Johnson v. Johnson

On the Merits.

The bill of complaint in this cause was filed by W. P. Johnson, the sole complainant, against the respondents Hays Johnson, Inez Allgood and Linnie Famed. The parties are brothers and sisters, children of J. C. Johnson and Mrs. J. C. Johnson, both deceased. The bill alleges that complainant and respondents are joint owners and that each owns an undivided one-fourth interest in ten shares of stock in the Marion County Banking Company, and that the same cannot be equitably divided or partitioned among the owners without a sale of the stock. The prayer of the bill is for a sale of the stock and a division of the proceeds among the alleged joint owners. Both parties treat the bill as one authorized by § 186, Title 47 of the Code of 1940, providing that “The circuit court shall have original jurisdiction to divide or partition, or sell for partition, any property, real or personal, held by joint owners or tenants in common * * For the purposes of the case as presented, we will so treat the bill.

Briefly, the evidence is that J. C. Johnson, at the time of his death January 3, 1946, was the owner of five shares of the bank stock, which, by reason of a subsequent stock dividend, was increased to the ten shares now involved. The bank records have shown and now show J. C. Johnson as the holder of the stock involved. J. C. Johnson died intestate and in his lifetime made no transfer of his bank stock. A year and six months after death of his father, the complainant W. P. Johnson executed an instrument which, as introduced in evidence by respondents, is as follows:

“June 3, 1947
“TO WHOM IT MAY CONCERN: AND TO MARION COUNTY BANKING COMPANY.
“This is to advise that anything and everything left by Father is for (Mrs. J. C. Johnson) her benefit, then farther-more all I have and all I ever expect to have is free to her disposal.
“Respy “/S/ W. P. Johnson M.D. “Witness: D. J. Jones”

On September 12, 1947, the two sisters, Mrs. Allgood and Mrs. Famed, executed these instruments respectively:

“Marion County Banking Company:
“My father, Dr. J. C. Johnson, wished my brother, Dr. R. H. Johnson, *691to have his shares of stock in the Marion County Banking Company.
“This is my wish also.
“/s/ Inez Johnson Allgood “September 12, 1947”
“To Whom It May Concern:
“I wish my brother, Dr. R. Hays Johnson to have the shares of stock left by my father, Dr. J. C. Johnson, Hamilton, Alabama
“/s/ Mrs. Linnie Johnson Famed”

On the same date Mrs. Johnson executed the following instrument:

“Marion County Banking Company
“This is to request that the Bank shares now in Dr. J. C. Johnson’s name be transferred to Dr. R. H. Johnson.
“/s/ Mrs. T. C. Johnson “September 12, 1947”

The widow and mother died August 26, 1957. This suit was instituted September 27, 1960.

The trial court rendered a decree in agreement with the prayer of complainant’s bill, finding the parties to the cause to be joint owners of the stock, each owning an undivided one-fourth interest therein, and that the stock be sold. It is from this decree that the respondents have appealed.

At the outset appellants argue that the trial court erred in overruling their demand for a trial by jury. In view of our conclusion upon the merits of the case, it would serve no useful purpose to enter upon a consideration of that question, and we make no decision thereon.

Neither on the trial nor on this appeal has any question been raised as to efficacy of the instruments executed by Mrs. Allgood and Mrs. Famed.

Thus the case boils down to the single question whether W. P. Johnson had any interest in the subject bank stock at the time he commenced this suit. If he did, that interest would be an undivided one-fourth, the other three-fourths interest being vested in Hays Johnson. If W. P. Johnson had no interest, then the entire interest vested in Hays Johnson.

To sustain his claim, appellee takes the position that ownership of the stock remained at all times in J. C. Johnson to whom it was issued and that upon his death it descended to his widow and their four children, and upon the subsequent death of the widow to the four children in equal parts. It is argued by appellee that, in view of § 48, Title 10 of the Code of 1940 (a part of the Uniform Stock Transfer Law) there was never any valid transfer of the subject stock to the widow by the original owner or by appellee and that even so the attempted transfer by the widow to Hays Johnson was in no wise such as the statute requires. In substance § 48 provides that title to a certificate and the shares represented thereby can be transferred only by delivery of the certificate endorsed in blank or to a designated person by the person appearing to be the owner, or by delivery of the certificate together with a separate written document containing an assignment of the certificate.

Appellants answer appellee’s contention by advancing two propositions. The first is appellee failed to meet the burden of proving his allegation that he and the respondents are joint owners of the stock which was fatal to his right to a sale for division, citing McMillan v. McMillan, 202 Ala. 322, 80 So. 404, and Hockstein v. Hamilton, 224 Ala. 207, 139 So. 288. The second is, in effect, that Code, Title 10, § 48 is not controlling, but rather that the rule with respect to assignments generally should be applied. Specifically it is argued that though an assignment is not made in conformity to a statute prescribing the mode of -making such assignment, yet it may be sufficient to transfer in equity. Planters & Merchants Insurance Co. v. Tunstall, 72 Ala. 142, and Gardner v. Mobile & N. W. *692Railroad Co., 102 Ala.'635, 15 So. 271 are cited along with several cases from other states.

As we view the case here presented, the question of transfer of corporate stocks, in the strict or technical sense, is not involved and § 48, Title 10, supra, is without controlling influence. The determinative question is the equitable ownership of, or title to, the stock. Hence, we confine ourselves to the paper executed by the appellee. It is not denied that he executed the paper, but he insists he did not intend to transfer his interest in the stock to his mother and more specifically to his brother. His intent is to be gathered from the words he used in the paper in the light of the situation and the acts of the parties as disclosed by the evidence. Clearly enough, all four of the children, appellee and appellants, were concerned about the well-being of their mother. The father had left no will nor made any property transfers to her. The appellant Hays Johnson had taken the mother into his home where he cared for her. Appellee, as well as his two sisters, knew about this, and had knowledge that Hays Johnson might need some assistance and desired to have the stock available in order to borrow money. Clearly enough, appellee knew of the existence of the stock and its status. It is significant that appellee’s notice was addressed to the bank, whose corporate stock had been issued in the name of the father. While appellee testified that Mrs. J. C. Johnson’s name was not on the paper when he signed it, he testified that what he had said in the paper addressed to the bank was: “This is to advise that anything and everything left by my father is for my mother”. Thus, even if his mother’s name had not been given in the writing, his own evidence supplied the omission. Again, it is significant that he raised no question about the stock until some thirteen years after he had written and signed the instrument and his mother and sisters had executed their papers giving notice to the bank of their wish and desire that Hays Johnson have the stock, and some three years after the death of his mother. Apparently the stock certificate was in the possession of Mrs. Johnson at the time appellee executed his paper, and Hays Johnson had possession of the certificate or certificates thereafter. In our judgment the paper writing of appellee constituted a valid equitable assignment of his interest in the stock to his mother. In Venturi v. Silvio, 197 Ala. 607, 73 So. 45, we said:

“In equity no particular form is essential to the validity of an assignment; it may be in writing or by parol. It is sufficient if there is an intentional transfer or making over of the subject-matter, conferring a complete and present right in the assignee.”

To hold in agreement with appellee’s contention that there must have been a delivery of the stock certificate along with his assignment to his mother would be to require an act at once impossible and useless. Appellee could not deliver what he did not hold, possess, or own. He did not possess the stock. He owned not the stock, but merely an inchoate, undivided interest in it. As we have indicated, for aught appearing, the mother already had possession of the certificate. While not on all-fours with this case, our decision in Davis v. Wachter, 224 Ala. 306, 140 So. 361, upholding a gift of corporate stock, is by analogy sustentive of the conclusion here reached. It is our judgment that appellee divested himself of any interest he had in the bank stock and hence was not a joint owner thereof as alleged in his bill.

It results that since the complainant below, appellee here, failed to meet and carry the burden of proof resting upon him to show that he was a joint owner of the stock, his bill should have been dismissed. Hockstein v. Hamilton, supra.

The decree granting complainant the relief accorded to him is reversed and the cause remanded with directions that a decree be entered dismissing the bill.

*693Reversed and remanded with directions.

■LIVINGSTON, C. J., and MERRILL and HARWOOD, JJ., concur.