Ex Parte Morgan ( 1924 )

1 While we may concede the inapplicability of the sections of the Code cited and discussed in the opinion of the Court of Appeals and may not differ as to the rule under the common law as to the proper party to suits when one is a mere beneficiary under the bond and not the payee, yet we think the right of this appellee to maintain the present suit was expressly authorized by the act in question. Section 3 of the Act of 1920, page 63, among other things provides:

"Any person who shall be induced to purchase any stock of any corporation, proposed corporation, copartnership, or unincorporated association by reason of any misrepresentation or concealment of any material facts concerning such stock, shall have the right [at any time within twelve months thereafter] to bring suit upon the bond hereinabove provided for, and such bond shall stand as security and indemnity for such person so purchasing the stock."

True, the quoted provision does not say "in his own name," but it expressly authorizes him to bring suit upon the bond and necessarily means "in his own name." We also think that the reasoning of the Court of Appeals arguendo, that if parties are at liberty to sue in their own name the suits might absorb or exceed the bond, is attempted to be met by a later provision of the act which provides against such a contingency.

We concur in the holding of the Court of Appeals as to the proposition that the act of 1920 is a substitute for and a complete repeal of the act of 1919, and that the statute of limitations there provided applies to the instant claim. See in addition to authorities cited in said opinion, Coker v. Fountain, 200 Ala. 95, 75 So. 471, which by way of analogy supports the present holding. We think it unnecessary, however, to decide which rule should be applied to existing claims, that is, a reasonable time after the passage of the law or the full period fixed by the statute, as the defendant's fourth plea expressly avers that twelve months expired not only after the purchase of the stock but after the new law was enacted before the suit was brought.

The writ is awarded, the judgment of the Court of Appeals is reversed, and the cause is remanded to said court for further consideration in conformity with this opinion.

Writ awarded, and reversed and remanded.

All the Justices concur, except GARDNER, J., who dissents.