Court Opinion

ID: 5561304
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:51:06.458252+00
Date Added: 2024-06-11T08:35:29.087693
License: Public Domain

Jackson, Chief Justice.
This suit was brought by the Grangers’ Life and Health Insurance Company of the United States of America, a corporation created by virtue of the laws of the state of Alabama, against John W. Turner, for the recovery of a ten per cent installment called for on a promissory note for stock therein. The defendant set up by plea that the corporation was permitted by the laws of Alabama to issue stock only to the amount of one hundred thousand dollars, which had been exhausted by the issue of stock to that amount prior to his subscription, and therefore the issue *4of more stock was ultra vires and void, and if he paid his. subscription, he would get nothing therefor. The entire case, on law and facts, was submitted to the presiding judge • without a jury; the_ judge rendered a decision for the defendant, and the assignee of the corporation having been made a party, excepted, and assigns, that judgment for error here.
It seems clear from the evidence that the stock was limited to one hundred thousand dollars in the application, for and grant of the charter, under the general laws of Alabama, by the proper court of that state. There was, some sort of reservation of the right to issue more in this application, but nothing was done by the court in respect, thereto, nor was any authority granted to the corporation to issue more, under the laws of Alabama.
Indeed, in the case. of this same company against Nampes et al., decided by the Supreme Court of Alabama at the December term, 1882, it was held that, under the general law of Alabama and the amendments thereto and the charter of this company by the Mobile court, there was given it no power to go beyond the sum of one hundred thousand dollars; that the issue of stock beyond that amount was ultra vires and void, and consequently that the subscription beyond that sum could not be collected. A certified copy of the opinion in that case is before u's, the case not having been yet reported and published, and that judgment must control and conclude this case. The Alabama decision upon its own statute law is respected in the sister states of the Union, and would be recognized as giving the true intent and scope of her statute law by the Supreme Court of The United States. The latter court, in the case of Scovill vs. Thayer, 105 U. S., 143, annount ces the same principle as is decided in the case of this corporation by the Alabama decision, in a similar Louisiana case, and holds stock beyond an amount authorized by the laws of Louisiana utterly void and uncollectible by judh cial process, ruling that subscription to such stock create^., *5no privilege or right in the subscriber and no liability on his part. If this subscriber had induced insurance on the part of any person in the Grangers’ Life and Health Insurance Company by his acts as-trustee or agent, or on the faith of his subscription, then an action on his individual right for the tort against Turner would lie; but this assignee stands in the shoes of the corporation and sues for the benefit of all creditors, and there is no pretense in this record that any particular creditor was induced or influenced by his action to insure in the company. Scovill vs. Thayer, supra. So that neither the corporation nor its general assignee can recover in this suit, on the facts which this record discloses. In the cases of Turner vs. The Grangers’ Life and Health Insurance Co., 65 Ga., 649, and Hamilton vs. the same, 65 Ga., 750, and 67 Ib., 145, this plea of ultra vires was not in issue, but the partihs against this corporation in those cases relied upon false and fraudulent representations on the part of the company as inducing their subscriptions as the ground of their de.fense, and their action in reference to this company and their subscriptions therein. So that neither of those cases touch the decision now made. For the first time, this point is now made in this court, and, as seen above, the judgment by the Supreme Court of Alabama, in the case of this company vs. Kampes et al., sup)"a, absolutely controls and 'concludes this case, that judgment being a construction of the power of an Alabama corporation' under its statutes.
Judgment affirmed.