Birmingham Trust & Savings Co. v. Cannon

• Decision Date: 03 June 1920
• Docket Number: 6 Div. 21
• Citation: 204 Ala. 336,85 So. 768
• Parties: BIRMINGHAM TRUST & SAVINGS CO. et al. v. CANNON.
• Court: Alabama Supreme Court

85 So. 768

204 Ala. 336

BIRMINGHAM TRUST & SAVINGS CO. et al. v. CANNON.

6 Div. 21

Supreme Court of Alabama

June 3, 1920

Appeal from Circuit Court, Jefferson County; Horace C. Wilkinson Judge.

Bill by Rose Johns Cannon against the Birmingham Trust & Savings Company and A.W. Smith, to annul two trust agreements. From a decree overruling the demurrers of respondents to the bill as amended, respondents appeal. Affirmed.

In an action to have a trust declared in corporate stock transferred in an antenuptial agreement to the complainant bill held to sufficiently charge undue influence upon the part of the husband in causing or inducing the complainant to sign a postnuptial agreement.

The amendments to the bill are as follows:

Rose Johns Cannon, a resident of Jefferson county, Alabama exhibits this her bill of complaint against the Birmingham Trust & Savings Company, a corporation and Arthur W. Smith, a resident of Jefferson county, Alabama, and as a basis for the relief hereinafter prayed states the following facts:

First. Complainant and respondent Arthur W. Smith are each over twenty-one years of age, and residents of Jefferson county, Alabama. Respondent Birmingham Trust & Savings Company is a corporation organized under the laws of the state of Alabama, having its principal place of business at Birmingham, Jefferson county, Alabama. On and since July 4 1908, the said Arthur W. Smith has been the president and chief administrative officer of respondent Birmingham Trust &amp Savings Company, and a large stockholder thereof. On and since July 4, 1908, Lee C. Bradley has been a director of respondent Birmingham Trust & Savings Company, and a large stockholder thereof.

Second. On, to wit, the 5th day of August, 1903, L.W. Johns and complainant were married at Bessemer, Alabama, and their marital status continued until the death of the said L.W. Johns; complainant and said L.W. Johns, living during said period in or near Birmingham, Alabama. The said L.W. Johns died on, to wit, the 4th day of February, 1912, and shortly after his death complainant was appointed administratrix of his estate by the probate court of Jefferson county, Ala., and she is still such administratrix.

Third. Just prior to or at the time of complainant's marriage to the said L.W. Johns, she and the said L.W. Johns entered into an antenuptial contract, by the terms of which complainant agreed to marry the said L.W. Johns, and he made an antenuptial gift to complainant of the shares of the capital stock of the Birmingham Railway, Light & Power Company, both common and preferred, which were then owned by him, and in pursuance of said agreement, complainant married the said L.W. Johns.

Amendment of April 9, 1918: "And complainant avers that said antenuptial contract was evidenced by a written instrument at that time, signed by said L.W. Johns and delivered to complainant, which instrument, in substance, transferred to complainant, in consideration of love and affection, and her marriage to him, the shares of the capital stock of the Birmingham Railway, Light & Power Company, both common and preferred, which were then owned by him, and also other property not involved in this suit."

Subsequent to the marriage of complainant with the said L.W. Johns, the said shares of the capital stock of the Birmingham Railway, Light & Power Company, the subject-matter of said antenuptial contract, owing to a consolidation of said Birmingham Railway, Light & Power Company with the American Cities Railway & Light Company, came to be represented by certain shares of the capital stock of said last-named corporation, evidenced by certificates numbered 1235 for eighty (80) shares, and 1064 for one hundred (100) shares of the common stock of said corporation, and by certificates numbered 2063 for eighty-eight (88) shares, and 594 for one hundred (100) shares of the preferred stock of said corporation, and each of such certificates were without the knowledge or consent of complainant caused to stand on the stock books of said corporation in the name of Wallace Johns, who was an adult son of said L.W. Johns by a former wife. Shortly after July 4, 1908, respondent Birmingham Trust & Savings Company, acting under color of a written instrument signed on July 4, 1908, by complainant, the said L.W. Johns and respondent Birmingham Trust & Savings Company, a copy of which instrument is attached hereto, marked "Exhibit 1," and made a part hereof, procured to be reissued to it, in lieu of and as representing the capital stock, both common and preferred above described, Certificate No. G-2073, for ninety-four (94) shares of the preferred capital stock of said American Cities Railway & Light Company, certificate No. G-2074 for ninety-four (94) shares of the preferred capital stock of said company, certificate No. E-1247 for ninety (90) shares of the common capital stock of said company, and certificate No. E-1248, for ninety (90) shares of the common capital stock of said company. All of said shares were held by said respondent Birmingham Trust & Savings Company under color of said written instrument copied as Exhibit 1 to this bill, until, to wit, September, 1911, at or about which time, owing to a dissolution of the said American Cities Railway & Light Company as a body corporate, and the conversion of its assets into cash, and the distribution of same by said company among its stockholders according to their several interests, the said respondent Birmingham Trust & Savings Company received in lieu of all the said shares the sum of thirty-two thousand three hundred and fifty-seven and 60/100 dollars ($32,357.60) as follows: Ninety-four hundred ($9,400.00) dollars for certificate No. G-2073; ninety-four hundred ($9,400.00) dollars for certificate No. G-2074; sixty-seven hundred seventy-eight and 80/100 ($6,778.80) dollars for certificate No. E-1247; and sixty-seven hundred seventy-eight and 80/100 ($6,778.80) dollars for certificate No. E-1248.

The respondent Birmingham Trust & Savings Company held said sum of $32,357.60, under color of said instrument copied as Exhibit 1, to this bill, until, to wit, December 22, 1911, on which date complainant, her said husband, L.W. Johns, respondent, Arthur W. Smith, and respondent Birmingham Trust & Savings Company signed another instrument in writing, a copy of which is hereto attached, marked "Exhibit 2," and made a part of this bill. Shortly after the signing of said last-named instrument in writing, and acting under color of same, respondent Birmingham Trust & Savings Company transferred said $32,357.60 to respondent Arthur W. Smith, which said respondent held said fund or its equivalent in bonds, mortgages, or other securities into which he had converted same, taking title in his own name under color of said last-mentioned instrument in writing, until the death of complainant's said husband, L.W. Johns, but complainant is not advised what portion of said fund was held by said Arthur W. Smith in cash, or what portion was held by him in the form of bonds, mortgages, or other securities into which he had converted same, and title to which he had taken in his own name as aforesaid. Complainant is informed and believes and upon such information and belief avers the facts to be: That after the death of complainant's said husband, L.W. Johns, respondent Arthur W. Smith transferred and delivered to respondent Birmingham Trust & Savings Company a portion of said fund and some of said securities so held by him at the death of complainant's said husband, and himself retained a portion of same, but what amount of said fund and which of said securities he so transferred and delivered and what amounts and which of same he retained complainant does not know; that since the death of complainant's said husband the respondent Birmingham Trust & Savings Company has loaned, invested, and reinvested a portion or all of said fund and securities so delivered to it, taking title to such investments and reinvestments in its own name and collecting interest thereon, but the extent and exact nature of such investments and reinvestments and the amount of such interest is unknown to complainant; that since the death of complainant's said husband, L.W. Johns, respondent Arthur W. Smith has loaned, invested, and reinvested a portion or all of said fund and securities so retained by him, taking title to such investments in his own name and collecting interest thereon, but the extent and exact nature of such investments and reinvestments and the amount of such interest is unknown to complainant; that the respondent Arthur W. Smith, and Birmingham Trust & Savings Company now either jointly or severally hold the said fund or the proceeds thereof in cash or securities, or both, and withhold the same from complainant; that respondents have loaned, invested, and reinvested said fund and said securities as aforesaid, and taken title to said investments and reinvestments, and made collections of said interest, and now withhold from complainant the proceeds under color of the written instrument copied as Exhibit 2 to this bill. And complainant avers that before bringing this suit she made demand on the said respondents separately and severally for said money and said securities, the proceeds of said fund, and each of them refused to deliver the same to her or to account to her for same.

Amendment of April 9, 1918:

"Fourth. Complainant avers that the written instrument dated July 4, 1908, a copy of which is attached as Exhibit 1 to this bill, is invalid and not binding on her, for the reason that she was induced to sign it through and by the exercise upon her to that end of undue influence by her said husband, L.W. Johns. Complainant further avers that the written instrument dated December 22, 1911

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