Western Grain Company Cases

85 So. 2d 395, 264 Ala. 145, 1955 Ala. LEXIS 745
CourtSupreme Court of Alabama
DecidedFebruary 3, 1955
Docket6 Div. 374, 489, 490, 585, 491, 492, 584, 657, 658, 143, 144, 694, 966, 689, 892, 893
StatusPublished
Cited by31 cases

This text of 85 So. 2d 395 (Western Grain Company Cases) 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
Western Grain Company Cases, 85 So. 2d 395, 264 Ala. 145, 1955 Ala. LEXIS 745 (Ala. 1955).

Opinions

PER CURIAM.

These cases pertain to a bitter family dispute in what has developed to be a struggle to gain control of Western Grain •Company, a corporation.

Prior to October 9, 1953, the date of submission of the sixteen cases now being considered, there had been eleven appeals to this court involving various phases of the litigation. Written opinions appear in the following cases: Wilkinson v. McCall, 247 Ala. 225, 23 So.2d 577; Riley v. Wilkinson, 247 Ala. 231, 23 So.2d 582; Ex parte Riley, 247 Ala. 242, 23 So.2d 592; Mudd v. Lanier, 247 Ala. 363, 24 So.2d 550; Riley v. Wilkinson, 247 Ala. 579, 25 So.2d 384, and Riley v. Bradley, 252 Ala. 282, 41 So.2d 641. Appeals in which no opinions were written are Wilkinson v. Wilkinson, 247 Ala. 702, 23 So.2d 601; Ex parte Riley, 247 Ala. 700, 23 So.2d 601; Mudd v. Wilkinson, 247 Ala. 699, 23 So.2d 602; Ex parte Mudd, 247 Ala. 699, 23 So.2d 601, and Ex parte Mudd, 247 Ala. 699, 23 So.2d 601.

These sixteen cases now before us are not the normal cases that are prosecuted to an appellate court. One of the parties describes the record as being of more than 15,000 pages, divided into 27 volumes, and the briefs as consisting of 3,500 pages, further stating that there have been “twelve years of controversy which have successively burdened nine trial ' judges, involved twenty lawyers and imposed thirty appellate proceedings on this court.” (In addition to the eleven appeals already disposed of and the sixteen appeals .now. being considered, four new cases were submitted on November 17, 1954.) It is not practical that we attempt to handle these appeals in the usual manner. We propose to handle each case with a minimum of discussion. At the outset we quote a paragraph from the case of Shepherd v. Sartain, 185 Ala. 439, 460, 64 So. 57, 65, which we consider appropriate:

“To assert that we have compassed the enormous task here imposed upon us, involving as it does innumerable questions of fact as well as of law, without mistakes more or less numerous, would be an unbecoming assumption of judicial infallibility. That we have reached an approximately correct result we have, however, no reason for seriously doubting.”

A comprehensive statement of facts leading up to this litigation appears in Wilkinson v. McCall, 247 Ala. 225, 23 So.2d 577, supra, and Mudd v. Lanier, 247 Ala. 363, 24 So.2d 550, supra. Accordingly, we shall attempt to condense our statement here to a bare minimum consistent with readability and understandability.

In 1912 Edward Wilkinson, Sr., organized the Western Grain Company, an Alabama corporation, and was at all times the owner of a majority of the common stock. In 1921 Frank Nelson became the largest minority holder of common stock. In 1922 friction arose between the two and J. P. Mudd, Wilkinson’s son-in-law, purchased Nelson’s stock. Mudd became a director and attorney for the corporation shortly afterwards.

Edward Wilkinson, Sr., died on November 6, 1941, at the age of 77 years, leaving surviving him his widow, Grace H. Wilkinson, who is non compos mentis, and four children, viz.: Mrs. Marguerite W. Mudd, wife of J. P. Mudd, Mrs. Elizabeth W. Lanier, wife of Sterling S. Lanier, Jr., Mrs. Dimmis W. Riley, wife of E. W. Riley, and Edward Wilkinson, Jr. His estate consisted chiefly of 151 shares of common stock in Western Grain Company, which, by the terms of his will, were placed [154]*154in trust. By his will, Edward Wilkinson, Jr., and Mrs. Lanier were appointed joint executors and also as co-trustees for administering the 15J shares of stock.

During his life Edward Wilkinson, Sr., created five separate trusts for the benefit, respectively, of his wife and each of his four children. He named himself trustee in each of the trusts and named Edward Wilkinson, Jr., and Mrs. Lanier as successor co-trustees. The property in each of the trusts consisted only of shares of common stock in the Western Grain Company, divided as follows: Mrs. Grace Wilkinson, 30 shares; Mrs. Dimmis Riley, 30 shares; Mrs. Marguerite Mudd, 20 shares; Mrs. Elizabeth Lanier, 20 shares; and Edward Wilkinson, Jr., 20 shares; a total of 120 shares. At the time of his death there were outstanding 500 shares of common stock and 150 shares of preferred stock in the Western Grain Company.

On December 17, 1941, special meetings of the stockholders and directors of Western Grain Company were held. At the directors’ meeting it was proposed to elect Edward Wilkinson, Jr., as president of the company. Mr. and Mrs. Mudd objected on the grounds that he was neither capable nor fit for the office. The voting resulted in the election of Edward Wilkinson, Jr., Edward Wilkinson, Jr., and Mrs. Lanier voted for Edward Wilkinson, Jr., their individual stock and also the 151 shares belonging to the estate and the 120 shares of trust stock. They were joined by Mr. Lanier and Bethea McCall. Mr. and Mrs. Mudd voted for Mr. McCall.

On December 22, 1941, Mr. and Mrs. J. P. Mudd and Mrs. Grace Wilkinson, by Mrs. Mudd as next friend, filed a bill in equity praying for the removal of Edward Wilkinson, Jr., as President of Western Grain Company, and the removal of Edward Wilkinson, Jr., and Mrs. Lanier as executors and trustees. This suit was given the circuit court number of 53010, the number also given to the .administration of the estate of Edward Wilkinson, Sr., which had been removed to equity. The suit had several aspects: One, as a derivative stockholders’ suit to correct alleged corporate mismanagement by the board of directors acting through a majority block composed of Mr. and Mrs. Lanier, Edward Wilkinson, Jr., and Bethea McCall; two, by Mrs. Mudd, as beneficiary under the trusts created by her father, against the trustees and executors for maladministration of the and executors for maladministration of the trusts. In this suit Mr. and Mrs. Mudd were represented by Judge Horace Wilkinson, and the respondents, Mr. and Mrs. Lanier and Edward Wilkinson, Jr., were represented both in their individual and representative capacities by Mr. White E. Gibson, who was also a stockholder in Western Grain Company. A claim was also filed by Mr. Mudd in behalf of the Company against the estate of Edward Wilkinson, Sr., for $148,000 arising out of alleged improper withdrawals prior to his death.

We understand from the evidence that when suit 53010 was instituted, and on May 25, 1942, prior to the meetings of the board of directors and stockholders on that date, the 650 shares of stock in the company were distributed and aligned as follows:

Majority

Mrs. Lanier

Mr. Lanier

Edward Wilkinson, Jr.

Mrs. Tillman

Bethea McCall

Mrs. Mary S. Wilkinson

White E. Gibson

The estate, controlled by Edward Wilkinson, Jr., and Mrs. Lanier as Executors

The 5 trusts, controlled by the same parties as trustees Total for majority

Minority

J. P. Mudd

Mrs. Mudd

Alabama By-Products Co.

Mrs. Fowlkes

Mrs. Caldwell

Total for minority

Grand total issued

[155]*155Common Preferred

25 (later purchased by Edward Wilkinson, Jr.)

10 10

316 35 = 351

134 79

50 1

25 (purchased by Mr. Mudd)

5 (purchased by Mr. Mudd)

_ 5 (purchased by Mr. Muddl

184 115 = 299

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85 So. 2d 395, 264 Ala. 145, 1955 Ala. LEXIS 745, Counsel Stack Legal Research, https://law.counselstack.com/opinion/western-grain-company-cases-ala-1955.