Williams v. Evans

• Decision Date: 07 November 1889
• Citation: 87 Ala. 725,6 So. 702
• Parties: WILLIAMS v. EVANS.
• Court: Alabama Supreme Court

6 So. 702

87 Ala. 725

WILLIAMS v. EVANS.

Supreme Court of Alabama

November 7, 1889

Appeal from circuit court, Elmore county; JAMES R. DOWDELL, Judge.

This action was brought by H. G. Evans against E. M. Williams, to recover the price agreed to be paid for 50 shares of stock in the Decatur Land & Improvement Company, and was commenced on the 23d of January, 1888. The original complaint contained a special count on the written instrument, in the form of a bill of exchange, which was given for the agreed price alleging its nonpayment on presentment to the drawee, and the common counts; and a third count was added by amendment which sets out the terms of the contract. The court overruled a demurrer to the third count, and, on the evidence adduced instructed the jury to find for the plaintiff, if they believed the evidence. The defendant excepted to this charge and here assigns it as error. Thorington & Smith, for appellant.

Watts & Son, for appellee.

SOMERVILLE J.

Upon first consideration, we were of opinion that the contract sued on in this case was not illegal or invalid, as in violation of public policy; but after further deliberation we have come to the opposite conclusion.

It is too plain for argument that, under the evidence, if the plaintiff can recover at all, it must be under the third count, which claims the price agreed to be paid for the sale of 50 shares of stock in the Decatur Land Company. The bill of exceptions sets out all the evidence; and this evidence, in our opinion, shows a contract in violation of section 6, art. 14, of the constitution, (1875,) which provides that "no corporation shall issue stock or bonds, except for money, labor done, or money or property actually received; and all fictitious increase of stock or indebtedness shall be void."

The plaintiff's own testimony shows that he had subscribed originally for $2,500 of stock in said company,-say 25 shares,-with the understanding that the company was to issue to him "five dollars of stock for one dollar of subscription," which would be $12,500,-a fictitious increase of five to one. The plaintiff sold $1,000, or 10 shares, of the original stock, and "gave the defendant an order on the Decatur Land Company to issue to defendant 50 shares of said lad company stock, which was the amount called for by the $1,000 of the original subscription, and to transfer the same to defendant, on the books of the company." This...