Williams v. North Alabama Exp.

• Decision Date: 10 November 1955
• Docket Number: 7 Div. 259
• Citation: 263 Ala. 581,83 So.2d 330
• Parties: L. M. WILLIAMS v. NORTH ALABAMA EXPRESS, Inc.
• Court: Alabama Supreme Court

Page 330

83 So.2d 330

263 Ala. 581

L. M. WILLIAMS v. NORTH ALABAMA EXPRESS, Inc.

7 Div. 259.

Supreme Court of Alabama.

Nov. 10, 1955.

McKay, Livingston & Worthy, Sylacauga, and C. W. McKay, Ashland, for appellant.

Thos. Reuben Bell, Sylacauga, and Stringer & Montgomery, Talladega, for appellee.

PER CURIAM.

This is an appeal by appellant (plaintiff) from a verdict for appellee (defendant) in a suit on the common counts for an account stated, an open account and for money loaned and for money paid.

Prior to and on August 25, 1952, defendant was a corporation solely owned by A. O. Cleveland and his wife Lucile Cleveland. On that day the Clevelands sold all the stock in the corporation to the Gothard brothers. Prior to that time, both before and after the corporation was organized, there had been a long series of transactions between plaintiff, L. M. Williams, and Cleveland. These consisted largely of many loans by plaintiff to the Clevelands or paid at their request, and some to the corporation.

After some conversations looking to a sale of the capital stock of the corporation to the Gothards by Cleveland, on July 17, 1952, there was a conference in the office of K. L. Williams (plaintiff's son), at Sylacauga, for the purpose of stating the amount due plaintiff by the corporation, including the personal loans to Cleveland,--the amount due being represented by notes, mortgages, checks, etc. At this meeting there were present the plaintiff, his son, both the Clevelands and Mr. Pow who was an accountant then, as well as previously, in the employ of the corporation. Mr. Cleveland, plaintiff Williams and his son testified that after an all day conference and study of the books and documents, they reached an agreement that the corporation was indebted to plaintiff in the sum of $32,391.45, agreed to by Mr. Cleveland and his wife who owned all the stock of the corporation. Mr. Pow testified that they mentioned some figure at the time, but did not agree on $32,391.45, nor $27,000, or any other amount. His testimony conflicted with that of the others present that they agreed upon the figure of $32,391.45. The work sheets used on that occasion were not introduced in evidence, nor is it shown what figures make up that total.

On said August 25, 1952, about 2:30 p. m., at a drug store in Sylacauga, the Gothards and Cleveland had an agreement by which the Gothards were to purchase from Cleveland all the stock of the defendant corporation. Of course that alone did not affect any indebtedness owing by the corporation to plaintiff. But on that occasion plaintiff was present and had a transaction about his claim against the corporation. Plaintiff testified that the Gothards agreed to pay him $10,000 in money the next day if he completed the purchase from Cleveland, and to pay $100 a week until Christmas, and thereafter to pay $1,000 a month until the $32,391.45 was paid. Plaintiff further testified that thereupon he marked 'paid' and surrendered to Gothard some mortgages and some other instruments executed by Cleveland to him to be used in preparing papers by Gothard for the corporation to execute to him, together with a separate release of any debt contracted by Cleveland for the corporation. Both the Gothards testified that during the meeting at the drug store plaintiff produced an adding machine tape of a set of figures showing an indebtedness to him by the corporation of $9,503.86, and stated that was all the corporation owed him. The original is before this Court on this appeal. They further testified that George Gothard wrote a check for the amount on the First National Bank of Sylacauga and gave it to plaintiff who then marked the documents 'paid' and gave them and the receipt to George Gothard. The Gothards also testified that George Gothard gave to Cleveland a check for $2,000, which he paid Cleveland in cash and took up the check on the next day in Birmingham. The amount was for the purchase of the stock. (Payment of that amount was admitted by Cleveland.) The Gothards further testified that they saw plaintiff again the same day at a filling station which the Gothards owned but sold for cash on that day: that plaintiff wanted to know if he could get the cash for his check, and was told he could get the cash the next morning. So the following morning at about 6:30 they met at the filling station where George Gothard had in his safe the cash from the sale of the filling station and other sources, and gave to plaintiff the full amount of the check. Plaintiff then returned the check to Gothard and it was destroyed. All of this was denied by plaintiff.

They jury could have found from the evidence that plaintiff knew at the time of that conversation at the drug store on August 25th that Gothard intended to buy all the stock of the corporation; that it was important for him to know what the corporation owed plaintiff; and that the information given him would be influential in causing Gothard to act in that respect. Gothard had no other means of knowing the amount of the indebtedness. If plaintiff, under those circumstances, told Gothard that the total was $9,503.86, Gothard had the right to act on that information given for that purpose, and plaintff would be estopped to deny it as to Gothard; and if that amount was paid plaintiff, as Gothard testified, the debt was discharged. Graves & Gross v. Leach, 192 Ala. 164, 68 So. 297.

Although the estoppel operated for the direct benefit of Gothard personally, it also operated for the benefit of the corporation which was to become completely and wholly owned by Gothard. He was acting for the benefit of the corporation in paying plaintiff, if he did in fact. At the moment he was in the act of acquiring all the capital stock. It was all a continuous transaction. The payment of the debt of the corporation enured to its benefit both as a payment and as an estoppel to claim more. Stockholders owning all the shares of stock of a corporation are the equitable owners of its assets, Autauga Co-Operative Leasing Ass'n v. Ward, 250 Ala. 229, 33 So.2d 904; Boozer v. Blake, 245 Ala. 389(14), 17 So.2d 152; First Nat. Bank of Gadsden v. Winchester, 119 Ala. 168, 24 So. 351,--and, of course, they are interested in its liabilities.

The acts and contracts of persons owning all the stock of a corporation may be considered as the acts and contracts of the corporation, where the effect is the same as though the corporation had acted as such. Birmingham Realty Co. v. Crossett, 210 Ala. 650, 654, 98 So. 895 (quoting from Cook on Corporations).

There are ninety-three assignments of error. The first ten do not relate to a ruling of the court. Appellant's brief sets out twenty propositions of law. They do not refer to any assignments specially as they should under old Supreme Court Rule 10, Code 1940, Tit. 7 Appendix (in effect when this case was...