The complainant, a stockholder owning five shares in the Elyton Land Company, a corporation, filed the present bill, for the purpose of annulling and setting aside a sale and conveyance of its property assets to the Elyton Company, a corporation, and to set aside and annul a mortgage executed by the Elyton Company to the Maryland Trust Company, as trustee, to secure the payment of certain bonds issued by the Elyton Company.
To the bill the respondent filed a plea and answer in support of the plea, to which the complainant excepted as being insufficient. The court sustained the exception, and this ruling is the only error assigned. In December, 1870, the Elyton Land Company was incorporated, for the purpose of ‘‘buying lands and selling lots with the view to the location, laying off and effecting the building of a city at or near Elyton” in Jefferson county, Alabama. Its capital stock was two hundred thousand dollars, divided into two thousand shares of one hundred dollars each. In February, 1889, the charter of the Elyton Land Company, by act of the legislature, was amended and confirmed, by which its corporate existence was continued with all its rights, privileges and franchises for fifty years, and during such continued existence, it was authorized and empowered ‘ ‘to borrow and lend money, to guarantee indebtedness for persons and corporations, to build, own, rent, lease, and otherwise lawfully use buildings of every kind and description, to issue bonds in amount not to exceed five millions of dollars * * * and to take stock in other cor
This seems to have been the relative situation of the parties when the financial depression came on, so greatly affecting the value of securities and property. On the
The Elyton Land Company sold and transferred all its property of every kind to the Elyton Company. The
Immediately after the consummation of the transaction between the two corporations, complainant filed her bill.
If in the foregoing summary of the facts and transactions, there are any omissions, the appellant has been given the advantage. We do not doubt the right of complainant to relief, so far as the defense is rested upon the plea. In the first place, by its charter, The Elyton Company was authorized to purchase the property of The Elyton Land Company, “provided that such sale is made under the laws now in force, and nothing in this act shall be construed to -impair, or in any manner whatsoever to affect the rights of any stockholder of The Ely-ton Land Company.” At the time of the sale and transfer of its property, The Elyton Land Company was solvent, a going corporation, and its stock was very valuable. Its duties and powers were fixed by its charter, and its business evidently managed with great skill and success, for the benefit of its shareholders. The Elyton Company by its charter was authorized to engage in many enterprises not within the scope of the powers of The Elyton Land Conpany. A shareholder in the latter might not be willing to become a shareholder in the other. By the sale and transfer of the property, The Elyton Land Company divested itself of all its property and capacity to continue the business for which it was organized. If the sale stands, the owner of stock in The Elyton Land Company is compelled to accept the stock of the new corporation, or hold stock in a corpora
The facts set up in the plea do not present an estoppel as to the complainant whatever may be their effect upon the dividend bondholders, and the other stockholders, who aided in carrying out the arrangement, or have since ratified it.-Kean v. Johnson, 9 N. J. Eq. 401; N. O. &c R. R. Co. v. Harris, 27 Miss. 517.
The decree of the city court is affirmed.