders, and may be waived by them and so all reason for requiring compliance with them removed. Nelson v. Hubbard, 96 Ala. 238, 11 So. 428, 17 L.R.A. 375; West Point Mining & Manufacturing Co. v Allen, 143 Ala. 547, 39 So. 351, 111 Am.St.Rep. 60, 5 Ann.Cas. 532. In Southern Bldg. & Loan Assoc. v. Casa Grande Stable Co., 119 Ala. 175, 24 So. 886; Id., 128 Ala. 624, 29 So. 654, upon which appellant seems to lay stress, no waiver was shown. Here the record shows the authorization by all the stockholders, though irregularly expressed, of a mortgage on all the real property of appellant corporation. The point that the mortgage at issue covered a part only of appellant's property, instead of the whole, is too narrow to afford the court anything like a satisfactory instance from which to knock down appellee's security.

2. That the mortgage was ultra vires the corporation in that the loan secured by it was negotiated for the benefit of Curry, a third person, or perhaps Lasseter, one of the stockholders. Strictly speaking, a corporate act is said to be ultra vires when it is not within the scope of the power of the corporation to perform it under any circumstances or for any purpose. Buck Creek Lumber Co. v. Nelson, 66 So 476. Appellant corporation had...