Opinion ID: 1942580
Heading Depth: 1
Heading Rank: 3

Heading: Alabama Dry Dock & Shipbuilding Co. Executive Department President

Text: Gentlemen: Because of my health, I am unable to attend the special meeting of the stockholders called for Tuesday, January 30, 1973, so I am writing you my objections to the proposed retirement plan. On page 4 of the notice of the stockholders meeting, I find the following statement: `Based on data estimated as of January 1, 1973, the actuary has calculated normal contributions payable by the Company for current service of Members at 3,41% of payroll.    Contributions made payable by the Company for prior service of Members since March 1, 1962, approximate $98,866 ($4,125 for officers and employee-directors and $94,741 for other employees) per annum, such amounts being the level payments required to liquidate the estimated prior service cost of $1,518.921.' The Supreme Court of Alabama and all other courts as far as I have been able to find from a thorough search of the law hold that the directors do not have the power to make increased payments for prior services rendered and to do so constitutes a misappropriation of corporate funds which cannot be ratified except by every stockholder. In other words, if this resolution is passed, the directors will be personally liable for all the amounts paid for past services as stated in the notice, and the fact that every stockholder except the holder of one share approves will not relieve them of liability. Mr. Charlie Johnstone stated to me that he did not consider it a payment for past services, but his statement is contrary to the statement in the notice as quoted above and is, in my opinion, absurd. It definitely does constitute payment for prior services and therefore, is beyond the power of the directors or the stockholders if one stockholder objects. The directors who are responsible for this resolution are and should be held personally liable for all illegal payments. The fact that the notice expressly states that the payments are for prior service for Members since March 1, 1962, should be conclusive in any court and the liability of the directors clear. I am writing this letter because I feel you should know what liability you are assuming if you persist in the passage of this resolution. I have numerous other objections which I think are valid and which will be raised in contesting the legality of any payments made, but the foregoing reason is so clear that it should be sufficient. Defendants dispute that the above letter creates a justiciable controversy but, nevertheless, counter with affidavits from which we quote in pertinent part: ... I further state that neither I, nor any member of my family holding stock in the corporation will file any proceedings to prevent the implementation of said plan, or to have the plan declared illegal, and I have advised the Directors of the Complainant Corporation of this. ... /s/ Harry H. Smith ... I have never at any time threatened any controversy or instituted any controversy with the company with regard to said proposed retirement plan; I never have and do not now have any intention of filing any proceedings to prevent the implementation of the said plan or to have it declared illegal, and I now affirmatively state that I will not undertake to institute any proceedings to prevent the implementation of said plan or to have it declared illegal. ... /s/ Gregory L. Smith ... I have never at any time threatened any controversy or instituted any action or controversy with the company with regard to its proposed retirement plan. I have never had, and do not now have any intention of filing any proceedings to prevent the implementation of the said plan, and I now affirmatively state that I will not undertake to institute any proceedings to prevent the implementation of said plan. ... /s/ Frank M. Ladd, Jr. A justiciable controversy does not exist merely because a stockholder disagrees with management or votes his stock contrary to management's position. While there may be some equivocation in Harry H. Smith's statements, nevertheless, they, so far as pertinent here, refer to matters which may or may not occur in the future. The complaint itself alleges that the Retirement Plan will or may be contested by Respondents or some of them. Allegations which merely show that the plaintiff anticipates such a controversy may arise are not sufficient to invite judicial declaration of rights. Saenger Theatres Corp. v. McDermott et al., 237 Ala. 489, 187 So. 460; Theater Company v. Manning et al., 236 Ala. 670, 185 So. 171; Jefferson County v. Johnson, 232 Ala. 406, 168 So. 450. It is also pertinent we think that the retirement plan is not in effect. The board of directors of plaintiff passed a resolution stating that the plan would not be put into operation until court approval was obtained. It has long been the law of this State that courts will not decide moot, abstract or hypothetical questions or render purely advisory opinions. Many cases to this effect are collected in the Alabama Digest under Declaratory Judgment. To rule otherwise we think would cause a deluge of court litigation concerning the operation and future action of private corporations. The plaintiff has relied primarily on the following cases: Klein v. Jefferson County Building and Loan Ass'n, 239 Ala. 460, 195 So. 593; Fore v. Alabama State Bridge Corporation, 242 Ala. 455, 6 So.2d 508; Scott v. Alabama State Bridge Corporation, 233 Ala. 12, 169 So. 273; Lang v. City of Mobile, 239 Ala. 331, 195 So. 248; Alabama-Tennessee Natural Gas Co. v. City of Huntsville, 275 Ala. 184, 153 So.2d 619. While in some instances these cases are persuasive, we nevertheless are of the opinion that they fall short of sustaining its position. These cases involve the construction or constitutionality of statutes or involve matters of substantial public interest. They stand for the proposition that controversy touching the legality of acts of public officials or public agencies challenged by parties whose interests are adversely affected is one of the favored fields for declaratory judgment. While we regard the holdings of these cases as sound, we do not think they are applicable to private matters not involving public interest. Here, we are dealing with a proposed future act of a private corporation. Since the judgment of the trial court was void because of the lack of a justiciable controversy between the parties and since a void judgment will not support an appeal, it follows that the appeal is dismissed. City of Mobile v. Scott, 278 Ala. 388, 178 So.2d 545; State ex rel. Baxley v. Johnson, 293 Ala. 69, 300 So.2d 106. In view of our decision, mandamus is appropriate, although perhaps unnecessary. Wood v. Casualty Reciprocal Exchange, 291 Ala. 243, 279 So.2d 506; Light v. Harrison, 289 Ala. 1, 265 So.2d 437. The defendant's petition for writ of mandamus is granted and the trial court is directed to vacate its May 30, 1974, summary judgment. Appeal dismissed; writ granted. HEFLIN, C. J., and BLOODWORTH, FAULKNER and EMBRY, JJ., concur.