Title: Kinsaul v. Florala Telephone Company
Citation: 228 So. 2d 777
Docket Number: N/A
State: Alabama
Issuer: Alabama Supreme Court
Date: November 7, 1969

228 So. 2d 777 (1969)
Mary Josephine KINSAUL et al.,
v.
FLORALA TELEPHONE COMPANY, Inc., a Corporation et al.
4 Div. 275.

Supreme Court of Alabama.
November 7, 1969.
Rehearing Denied December 11, 1969.
Tipler &amp; Fuller, Andalusia, for appellants.
Albert L. Rankin, Albrittons &amp; Rankin, Andalusia, for appellees.
MERRILL, Justice.
This appeal is from a decree dismissing a bill in equity after a hearing filed by appellant *778 stockholders and directors against Florala Telephone Company, Inc., its president, Lloyd G. Vaughan, and A. B. Lowery and H. G. Huggins, who, along with appellants are the other stockholders and directors of the corporation.
Florala Telephone Company was owned by a man named Vaughan. At his death, this property passed by will to his widow and children in the following manner:
In 1947, Lloyd Vaughan purchased the undivided interests of his brother William and his sister Gertrude for $5,000 each. He borrowed the $10,000 purchase money from the Bank of Florala, giving his 2/7ths interest and the purchased 2/7ths interest as security for the $10,000. In 1950, he, being the member of the family who had managed and operated the business, began negotiations with the Rural Electrification Agency to borrow funds for the expansion of the company. Two of REA's conditions were that the company become a corporation and that the encumbrance on Lloyd Vaughan's interest be cleared.
Vaughan then obtained the agreement of the widow and his sister to an incorporation wherein stock would be issued on a "pro rata basis" with the interests in the partnership. He also obtained a second agreement that, when the company was formed, it would lend him $10,000 at 2% per annum interest on a thirty-five year note. `This incorporation gave him roughly 57% of the new company. But in order to get sufficient cash in the company to enable it to lend him $10,000, Vaughan resorted to selling a $30,000 preferred stock issue. Having a little over $25,000 paid in, he borrowed the $10,000 and used $5,875.00 of it to "pay down" the bank note. The bank then released the security and took an open renewal of the unpaid balance. The remaining $4,125.00 was used to purchase the unbought preferred stock.
The bill sought an accounting from the corporation and Vaughan as to his actions involving the use of company funds and assets.
Respondents answered and denied any wrong doing, showed that complainants knew of and agreed to Vaughan's activities to get the REA loan at the time, and after waiting fifteen years were guilty of laches, that they, as stockholders and directors, had access to all the books and records of the company, and that if complainants had a claim, it was barred by the statute of limitations.
The trial court filed a comprehensive opinion dealing with the contentions of the parties. The opinion part of the decree ends with this sentence: "It is the opinion of the Court that the complainants have failed to prove their case as alleged in the bill of complaint filed in this cause on the 8th day of December, 1964, and that the same should be dismissed, and the cost of this proceeding taxed against them."
The only reference to any assignments of error in appellants' original brief is on page 7 of their brief, which page is between the last page of "Propositions of Law" and the page labeled "Argument." We consider page 7 as part of the argument section of the brief and that page reads:
"PROPOSITIONS OF LAW I, II, III, IV, V, VI, and VII
*779 "PROPOSITION OF LAW VIII
(We note that there are no "individual sections" in the "argument" part of the brief).
Since this is the only mention of any assignments of error in the brief, the others will be deemed waived and will not be considered by the court. Alabama Power Co. v. Scholz, 283 Ala. 232, 215 So. 2d 447; International Union, etc. v. Palmer, 267 Ala. 683, 104 So. 2d 691; Supreme Court Rule 9.
Assignments 2, 10 and 11 read:
Assignment 2 presents nothing for review and is without merit whether at equity or law. Smith v. Smith, 279 Ala. 570, 188 So. 2d 530 (equity); Franklin v. State ex rel. Trammell, 275 Ala. 92, 152 So. 2d 158 (equity); Vernon v. Prine, 277 Ala. 402, 171 So. 2d 110 (law); Andrews v. May Supply Co., 277 Ala. 248, 168 So. 2d 619 (law).
We also note that assignment 11 is without merit for two reasons. First, before equity will entertain a stockholder's action on behalf of the corporation, the complaining stockholder must first seek redress within the corporate body, unless from the bill it is clearly shown that if such demand had been made it would have met with refusal. American Life Ins. Co. v. Powell, 262 Ala. 560, 80 So. 2d 487, and cases there cited.
Title 10, § 34, Code 1940, was superseded by Act No. 414, approved November 13, 1959, and now appears in the 1958 compilation as Tit. 10, § 21(46) Pocket Part. It provides in part:
It also provides for a penalty for refusal of such examination "without reasonable cause."
Here, the appellants were not only stockholders but directors, and there is no allegation that they made any written demand under the statute, or that it was refused or would have been refused. The record also reveals that one of the appellants, Nora S. Lawrence, voted, as a director, to approve two of the actions of appellee Vaughan which are now attacked in this action. We are convinced that there is no merit in assignment of error 11.
Assignments 2, 10 and 11 were argued together and since 2 and 11 were without merit, it is unnecessary to consider 10, under the rule that where unrelated assignments of error are argued in *780 bulk in brief, and one is found to be without merit, the court will not consider the others. Piper Ice Cream Co. v. Midwest Dairy Products Corp., 279 Ala. 471, 187 So. 2d 228; Callahan v. Booth, 275 Ala. 275, 154 So. 2d 32.
Assignments of error 3, 4 and 13 read:
The assignments are related because all are concerned with the sufficiency of the evidence, and it was not error to argue them together in brief. Southern Electric Generating Co. v. Lance, 269 Ala. 25, 110 So. 2d 627.
But appellees argue that we cannot consider these assignments of error and we agree. Supreme Court Rule 9(b) reads:
The index to the record shows that seven witnesses testified, but there is no effort by appellants to comply with Rule 9(b). When there is no compliance with the rule, we apply the presumption that the record contains evidence to sustain every finding of fact. Evergreen Heading Co. v. Skipper, 276 Ala. 623, 165 So. 2d 705; Nixon v. Richardson, 281 Ala. 632, 206 So. 2d 877.
Although appellants filed a reply brief in which an attempt was made to meet objections to their original brief raised by appellees, such brief cannot be looked to in order to determine whether the original brief complies with Supreme Court Rule 9. Piper Ice Cream Co. v. Midwest Dairy Products Corp., 279 Ala. 471, 187 So. 2d 228.
This case was originally submitted to another justice and was transferred to the author of this opinion on October 10, 1969.
No reversible error is presented for our consideration.
Affirmed.
LAWSON, HARWOOD, MADDOX and McCALL, JJ., concur.
[1]  The errors were assigned `separately and severally'. The above listed Assignments of Error involve the same substantial questions.