Randle v. Walker

• Decision Date: 28 October 1919
• Docket Number: 6 Div. 519
• Parties: RANDLE v. WALKER.
• Court: Alabama Court of Appeals

84 So. 551

17 Ala.App. 211

RANDLE v. WALKER.

6 Div. 519

Court of Appeals of Alabama

October 28, 1919

Appeal from Circuit Court, Jefferson County; John C. Pugh, Judge.

Assumpsit by J.M. Walker against G.P. Randle. Judgment for plaintiff and defendant appeals. Reversed and rendered.

Beddow & Oberdorfer, of Birmingham, for appellant.

Stroling A. Wood, of Birmingham, for appellee.

BROWN P.J.

This is an action of assumpsit by the appellee against the appellant the complaint consisting of the common counts. The litigation arises out of a transaction in which the plaintiff sold to the defendant the Central Pharmacy, located at Wylam, Ala., and consisting of a stock of goods and fixtures, and a going business. The contract of sale was in writing and the stipulations thereof here pertinent are:

"All stock of goods of whatever kind and description now in the store where said business is located, together with the soda fountain, counters, shelving, furniture, and fixtures of whatever kind and description now in said store shall be invoiced and listed at the cost of same placed in store, and the total cost as evidenced by the said invoice price shall be the price the said J.M. Walker agrees to take and the said G.D. Randle agrees to give for said business.

"The said G.D. Randle has upon the signing of this agreement paid to J.M. Walker the sum of $100.00, the receipt of which is hereby acknowledged, to bind the trade, the same to be part payment on the purchase price of said business, provided the said G.D. Randle shall perform his part of this agreement. Should the said G.D. Randle fail or refuse to perform his part of this agreement, then the said sum of $100.00 shall be forfeited to J.M. Walker. Should J.M. Walker fail or refuse to perform his part of this agreement, then he shall return the said $100.00 to the said G.D. Randle.

"Payments to be made as follows: $400.00 paid in cash when deal is closed; $1,000.00 to be paid in capital stock of the Averyt Drug Company at par value; and balance of purchase price to be secured by bankable promissory notes and mortgage on certain fixtures now in said store, hereinafter to be agreed on.

"It is further agreed that there are certain outstanding accounts owing by J.M. Walker for stock, etc., now in said store which is to be paid by G.D. Randle as they come due and charged to J.M. Walker or deducted from the purchase price of said business, also one certain mortgage for about $456.16 due from J.M. Walker to J.W. Lockhart payable at ten dollars per month, which is to be paid off by G.D. Randle and charged against J.M. Walker as stated above relative to the outstanding accounts.

"It is further agreed that the parties hereto appoint such persons as they may agree on to take stock and value of same, and the prices thus fixed by the parties taking the invoice shall be the price the said J.M. Walker agrees to take and the said G.D. Randle agrees to pay."

The sale was consummated on May 14, 1914, and the possession of the property delivered to the purchaser, along with a bill of sale, which recites, among other things:

"Know all men by these presents that I, J.M. Walker, of Wylam, in said state and county, being the sole owner and proprietor of the Central Pharmacy, located at Wylam, for and in consideration of the sum of two thousand eight hundred and eighty-one ($2,881.00) dollars to me in hand paid as follows, viz.: Nine hundred and seventy-five ($975.00) dollars in cash, one thousand ($1,000.00) dollars in Averyt Drug Company, Inc., capital stock at par value, the assumption, by the purchaser hereinafter named of mortgage due by me to J.W. Lockhart for four hundred and fifty-six ($456.00) dollars, and outstanding accounts against the said Central Pharmacy estimated to be about four hundred and fifty ($450.00) dollars--do hereby grant, bargain, sell, convey, and deliver unto G.D. Randle all right, title, and interest in and to the following described personal property, viz.: The business known as the Central Pharmacy, now located at Wylam, in said state and county, together with all stock of drugs, cigars, tobacco, and merchandise of whatever kind or description now in said place of business, all counters, shelving, showcases, scales, cash registers, soda fountain, and furniture and fixtures of whatever kind or description now located in said place of business, the said stock of merchandise, furniture, and fixtures having been this date invoiced and listed by J.W. Lockhart and G.D. Randle, a copy of said invoice and lists being attached hereto and made a part hereof, to have and to hold forever."

It is conceded by the plaintiff that the defendant fully performed the contract with respect to the payment of the purchase money, except as to the stipulation as to the "one thousand ($1,000.00) dollars in Averyt Drug Co., Inc., capital stock at par value." As to this, it is condeded that the defendant delivered to the plaintiff, properly indorsed, "certificate 131," issued to the defendant for 10 shares of the preferred stock in the Averyt Drug Company, Inc., at par value of $100, reciting, among other things, that the defendant had paid therefor in cash the sum of $1,000. It is not disputed that this certificate, properly indorsed, was accepted by the plaintiff in performance of this provision of the contract, and was afterwards by him indorsed to his father, N.A. Walker, who surrendered it to the Averyt Drug Company, Inc., and in lieu thereof had other certificates issued to and in the name of said N.A.

Walker, that N.A. Walker, or the plaintiff, caused one of such certificates to be issued to one Flumer, and that 9 shares of the stock originally represented by the certificate delivered by the defendant to the plaintiff were transferred on the books of the corporation to N.A. Walker and the other to said Flumer. The certificate of stock issued by the drug company to N.A. Walker was held by him, or by the plaintiff through him, for 18 months or more without any suggestion that the consummation of the contract was not satisfactory, and during that time one or more dividends were paid by the corporation on the stock which was received and retained by the plaintiff. About this time some litigation between the Averyt Drug Company and one Heide arose, involving the validity of the stock issued by the Averyt Drug Company, and the plaintiff, assuming, or being advised, that the certificate of stock held by his father or by him was void, tendered said 9 shares to the defendant and demanded of him $1,000, the balance alleged to be due on the property sold by the plaintiff to the defendant. This demand was refused, and the plaintiff, on August 10, 1917, brought this action to recover said alleged balance.

The contention of the plaintiff here is that the certificate of stock purporting to represent 10 shares of the preferred stock in the Averyt Drug Company, Inc., represented nothing that the supposed issue of stock was fictitious and void because of a violation of the statute in its authorization and issuance. By this contention the plaintiff shoulders the burden of proving these facts. To this end he offered, without more, the following evidence: A certified copy of the declaration of incorporation of the Averyt Drug Company, Inc., and the certificates pertaining thereto, and two amendments to the declaration of incorporation, one increasing the amount of the authorized capital stock and the certificates relating thereto, and another changing the name of the corporation from the Averyt Drug Company, Inc., to the Capital Securities Company, and the certificates of stock issued to the defendant, the indorsements thereon, and those issued by the Averyt Drug Company, Inc., to N.A. Walker upon the surrender of said certificate numbered 131. This evidence establishes the following facts: That the Averyt Drug Company, Inc., was organized with an authorized capital stock of $2,000, divided into 20 shares of $100 each, 10 of which were designated as common stock and 10 preferred stock; that all of the common stock originally authorized was subscribed and paid for in cash, and that the declaration of incorporation, together with the certificates and proof required by the statute, was duly filed in the office of the judge of probate of Jefferson county and recorded therein on May 22, 1913; that...