70 So. 179 | Ala. | 1915
This appeal was submitted under rule 46, 178 Ala. xix, 65 South, vii, and has been considered in accordance with that rule.
Appellee Musgrove, as surviving partner of the late firm of L. B. & J. C. Musgrove, stockholders in the defendant corporation, sued the Gulf Coal & Coke Company to recover certain dividends that had been declared on their stock. Plaintiff had judgment, and the defendant appeals.
Considering first the item of $8,000, it. is to be noted that this section was commenced February 28, 1914, within six years of the date on which appellant converted the dividend of that amount to its own use. By the declaration of the dividend the corporation became a debtor to its stockholders. Thereafter the fund was held as security, not, however, as security for any liability on the part of appellee for breaches of covenant then ascertained or agreed upon, for appellee has at all times denied that there was or ever could be any-such breach, but to cover, as we must presume, any such liability of possible future development as the directors deemed it prudent to guard against It is not irrelevant nor immaterial in this connection further to note that appellant’s board of directors, in withholding the two dividends, do not appear to have had in mind security against breaches of covenant affecting the particular parcels of land in respect of which appellant sought by way of set-off to show damages suffered, but, generally, their purpose was to take security against possible breaches as to any of the numerous and extensive tracts of land it had purchased from the Musgroves. Indeed, the evidence shows affirmatively that this was the idea and purpose, and on no other hypothesis can appellant’s action b'e explained consistently with reason and fair dealing, for while it retained first and last $20,000 of dividends declared upon the Musgrove stock, the measure of damages to accrue from the specific breaches alleged in this suit was by the covenant itself contingently fixed at a sum slightly in excess of $5,000. This arrangement as to the $8,000 dividend was in the nature of a pledge of the fund, and .thereby a trust was created. — Keeble v. Jones, 187 Ala. 207, 65 South. 384; Glennon v. Harris, 149 Ala. 236, 42 South. 1003, 9 L. R. A. (N. S.) 214, 13 Ann. Cas. 1163.
To meet difficulties that arise in connection with one aspect of the argument on its behalf, to avoid consequences flowing from the fact that it was not appellee’s immediate grantee, appellant cites section 673 of Cook on Corporations as going to show that it is one and the same corporation as the Gulf Coal & Coke Company, that the continuity of corporate existence has not been broken, and that it was entitled on the trial to the benefit of every right that the Coal & Coke Company might have asserted had it occupied appellant’s place in the suit. In other words, to state the contention with a view to its only possible practical operation, it is that, even if the breach alleged were coeval with the covenant, and so appellant’s cross-action on the covenants was barred by the statute of limitations, still •its statutory lien on appellee’s stock and dividends, by which the liability of the Musgroves was secured, remained unimpaired by the lapse of time, and should have been made effectual as a set-off against appellee’s suit to recover dividends. The cited
The controversy as to parcels 32, 40, 109, 130, 155, and 216 is to be determined on different considerations. Appellee testified that he had never been paid for these parcels, that while his deeds included them, his conveyances were made upon the understanding that payments were to be made as his titles were approved by the grantee’s attorney, and he now refers to several circumstances which tend to corroborate his contention that his titles to these parcels were never approved, and that he was never paid for them. But an inference to the contrary may be drawn from the conflicting testimony, and for this reason, as well as because the trial court in ruling upon the motion for a new trial indicated that the case was decided adversely to appellant' without reaching the disputed question as to payment, we have preferred to pass to other grounds of judgment.
Appellant now contends that this stipulation meant only that there was at the time to which it refers outstanding valid claims of title, and intended nothing at all in regard to actual possession of these several parcels. It cannot be assumed that the agreement was improvidently made on either hand, and for us its
Affirmed.