Belcher v. Birmingham Trust National Bank
| Citation | 348 F. Supp. 61 |
| Decision Date | 01 May 1968 |
| Docket Number | Civ. A. No. 64-168. |
| Parties | Charles Donald BELCHER, Plaintiff, v. BIRMINGHAM TRUST NATIONAL BANK, a corporation, et al., Defendants. |
| Court | United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama |
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Charles E. Clark, of Silberman, Silberman, Clark & Loeb, Birmingham, Ala., Baker & Baker, Clearwater, Fla., for plaintiff.
Robert B. Donworth, Jr., and Harry R. Teel, of Bradley, Arant, Rose & White, Birmingham, Ala., for Birmingham Trust National Bank.
Ralph B. Tate, John P. Ansley of Spain, Gillon, Riley, Tate & Ansley, Birmingham, Ala., for Robena B. Davis and Fred H. Davis.
Erle Pettus, Jr., and Edgar M. Elliott, III, and W. Eugene Rutledge of Rives, Peterson, Pettus & Conway, Birmingham, Ala., for corporation, partnership, and individual defendants other than Robena B. Davis and Fred H. Davis. McLean Pitts, of Pitts & Pitts, Selma, Ala., associated counsel.
OPINION IN LIEU OF FORMAL FINDINGS UNDER RULE 52 F.R.CIV.P.*
After sundry preliminary hearings, the trial of this action began on May 17, 1965, and was concluded on July 27, 1966. Sixty days were devoted to the taking of evidence, the transcript of which, excluding exhibits, covers 9662 pages. Depositions received in evidence cover 6012 pages, not including exhibits. Over 1600 exhibits were tendered and most of them admitted in evidence. The Court files, six in number, contain 1450 pages. The briefs extend to a total of 1850 pages. Certain of the defendants and cross-defendants have provided the Court with proposed Findings and Conclusions of 288 pages. The Court's penciled notes made during the course of the trial are 152 pages in length. These statistics are recited neither for the discouragement nor the enlightenment of those who must read them, nor for the elicitation of sympathy for the Court from the sheer size of the undertaking which has devolved upon it, but to account for the length of the opinion which follows, the time required for its preparation, and the resulting delay in its issuance.
In the hope that perhaps the areas of decision, both as to facts and law, may be more succinctly detailed, the Court has chosen to state the facts chronologically and narratively, with the law applicable thereto, rather than in the usual numerical sequence common to Rule 52 findings and conclusions.
To avoid repetition, the facts found as to any issue are to be taken and considered as found as to any other issue to which they may be applicable.
In formulating its opinion, the Court has given careful consideration to the evidence and exhibits, the oral arguments, the excellent briefs, the entire proceedings, and issues submitted to it. The results speak for themselves.
The W. E. Belcher Lumber Company was founded by W. E. Belcher, Sr. during the early part of the century and was operated as a sole proprietorship until 1941. The Lumber Company (herein referred to as the Corporation) was incorporated in 1941 as the W. E. Belcher Lumber Company, Inc. The incorporators, who were also the original directors and stockholders, were issued 1,000 shares of stock of a par value of $50.00 per share, and were as follows:
W. E. Belcher 996 shares
Brady Belcher 1 share
H. H. Maxwell 1 share
A. Roland Belcher 1 share
W. E. Belcher, Jr. 1 share
W. E. Belcher was president, Brady Belcherâ vice-president, and Roland Belcherâ secretary. Upon the death of W. E. Belcher in 1945, Brady Belcher became president and has continued to serve as such. The original directors, other than W. E. Belcher, Sr., have continued to serve in that capacity, with the exception of Roland Belcher who retired from participation in the company business in 1949. Mrs. Robena Davis and Mrs. H. H. Maxwell have served as directors since that year.
Mr. Belcher, Sr. was survived by five children and his widow, Mrs. Ella Belcher. These children in order of birth are: Brady, Mrs. Ruby Maxwell, A. Roland, W. E., Jr., and Mrs. Robena Davis.
Prior to 1949 all of the 996 shares of stock in the Corporation was transferred to the children of W. E. Belcherâ the government accepting an estate valuation of $650.00 per share on the transfers. In 1949 the stock was held as follows:
Brady Belcher 201 shares
Mrs. H. H. Maxwell 199 shares
Mr. H. H. Maxwell 1 share
A. Roland Belcher 200 shares
W. E. Belcher, Jr. 200 shares
Mrs. Robena Davis 199 shares
____________
Total ........... 1,000 shares
The business of the Corporation had flourished by the time of the death of Mr. Belcher in 1945. Some 80,000 acres of timber land had been acquired, and the operation had grown from a small sawmill to an extensive plant at Centreville, Alabama, manufacturing various lumber products.
On July 1, 1949, Roland conveyed 40 shares of his stock to the Corporation subject to an option to repurchase within ten years. On July 16, 1951, he conveyed to it 30 additional shares subject to a like option to repurchase. Neither option was exercised. The facts as to these options will appear in detail when the specific questions involving them are reached.
On July 16, 1951, Roland by deed of trust conveyed his remaining 130 shares to the Birmingham Trust National Bank, as Trustee, under an inter vivos trust. The options to repurchase, together with certain other property, were also set over to said trust.
On May 23, 1963, the Birmingham Trust sold 30 shares of the stock held by it in the trust to Fred H. Davis, the husband of Robena. The Corporation thereafter refused to transfer the ownership of this 30 shares upon its books. Title to this 30 shares is in dispute in this litigation. The facts as to the sale of the 30 shares will likewise appear later in these findings. Since the sale to Davis, W. E. Belcher, Jr. has transferred one share of his stock to his son W. E. Belcher, III. Mrs. Maxwell has transferred one of her shares to her daughter, Mrs. Fred Hallman. The 30 shares involved on the second sale by Roland were acquired upon the expiration of the option by the Belcher Lumber Sales Co., Ltd.
The Belcher Lumber Sales Co. was formed in 1944 as a general partnership. This partnership entered into an "output" agreement with the Corporation, by which it was to act as a sales agency to the Corporation. The purchase price of lumber payable to the Corporation was 8% less than the sales price with a credit period of 15 days to the Sales Company. The partners contributed capital to the Sales Company in the amount of $100,000.00 in the following percentages:
Brady Belcher 34 %
Mrs. H. H. Maxwell 16.5%
A. Roland Belcher 16.5%
W. E. Belcher, Jr. 16.5%
Mrs. Robena Roby (Davis) 16.5%
______
100 %
The general partnership continued until July 16, 1951, when, with the consent of all the partners, Roland's interest was conveyed to the Birmingham Trust. On July 23, 1961, the Belcher Lumber Sales Company, Ltd., a limited partnership under the laws of Alabama, was established and assumed the business of the existing general partnership. The Birmingham Trust became a special or limited partner. The percentages of ownership remained the same, but the capital was reduced by one-half, and the other one-half plus an earned surplus account of approximately $24,000.00 were set up in a paid surplus account. On January 1, 1952, all accounts were merged into a single partner's account.
On November 13, 1956, the Belcher Wood Products, Ltd. was formed for the purpose of purchasing non-merchantable timber products from the Corporation for conversion to wood chips for sale to paper manufacturers. The partners contributed $50,000.00 to the capital in the following percentages:
Brady Belcher 20%
Mrs. H. H. Maxwell 10%
Mrs. Fred Hallman 5%
Mrs. Ruby Maxwell Palmer 5%
W. E. Belcher, Jr. 20%
Mrs. Robena Davis 20%
Birmingham Trust 20%
Mrs. Palmer, not heretofore identified, is the daughter of Mrs. Maxwell. Birmingham Trust was and is a special partner.
In 1959 Brady, W. E., Jr., Mrs. Maxwell and Mrs. Davis organized a corporation known as Engineered Structures, Inc. Each of the stockholders owns 25% of the stock. This corporation was organized to use the Corporation products in the manufacture of wooden structural members, principally roof trusses. The corporation did not intend to pay dividends, and the Birmingham Trust declined an invitation to become a partner.
In the 1940's Brady Belcher, his wife Beulah, and his brother-in-law George Phillip White, an attorney, formed Brady Belcher Interests, Inc. This company owned a sawmill known as Silas Lumber Company. These parties were also the incorporators of the Belcher Motor Company and the Centreville Oil Company. The Belcher Investment Company is a partnership or joint venture organized in 1954 by Brady with a two-thirds interest and by W. E., Jr. with a one-third interest. Southern Pine Homes, Inc. was organized in 1954 by Brady, W. E., Jr., Lester Harris and Earl Furlong, with control resting equally in Brady and W. E., Jr. It was organized to engage in the house building business. All of the corporations referred to are Alabama corporations with their principal places of business in Centreville, Alabama.
J. L. Bell Company, Inc. and Norris Furniture Corporation are Florida corporations, with their principal offices in Quincy, Florida, engaged in the manufacture and sale of furniture, respectively. The capital stock of these corporations was acquired in the name of Brady and W. E.,...
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