Alabama Central Ry. Co. v. Stokes

ANDERSON, J. — The bill in this case evidently proceeds under Acts 1903, p. 338, § 50, being section 3512 of the Code of 1907, and which provides as follows: “Whenever any corporation shall become insolvent, or shall suspend its ordinary business for the lack of funds to carry on the same, any creditors or stockholders, may, by bill or petition, apply to the chancery court of the division in which the corporation has its principal place of business, or to any court in such place possessing chancery jurisdiction, for a writ of injunction and appointment of a receiver, and the dissolution of the corporation,” etc. It will be noted that, in order to work a dissolution of the corporation under said statute, the corporation must be insolvent or must have suspended its ordinary business for lack of funds. As to insolvency, as used in special instances, as in the insolvency and bankruptcy laws, and especially when applied to traders or persons engaged in commercial pursuits, the term “insolvent” generally means the condition of a person who is unable to pay his debts as they become due in the ordinary course of business. But in its popular and general sense the term “insolvent” denotes the insuffi [205] ciency of the entire property and assets of an individual to pay his debts. —16 Am. & Eng. Ency. Law, 636, and cases cited in note 3; 22 Cyc. 1256. We think the term “insolvent” as used in the aforesaid statute, should be interpreted to define insolvency in the general, rather than the special, sense, and that the statute has reference to a corporation whose liabilities exceed its assets, and not those which are merely embarrassed, but which have assets in excess of all liabilities. The proof in this case sIioavs that this respondent corporation has assets which exceed in value the amount ol its indebtedness. The proof fails to shOAV that the coiporation has suspended its ordinary business for the lack of funds. On the other hand, it appears from the evidence that it is a going concern, engaged in the business provided by its charter. The complainant does not make out a case for a dissolution of the corporation under the common laAV, as the proof fails to show that the corporation has suspended business, or is derelict, or that it is impossible for it to attain the real objects for Avhich it was formed. —Noble v. Gadsden Co., 133 Ala. 250, 31 South. 856, 91 Am. St. Rep. 27; Ross v. American Banana Co., 150 Ala. 268, 43 South. 817. MoreoA'er, Wilson, a stockholder, would be a necessary party to such a bill. The chancellor erred in granting relief upon the proof, even if the bill contained equity upon its face, Avhich point we need not decide. The decree of the chancery «.ourt is accordingly reversed, and one is here rendered denying complainant relief and dismissing the bill of complaint. Reversed and rendered. Tyson, C. J., and Dowdell, Simpson, and Denson, JJ., concur.