Dissenting Opinion
Bobbitt, J.I am fully aware that appellants have the burden of proving that the ownership of the stock in question was in Xen McNair, individually, and not as trustee. However, the question here, as I see it, is: “Did the evidence entitle appellants to relief which was denied them?”
Appellee was, at the beginning of the chain of events involved herein, the president of a corporation in which 98% of the stock was held by his wife as a gift from him.
A new corporation was subsequently formed at which time appellee proposed that the assets of the old corporation (in which his wife owned 99% of the stock) be transferred to the new corporation, consideration for which the new corporation was to issue 1500 shares of preferred and 1500 shares of common stock. This was done and on September 18, 1931, the new corporation, at the direction of appellee, Xen McNair, issued all of the 1500 shares of the common stock, except individual shares held by directors, to one Marie Reed who was McNair’s secretary and his sister-in-law. McNair testified that this was done at the time “because it was decided between Mrs. McNair and I at the time that we would put it in Marie Reed’s name until such time as we decided how we were going to place it in trust.”
The certificate for 1496 shares of the common stock of the new company which was issued to Marie Reed was immediately endorsed by her in blank and delivered into the possession of Xen McNair. Sometime later which, according to the evidence, might have been in *611934, 1935, or 1938, at the direction of McNair, Mrs. McNair’s name was filled in as assignee on this stock certificate.
On the same date on which the common stock was issued, preferred stock was also issued to Marie Reed but the certificate was retained by McNair. Later, in 1932, Marie Reed, at McNair’s direction, executed assignments in blank covering all the preferred stock that had been issued in her name and delivered the same to McNair. Subsequently McNair, without any explanation for his doing so, wrote “Cancelled” across the face of the preferred stock certificate.
Appellee, McNair, managed the corporation, transacted its business, made its tax returns, and until 1945 or 1946 drew a salary of $250 per month, and since that time a salary of $10,000 per year. He could increase his salary as he wished. McNair lives- on a farm owned by the. corporation, rent free, drives an automobile owned by the corporation, and he keeps silverware owned by the corporation for his own use.
In 1948, McNair was divorced by his wife. In the divorce proceedings a property settlement was executed by both parties stating that “the principal assets claimed by-wife and husband are held by corporation.” This agreement further stated that, “WHEREAS, with respect to one thousand four hundred and ninety-six (1496) shares of the capital stock of corporation there is a bona fide and subsisting dispute and controversy between wife and husband as to the ownership between them..of such stock; . . . .” (My emphasis.) As a part of the property settlement in the divorce proceedings Mrs. McNair signed a release to McNair of any claim she had or might or could assert to any “shares of corporation’s stock.”
*62Under the law as it now exists in Indiana the delivery of the stock certificate, endorsed in blank, to Xen McNair was sufficient to transfer title to him. Acts 1923, ch. 24, §1, p. 71, being §25-701, Burns’ 1948 Replacement; First Merch. Nat. Bk. v. Murdock Realty Co. (1942), 111 Ind. App. 226, 39 N. E. 2d 507; Crowder v. Terhorst (1939), 107 Ind. App. 288, 21 N. E. 2d 141; Conrad v. Olds (1942), 110 Ind. App. 208, 37 N. E. 2d 297.
In the divorce settlement Mrs. McNair released any right which she might have had in said stock to her husband, Xen McNair. Since he, at that time, had possession of the certificate for the 1496 shares of stock, the release to him by Mrs. McNair of any rights which she might have in the stock transferred absolute legal title to McNair, individually. Section 25-701, supra.
From the foregoing it appears to me that the evidence established a prima facie case of ownership of the stock in McNair, individually.
Since appellee, McNair, asserts that this stock was held by him in trust, the burden was upon him to establish the trust and to go forward with evidence to overcome the prima facie case which plaintiff had established. Young v. Miller (1896), 145 Ind. 652, 656, 44 N. E. 757.
To discharge this burden appellee testified that he and Mrs. McNair had orally agreed to establish a trust in favor of their children with the shares of such stock as the res of the trust.
Concerning the establishment of this trust, McNair testified as follows:
“Q. I hand you plaintiff’s exhibit 21, [preferred certificate] was that issued at the same time.
“A. Yes.
*63“Q. Was that handled in the same way [as the common certificate] ?
“A. No sir.
“Q. What happened that you didn’t handle them alike ?
“A. Well, 21 years- ago I can’t tell you why.
“Q. Weren’t you going to treat them alike?
“A. ,We had agreed that these two certificates of stock would be in trust for our children, whether I forgot to have her [Marie Reed] sign this I couldn’t say, I wouldn’t say yes or no, maybe I forgot it, maybe I didn’t, may-me I did it deliberately.”
Later Xen McNair testified:
“Q. Is this trust you are talking about in writing?
“A. No, it isn’t. It was a verbal trust between Mrs. McNair and myself.
“Q. When was it made?
“A. It was consummated on the 18th of September, 1931.
“Q. There isn’t a bit of doubt in your mind about that date?
“A. No, although it was talked of etc. prior, but there is no doubt about consummation.
“Q. Well it was talked about a great deal over a period of time?
“A. I think in March, 1930 it was talked over.”
And still later, in response to questions concerning the ownership of the stock, Xen McNair said:
“A. I do say that. I never owned it.
“Q. What date do you fix for your trust agreement now?
“A. I fix September 18, 1931 as the trust agreement but February 13, 1932 as a solidifying of that what was intended.”
*64McNair further testified that no tax returns had ever been filed for the alleged trust and that it had never received any income to report.
There is no evidence that during the more than 20 years which he retained possession of the stock certificate for 1496 shares of the common stock of the corporation, he made any effort to have it transferred to himself as trustee on the books of the corporation. Neither did he fill in his name as trustee on the stock certificate during the time he held it with a blank endorsement, but, on the contrary, he did some 15 or 20 years ago assign such stock to his wife by filling in her name as assignee.
The question which this court must decide is whether or not, as a matter of law, a trust was established as asserted by appellee, McNair. If a trust was established it must rest on the testimony of appellee, Xen McNair, and the circumstances surrounding the alleged trust.
It is well established that a trust in personalty may be created by parol declarations. However, the establishment of such trust by parol testimony has been restricted by this court. In Baker v. Leathers (1853), 3 Ind. 558, 563, it is said:
“ * * such evidence [parol] is most unsatisfactory, on account of the facility with which it may be fabricated, the impossibility of contradiction, and the consequences which the slightest mistake or failure of memory may produce. Yet if plain, consistent, and, especially, if corroborated by circumstances, it is competent ground for a decree.’ 2 J. C. R. 405—1 Wendell, 626.”
In Richards v. Wilson (1916), 185 Ind. 335, 368, 112 N. E. 780, it is said:
*65“. . . express trusts in personalty . . . -may, ... be created, declared, or admitted verbally when the evidence is clear and unequivocal.”
The general rule is stated in Scott on Trusts, Vol 1, §52, p. 285, as follows:
“Where a trust of personalty is orally declared, it is often said that the trust must be proved by clear and convincing evidence.”
Appellee McNair is asserting the trust in this case, and it was incumbent upon him to prove its establishment by clear and satisfactory evidence, having in mind all the surrounding facts and circumstances.
Appellee’s testimony may be considered in establishing the alleged trust, but such testimony must be supported either by other competent, direct or circumstantial evidence, or by circumstances surrounding the alleged trust from which proper inferences may be drawn and which are such as to lead inescapably to the establishment of an oral trust as asserted by appellee.
Appellee’s testimony is not supported by any other direct or circumstantial evidence, or by any reasonable inferences, but, on the contrary, his detailed recital of facts, and all inferences which may be drawn from circumstances surrounding the ownership of such stock since its issuance, lead inescapably to the conclusion that Xen McNair, individually, was at the time this action was instituted, the the sole owner of the stock here in question.
If this be true then plaintiffs-appellants were denied relief to which they were entitled by the evidence and the verdict is contrary to law.
While it is true that the result reached by the jury might indicate that they believed McNair held such *66stock as trustee, it is of interest to note the answer to one of the interrogatories submitted by the defendant.
1. “Q. Is Xen McNair as Trustee for his children, Sonia and Xen McNair, Jr., the owner of certificate number 45 for 1496 shares of common stock of Gary Real Estate Exchange, Incorporated?
“A. Not sufficient evidence.” (My emphasis.)
McNair either held the stock as trustee or owned it individually. There is nothing in the evidence to indicate otherwise. If the jury thought the evidence was insufficient to establish ownership as trustee, then the only other conclusion which could be drawn is that he held it individually.
Sufficient evidence has been defined as, “Such evidence, in character, weight, or amount, as will legally justify the judicial or official action demanded;” Black’s Law Dict., 3d Ed., p. 702; and as “Such evidence as in amount is adequate to justify the court or jury in adopting the conclusion in support of which it was adduced.” 32 C. J. S., Evidence, §1016, p. 1043.
Can it be successfully asserted that the unsupported testimony of the defendant given under the circumstances in this case, 21 years after the date on which he claims to have created an oral trust, is adequate or of such character as would justify the conclusion that an oral trust for his children was established by him in September of 1931. I think not.
While this court will not weigh evidence, it will not say that a mere trace or trifle is sufficient to sustain an issuable fact. Rhoades v. State (1946), 224 Ind. 569, 575, 70 N. E. 2d 27.
As stated by the Appellate Court in its opinion (122 N. E. 2d 875), McNair’s general statement that he never owned the stock is completely disproved by the *67detailed facts, some of which are recited in his testimony, and cannot be considered as creating a dispute in the evidence. Rhoades v. State, supra.
In my opinion appellee failed to produce even a “trace” of evidence of probative value to sustain his burden of proving the establishment of the alleged trust, and this part of the judgment should be reversed.
The Appellate Court reached a correct result and the petition to transfer should be denied.
By holding that an oral trust may be established by the sole unsupported testimony of the settlor, given more than 21 years after the date on which the trust was allegedly formed, the majority opinion has opened wide the door to the unscrupulous for the perpetration of unlimited frauds.
I would deny the petition to transfer.
Landis, J. concurs.
Note. — Reported in 129 N. E. 2d 553.