Sugar Factories Const. Co. v. Fies

• Court: Alabama Supreme Court
• Writing for the Court: SAYRE, J.
• Citation: Sugar Factories Const. Co. v. Fies, 213 Ala. 556, 105 So. 590 (Ala. 1925)
• Decision Date: 11 June 1925
• Docket Number: 6 Div. 292
• Parties: SUGAR FACTORIES CONST. CO. et al. v. FIES et al.

105 So. 590

213 Ala. 556

SUGAR FACTORIES CONST. CO. et al. v. FIES et al.

6 Div. 292

Supreme Court of Alabama

June 11, 1925

Rehearing Denied Oct. 22, 1925

Appeal from Circuit Court, Jefferson County; William M. Walker Judge.

Bill in equity by Eugene Fies and another against the Sugar Factories Construction Company and others. From a decree sustaining demurrer to plea in abatement of the defendant named and overruling demurrers of other defendants, they appeal. Appeal of the defendant named dismissed, and decree affirmed as against other defendants.

McClellan Rice & Stone, of Birmingham, for appellants.

Harrison & Judge, of Birmingham, for appellees.

SAYRE J.

Complainants appellees Eugene Fies and another, representing themselves to be creditors of the Sugar Factories Construction Company in a large sum, filed the bill in this cause against said company a corporation under the laws of the Republic of Cuba, Birmingham Machine & Foundry Company, and Ingalls Iron Works Company, corporations organized under the laws of this state, and against George M. Morrow, Jr., and Robert I. Ingalls, individually, and as both president and director of the foundry company and the iron works company, respectively. It is alleged that Morrow, Ingalls, the foundry company, and the iron works company subscribed to the capital stock of the sugar company, and that their subscriptions are not yet fully paid; that the amounts of the unpaid balances are unknown to complainants; that from a time anterior to May 16, 1922, the said Sugar Factories Construction Company has been insolvent; that it had become largely indebted to the Alabama corporations; that Morrow and Ingalls are large shareholders, and substantially the owners of the foundry and iron works companies, and by reason of their control of the sugar company did, while it was insolvent, and in violation of their duty to its creditors, cause large sums of money, the amounts of which are unknown to complainants, to be paid by it to the foundry and iron works companies, and have failed and omitted to pay the balances due upon their subscriptions or to call upon other shareholders for such payment; that the sugar company has a suit pending at Havana in one of the courts of Cuba for a large sum, and that Morrow, after having promised, for the sugar company, that the proceeds of said suit would be distributed pro rata among all its creditors, had caused the sugar company to pledge its said claim to the foundry company and the Ingalls Company with the intent and purpose of procuring for said companies, and for himself and Ingalls, practical owners, preferential payment over other creditors. It is alleged that--

"By the exercise of the equitable jurisdiction and powers of this court in personam upon and over the said respondents, the said assets, and all of the other assets of said sugar factories construction company, can be discovered and applied, pro rata, and without preference or priority of one over the other, to the payment of all its debts," etc.

The prayer is for discovery; that defendants be adjudged to pay the balances due upon their several subscriptions to the capital stock of the Sugar Factories Construction Company; that the assets of the Sugar Factories Construction Company be distributed among its several creditors, including complainants, without preference or priority. This rough outline will suffice to disclose the purport and purpose of the bill.

The Sugar Factories Construction Company pleaded in abatement. Other defendants demurred separately. Complainants' demurrer to the sugar company's plea was sustained. The separate demurrers of the other defendants to the bill were overruled. Defendants appeal, and assign errors severally.

We construe the bill as a bill by simple contract creditors to marshal and administer for the common benefit of all creditors, who may come in and prove their claims, the assets in this state of an insolvent corporation according to the provision of section 3509 of the Code of 1907, reproduced in the Code of 1923 as section 7062. If this be the correct construction of the bill, we find no sufficient reason on which to deny its equity. Jaggers v. Howell, 206 Ala. 337, 89 So. 604; Warren v. Kilgore, 176 Ala. 476, 58 So. 432.

"It is not necessary that complainants should show that they are judgment creditors, either for the maintenance of the bill in general...