Court Opinion

ID: 6516768
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:27:22.865692+00
Date Added: 2024-06-11T15:55:02.489690
License: Public Domain

HEAL, J.
This is an action upon a note given by defendant to the Alabama Terminal & Improvement Company for the price of shares of the capital stock of the company subscribed for by him. The promise was “to pay to the Alabama Términal & Improvement Company as now chartered under the general laws of the State of Alabama, or any amendments that may hereafter be made either by general law or by act of the legislature, its. order or assigns.” The first plea defends upon the allegation of false representations made to the defendant by those representing the company who took the note, inducing him to subscribe for the ■ shares and execute the note. The false representations alleged were that the company was an existing corporation, duly and legally organized under the laws of Alabama; that such persons further represented and agreed that upon the execution and delivery of said writing, and the payment by defendant of the sum of money therein stipulated to be paid, the defendant should become a member' and stockholder of said corporation, and have and receive therefor the sum of $2,500 of the capital stock of said corporation, which said stock should be and was that of a duly and legally organized corporation under the laws of Alabama. It is alleged that the writing sued on was given upon the faith and reliance on the truth of said representations. The falsity of the representations, and knowledge thereof by the parties making them, are alleged. It is alleged : That they were false in this : *448that the alleged corporation was not, nor has it since become, a legally organized corporate body under the laws of Alabama; and it was organized fraudulently, in this : that the originators and organizers and corporators or stockholders of the same did not, as required by law, pay in cash ' 20. per cent, of the capital subscribed to the capital stock of the proposed corporation, but agreed among themselves that the said 20 per cent, should not be paid or collected; and that in pursurance of such agreement checks were given for said 20 per cent, by the several subscribers, upon the understanding that they would be kept, and not presented for payment, and that they were so kept, and have never been presented for payment, to this day, and have never been paid. That the board of corpora-tors, whose duty it was to collect or see to the collection of the said 20 per cent, of the subscription to stock of said proposed corporation, falsely certified to the judge of probate, over their signatures, the payment of such 20 per cent, in cash, and thereby obtained the certificate of such officer that the said alleged corporation had been duly organized under the laws of Alabama, and authorized to commence business under their charter. That, after this, defendant’s said writing here sued on was taken from him by the agent of said alleged corporation for a proposed subscription by him to the capital stock of said alleged corporation, without any knowledge or information on his part of the said fraud and illegality in the oi'ganization of said alleged corporation, and that he had no notice or information thereof until after the commencement of this suit, nor had he any reason to suspect such fraud. And defendant says that it never has been, and is not now, in the power of said alleged corporation to carry out the contract with him, and deliver to him, on the payment of the amount of money specified in said writing, an equal amount of valid and legal stock iu a valid and legally organized corporation bearing the name or identity of the said alleged corporation.. Wherefore defendant says that the taking of the said writing from him under the circumstances aforesaid was and is a fraud upon him, and that he is under no obligation to pay said alleged debt.
■ My brothers think and hold that this plea is not subject to the grounds of demurrer assigned to it, and that *449the court erred in sustaining the demurrer. I express no opinion. . >
Reversed and remanded.
Brickell, C. J., not sitting.,