State ex rel. Fuller v. Hargrove

• Decision Date: 15 April 1965
• Docket Number: 6 Div. 157
• Citation: 174 So.2d 328,277 Ala. 688
• Parties: STATE of Alabama ex rel. Claudine FULLER v. James W. HARGROVE et al.
• Court: Alabama Supreme Court

Page 328

174 So.2d 328

277 Ala. 688

STATE of Alabama ex rel. Claudine FULLER v. James W. HARGROVE et al.

6 Div. 157.

Supreme Court of Alabama.

April 15, 1965.

Prince, Jones, Fowler, Propst & Topazi, Birmingham, for appellant.

Virgil K. Sandefer and Geo. E. Trawick, Birmingham, for appellees.

SIMPSON, Justice.

This case comes to us on appeal by the relator from a judgment of voluntary nonsuit to review rulings sustaining demurrer to an information in the nature of quo warranto. The action was brought in the name of the State, on the relation of Claudine Fuller, as a citizen and individually. Demurrer was sustained to the information as originally framed, and as successively amended.

Originally the action was brought against James W. Hargrove, Alfred A. Kelley, Marion DeCarlo and Paul DeCarlo. Purporting to proceed under both §§ 1133 and 1136, Title 7 of the Code of 1940, as amended, the relator sought the ouster of the named defendants from office as directors and officers of the corporation, PAJ Company, Inc., and also dissolution of the corporation, although the corporation was not named as a defendant. Where allegations of the information authorize relief under §§ 1133 and 1136, Title 7, the petitioner must elect under which section he will proceed. State ex rel. Weatherly v. Birmingham Water Works Co., 185 Ala. 388, 64 So. 23. A further prayer of the information was that the individual defendants be required to pay to the attorneys representing the relator the sum of $15,000 as a reasonable attorney's fee for their services in the premises and to pay relator $5,000 for services rendered in the premises and to be rendered to the State of Alabama by the causing of the dissolution of the fraudulently organized PAJ Company, Inc., and for general relief. By amendment the corporation was made a party defendant, but both §§ 1133 and 1136 were followed.

The basis for the relief (as alleged) sought, to state its substance, was that the purported certificate of incorporation of PAJ Company filed in the office of the judge of probate and recorded therein, which certificate is attached as exhibit to the information and made a part thereof failed to set forth with particularity the location of the principal place of business of the corporation; failed to show the name and post office address of the officer or agent designated to receive subscriptions to capital stock; failed to state names and addresses of incorporators and the number of shares subscribed for by each; failed to state the names and addresses of the directors and officers as required by law; failed to show statement under oath giving amount of capital stock which had been paid in; failed to have attached statement showing which of subscribers' payments were received in cash or otherwise. The certificate exhibited with the information is contradictory of the allegations of the information. Under the circumstances the exhibit must control the pleading. Gordon v. Central Park Little Boys League, 270 Ala. 311, 119 So.2d 23; Ivy v. Wiggins, 271 Ala. 610, 126 So.2d 469. Moreover, failure to follow the letter of the statute in some particular would not require judgment of dissolution. State ex rel. Flowers v. Oden, 248 Ala. 39, 26 So.2d 550.

A further specification that the statement in the certificate of incorporation showing subscribers to capital stock, the number of shares subscribed for and the amount paid in is false in that the named subscribers did not pay in the amounts stated. This allegation is a mere conclusion.

There are other allegations conclusional in form and without supporting allegations of fact: That the purported formation of the corporation would work fraud upon the numerous creditors of the incorporators, creating a 'fictitious shield of corporate innumity from personal obligation of alleged stockholders and allow the corporation to serve as a buffer between the interest of creditors, including a large segment of the general public as well as the taxing authorities of the State of Alabama'. It is alleged that the corporation has without consideration, and with the knowledge of the individual defendants, taken title to realty in such wise as to perpetrate fraud on legal or equitable claim owners who are citizens of Alabama and entitled to its protection.

Further amendment of the information charges, in effect, that one of the defendants fraudulently obtained a deed to realty, the title to which was in L. B. Fuller or L. B. Fuller and the relator, which deed was executed by L. B. Fuller and relator. Thereafter, it is charged, the named defendant conveyed to...