Ingram v. Omelet Shoppe, Inc.

• Decision Date: 12 September 1980
• Citation: 388 So.2d 190
• Parties: 30 UCC Rep.Serv. 680 William R. INGRAM v. OMELET SHOPPE, INC. William R. INGRAM v. R. Merritt ROGERS et al. William R. INGRAM v. R. Merritt ROGERS, Omelet Shoppe, Inc., an Alabama Corp., Ben C. Power and Russell H. Stanley. 79-237, 79-307, 79-442.
• Court: Alabama Supreme Court

Page 190

388 So.2d 190

30 UCC Rep.Serv. 680

William R. INGRAM v. OMELET SHOPPE, INC.

William R. INGRAM v. R. Merritt ROGERS et al.

William R. INGRAM v. R. Merritt ROGERS, Omelet Shoppe, Inc., an Alabama Corp., Ben C. Power and Russell H. Stanley.

79-237, 79-307, 79-442.

Supreme Court of Alabama.

Sept. 12, 1980.

Erle Pettus, Jr. of Rives, Peterson, Pettus, Conway, Elliott & Small, Birmingham, and Julian D. Butler of Butler & Potter, Huntsville, for appellant.

Thomas C. Najjar, Jr. of Najjar & Najjar, Birmingham, for appellee Omelet Shoppe, Inc.

J. Vernon Patrick, Jr. and Gary S. Marx of Berkowitz, Lefkovits & Patrick, Birmingham, for appellee R. Merritt Rogers.

Charles E. Clark of Carlton, Boles, Clark, Stichweh & Caddis, Birmingham, for appellee Russell Stanley.

B. G. Minisman of Fulford, Pope & Minisman, Birmingham, for appellee Ben C. Power.

PER CURIAM.

Appellant appeals from three final orders of a consolidated action in Jefferson County Circuit Court. The orders (1) approved a resolution providing for a combined issue of Omelet Shoppe, Inc. (OSI), debt obligations and stock; (2) adjudged plaintiff-appellee Rogers to be the owner of certain stock which appellant-defendant Ingram orally agreed to sell him and enjoined Ingram from interfering in any way with co-defendant OSI's business; and (3) ordered Ingram to pay OSI a money judgment pursuant to an accounting cross-claim filed by OSI against Ingram and to pay compensation to a court-appointed special master. We affirm.

The struggle for control of OSI began at a meeting on July 31, 1979, when plaintiff-appellee Rogers and one Ben Power voted to remove their co-director, defendant-appellant Ingram, as president of OSI. Rogers and Power then elected Rogers as president. Ingram, the majority stockholder of record at the time, notified Rogers of his intention to call a stockholder's meeting of OSI for August 10, 1979. Ingram owned enough stock to elect his own slate of directors and then to reelect himself as president. On August 6, 1979, Rogers individually filed the present action in the Circuit Court of Jefferson County.

Primarily, Rogers's complaint alleged that Ingram used false representations concerning the financial statement of OSI to induce Rogers to make loans to the corporation and to become a guarantor of indebtedness of the corporation. Rogers alleged that the corporation is now on the verge of bankruptcy due to Ingram's mismanagement and waste. Furthermore, Rogers complained that Ingram induced him to make, out of his personal funds, an unsecured loan of $300,000 to OSI in consideration of Ingram's oral promise to deliver to Rogers an additional ten per cent stock interest in OSI out of Ingram's own holdings of that stock.

Rogers sought a temporary restraining order and permanent injunction to enjoin Ingram from interfering with OSI's business affairs, causing the August 10, 1979, stockholders meeting to be held, voting or disposing of the ten per cent interest allegedly sold to Rogers, and acting as an OSI director. Rogers also sought specific performance of the oral contract between himself and Ingram. Rogers named OSI as a defendant in his complaint and asked for judicial authorization to make loans to OSI. The trial court issued the temporary restraining order on August 6, 1979, and authorized OSI to borrow money from Rogers.

On September 27, 1979, upon motion of OSI, the trial court entered a final order approving a resolution passed by the OSI board authorizing an issue of its debt obligations and stock to raise money for payment of the debt owed to particular investors, to pay off some of the money owed to Rogers, and to provide working capital.

After a trial on the merits from October 8-11, the trial court on November 1, 1979, entered an order and decree adjudging Rogers to be the owner of the disputed ten per cent stock interest and permanently enjoining Ingram from interfering with OSI's business.

On that same day, OSI amended its answer to cross-claim for an accounting and for the same type of injunctive relief against Ingram that Rogers sought. The trial court entered a money judgment on the accounting claim against Ingram based on a special master's report.

I. VENUE

The initial issue on this appeal is Ingram's defense of improper venue. We hold that Jefferson County was the proper place of venue as to Ingram and OSI.

Rule 82, ARCP, provides in part:

(b) Venue of Actions. Venue of actions shall not be affected by these rules except as the statute for venue for actions against individuals at law (Tit. 7, § 54) and the statute for venue for actions against individuals in equity (Tit. 7, § 294) are inconsistent. Such inconsistencies are resolved as follows:

(1) Against Resident Individuals. Actions against an individual or individuals having a permanent residence in this state :

(A) Must be brought in the county where the defendant or any material defendant resides at the commencement of the action, except that if the action is a personal action other than an action on a contract, it may be brought either in the county where the act or omission complained of occurred, or in the county of the permanent residence of the defendant or one of them; . . . (Emphasis added.)

The record discloses that Ingram, the individual defendant, resided in Shelby County at the commencement of this action.

Rule 82(b) applies only to individuals, not to corporations or other entities.

Code of Ala. 1975, § 6-3-7, the corporation venue statute, provides:

A foreign corporation may be sued in any county in which it does business by agent, and a domestic corporation may be sued in any county in which it does business by agent or was doing business by agent at the time the cause of action arose ; provided, that all actions against a domestic corporation for personal injuries must be commenced in the county where the injury occurred or in the county where the plaintiff resides if such corporation does business by agent in the county of the plaintiff's residence. (Emphasis added.)

The record reveals that OSI, the corporate defendant, was doing business in Jefferson County at the commencement of this action.

Venue, as distinguished from jurisdiction, is a legislative determination based upon the presumed convenience of the parties. See Boswell v. Citronelle-Mobile Gathering, Inc., 292 Ala. 344, 294 So.2d 428 (1974). "The burden of proving that venue is improper in a county in which suit is filed is upon the party making such claim." Medical Service Administration v. Dickerson, 362 So.2d 906, 909 (Ala.1978). Plaintiff Rogers filed the present action in Jefferson County, the principal place of business of OSI. Substantially all the facts involved in this litigation occurred in Jefferson County. Defendant Ingram argues that venue was proper only in Shelby County. We cannot agree.

Appellee Rogers contends, and we agree, that by looking solely at Ingram as a defendant, Jefferson County is the proper place of venue since the acts complained of against Ingram occurred therein. Rogers bases his contention on that part of Rule 82(b)(1)(A), ARCP, which provides "if the action is a personal action other than an action on a contract, it may be brought . . . in the county where the act or omission complained of occurred, . . ." (Emphasis added.)

Despite being founded in equity, Rogers's prayer for injunctive relief and specific performance in this case is nonetheless "personal." A "personal action" is an action in personam. It seeks to enforce an obligation imposed on the defendant by his contract or delict; that is, it is the contention that he is bound to transfer some dominion or to perform some service or to repair some loss. Black's Law Dictionary 50 (4th ed. Rev. 1968). That equity acts "in personam" is a basic axiom of our jurisprudence. Lyle v. Haskins, 24 Wash.2d 883, 168 P.2d 797. Once venue is properly established against Ingram in Jefferson County, the same is likewise accomplished against OSI under 82(c), ARCP. That section reads in part: "Where several claims or parties have been joined, the suit may be brought in any county in which any one of the claims could properly have been brought. . . ."

II. THE TRIAL COURT'S T.R.O.

Appellant alleges that in the absence of OSI as an indispensable party plaintiff, the temporary restraining order issued against Ingram on August 6, 1979, was an abuse of discretion which was further compounded by the trial court's refusal to dissolve said order. This contention is without merit.

The granting of a temporary injunction rests largely in the discretion of the trial court. Southern Rock Products Co. v. Self, 279 Ala. 488, 187 So.2d 244 (1966). The trial court's latitude in this area is considerable. Drake Associates, Inc. v. Letson, 277 Ala. 512, 172 So.2d 536 (1965). At the time the temporary restraining order was issued, OSI was on the verge of bankruptcy. (R. at pp. 1639-1943).

Plaintiff Rogers was president, a creditor and a guarantor of OSI. Defendant Ingram conceded in his appellate brief that plaintiff Rogers had standing to request that defendant OSI be placed in receivership.

The decision to appoint a receiver or take some less drastic action is within the sound discretion of the trial court. See, e. g., Hunter v. Parkman, 250 Ala. 312, 34 So.2d 221 (1948). As recognized by this Court in Hunter, the decision to order a receiver must be "based upon the fact that there is no other adequate remedy or means of accomplishing the desired objects of the judicial proceeding." 34 So.2d at 224, quoting Warren & Co. v. Pitts, 114 Ala. 65, 68, 21 So. 494 (1897).

In the present action, there was another adequate remedy available, the issuing of the temporary restraining order. Such action was a less drastic remedy, concomitant with the equity court's power to order the more drastic remedy of receivership. Accordingly, the trial court had the power to issue the T.R.O. See Cherry Investment Corp. v....