Opinion
8 Div. 903.
May 19, 1927.
Appeal from Circuit Court, Morgan County; James E. Horton, Judge.
Eyster Eyster, of Albany, for appellants.
The bill should particularly describe the debt or liability sought to be secured by the lien, that it was necessary to sell the stock for satisfaction of such debt, and also a personal demand for payment. Wynn v. Tallapoosa, 168 Ala. 470, 53 So. 228. The stock certificate is prima facie evidence of payment therefor. 7 R. C. L. 218. As against Beard, the complainant is now estopped from asserting its lien on the stock of Mrs. Crawford. Malone v. M. F. Bank, 213 Ala. 215, 104 So. 758; First Nat. Bank v. Huntsville B. T. Co., 213 Ala. 236, 104 So. 760.
A. J. Harris, of Decatur, for appellee.
An issue of stock in excess of the authorized capital stock is void, and cannot be ratified nor raise an estoppel. 14 C. J. 475; Grangers' L. H. I. Co. v. Kamper, 73 Ala. 343; 7 R. C. L. 190. A sale of an original issue of stock at less than half its par value is void — much more so an issue for which nothing was received. Perry v. Tuskaloosa Mill, 93 Ala. 372, 9 So. 217; Fitzpatrick v. Dispatch Pub. Co., 83 Ala. 606, 2 So. 727. Equity has jurisdiction to cancel the stock issued to Mrs. Crawford. Crow v. Florence I. C. Co., 143 Ala. 543, 39 So. 401. The lien of the complainant is superior to that of Beard. People's Bank v. Mobile Towing W. Co., 210 Ala. 678, 99 So. 87. Beard was charged by law with knowledge that the corporation had a lien on Mrs. Crawford's stock for any liability which she may have been due it. Mobile Towing W. Co. v. First Nat. Bank, 201 Ala. 419, 78 So. 797.
It is a well-established principle that any issue of stock by a corporation in excess of the amount prescribed or limited by its charter is ultra vires, and the stock so issued is void, even in the hands of a bona fide purchaser for value. 7 R. C. L. p. 218. "The attempt to increase the stock of the company beyond the limit fixed by its charter was ultra vires. The stock itself was, therefore, void. It conferred on the holders no rights, and subjected them to no liabilities." Granger's Life Health Ins. Co. v. Kamper, 73 Ala. 343.
It would therefore seem that the 27 shares issued to Mrs. Crawford in excess of the capital stock was void. We also think that the bill sufficiently charges that the other 567 shares had been issued and delivered. It says that said 567 shares "had already been subscribed and sold and was outstanding." The bill was not subject to the demurrer as to this phase of the case.
As to the other stock issued to Mrs. Crawford, the bill is in the alternative, and seeks a cancellation of same because issued without consideration, or, if anything was paid, a great portion is unpaid, and as to this the bill seeks the enforcement of a lien on said stock. If this stock was issued without consideration and the complainant received nothing therefor, as charged in the first alternative, the issue was violative of law, and should be canceled without an offer of restitution, as the bill negatives in said first alternative the receipt of anything for the stock. Perry v. Tuskaloosa. Oil Co., 93 Ala. 364, 9 So. 217. On the other hand, if the stock was issued in good faith, and something was paid thereon, the complainant would have a lien upon same for whatever might be due it. Section 7000 of the Code of 1923. And this lien is superior to the one acquired by Beard as an attaching creditor. The bill shows the debt was owing the corporation before notice of the levy of Beard's attachment. It was also incumbent upon Beard to ascertain if the corporation had a lien upon the stock. Mobile Towing Co. v. First National Bank, 201 Ala. 419, 78 So. 797. This case is unlike the case of First National Bank of Chattanooga v. Huntsville Bank, 213 Ala. 236, 104 So. 760, as is demonstrated in the case last cited.
The bill to enforce a lien on the stock should particularly describe the debt or liability sought to be secured in the lien. Wynn v. Tallapoosa County Bank, 168 Ala. 486, 53 So. 228. The bill here describes the debt as being the purchase money for the stock. The only thing being uncertain is the amount of the debt, and the bill avers that nothing was paid for same, and it never received anything, but, if anything was paid, the bill seeks a lien for the balance due. We think that this meets the requirements of the rule. Moreover, the demurrers are addressed to the bill as a whole, and, even if it is deficient in this respect, the demurrer would have to be overruled. Forrester v. Granberry, 211 Ala. 402, 100 So. 551.
The lien given by section 7000 of the Code of 1923 is enforceable in a court of equity, notwithstanding another method may be given, and which is merely cumulative. Rowe v. Bank of New Brockton, 207 Ala. 384, 92 So. 643. And this may be done without averment that it is necessary to sell the stock or that the corporation had made personal demand for payment or satisfaction, as these conditions apply to a pursuit of the statutory remedy and not to a bill in equity to enforce the lien. Rowe Case, supra. What was said in the case of Wynn v. Tallapoosa County Bank, 168 Ala. 486, 53 So. 228, as to averment of necessity and demand as a condition precedent to filing the bill was explained in the Rowe Case, supra.
The trial court did not err in overruling the demurrers to the bill of complaint, and the decree of the circuit court is affirmed.
Affirmed.
SAYRE, GARDNER, and BOULDIN, JJ., concur.