Maya Corporation v. Smith

199 So. 549, 240 Ala. 371, 1940 Ala. LEXIS 272
Supreme Court of Alabama·Decided December 5, 1940·No. 8 Div. 6.·Published·Cited by 19 cases

Opinion

FOSTER, Justice.

The pleadings as originally filed are substantially set out on a former appeal. 227 Ala. 6, 148 So. 621. The facts there stated need not be repeated. Amendments have been filed since that appeal was disposed of. As amended, the bill alleges that there was a modification of the contract of January 1, 1926, effected at a later date (shown to have been March 24, 1926), and complainant consented in the amendment that the rights of the parties may be settled and adjusted in the light of such changes, but does not set out his version of such changes.

It also alleges that the Cherokee Mining Company is a corporation, all of whose shares, except qualifying shares of others, “are and have all the time been owned by the Maya Corporation,” as well as the stock of the “seven companies” assigned to it by complainant.

It prays, among other things, that the Cherokee Mining Company and Maya Corporation be declared trustees of said mineral interests conveyed by said “seven companies,” for the benefit of complainant and said “seven companies”, and for the purpose of the contract of January 1, 1926, and be enjoined from conveying said interests until said contract be complied with and until said corporations shall pay or cause to be paid to complainant the money and stock which under said contract should be paid before the mineral interest should vest in them, and for a decree against them for the amount they should pay complainant and for other specially described relief and for general relief.

As finally amended, it prays also that the court will ascertain the amount due complainant and those in interest with him, under said agreement of January 1, 1926, and give Cherokee Mining Company, Maya Corporation and' said “seven companies” the option within a reasonable time of paying the amount due him and of issuing and delivering the capital stock in the Maya Corporation as agreed on and of restoring to the treasury certain stocks and correcting the stock set up and ownership of shares in the Maya Corporation pursuant to said contract of January 1, 1926. That if this is done as required, then the claims of complainant and his associates shall be vested in defendant. But if this is not done, then all the claims of said companies shall cease and be forever divested out of them and vested in complainant and his associates. We have not undertaken to copy the prayer but to state its substance as here material.

The contentions of the Maya Corporation are set out in its cross-bill and are substantially as stated in the report of the case on the appeal reported in 227 Ala. 6, 148 So. 621.

Without now considering the collateral questions and the decree as to them, the court in its final decree found that the contract of January 1, 1926, was executed and not rescinded but was modified on March 24, 1926, so “that the amount to be presently *376 paid by said Cullinan or said Cherokee Mining Company or said Maya Corporation on the debts of the said ‘seven companies’ should be three hundred thousand dollars to liquidate liens and mortgages against the properties of said ‘seven companies’ which were threatening foreclosure instead of paying at that time the $447,000.00 as stipulated in said contract of January 1, 1926; (2) that activities under subsection ‘e’ paragraph 2 of said contract should be curtailed to keep within the finance which the said Cullinan might be able to secure for said purpose; (3) that mineral lands which were being acquired under said subsection ‘e’ of said contract should continue to be acquired in the name of J. S. Cullinan as grantee and paid for in his name until April 1, 1926, but that after said date said acquisitions and purchases should be made and paid for in the name of Cherokee Mining Company as grantee, with the exception of lands upon which options had been taken in the name of J. S. Cullinan or the Southern Exploit Company and that in such last named instances deeds might be made to the person in whose name the option ran— but it was agreed that all activities in the purchase of lands under said subsection ‘e’ after January 1, 1926, should be for the account of the Cherokee Mining Company, but the court finds that said contract of January 1, 1926, has never been abrogated or rescinded and is still in full force and effect so far as concerns the issues in this case.”

It is also found that said modification was as just set out and not material to the questions arising in this case, since it related to the acquisition of other Jands than those here involved.

The court then found that the cash amount due complainant and his associates under said contract of January 1, 1926, was for 359,902 acres of land at $3 per acre or $1,079,706, which with interest to April 1, 1939 (about the date of the decree), was $2,143,570. That from this amount should be deducted the total sum of $738,049.21, amounts with interest paid by defendants on complainant’s account, leaving a balance of $1,405,520.91, to which should be added the amount of $46,155, unpaid salary of complainant, under the contract of April 1, 1926, leaving the definitive sum of $1,451,-675.91.

Thereupon, the Cherokee Mining Company and the Maya Corporation were given the option to discharge the equities of complainant as set out herein by accepting it in writing within thirty days, and paying certain costs and taxes. If not so accepted, and costs and taxes paid, then all their right, title, interest or claim of said corporations shall forever cease. If said acceptance is filed, and costs and taxes paid, said corporations shall in six months issue to complainant 5,797 further shares of preferred stock in the Maya Corporation, and 2,318 shares of common stock in it, and shall pay also in six months the amount due as settled by the decree, for. the parties whose interests are there fixed. If this is done then all the interests of complainant and his associates shall forever cease, and be vested in Cherokee Mining Company and the Maya Corporation as their interests may appear: or, failing to do so, the interests of said companies and the “seven companies” shall be thereby vested in complainant, subject to certain equities between him and certain cross-complainants. The decree covers twenty pages of the transcript, and has much detail of finding and adjudication, not necessary now to mention.

The conveyance of the land by the “seven companies” to the Cherokee Mining Company effected by the respondents is not such an act as of itself to confer on complainant any equitable right. If complainant has any equity, it is to enforce a vend- or’s lien by him as in the nature of specific performance available to a vendor. Morgan v. Lewis, 203 Ala. 47, 82 So. 7; 58 Corpus Juris 1236, note 99; 66 Corpus Juris 1459, note 28.

To make effectual such right, the Cherokee Mining Company holds the land in subordination to it, since that company is not a bona fide purchaser for value. 66 Corpus Juris 1250, note 1137.

It is in that sense a trustee de son tort, or ex maleficio. Such relation only exists to the extent that others have a beneficial interest sought to be fastened upon the property (Alabama Water Co. v. City of Anniston, 227 Ala. 579, at page 581, 151 So. 457; Lee v. Lee, 67 Ala. 406; Houston v. Farris, 93 Ala. 587, 11 So. 330), as where a creditor of the grantor seeks to subject the property to the payment of his debt by a creditor’s bill, or one in that nature. .

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Maya Corporation v. Smith, 199 So. 549, 240 Ala. 371, 1940 Ala. LEXIS 272 (Ala. 1940).

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