Wilson v. Stevens

• Decision Date: 05 February 1901
• Citation: 29 So. 678,129 Ala. 630
• Parties: WILSON v. STEVENS ET AL.
• Court: Alabama Supreme Court

29 So. 678

129 Ala. 630

WILSON v. STEVENS ET AL.

Supreme Court of Alabama

February 5, 1901

Appeal from chancery court, Madison county; William H. Simpson Chancellor.

Action by Elizabeth Owen Wilson, administratrix of Arthur Owen Wilson, against the North Alabama Improvement Company and others. Judgment for defendants, and plaintiff appeals. Affirmed.

It was averred in the bill that the complainant had recovered a judgment against the North Alabama Improvement Company for the sum of $5,349.53, on March 20, 1895, in the circuit court of Madison county; that execution had been issued thereon and returned, "No property found;" that the debt upon which this judgment was founded was a debt evidenced by the note for $5,000, which was made by the defendant corporation, and was payable to Charles H. Crawford, as administrator of Arthur Owen Wilson, deceased, and was dated April 1, 1892, and payable one year after date; that said Crawford had been, at the suggestion of one of the directors of the North Alabama Improvement Company, appointed administrator of the estate of Arthur Owen Wilson, deceased and as such administrator had collected $5,000 on the policy of life insurance issued to Arthur Owen Wilson, the intestate, by the New York Life Insurance Company. It was then averred that said Crawford, as such administrator, made application to the probate court of Madison county to be allowed to lend the $5,000 so collected by him on said life insurance policy to the North Alabama Improvement Company but the said court refused to order or authorize the loan of such money, and that, notwithstanding such refusal of the court, the said Crawford did lend the money so collected by him upon the life insurance policy to the North Alabama Improvement Company, and that the said note above referred to was given for such loan, and, to secure the payment thereof, the said company executed a mortgage upon certain property, which was owned by it at the time, but which was greatly less in value than $5,000; that, at the time of the negotiation of this loan, the individual defendants to the bill were the directors of said corporation, and that it was through their instrumentality the loan was made by said Crawford, and that they and said Crawford knew at the time that the loan was without authority of law. The bill then averred in detail several alleged acts of misconduct and mismanagement on the part of the directors of the defendant corporation of its assets and of the corporate business, and that, as the result of such mismanagement and misconduct, the corporation had been reduced to insolvency; that, in the negotiation of a sale of property, they preferred one of their number, who was a director, and conveyed to him large tracts of land, and issued bonds, which they delivered to James F. O'Shaughnessy, who was at that time a director, which was used for his own benefit, although said conveyance of land and the delivery of the bonds proper should have been upon the alleged indebtedness from said corporation to said O'Shaughnessy. The facts complained of by the complainant in the bill, as shown by the averments thereof, took place prior to the negotiation of the loan for $5,000 to the defendant corporation. It was then averred that said Charles H. Crawford had resigned as administrator of the estate of Arthur Owen Wilson, and that the complainant had been duly appointed administrator de bonis non. The prayer of the bill was as follows: "That a decree may be rendered against all of the defendants for the amount of said mortgage, with the interest due thereon, the defendants to be credited by the amounts received by the foreclosure of said mortgage; that a reference may be had to the register of this court to ascertain the amount due to complainant, and to ascertain and state an account between the defendant directors and defendant corporation; and that the directors may be charged with the assets of said corporation that have been misapplied or wasted by them, and that, out of the amount found due to the defendant corporation, the defendants may be required to pay the amount found to be due to the complainant. The complainant prays for all other and further relief to which she is entitled on the facts as herein stated." The defendants filed answers to the bill, in which they denied the specific charges of fraud, and averred, in detail, the facts attending the several transactions set forth in the bill. It is unnecessary to set out at length the evidence in the case. On the final submission of the cause upon the pleadings and proof, the chancellor rendered a decree denying the relief prayed for, and ordered the bill dismissed. From this decree the complainant appeals, and assigns the rendition thereof as error.

D. D. Shelby and Jas. H. Branch, for appellant.

R. W. Walker, for appellees.

DOWDELL J.

The purpose of the bill in this case is to hold the directors individually liable for the debt of the corporation. Charles...