Bullock v. Young
| Decision Date | 20 February 1934 |
| Citation | 252 Ky. 640 |
| Parties | Bullock v. Young. |
| Court | United States State Supreme Court — District of Kentucky |
2. Appeal and Error. — Trial court's exercise of discretion in allowing amendment to pleading will not be controlled unless abuse thereof affirmatively appears (Civil Code of Practice, sec. 134).
3. Continuance. — Proceeding with trial after filing of amendments to petition and reply held not abuse of discretion (Civil Code of Practice, sec. 136).
4. Pleading. — Objection to pleading for want of verification should be by rule requiring party to verify pleading and, on his failure to have pleading stricken, or by exception to decision refusing to require verification (Civil Code of Practice, sec. 138).
5. Pleading. — Timely and otherwise proper amendment should not be denied for want of verification (Civil Code of Practice, sec. 138).
6. Appeal and Error. — Where record did not affirmatively show that objection to filing of amended pleadings was based on lack of verification, alleged error in allowing pleadings to be filed without verification held harmless (Civil Code of Practice, sec. 138).
7. Contracts. — Contract must stand as written, absent plea of fraud or mutual mistake, until reformed on proper pleading and clear and convincing evidence.
8. Contracts. — Intention of parties, as ascertained from written contract as whole, determines carrying out of every part of contract.
9. Evidence. — Best test of whether parties intended to integrate part of transaction in written contract, so as to preclude parol evidence thereof, is whether written contract deals with that part of transaction.
If such part of transaction is mentioned in the written contract, then presumably the writing was meant to represent all of the transaction on that element, if not, then probably the writing was not intended to embody that element of the negotiations.
10. Contracts. — To ascertain intention of parties to written contract, language used, subject-matter, and purpose of contract may be considered.
11. Evidence. — Where written contract is incomplete on its face, parol evidence is admissible to aid in establishing intention of parties.
12. Contracts. — Ambiguous written contract must be construed to effect intention of parties as expressed by contract in light of circumstances inducing and attending its execution.
13. Evidence. — Actual consideration may always be shown by parol, although varying terms of written contract.
14. Evidence. — Parol evidence is competent to establish parol contemporaneous agreement not inconsistent with written contract.
15. Evidence. — Parol evidence is admissible when agreement between parties is one and entire and only part thereof is reduced to writing.
16. Evidence. — Where written contract provided that defendant should receive salaries of plaintiff, defendant, and another in trust and apply them to indebtedness incurred by plaintiff and defendant, parol evidence of agreement as to division of trust fund between plaintiff and defendant held admissible.
17. Frauds, Statute Of. — In action to recover salary or stock promised plaintiff where counterclaim sought to recover on notes of corporation, reply alleging contract between plaintiff and defendant to sign as sureties notes of corporation, payment of note by plaintiff, and defendant's failure to sign as surety held not within statute of frauds (See Ky. Stats., sec. 470 et seq.).
18. Limitation of Actions. — In action to recover salary or stock promised plaintiff where counterclaim sought recovery on notes of corporation, and reply set up defense of agreement between defendant and plaintiff to sign as sureties corporation notes and payment of note by plaintiff and failure to sign as surety by defendant, statute of limitations held not available against such defense where jury failed to find for plaintiff on his reply but for him in so far as facts constituted defense.
19. Appeal and Error. — Party cannot complain of instruction containing same vice as one offered by him.
20. Trusts. — In action on alleged contract requiring defendant to receive salaries of plaintiff, defendant, and another in trust, and apply them to indebtedness incurred by plaintiff and defendant, pleadings held not to raise issue of liabilities of plaintiff and defendant to each other growing out of their joint indebtedness.
21. Interest. — In successful action for share of combined salaries of plaintiff, defendant, and another, allowing interest from date of letter demanding settlement held authorized.
Appeal from Jefferson Circuit Court
WOODWARD, HAMILTON & HOBSON and WILBUR FIELDS for appellant.
GORDON, LAURENT & OGDEN for appellee.
Affirming.
For many years prior to 1925, H.E. Bullock and T. L. Young were associated in the operation of several coal companies, both producing and selling, controlling them for the profits of co-operative control of both ends of the industry. Two or three of the corporations were engaged exclusively in marketing coal and for that reason Bullock and Young were anxious for the control of the Carrs Fork Coal Company which owned and operated certain mines in Eastern Kentucky. To secure the control of it, it was necessary that they buy approximately 200 additional shares of the stock of that company. T.J. McConnell and W.J. Raybould owned 211 shares of its stock. On the 18th day of December, 1923, Bullock, Young, and one L.H. Stone contracted to buy and bought the 211 shares at $200 per share. They executed and delivered a writing evidencing their purchase, and their joint notes therefor, for $42,200. Stone became insolvent and dropped out of the transaction, and, as the $42,200 became due, and renewals were required, Young signed them with Bullock. Within about two years after the contract for the purchase of the 211 shares, Bullock and Young got themselves in a position to acquire administrative control of the corporation, which was accomplished in June, 1925. The election of directors was held that month. Some time prior to the election, Bullock, Young, and Frank E. Wood, a practicing attorney of Cincinnati, Ohio, agreed to elect themselves as president, treasurer, and secretary, respectively. From this point, the digression of the asservations of Bullock and Young becomes the vital issue of the case. Frank E. Wood was not a party to the purchase of the McConnell and Raybould stock, nor did he sign any notes executed for it. His only connection was as an attorney of the several corporations under the control at that time of Bullock and Young. At the time Young agreed to go in with Bullock and purchase the 211 shares, he was without means with which to pay for his portion of the stock, which fact was known to Bullock. For this reason he agreed to participate in the purchase of the stock on the condition that he be paid a salary by the Carrs Fork Coal Company and that his salary be applied to the payment of his proportion of the stock, and Bullock consented to this arrangement. He claims that on the day the meeting was held to elect directors, which would enable Bullock and himself to acquire the cherished control of the Carrs Fork Coal Company, he, Bullock, and Wood agreed on the side that a salary would be voted to Bullock of $7,500, to Wood $2,500, and to Young, $2,500, as president, treasurer, and secretary, respectively, and that, as the salaries accumulated they would be applied by Bullock to the payment of his and Bullock's notes outstanding for the purchase price of the 211 shares of stock of the Carrs Fork Coal Company. He claims this arrangement was not put through at that meeting which was adjourned to Wood's office where later it was carried out by a resolution of the board of directors. At the time it was made by the three of them, it was agreed that Wood would reduce to writing their agreement showing the amount of their salaries and that Bullock was to receive, as trustee, and apply, the same as they accumulated on the payment of his and Young's obligation for the 211 shares of stock. On May 12, 1925, the board of directors voted Bullock's salary as president at $7,500; Wood's as secretary at $2,500; and Young's as treasurer at $2,500, per year. They continued in office until July 8, 1926, during which time Bullock drew a salary of $625 per month for himself. On July 8, 1926, he was re-elected president at a salary of $2,500 per year. The record of the corporation, which was in the possession of Bullock as president, charged $2,500 as Young's salary. It fails to reflect the payment of the salary to Young. An entry therein shows payment to Wood, on account of salary, $2,000 on May 6, 1926, $500 on May 31, 1926, and on July 30, 1926, $208.33. On July 18, 1926, Wood was elected attorney of the company at a salary of $2,500, payable in equal monthly installments. The record also shows that on May 28, 1926, a certificate of 150 shares of stock was issued to Frank E. Wood. It was signed by Bullock as president and Wood as secretary. A certificate of stock was issued to Bullock for 200 shares, on the 27th day of January, 1927. An indorsement on the back of it shows 12 1/2 shares transferred to Frank E. Wood and 7 1/2 shares to H.E. Bullock. The certificate of 12 1/2 shares to Wood, issued on the 4th day of June, 1927, was canceled July 12, 1927, and a new certificate, No. 376, issued to Bullock, which was originally issued to Bullock on January 27, 1927. On December 11, 1928, 52 shares of the 120 shares issued to Wood were transferred by Wood to Bullock. Wood, on May 15, 1926, was paid attorney's fee of $3,000; also March 12, 1926, $30,...
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