Court Opinion

ID: 7368965
Source: CourtListenerOpinion
Date Created: 2022-07-27 23:54:26.758032+00
Date Added: 2024-06-11T16:20:51.232331
License: Public Domain

THOMAS, J.
This is an appeal by the Brighton Cemetery Company, a corporation, James H. Davis, Mary E. Wagensler, and George M. Wagensler, from a decree of the city court overruling the several separate demurrers to a bill of complaint filed by J. B. Faulks as a judgment creditor of the Bellview Cemetery Company, a corporation; to the properties and rights of which latter company the Brighton Cemetery Company succeeded by purchase.
(1) It has long been settled that a bill filed by a judgment creditor to reach the equitable assets of a corporation in satisfaction of the complainant’s judgment at law, averring such assets to be (1) those arising from the right of the corporation to call on its stockholders for their unpaid subscriptions to the capital stock, and (2) those that may be produced by the setting aside of fraudulent conveyances of the corporate property, is not subject to demurrer for multifariousness. Any number of fraud*582ulent grantees and stockholders subject as such for unpaid stock may be joined in one bill; such different assets come from a common source, the corporation, debtor to the complainant.—Code, 3095; Gassenheimer v. Kellogg, 121 Ala. 109, 26 South. 29; Henderson v. Hall, 134 Ala. 455, 32 South. 840, 63 L. R. A. 673; Webb v. Butler, 192 Ala. 287, 68 South. 369, Ann. Cas. 1916D, 815; Hall and Farley, Trustees, v. Henderson, 114 Ala. 601, 21 South. 1020, 62 Am. St. Rep. 141; Clay, Adm’r, v. Gurley, Adm’r, 62 Ala. 14; Lehman v. Meyer, 67 Ala. 396; Holt v. Wilson, 75 Ala. 58; Russell v. Garrett, 75 Ala. 348; Hinds v. Hinds, 80 Ala. 225; Allen v. Montgomery, etc., Co., 11 Ala. 437; Durr v. Hanover Nat. Bank, 170 Ala. 260, 53 South. 1012.
(2) The law is further settled that when a creditor has sued a corporation at law to judgment, and had execution thereon which is returned “No property found,” such creditor may proceed in equity to compel payment by stockholders who have surrendered their stock and taken assets of the corporation in lieu thereof. And it must follow that a stockholder who has paid up his subscription for stock in the corporation with property at an “inflated value,” as heretofore defined by this court, may be subjected by such a creditor, in the same manner, to the extent of the amount so due the corporation. That is to say, any balance due on the stock subscription for the excess over the reasonable value of the property so transferred to the corporation may be subjected to the payment of the creditor’s demand. In either case it is an equitable asset of the corporation — so far as the creditor is concerned — in the hands of the stockholders, that is sought to be subjected to the payment of the judgment.
The rule declared in Elyton Land Company v. Birmingham, etc., Co., 92 Ala. 407, 9 South. 129, 12 L. R. A. 307, 27 Am. St. Rep. 65, and followed by our courts, is as follows:
“When a subscription for stock in a corporation is made payable in property, the property must be taken at its reasonable money value; and though a margin will be allowed for an honest difference of opinion as to its value, a valuation grossly excessive, knowingly made, while its acceptance may bind the corporation, is a fraud on creditors, and they may proceed against the stockholders individually as for an unpaid subscription.”—Nicrosi v. Irvine, 102 Ala. 648, 15 South. 429, 48 Am. St. Rep. 92; Hall and Farley v. Henderson, supra; Roman v. Dimmick, 115 Ala. 233, 22 South. 109; Montgomery Iron Works v. Capital City Ins. Co., *583137 Ala. 134, 34 South. 210; Lea v. Iron Belt Mercantile Co., 119 Ala. 271, 24 South. 28; Id., 147 Ala. 421, 42 South. 415, 8 L. R. A. (N. S.) 279, 119 Am. St. Rep. 93; Pickering v. Townsend, 118 Ala. 351, 23 South. 703; Roman v. Dimmick, 123 Ala. 366, 26 South. 214.
(3) The complainant is not required to show his right, title, or claim more clearly than to state the facts with reference to the acts subjecting the several respondents to such liability. The demurrers were properly overruled.
It results from what we have said that the decree of the judge of the city court of Bessemer, sitting in equity, must be affirmed.
Affirmed.
Anderson, C. J., and Mayfield and Somerville, JJ., concur.