Lexis Nexis - Case Brief

Not a Lexis Advance subscriber? Try it out for free.

Law School Case Brief

Adams v. Smith - 275 Ala. 142, 153 So. 2d 221 (1963)

Rule:

Where a complaint neither contains a copy of the certificate of incorporation with its charter powers nor contains a statement of those powers, allegations that certain acts are ultra vires are conclusory statements and not a proper pleading of facts.

Facts:

Following a corporate resolution to pay money to the widows of the corporate president and comptroller, appellee minority shareholder commenced suit, claiming the payments to be unauthorized gifts of corporate property. Appellee sought repayment and an injunction precluding future payments, contending that payment of corporate money, without consideration, was not within the directors' power. Appellants, the corporate directors and the widows, sought review of the trial court's decree overruling their demurrers to the complaint.

Issue:

Was the complaint's averment that the payments were unauthorized a proper pleading of fact?

Answer:

No

Conclusion:

The court reversed the lower court's holding, noting that the complaint neither contained a copy of the certificate of incorporation nor contained a statement of director powers. The complaint's averment that the payments were unauthorized was thus not a proper pleading of fact, and the grounds for demurrer were thus sustained. The matter was remanded, however, and appellee was afforded leave to amend to properly plead his claim.

Access the full text case Not a Lexis Advance subscriber? Try it out for free.
Be Sure You're Prepared for Class