Bibb v. Montgomery Iron Works , 101 Ala. 301 ( 1893 )

COLEMAN, J.

The bill avers that Joseph W. Dim-mick, W. L. Chambers, Geo. W. Craik, P.B. Bibb, A. M. Baldwin and B. McAdam were the promoters, organizers and corporators of the Montgomery Iron Works ; that it was incorporated with its capital stock fixed at $50,000, which was subscribed and paid for by them, by “ turning over and delivering to the corporation a certain- lot of land, houses and manufacturing material jointly owned by them for which they paid $25,000, in the following proportion and amounts: P.B. Bibb, $7,500, Dimmick, Baldwin and Chambers, each, $5,000, and Craik, $2,500, and that $25,000 was its full value.” This statement fails to account for the interest of McAdam. The omission may not be material for a determination of the questions raised in the record. The bill avers that stock was issued to the subscribers in double the amount of the respective sums paid by them, and that the amount actually paid inis of no greater value than the original cost of the purchsae, to-wit: $25,000. The bill further charges that the corporation issued its bonds to the amount of fifty thousand dollars, which were secured by a mortgage upon its property. The bonds bore interest at 8 per cent., the interest payable annually, and upon default of payment of interest the mortgage might be foreclosed. The bonds do not mature for several years yet in the future. Of the $50,000 of the issue of bonds, $25,000 were placed in the treasury for the use of the company, and which have been used, sold, hypothecated or placed as collateral security to the First National Bank of Montgomery. Of the remaining bonds, not thus disposed of, complainant claims to be a bona fide holder and owner of $7,500 for value, and without notice of any defect or irregularity in their issue, that the said Dimmick received $5,000, Bal win, $5,000 and Craik, $2,500, without paying any consideration therefor, but received them solely in consideration of being stockholders, and are not to account for them in anyway. The bill further charges that the assets of the company are not equal in value to its liabilities, that the business is not successfully conducted, and to meet its liabilities, it is compelled to borrow money and increase its indebtedness ; that either from its earnings or from money borrowed, the annual interest accruing on its bonded indebtedness, including those held by the said Dimmick, Baldwin and Craik, is paid. The conclusion of the pleader is, that the bonds held by the stockholders, for which they paid nothing, are illegal, and in law are not proper charges upon the property of the company. The prayer of the bill is, that these bonds be cancelled, and that the holders be required to account to the corporation for the interest received by them on these bonds.

To properly understand the case made by the bill, it is necessary to note some omissions of averments which seem to us to be material for a proper consideration of the case intended to be raised by the bill. It is not stated, that the’company has made default in the payment of the interest due on its bonds, including those held by complainant. It is not stated that the corporation company is, in any manner, impairing the property mortgaged as a security for the payment of the bonds. It is not pretended that complainant has any lien upon or claim to, or control of the earnings of the company, or its management, or the money received by it as a loan. What claim has the complainant, whose bonds are not yet due, and to whom there has been no default in the payment of interest, to the money earned by the corporation ; or what right to enjoin her debtor from contracting other debts, or applying its own money to the discharge of other obligations, contracted in the regular course of its business ?

It is not pretended that the corporation company has in any manner misused or impaired the property which is mortgaged to secure complainant’s debt.

Some questions are presented and argued, upon which all the members of the court are not agreed, but their decision is not necessary for a determination of the case. The court is unanimous in the opinion that the bill is without equity, and that the decree of the chancellor, dismissing the bill, is free from error.

Affirmed.