Parrish v. Reese

• Decision Date: 18 January 1910
• Citation: 51 So. 824,165 Ala. 638
• Parties: PARRISH ET AL. v. REESE ET AL.
• Court: Alabama Supreme Court

51 So. 824

165 Ala. 638

PARRISH ET AL. v. REESE ET AL.

Supreme Court of Alabama

January 18, 1910

Appeal from City Court of Selma; J. W. Mabry, Judge.

Suit by J. E. Reese and others against A. G. Parrish and others. From a decree granting an injunction pendente lite, defendants appeal. Affirmed.

A. L McLeod, W. M. Vaughan, and E. C. Jones, for appellants.

W. F Hogue and W. T. Harris, for appellees.

McCLELLAN J.

By original bill, exhibited by Reese and others, as stockholders in the Minona Portland Cement Company, against that incorporation, Parrish, Armstrong, Kenan, and others, the dissolution of the incorporation was sought, and in connection with its dissolution and the disposition of its assets among those entitled thereto it was further sought that the "common stock," as distinguished from the "preferred stock," issued by the incorporation, be canceled, on the averred ground that its issue was fraudulent, in consequence of a fictitious and excessive valuation of lands conveyed to the company. The court, after amendment of the bill, sustained it, both against the objection of want of equity and against numerously grounded demurrer. From this decree an appeal was taken, in April 1909, to this court, where that cause now pends.

On June 29, 1909, the board of directors of the Minona Portland Cement Company recommended to the stockholders thereof a proposition for the merger of the Minona Portland Cement Company with the Alabama Portland Cement Company; the details of the merger including the taking over by the latter company of all the real properties of the former company, the increase of the capital stock of the Alabama Portland Cement Company, the delivery of first mortgage bonds to holders of "preferred stock" in the Minona Company, and the recognition of, and issuance of stock to, the holders of "common stock" in the Minona Company. Much of the proposal is, of course, unnecessary to be now stated. A meeting of the stockholders of the Minona Company was, after notice, held on August 4, 1909; but, because the requisite proportion of the stock in the company was not voted in favor of the merger, that meeting was treated as vain. Another meeting of the stockholders was called for September 15 1909. On the day previous to this meeting, in response to a petition of Reese and others, the city court issued an order restraining, pending hearing on the petition, further action on the part of the Minona Company, or its stockholders, looking to the effectuation of the merger proposed, and upon the hearing the city court granted the prayer of the petition and enjoined such action pendente lite. Summarily stated, the petition's basis is that the status quo should be maintained until adjudication of the matters averred in the original bill was finally had, and so, with the view to prevent embarrassment and hindrance in the orderly enforcement in that cause of the rights, if found to exist, asserted in the original bill, an embarrassment or hindrance necessarily resulting if the merger, and its consequences, of the Minona Company into the Alabama Company, a company not a party to the cause, was effected.

The court below, in dealing with this petition, accepted Coxe v. Huntsville Gaslight Co., 129 Ala. 496, 29 So. 867, as authority for the conclusion reached and action taken. In so doing no error was committed. It is not necessary to rehearse the ruling in Coxe v. Huntsville Gaslight Co., nor will it be proper, in this collateral proceeding, and with the main cause pending here, to enter upon a discussion of the facts of the original cause out of which the right to the injunction pendente lite arises. After full consideration of the averments of the pleadings in the original cause, and with them, the matters set forth in the petition in this proceeding, it will suffice to now announce that the status shown clearly justified...