Louisville & Nashville Railroad v. Neal

128 Ala. 149 | Ala. | 1900

DOWDELL, J.

The appeal and cross-appeal in this case are taken from the decree of the chancellor on the demurrers of respondent to complainant’s bill. The bill is that of a complaining stockholder. The wrongs complained of are wrongs done to complainant’s company. In such cases the general rule is that action should be instituted in the name of the corporation. For wrongs done the corporation, before a stockholder can institute suit in his own name for the injury.done he must first seek for redress of such wrongs within the corporation by applying to the governing board of such corporation the exception being that he need not seek redress in this manner when it would he wholly unavailing, and this should be shown by the averments of the bill in a clear and unambiguous statement of the facts, which should never be left in mere inference, or to conjecture, Steiner v. Parsons, 103 Ala. 215; Manufacturing Co. v. Cox, 68 Ala. 71; Nathan v. Tompkins, 32 Ala. 437 Roman v. Woolfolk, 98 Ala. 219; Planters Line v. Waganer, 71 Ala. 581; Hawes v. Oakland, 104 U. S. 450.

There is uo pretense that complainant ever applied to either the board of directors., or to the stockholders as a body, for l’-edres-s of the wrongs -complained of, nor art the averments of the bill sufficient to withdraw the -case from the general rule as above -stated, and to bring i within the exception;;, where the complaining stockliolde: is excused from first seeking redress within the corpo-ra| tion. The bill avers that the Louisville & Nashville Rail| road Co. controlled in the election of -directors in tb complainant’s company, The South & North Alabam, Railroad Co., but it -also avers that the directory wal composed in part -of men of high character and stancj ing, and for aught that appears they constituted a m j'ority of the board. What is. -stated in the bill, and ev dently intended by the pleader, a-s an excuse or reasoj for not applying to the directors for a correction of tl alleged wrongs, is xxot such a -clear and unambiguor statement of facts a-s the rule would require, and indewe might say that -at best they -are but opinions and co: -elusions. That men of high character and standi: woxxld knowingly permit, in the discharge of the dutiof a trast 'Committed to them, the perpetration and commission of tlie frauds and wrongs, as charged in the bill, and refuse upon application made by a stockholder to redress the wrong done, is altogether unreasonable. It by no means dearly appears from tliese statements that, if redress liad been sought from the board of directors, constituted and made up of men as described in the bill, it would have been without avail. We think the court erred in 'overruling the respondent's demurrer raising this question.

.For want of a brief by the appellant in the cross-appeal, the assignment of error on such cross-appeal will not he considered.

For the reasons pointed out, the decree of the chancellor assigned as error on the direct appeal, will he reversed and the cause remanded, and the decree as to the cross-appeal will he affirmed.