Preston Motors Corporation v. Griffin

• Decision Date: 28 October 1924
• Docket Number: 6 Div. 296.
• Citation: 20 Ala.App. 328,101 So. 782
• Parties: PRESTON MOTORS CORPORATION v. GRIFFIN.
• Court: Alabama Court of Appeals

101 So. 782

20 Ala.App. 328

PRESTON MOTORS CORPORATION v. GRIFFIN.

6 Div. 296.

Court of Appeals of Alabama

October 28, 1924

Appeal from Circuit Court, Jefferson County; Richard V. Evans Judge.

Action by R. J. Griffin against the Preston Motors Corporation. Judgment for plaintiff, and defendant appeals. Affirmed.

Plea in abatement of action for damages for breach of contract by foreign corporation to deliver stock therein, in exchange for plaintiff's stock in another corporation, held not to show lack of jurisdiction in state courts to determine question of ultra vires.

Count 1 of the complaint is as follows:

"Plaintiff claims of defendants the sum of $1,000 damages, for that heretofore, to wit, on October 21, 1919, the defendants entered into an agreement with the plaintiff by which they agreed to deliver to the plaintiff 62 shares of the common stock of the Preston Motors Corporation in exchange for 170 shares of common stock of the Preston Motor Car Company, which said 170 shares of said common stock the plaintiff delivered to the defendants, and although plaintiff has complied with all the provisions of said agreement on his part, the defendants have failed and refused to deliver to him the said 62 shares of the common stock of the Preston Motors Corporation, hence this suit."

The plea in abatement of defendant follows:

"Come the undersigned, Roscoe Chamblee and Weatherly & Birch, as attorneys for the defendants in the above-stated cause, and appear specially for the purpose of filing this plea in abatement to the jurisdiction of this court over said cause, and for no other purpose, and specially plead for each of said defendants, separately and severally, to the jurisdiction of this court over said cause, and say that the court has no jurisdiction over the cause or causes set forth, or attempted to be set forth, in said complaint and in each count thereof, separately and severally, because Preston Motors Corporation, named as a defendant, is a foreign corporation created by, and existing under and by virtue of, the authority and laws of the state of Delaware that said laws of the state of Delaware require that it maintain a principal office and place of business in said state, and that same is located at 3154 Du Pont Building, 7 West 10th street, Wilmington, Del., that Preston Motor Car Company, referred to and designated in said complaint, is also a foreign corporation chartered and organized under the laws of the state of Delaware, that the cause of action or controversy set out, or attempted to be set out, in the complaint and each count thereof is one involving the alleged rights, if any, of plaintiff under the alleged executory agreement referred to in the first count of the complaint, and a subsequent rescission of said executory agreement by the board of directors of Preston Motors Corporation in and by a resolution heretofore passed, which said executory agreement and resolution are hereinbelow particularly set out; that said agreement was in words and figures as follows, viz.:

"'Birmingham, Ala., Oct. 21, 1919. Received of Dr. R. J. Griffin of Moundsville, Ala. (170) one hundred and seventy shares of common stock of the Preston Motor Car Company, for which we agree to issue and deliver to him (62) sixty-two shares of the common stock of the Preston Motors Corporation.

"'[Signed] Preston Motors Corporation,

"'Preston Orr, Secty. & Treas.'

"And that said executory agreement was, and has been, rescinded by a resolution passed by the board of directors of said foreign corporation viz. Preston Motors Corporation, on to wit, May 19, 1920, at a meeting regularly held and duly constituted, which said resolution was in words and figures as follows, viz.:

"'Whereas, various executory agreements, either verbal or written, have heretofore been attempted to be made at various times in the name of Preston Motors Corporation, by its officers, directors or agents, without authority of law and without the consent of its stockholders, in each of which it was separately agreed with certain of the stockholders of Preston Motor Car Company in substance as follows: That Preston Motors Corporation would issue and deliver to each of them a certain amount of its common stock, which amount is below specified, and receive in payment therefor certificates of stock held by each of them in Preston Motor Car Company, said latter stock being valued on a basis of what it actually cost each of the holders thereof at the times of their originally buying the same and to be taken as payment of an amount of Preston Motors Corporation's stock equal to said actual cost as aforesaid; and

"'Whereas, said Preston Motor Car Company stock has already been delivered to the officers of Preston Motors Corporation and is now in the possession of such officers and said officers have already signed up some of its stock which was to be so exchanged therefor, but same are still in the Preston Motors Corporation's possession and have not been delivered; and

"'Whereas, at the times of making said executory agreements Preston Motor Car Company had gone out of business, its good will had been dissipated, and it had no assets except a factory site in East Birmingham, Ala., which was and is mortgaged for practically all that it is worth; and

"'Whereas, as authorized by section 14, of the General Corporation Laws of Delaware, it is the judgment of this board of directors that, at the times of attempting to make said executory agreements and also at the present time said Preston Motor Car Company stock was and is

...