Under Alabama law, a corporation is "owned" by its shareholders. See American Cast Iron Pipe Co. v. Commerce Industry Ins. Co., 481 So.2d 892, 896 (Ala. 1985) ("In Alabama, the shareholders are the equitable owners of corporate assets, including real property."); Williams v. North Alabama Exp., Inc., 263 Ala. 581, 83 So.2d 330, 333 (Ala. 1955) ("stockholders owing all the shares of stock of a corporation are the equitable owners of its assets"). See generally H. Henn J. Alexander, Laws of Corporations at 491 (Practicing Law Institute, 1991) ("shareholders 'own' the corporation . . .").
The district court properly found Hazel Patterson to be the alter ego of the corporation, and therefore held that her acts were tantamount to acts of the corporation. This is consistent with Alabama law. Ex parte City Sales Corp., supra; Williams v. North Alabama Express, 263 Ala. 581, 584, 83 So.2d 330, 333 (1955). In Alabama, the alter ego of a corporation may be either a sole or controlling owner.
[It is a] well-settled rule in Alabama that the stockholders of a corporation are the equitable owners of its assets. Williams v. North Ala. Express, 263 Ala. 581, 83 So.2d 330 (1955). Therefore, because the good will of a corporation is a corporate asset, a stockholder is the equitable owner of that good will in the proportion that his shares bear to the total outstanding shares of stock in the corporation.
In Alabama, shareholders are the equitable owners of corporate assets, including real property, to the extent of their interest, and thus exercise ultimate control over the corporation through their voting power to elect directors. Williams v. North Alabama Express, 263 Ala. 581, 83 So.2d 330 (1955). As was more pointedly stated in Diebold v. Commissioner of Internal Revenue, 194 F.2d 266, 268 (3d Cir. 1952):
"[T]he well-settled rule in Alabama [is] that the stockholders of a corporation are the equitable owners of its assets. Williams v. North Ala. Express, 263 Ala. 581, 83 So.2d 330 (1955). Therefore, because the good will of a corporation is a corporate asset, a stockholder is the equitable owner of that good will in the proportion that his shares bear to the total outstanding shares of stock in the corporation.
In Alabama it is settled that the shareholders of a corporation are the equitable owners of its assets. Williams v. North Alabama Express, 263 Ala. 581, 83 So.2d 330 (1955). Indeed, the corporate asset of good will is equitably owned by the shareholders in the proportion that their shares bear to the total outstanding shares in the corporation.
This proposition, however, overlooks the well-settled rule in Alabama that the stockholders of a corporation are the equitable owners of its assets. Williams v. North Ala. Express, 263 Ala. 581, 83 So.2d 330 (1955). Therefore, because the good will of a corporation is a corporate asset, a stockholder is the equitable owner of that good will in the proportion that his shares bear to the total outstanding shares of stock in the corporation.
suit Rule" or the rule of trust pursuit: A trust will follow property through all changes in its state and form, so long as such property, its product, or its proceeds are capable of identification. It will follow property into the hands of a transferee other than a bona fide purchaser for value, or restitution will be enforced, at the election of a beneficiary, through recourse against the trustee or the transferee personally, or through compelling the transferee to perform the trust except insofar as the transferee is protected as a bona fide purchaser for value. The trust pursuit rule applies where a constructive or a resulting trust as well as where an express trust, has once affixed itself to property in a certain state or form. Knowles v. Canant, 255 Ala. 331, 51 So.2d 355. The acts and contracts of persons owning all the stock of a corporation may be considered as the acts and contracts of the corporation where the effect is the same as though the corporation had acted as such. Williams v. North Ala. Express, 263 Ala. 581, 83 So.2d 330. Reneau Reneau, Wetumpka, for appellees.
Willard C. Beach Air Brush Co. v. General Motors Corp., D.C., 118 F. Supp. 242; Id., 3 Cir., 214 F.2d 664. Where a contract is executed on behalf of a corporation by one who is the sole owner of the stock of the corporation, the contract is binding on the corporation as between the parties to it. Ex parte City Sales Co., 264 Ala. 637, 88 So.2d 668; Williams v. North Alabama Express, 263 Ala. 581, 83 So.2d 330; Muckle v. Fitts, D.C., 5 F. Supp. 41. Where sole owner of a corporation deals with the corporate property, acts done by him or at his instance in reference to property of corporation are done on its behalf or for its benefit and are binding on corporation. Copeland v. Swiss Cleaners, 255 Ala. 519, 52 So.2d 223; Rafter v. Richard K. Fox Pub. Co., 206 App. Div. 389, 201 N.Y.S. 401; Id., 238 N.Y. 567, 144 N.E. 894. Sale of the Alabama hospital insurance business purchased from Service Life and Health Insurance Company by National Union Life Insurance Company to United Security Life Insurance Company after notice of Ingram's claim given to Keith and Lee Boswell constitutes ratification of Ingram's contract. Bollstrom v. Duplex Power Car Co., 208 Mich. 15, 175 N.W. 492; University Chevrolet Co. v. Bank of Moundville, 25 Ala. App. 506, 150 So. 557; Id., 227 Ala. 516, 150 So. 560; 2 Fletcher's Cycl.Corp. 1173, ยง 773.
"The acts and contracts of persons owning all the stock of a corporation may be considered as the acts and contracts of the corporation, where the effect is the same as though the corporation had acted as such. Birmingham Realty Co. v. Crossett, 210 Ala. 650, 654, 98 So. 895 (quoting from Cook on Corporations)."Williams v. North Alabama Express, 263 Ala. 581, 583-84, 83 So.2d 330 (1955). The Department of Insurance, in its brief filed at the request of this court, relies on the insurance statutes of Alabama for the proposition that the appellant was not authorized to deal with the certificates in the manner in which he did.