Semple v. Glenn

• Decision Date: 21 May 1891
• Parties: SEMPLE v. GLENN.
• Court: Alabama Supreme Court

9 So. 265

91 Ala. 245

SEMPLE v. GLENN.

Supreme Court of Alabama

May 21, 1891

On rehearing. For former opinion, see 6 South. Rep. 46.

Troy, Tompkins & London and Pettus &amp Pettus, for appellant.

W S. Thorington, for appellee.

CLOPTON J.

In Glenn v. Semple, 80 Ala. 159, two propositions were declared: First, when the directors of a private corporation, having authority, neglect or refuse to call in unpaid subscriptions for stock, necessary to pay the claims of creditors, a court of equity will take jurisdiction and make the requisite calls; second, if, by the terms of subscription, the payments are to be made in installments as may be called by the company, the statute of limitations does not begin to run in favor of the subscriber until a call is made by the company, or by a court of competent jurisdiction. We are urged on the application for a rehearing to reconsider the question as to the time when the statute of limitations begins to run. It may be that the ends of justice and the wise policy of the statute would have been more effectually subserved had the rule been adhered to in these cases that, when a corporation abandons its charter, ceases to do business, and assigns all its effects, including the unpaid subscriptions for stock, to trustees for the benefit of creditors, so that calls cannot be made in the mode prescribed by the contract of subscription, the debt for the unpaid stock is regarded, as between the trustees or creditors and the subscribers, as payable on demand, without a formal call, and that such demand must be made in a reasonable time. This is the rule recognized in Curry v Wood ward, 53 Ala. 371; in Hatch v. Dana, 101 U.S. 205; in Glenn v. Dorsheimer, 23 F. 695, 24 F. 536; and in Glenn v. Priest, 28 F. 907. But, however this may be, the question as to the time when the statute of limitations commences to run has been subsequently decided by this court in Lehman v. Glenn, 87 Ala. 618, 6 South. Rep. 44, and other cases in the same volume; also by the courts of several of the states, and the supreme court of the United States, in suits by the same plaintiff against stockholders of the same corporation on the same call. There has been a consensus of opinion, maintaining the rule as declared in Glenn v. Semple, supra, and it should be regarded as settled, especially as between the parties to this suit. It would be unwise to disturb it now. We shall therefore confine the consideration to questions which did not arise, or were not decided, in the other cases.

A preliminary question arises on the allowance of an amendment to the complaint. The cause of action presented by each count of the original complaint is an express contract of subscription for 10 shares of stock made with the National Express & Transportation Company under the name of the National Express Company. The amendment which was made during the trial, introduces the common counts, for money had and received, account stated, money paid, work and labor done, and goods and chattels sold,-all of them, except the one for money had and received, being promises to plaintiff as trustee of the National Express & Transportation Company. Not only is there nothing in the record to authorize the presumption that the amendment was not intended to introduce new causes of action, but a comparison shows that the common counts represent separate and distinct causes of action from that presented in each count of the original complaint. That the circuit court so understood the amendment is manifest from the instruction to the jury to the effect, if defendant subscribed to the new company, he would be liable, independently of his original subscription; that is, of his express subscription, under the name of the National Express Company. On the authority of Mahan v. Smitherman, 71 Ala. 563, we must hold that the amendment was improperly allowed, though unwilling to extend that decision beyond the facts of the case, or substantially the same facts.

Appellee sues to recover a call of 50 per cent. of the par value of 10 shares of the capital stock of the National Express & Transportation Company, ordered March 26, 1886, by the chancery court of the city of Richmond, Va., on a creditors' bill, seeking the construction and enforcement of a deed of trust, by which the corporation assigned all its property, rights, and credits, including the unpaid subscriptions for stock, to three named persons for the benefit of its creditors, and the marshaling and distribution of the corporate assets. The record and proceedings of the chancery court were admitted in evidence against the objection of defendant. The specific objection is that the record fails to show service of process on the corporation, and a valid decree pro confesso; in other words, that the chancery court did not obtain jurisdiction of the corporation. The bill was filed, in December, 1871, against the corporation, some of its officers, and the trustees. It does not appear that any subp na was issued against the corporation until the day after an amended and supplemental bill was filed. August 4, 1879, when one was issued on the original amended and supplemental bill. It was served on a director and the cashier of the company, both of whom appeared and answered; but, neither having answered in the name of or for the company, the bill was taken as confessed against the corporation. The question of the sufficiency and validity of the service of process was directly brought, by the petition of certain stockholders, before the circuit court of Henrico county, to which the cause had been removed. By that court the service was adjudged to be valid, and that the corporation was before the court. The judgment of the circuit court denying the prayer of the petitioners, was affirmed by the court of appeals, which necessarily involved the validity of the service of process, though not passed on in terms. Hamilton v. Glenn, 85 Va. 901, 9 S.E. Rep. 129. It may be that the record and proceedings abound in errors and irregularities, but the decrees are not void; and we are bound to accord to them the same faith and credit they have, by law and usage, in the courts of Virginia.

Printed copies of the proceedings of the meetings of the subscribers to the stock of the National Express Company were also admitted in evidence against the objection of defendant. It does not appear from the record that the identification or correctness of the copies, or that the minutes were made by any person authorized to make them, was shown. But, as no objection on this ground seems to have been made in the trial court, nor made here, we must assume that this ground of objection was waived. The complaint avers that defendant subscribed for 10 shares of the capital stock of the National Express & Transportation Company, under the name of the National Express Company, and plaintiff introduced in evidence a written subscription to the latter company, eo nomine, and claims that by virtue thereof defendant is a stockholder in the National Express & Transportation Company. It was therefore incumbent on plaintiff to show the legal identity of the two companies. The statement in the opinion in Lehman v. Glenn, supra, that the legal identity of the companies was one of the points conclusively determined by the Richmond chancery court, does not seem to be sustained by the record. An examination shows that the identity of the two companies was not within the issues in that suit, nor was it decreed. That court was dealing with the National Express &amp Transportation Company as an original corporation, and only from the time of its organization; the preliminary proceedings, looking to incorporation, were not involved. By reference to the proceedings, it appears that, at a meeting of the citizens of Richmond, on September 18, 1865, it was proposed to organize a National Express Company, making the act of the legislature of Virginia passed March 22, 1861, incorporating the Southern Express Company, the basis of the corporation; and as a larger capital would be necessary than that authorized by that act, and as other provisions, not contained therein, would be required, to apply to the legislature to grant the company a modified charter, adapted to its objects and the magnitude of its plans. On the 19th day of the same month a committee was appointed to memorialize the general assembly for the passage of an act increasing the capital stock, changing the corporate name, and for such other modifications as "may" be deemed necessary. On October 12, 1865, certain gentlemen were appointed to visit several named cities, among them the city of Montgomery, to receive subscriptions to the stock of the company. Defendant testified that he subscribed in the fall of 1865, which must have been after these meetings were held. The National Express & Transportation Company was organized January 16, 1866, under the act of March 22, 1861, amended so as to change the name of the corporation, increase the capital stock, and authorize the company to do an express and general...