Oden v. King

• Decision Date: 30 June 1927
• Docket Number: 6 Div. 910
• Citation: 113 So. 609,216 Ala. 504
• Parties: ODEN v. KING et al.
• Court: Alabama Supreme Court

113 So. 609

216 Ala. 504

ODEN v. KING et al.

6 Div. 910

Supreme Court of Alabama

June 30, 1927

Appeal from Circuit Court, Jefferson County; W.M. Walker, Judge.

Bill for injunction by D.A. Oden against Sibley P. King and others. From a decree sustaining a demurrer to the bill complainant appeals. Reversed and remanded.

Hugh A Locke and Earl McBee, both of Birmingham, for appellant.

William S. Pritchard and John D. Higgins, both of Birmingham, for appellees.

THOMAS J.

The bill was filed on April 22, 1926, by D.A. Oden against S.P King, Allen-Oden Ore Company, a corporation, and W.H. Osburn, its executive officer. Demurrer was sustained to the bill as amended. It sought injunction to prevent the transfer, on the books of the corporation, of certain shares of stock in the corporation to said King.

It is alleged of certificate No. 77 that complainant does not know how King obtained the possession thereof, as transferee has no right, title, or interest in the same; that complainant as the owner thereof has never received any consideration therefor, and King has made demand on said secretary for its transfer to him.

It is alleged of certificate No. 83 that it was transferred by complainant to King in consideration of a credit on an indebtedness indicated, which credit was never given, and therefore there was "a total failure of consideration of such transfer and delivery."

It is alleged of certificate No. 53 that King claims title of same by virtue of a foreclosure of a mortgage of date of December 23, 1920; "the mortgage alleged to have been foreclosed on the 2d day of April, 1923, and bought by F.C. Sherrod," who is alleged to be "the partner associate, agent, employee, or servant" of said King; that "the foreclosure deed made in keeping with said foreclosure does not set forth or convey said certificate No. 53" embraced therein with certain parcels of land; "that the foreclosure deed shows the foreclosure of said real estate; and that it brought the full amount of the said mortgage indebtedness, plus costs, plus attorney's fees"; and "therefore that the said indebtedness has been canceled and the said King is no further entitled to the possession of said certificate of stock No. 53."

The respective allegations as to stock certificates Nos. 65, 66, and 67 are that King claims, by virtue of the mortgage given by complainant of date of December 31, 1920, for an indebtedness of $4,250, secured by said certificates of stock, and upon certain real property specifically described; that said mortgage "was foreclosed on April 2, 1923, by foreclosure deed, recorded in volume 1195, p. 293, in the office of the probate judge of Jefferson county, Ala.," and appellant alleges that at said foreclosure the certificates of stock and the several tracts of land were sold together "and not in separate sale"; that the real property was of the reasonable value of over $12,000, far more than "enough to satisfy the total indebtedness"; that said "alleged foreclosure of the certificates of stock is therefore voidable" and complainant elects to "avoid the same," for the reason that the "indebtedness has been satisfied by the alleged foreclosure of the real property"; and that King "has no right, title, interest in or claim to the said certificates of stock Nos. 65, 66, and 67 aforesaid, while having an instrument in writing purporting to convey to him a legal title and right to have said stock entered on the books of the corporation in his name, in equity he has no interest in or claim to said certificates."

It is further averred that the total consideration for said mortgages, stripped of usury and overcharges, was, to wit, $4,000, and the total valuation of said property securing both mortgages (aside from the value of the shares of stock Nos. 53, 65, 66, and 67) was, to wit, $15,000, and that by said foreclosure and sale of the real property said King "could have been more than satisfied as to his total indebtedness"; that the attempted "foreclosure of the said certificates of stock is voidable as aforesaid"; and that complainant has the right to have said certificates redelivered to him by said King, or his agent or servants.

It is further alleged that demand is made by King for the transfer of said certificates of stock on the corporation books; that the corporation and its secretary be enjoined from making or entering the transfers, and the attempted foreclosure of the certificates be canceled and annulled, and that they be required to deliver said certificates of stock to complainants; and that certificates of stock Nos. 77 and 83 be required to be redelivered to complainant as owner, and the alleged transfer thereof be canceled and annulled.

The demurrer by respondent King was directed to the bill as amended, as follows:

"Now comes the respondent S.P. King in the above-styled cause, by his solicitors, and refiles to the complainant's bill of complaint as amended the demurrers heretofore filed by this respondent to complainant's original bill in this cause; and respondent assigns said demurrers, separately and severally, to each and every paragraph of said bill of complaint as amended, separately and severally."

When a bill contains several aspects, the proper method of testing the pleading as a whole, and the several aspects thereof, is to address the demurrers to the bill as a whole, or to the aspect of the bill as the demurrer is appropriate and is desired to be challenged in such manner. Thompson v. Brown, 200 Ala. 382, 384, 76 So. 298; Worthington v. Miller, 134 Ala. 420, 32 So. 748; Hudson v. Hudson, 204 Ala. 75, 85 So. 282; Bank v. Dunnavant, 204 Ala. 636, 639, 87 So. 105; City of Birmingham v. L. & N.R. Co. (Ala.Sup.) 112 So. 742.

It follows from these decisions that a demurrer addressed to the bill as a whole, and separately and severally to each and every paragraph of the bill of complaint as amended, has the effect of a demurrer to the bill as a whole. And where a demurrer going to the bill as a whole is sustained, and the bill is dismissed as to demurrants, and no reference to grounds going to parts of the bill, it will be presumed that the trial court did not pass upon the partial demurrer--that to the different aspects of the bill. Sandlin v. Anders, 210 Ala. 396, 98 So. 299. That is, if demurrer directed to the bill as a whole and not to its respective aspects, it is error to sustain the same where any one of the aspects presented by the bill is not subject thereto. Jasper Land Co. v. Manchester Sawmills, 209 Ala. 446, 96 So. 417; Robinson v. Griffin, 173 Ala. 372, 56 So. 124; George v. Cent. R. Co., 101 Ala. 607, 621, 14 So. 752.

The instant bill contains three aspects or phases thereof. They are (1) the delivery up and cancellation of any attempted transfer of certificates Nos. 77 and 83, and injunction against the transfer thereof on the books of respondent corporation to respondent King; (2) that pertaining to certificate No. 53 alleged to be wrongfully in King's possession under foreclosure of mortgage covering it, and real property, the latter bringing at foreclosure the amount of the debt and lawful charges; (3) this aspect has to do with the certificates of stock Nos. 65, 66, and 67, alleged to have come into King's possession by virtue of a mortgage that also conveyed real property, and that at foreclosure the real estate and the said certificates of stock were not exposed to separate sale; (4) that relief by injunction was against the threatened injury by transfer to King of said stock in the corporation, evidence by the certificates indicated as standing certificates on the books of the corporation in complainant's name.

It is established that one in whose name corporate stock is duly registered on the books of the corporation is entitled to the benefits and subject to liabilities as the owner--the stock book, being the evidence of the right or duty of ownership, is a prima facie right unless impeached for fraud. Walsh et al. v. State ex rel. Cook, 199 Ala. 123, 74 So. 45, 2 A.L.R. 551; Oden v. Vaughn, 204 Ala. 445, 85 So. 779; Davis v. Lime Cola Bottling Works, 18 Ala.App. 562, 93 So. 328. Where one in the wrongful possession of corporate stock under purported transfer is demanding of the corporation to complete the transfer under the law, it is such action that enters into and affects the rightful ownership of the stock. The subject-matter or status quo of the book ownership of such stock should be preserved by injunction until the respective or alleged rights of the contending parties can be finally adjudicated. The general authorities are collected on temporary injunction in Rice v. Davidson, 206 Ala. 226, 89 So. 600. "The writs of mandamus and injunction are somewhat correlative to each other" is the statement in Board v. McComb, 92 U.S. 531, 23 L.Ed. 623, 628. And the rights and necessities for corporate action under the law to preserve the true evidence of ownership by the stock book and the rights and duties to exercise the same were the subject of discussion in petition for mandamus in Walsh et al. v. State ex rel. Cook et al., 199 Ala. 123, 74 So. 45, 2 A.L.R. 551; and the necessity for resort to extraordinary remedies to prevent unwarranted or unlawful transfers of corporate stock and to preserve the status quo until final adjudication, in Oden v. Vaughn, 204 Ala. 445, 85 So. 779.

In Osborn v. Bank of United States, 9 Wheat. 738, 841, 842, 6 L.Ed. 204, 228, 229, Mr. Chief Justice Marshall said:

"Why would such person or company have been enjoined? To prevent a permanent injury from being done to the party entitled to the franchise or privilege; which injury, the appellants say, cannot be estimated in damages. It requires no argument to prove, that the injury is greater, if

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