Bolling & Son v. LeGrand

87 Ala. 482
CourtSupreme Court of Alabama
DecidedDecember 15, 1888
StatusPublished
Cited by3 cases

This text of 87 Ala. 482 (Bolling & Son v. LeGrand) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bolling & Son v. LeGrand, 87 Ala. 482 (Ala. 1888).

Opinion

McCLELLAN, J.

The theory upon which this suit was instituted, and this appeal prosecuted, is, that the efforts of the defendant below — appellee here — and others acting with him, to organize a corporation, were so far abortive that the would-be corporators, instead of forming a body corporate, in law and fact constituted a partnership, or voluntary association of individuals, and as individuals became bound on the contracts purporting to be made by the corporation and [488]*488in its name. Two defenses were relied on in the court below: First, that the corporation, whose existence as such is thus attempted to be impeached, was duly and regularly organized, and is alone liable on the contract sued on; and, second, that this contract was made with it as a corporation, and the plaintiff is now estopped to deny its corporate existence and capacity. Manifestly, the consideration of this second defense will be important only in the event that it shall be determined that there was a failure on the part of the declarants to attain corporate existence, and that question will be first considered.

The infirmity in the proceedings had and taken by and at the instance of the defendant and his associates, which is relied on as defeating their purpose to organize a corporation, is alleged to result from non-compliance with two acts of the General Assembly passed at the session of 1882-3, amending respectively sections 1803 and 1804 and section 1807 of the Code of 1876.

By an act of December 6, 1882, sections 1803 and 1804 of the Code of 1876 were amended so as to read as follows, respectively:

“§ 1803. Declaration filed with Probate Court; contents. — Two or more persons desiring to form themselves into a private corporation, for the purpose of carrying on any manufacturing, mining, immigrating, industrial or other lawful business, not otherwise specifically provided for by law, may file with the Probate Court of the county, in which it is proposed that such company shall have its only or principal place of business, a written declaration, signed by themselves, setting forth:—

“1. The names and residences of the petitioners.

“2. The name of the proposed corporation, the place at which it proposes to have its principal or only place of business, the general purpose of the corporation, and the nature of the business which it proposes to do.

“3. The amount of the capital stock, and the number of shares into which it is to be divided, showing the par value of each share.

“4. Any other matter which it may be desirable to set forth in the organic law.

“§ 1804. Commission issued to board of corporatorsj books of subscription; token and where opened. Upon the filing of the declaration as above, the probate judge of the county shall issue to the parties, or to any two or more of [489]*489them, a commission constituting them a board of corporators, giving them authority to open boohs of subscription to the capital stock of the proposed company, at such time and place as they deem fit.”

By an act “to amend section 1807 of the Code,” approved February 5, 1883, that section was made to read as follows:

“§ 1807. Certificate of organization. — Upon the completion of the organization of the company, and the payment to the treasurer of the company, or some officer designated for that purpose, in cash, of at least twenty per cent, of the capital subscribed, payable in money, and the payment of the remainder of the capital so subscribed for, payable in money, being secured to be paid in such installments and cvt such times as may be provided in the written declaration required by section 1803 of the Codej and also the delivery to such officer oj at least twenty per cent, of the property so subscribed to the capital of such corporation, toith security for the delivery of the remainder of said property, so subscribed to the capital as may be promised by said written declaration required by section 1803; the board of corpora-tors shall, in writing, over their signatures, certify the same to the probate judge of the county, who shall issue to the company a certificate that they have been fully organized according to the law of Alabama, under the name and for the purpose indicated in their written declaration, and that they are fully authorized to commence business under their charter.”

By the first of the acts copied above, section 1803 of the Code of 1876 was amended by inserting the words, “or other lawful business, not otherwise specifically provided for by law”; and section 1804 was amended so as to take away from the probate judge the power and duty of requiring the board of corporators to give such notice of the time and place of opening the books of subscription, as he might deem fit, and, in lieu thereof, require that officer to authorize the corporators to open books for subscription “at such time and place as they deem fit.” The amendment of section 1807 of the Code attempted to be made by the second statute set out, is indicated by the italization in the body of the act as quoted.

While the statutes were in force, and with the unamended sections of Article 1, Chapter 1, Title 1, Part Second of the Code of 1876, constituted the law under which certain classes of corporations were required to be organized, [490]*490the defendant in this action, with others, undertook to organize a corporation to be called “The Southern Railway Construction and Land Company,” and to that end filed in the office of the judge of probate of Montgomery county,- where it was proposed the said company should have its principal or only place of business, a declaration in strict compliance with the statute quoted first above, amendatory of section 1803, and setting forth, under clause 4 of that section, “that .said corporation. shall have the power to purchase, own, sell and deal generally in real estate, to improve-the same, and to sublet any contract it may have for the construction of railroads.” This declaration nowhere attempts to provide for, or specify the installments, in which that part of the capital stock of the proposed corporation which is not paid in cash, shall be paid, nor the times at which deferred installments shall be paid, nor does it provide for or require any kind of security for the payment of deferred installments; and in point of fact, no other security than the individual obligation of each subscriber to the stock of the company, evidenced by their respective subscriptions, was ever required or given, for the payment of that part of the money subscribed which was not paid on organization. It is clear, that neither the original section 1803, nor as it was amended by the ant of December 6, 1882, above set out, required that the declaration of persons desiring to form themselves into a private corporation should state the installments into which subscriptions should be divided, nor the time at which subscriptions should be paid, nor prescribe that any security should be given for the payment of subscriptions in whole, or in any part or parts, presently, or at any time or times in the future. The original section 1804 required that twenty per cent, of the capital subscribed shoirld be paid in, and the fact certified to the judge of probate, before it became the duty of that officer to issue a certificate of organization; and it appears that this provision was complied with in the present case.

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Bluebook (online)
87 Ala. 482, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bolling-son-v-legrand-ala-1888.