SIMPSON, Justice. This is an action by appellant against appellee for the conversion by appellee of appellant's share of stock in appellee corporation. The complaint also contains a count in assumpsit and two counts declaring upon Title 7, § 42, Code of Alabama of 1940, relying upon discovery of fraud within one year prior to the filing of the complaint.
This is the second appeal in this case. On the first appellee sought to transfer the case to equity on the contention that it could not take advantage of certain equitable defenses on the law side. This court reversed the trial court (266 Ala. 407, 96 So.2d 728), holding that all available defenses were pleadable at law.
The trial was had at law and the trial court at the conclusion of the evidence gave the general affirmative charge with hypothesis for the appellee. From that judgment this appeal is taken.
The record in this case consists of some 1,175 transcript pages. Only the salient facts as established by the evidence and necessary to an understanding of our decision will be mentioned.
In 1926 J. N. Brown owned and operated Brown Funeral Home and appellant was his embalmer. In 1926 J. N. Brown Funeral Benefit Association filed its articles of incorporation in the Probate Court of Jefferson County showing five incorporators including Brown and appellant. Brown subscribed for 46 shares and the other four subscribed for 1 share each. Nobody got a certificate in 1926, but in 1928 all of the stock was issued to Brown. In 1928 the burial association changed its name and increased its capital in a stockholders' meeting which recorded J. N. Brown voting 46 shares, and four other individuals not including appellant, voting one share each. The common stock was increased to 500 shares of stock authorized at that time. Preferred stock was created in the 1928 meeting and a 2,000 share preferred stock dividend was declared by the directors who were the same persons who voted the increase, but none of them except Brown and Edmundson got stock certificates.
In January, 1933 the company became known as the Brown-Service Funeral Company. In 1938 the name was changed to Brown-Service Insurance Company, and in 1944 the company and Liberty National Insurance Company were consolidated, and the new consolidated company was named Liberty National Life Insurance Company. All of the outstanding stock of the former Brown-Service and Liberty National companies was cancelled and put back in the stock books and all of the stock of the new consolidated company was issued in exchange, pursuant to the consolidation agreement.
In 1954 appellant demanded of Liberty National, appellee, stock evidencing his interest as a stockholder in Liberty National Life Insurance Company as a result of the mergers involving the original assets of J. N. Brown Burial Benefit Association.
Appellant contends that the trial court erred in directing a verdict for appellee on the ground of prescription, arguing that prescription does not lie to prevent a suit by a stockholder against a corporation to require it to issue a stockholder a certificate
Defendant-appellee takes the position that if the action by the corporate officers in 1928 was a conversion of the plaintiff's stock, his cause of action is barred by the statute of limitations of six years, or in any event his claim is barred by the twenty year prescriptive period.
Appellant also contends that the twenty year prescriptive period does not bar him in this action since appellee filed in 1935, several years after the 1923 meeting, and within less than twenty years before the filing of this suit, an amendment to its charter adopting the original charter showing the appellant as a stockholder, that this amounts to recognition within twenty years and prevents the doctrine of prescription from applying.
He also relies upon Title 7, § 42, supra, seeking relief on the ground of fraud with suit brought within one year from the discovery of fraud.
The law, of course, as argued by appellant is that one can be a stockholder in a corporation without having issued to him a certificate of stock. In Birmingham National Bank v. Roden, 97 Ala. 404, 11 So. 883, 884, this court said:
However, as to the contention that a shareholder is not barred by limitations or prescription when his stock has been converted, we cannot agree.
In 1926, and thereafter until 1928 when all stock was issued, appellant, being listed as a shareholder in the certificate of incorporation of the J. N. Brown Funeral Benefit Association, had his remedy as a person entitled to a certificate to compel the corporation to issue one to him. After 1928 he was entitled to damages for the conversion of his stock. In the Birmingham National Bank v. Roden case, supra, a bill was brought in equity to compel the corporation to issue stock to the plaintiff or pay the value of the stock, etc. The reporter in the Southern Reporter thus correctly epitomized the holding of the chancellor:
The holding was affirmed by this court. But in the case at bar, neither of these remedies did the appellant pursue. He, instead, has waited some 28 years and has demanded recognition in a corporation which is two corporations removed from the original. We think he has waited too long.
The doctrine of prescription has been stated many times in our decisions. Snodgrass v. Snodgrass, 176 Ala. 276, 58 So. 201, cited with approval in Eatman v. Goodson, 1954, 262 Ala. 242, 78 So.2d 625, stated the rule as follows:
The rule has been applied to various situations but always consistently and unvariably. Eason v. Samson Lodge # 624, A.F. & A.M., Ala., 117 So.2d 138; Mott v. Helmes, 246 Ala. 331, 20 So.2d 461; Wise v. Helms, 252 Ala. 227, 40 So.2d 700; Oxford v. Estes, 229 Ala. 606, 158 So. 534; Case v. Conservation & Land Co., Inc., 256 Ala. 46, 53 So.2d 562; Eatman v. Goodson, 262 Ala. 242, 247, 78 So.2d 625.
Lack of notice is not sufficient to avert the application of the doctrine Merrill v. Merrill, 260 Ala. 408, 71 So.2d 44— as is the mere assertion of a claim insufficient to avert its application. See Eatman v. Goodson, supra.
We have often stated that "the basic principle of prescription is not the mere
Appellant asseverates that Braun v. Pettyjohn, 176 Ala. 592, 58 So. 907, sustains his contention that the 1935 re-recording of the articles of incorporation of J. N. Brown Burial Benefit Association was a recognition by the successor corporation of appellant's claim. That case dealt with a mortgage foreclosure bill filed less than 20 years from the date of the mortgage, where the property, the subject of the mortgage had subsequent to its execution, been conveyed to the respondent by a deed specifically saying the land was subject to the mortgage. There the respondent distinctly recognized the mortgage lien of complainant. Such is not the case here, and Braun v. Pettyjohn, supra, does not support appellant's contention with respect to the 1935 re-recordation of the articles of incorporation of the original corporation.
The 1935 re-recordation of the Articles of Incorporation of the J. N. Brown Burial Benefit Association, the original corporation, was the result of orders of the Superintendent of Insurance to the successor corporation. That re-recordation did not amount as a matter of law to a recognition of appellant's claim as of 1935. It simply stated that he was an original incorporator in 1926, which does not rise to the dignity of a "distinct" recognition of his claim as of 1935.
The record discloses no evidence from which the jury could have inferred fraud so as to bring into operation Title 7, § 42, Code of Alabama of 1940.
This being the view we take of the case, there is no necessity to further note other assignments of error complained of by appellant. We entertain the view that the trial court correctly directed a verdict for appellee.
GOODWYN, MERRILL, and COLEMAN, JJ., concur.
Counsel for appellant in his application brief on rehearing and letter to the Court transmitting the same has characterized the original opinion in this case, among other things, as "ridiculous", "a sadly erroneous opinion", "a grievous injustice", and an "unmitigated tragedy", and says that appellant is "old and sick and his family will suffer for the necessities of life because his property has been taken from him and given with the sanction of this Court to the most powerful and wealthy corporation in this state".
As sympathetic as we might be with the personal plight of appellant, we are constrained to decide cases in this Court on the law as we believe it to be applicable. This is what we endeavored to do in our original opinion, to which we still adhere, and which will appear correct to the impartial mind. It is our belief that the doctrine of prescription as it has been applied in this state bars the appellant in his claim. In a given instance the effect of this longestablished principle of law might work hardship and disappointment. It is not our province, however, to decide cases on the basis of what we feel would be the most humane, but to apply to the facts the applicable law. And it is our sincere belief that our system of justice based upon application of precedent, which binds us, is over-all the most humane and fair procedure. After a careful study of the two briefs filed on behalf of appellant in his effort to obtain a rehearing of this cause, we are still of the opinion that the law in this state is against the appellant. In 13
"While a certificate of stock is not necessary to the complete ownership of the stock or to the creation of the relationship of stockholder, there can be no doubt that a corporation is bound, even in the absence of a statutory provision, through its proper officers, to issue to each stockholder who has fully paid for his stock a stock certificate representing his interest in the corporation; and upon the refusal of the corporation, upon demand, to issue a certificate of stock to the person entitled thereto, the latter may at his election bring an action at law against the corporation for damages, treating the wrongful refusal to so issue the certificate as a conversion, or a suit in equity to compel the corporate officers to execute and deliver a proper certificate. Equity has jurisdiction in the matter of a suit brought by a stockholder against a corporation to compel it to issue a certificate for the shares of stock owned by him in such corporation; and if there is any valid reason why this relief cannot be given, equity will grant alternative relief by way of damages. A corporation cannot, however, be compelled to issue stock if it is not provided for by the law of its incorporation and available to be issued.
See also, by way of analogy, Greenlees v. Greenlees, et als., 62 Ala. 330, 333.
Can it be said that appellant did not know that he was not being recognized as a stockholder in the appellee corporation and its predecessors? He never received any notice of meetings of stockholders, any dividends, etc. He was working for the corporation (and its predecessors) throughout the whole of the twenty-eight years involved. He is bound to have been cognizant of the prosperity and expansion which his employer enjoyed. Surely the most naive would realize that he was not being treated as a stockholder.
The doctrine of prescription in this state is perhaps unique. It is, however, well established, and has application beyond the statute of limitations, and not affected by it. Patterson v. Weaver, 216 Ala. 686, 114 So. 301. The rule creates a conclusive bar. Roach v. Cox, 160 Ala. 425, 49 So. 578, 135 Am.St.Rep. 107. It is "not affected by the circumstances of the situation, that is to say, whether truth and justice are thereby obscured, or by the death of parties or destruction of testimony, and conduct based upon the apparent situation, or the age, state of mind, or status of responsibility. These are circumstances which are considered in respect to laches but not prescription. Oxford v. Estes, supra; Courson v. Tollison, 226 Ala. 530, 147 So. 635; Ashurst v. Peck, 101 Ala. 499, 14 So. 541; * * *". Quoted from Wilkerson v. Wilkerson, 230 Ala. 567, 571, 161 So. 820, 822. And in Garrett v. Garrett, 69 Ala. 429, it is said:
With this illustration of the state of the law of prescription in Alabama we are not persuaded that an exception to its operation should be made in the case of a stockholder without a certificate with a twenty-eight year old claim against the corporation, inasmuch as the rule is clear that status of
Our doctrine of prescription is so long established in this state, as illustrated by the authorities cited in the original opinion, that we do not consider it necessary to restate it here.
Opinion extended and application for rehearing overruled.
SIMPSON, GOODWYN, MERRILL, and COLEMAN, JJ., concur.