Dargin v. Hewlitt

HEAD, J. The appellee, Hewlitt, having acquired options of purchase of certain real' property in Jefferson county known as the “Fair Grounds,” containing about 80 acres, on or about April 1, 1895, contracted with appellant, Dargin, to sell said land to him at the price of $12,500 in cash, and for the further consideration that he, Hewlitt, should receive one-third of the proceeds of all privileges incident to the holding of fairs, races or other events of like character upon said grounds. About 75 acres of the land was inclosed by a fence, within which there were a race track and buildings especially adapted to the holding of races and fairs. At the time of sale, Hewlitt caused the property to be conveyed to Dargin by deeds of conveyance which were approved and accepted by him, and Dargin paid the stipulated cash consideration and entered into the possession and enjoyment^of the premises. On the 16th of January, 1896, Dargin caused a corporation to be organized by the name of The Alabama State Fair and Racing Association, under the general [515] laws of Alabama, with an authorized capital of $50,000, divided into five hundred shares of the per value of $100 each. Dargin subscribed for 498 of said shares, and respondents, Crawford and Fox, each subscribed for one share, and the entire subscription was paid by Dargin, by his conveyance of said property to the corporation, the deed bearing date April 1, 1896. The bill avers that Dargin is the real beneficial owner of all the. stock, and that he induced Crawford and Fox to take a share solely for the purpose of enabling him to comply with the laws as to the organization of a corporation and procure a charter. It is also averred that Dargin did this in the hope, and for the sole purpose and design, to . escape from, and evade, the agreement which he made with Hewlitt, and to defraud the latter of his rights and interests thereunder. The bill avers that a race meeting was held on the grounds beginning March 16, 1896, and ending on the 28th of same month, during which time there were run each day five or six races; that said meeting was held ostensibly under the management of the said ‘ ‘Alabama State Fair and Racing Association,” but that Dargin really managed and controlled the thing ; that there was a large attendance of spectators, and that the receipts from the prices of admission to the grounds were large, but that orator has no means of knowing the actual amount; that Dargin caused a number of tickets to be distributed, and granted admission to many for the purpose of swelling the number of those who would bet with him, or at the books which he controlled, on the races there taking place; that the proceeds from the restaurant and bar-room privileges and from various other sources, unknown to orator, were very large ; that Dargin left Alabama within a few days after the said race meeting, to-wit, about the first of April, 1896, and since that time has been, continuously, and is now absent from the State ; and it is averred that he carried away with him and now has in his possession all of the books and records of the said association, and that orator does not know, and except by the aid of this court, is. without the means of ascertaining, either the gross amount of the receipts of proceeds of the privileges, or the various items thereof; and Dargin and the said association have failed to account to orator, or pay to him the sum to which he is entitled. [516] . The bill makes Dargin, the said association and said Crawford, who was president of the said association, parties defendant. ■ The prayer is for an account to ascertain the amount due orator and for a decree therefor against Dargin and the Association. It is specially prayed that the defendants be charged with, and held to account for, all tickets of admission issued by them and upon which admittance to the grounds was granted, at the regular price of admission. An injunction against any disposition by Dargin of the capital stock of the association, or any of the shares thereof, owned by him, until the final determination of this cause, is also prayed for, to which is added the prayer for general relief. The bill contains many interrogatories seeking to discover the facts and figures touching the subject-matter of the bill. Each of the respondents filed a demurrer to the bill setting up numerous grounds. I am inclined to the opinion that upon the facts stated in the bill, the objection that complainant has an adequate remedy at law is not well taken ; but my brothers, upon consultation, think otherwise. They hold that the bill'shows no more than that Dargin received money legally belonging to complainant, which he failed to pay over, for which an action at law for money had and received would lie, without showing any confusion or complication of accounts justifying a resort to equity. The cases of Westmoreland v. Foster, 60 Ala. 448, and Bellinger v. Lehman, Durr & Co., 103 Ala. 385, were cases in equity, where the complainants sought the recovery of funds which proceeded from property upon which they held liens, and were regarded in the same light as proceedings to establish and enforce liens upon the property itself. See full discussion and citation of authoxúties 1 Pom. Eq. Jxir., § 178. We all concur that the bill is deficient as a bill of discovery.—1 Brick. Dig., 714, §§1066 — 1068; Guice v. Parker, 46 Ala. 616. If the bill shall be so amended as to meet the objections above pointed out, we think the objection that the “Alabama State Fair and Racing Association” and said Crawford are not -proper parties defendant, is not well taken. The bill shows that this association and said [517] Dargin are, essentially, for the purposes of this case, one and the same person. If the bill be true, the organization of the corporation by Dargin was a mere form, conceived by him for the purpose of introducing a new person or entity, as an owner of the property and of the business to be carried on, prompted by the misconception that such a scheme would absolve him from the obligations of his contract with the complainant. The corporation, however, by reason of its legal creation, being a distinct person, and being the legal owner of the property and business to be carried on for the use of Dargin, it was essential that it be brought before the court; and Crawford, being its president, was not improperly made a defendant. Nor if the bill be properly amended, as indicated, do we think there is merit in the objection that the proceeds of the privileges named in the bill, had not, at the time of the alleged contract of sale, any existence, actual or potential, such as to make them a subject of sale. The bill fully shows that the property was improved and prepared for the purpose of, and made especially adapted to the holding of fairs, races, &c., thus showing a potential existence of the income to be derived from the prosecution of the business to be carried on. We cannot pronounce the contract void for indefiniteness, as contended for by the demurrers; nor does the fact that the bill fails to show that the contract was in writing, or where entered into, or what time the contract was to run, render the bill demurrable. The defense that the contract was void, under the statute of frauds, because not in writing, if an available defense in the case, must be made by plea or answer. In view, however, of the relief sought here, the statute of frauds cannot arise. So far as relief is sought, the bill shows that the contract was an executed one and it is not material that no time was fixed for its termination. No effort is here made to enforce the executory agreement to carry on the business. The complainant merely seeks to recover that which has already been earned under the agreement. Whether, by the contract, complainant is entitled to any part of the gate fees or not, the fact that he claims one-third thereof does not render the whole bill demurrable, there being other sources of income from the [518] business which the contract does show he is entitled to share in. The demurrer, to raise the question, should have been addressed to only so much of the bill as seeks to recover gate fees. Nor does an improper claim of gate fees render the bill multifarious. It was sufficient to set out the contract according to its -legal effect without introducing it in haec verba. The insolvency of Dargin vel non is not material. We are unable to see- anything immoral in a contract to pay a share of the proceeds of all privileges incident to the holding of fairs, races, or other events of like character. For the reasons hereinabove stated, the demurrers ought to have been sustained, and the decretal order • overruling them is reversed and the cause remanded, with directions to the city court to sustain the demurrers unless the bill is amended so as to make it sufficient. Reversed and remanded.