Dearmon v. Dearmon
| Decision Date | 27 June 1986 |
| Citation | 492 So.2d 1004 |
| Parties | Alice F. DEARMON v. J.D. DEARMON and Camden Woodyard, Inc. 84-511. |
| Court | Alabama Supreme Court |
Matthew W. Burns, Destin, for appellant.
William L. Utsey, of Utsey & Christopher, Butler, for appellees.
Alice F. Dearmon appeals from a final judgment in an interpleader action awarding co-defendant/cross-claimant J.D. Dearmon and intervenor/co-defendant Camden Woodyard, Inc., a major portion of the interpleaded fund.
On September 15, 1977, A & D Pulpwood Co., Inc. (hereinafter "A & D"), was incorporated by three incorporators and shareholders: J.D. Dearmon, his wife Alice Dearmon, and Judy Albin. They held 225 shares, 25 shares, and 250 shares, respectively.
On April 12, 1978, the Dearmons were granted a divorce. The divorce decree incorporated a property settlement which, among other things, provided that J.D Dearmon would transfer his interest in A & D to Alice Dearmon.
Subsequent to the divorce, Alice Dearmon and Judy Albin asked J.D. to become reinvolved in A & D because neither Alice nor Judy had any experience in the wood and timber business. J.D. testified that he agreed to act as president of A & D in exchange for 25 shares of stock in A & D.
Due to the financial difficulties of A & D, Judy and J.D. agreed to advance money, as needed for operations, to A & D, with an understanding that the advances would be repaid from the funds generated by the operation of A & D. During the period September 10, 1979, to May 26, 1981, Camden Woodyard, of which J.D. is president and sole owner, advanced $11,038.89 to A & D.
A & D also wrote three checks to Alice totaling $16,714 to enable her to pay her income taxes in 1979, 1980, and 1981. J.D. testified that these were loans to Alice. In addition to these alleged loans, J.D. continued to pay his ex-wife $3000 per month in alimony.
In 1982, A & D received a $125,000 settlement from a lawsuit it was involved in. The settlement funds were placed in escrow with Robert B. Harwood, Jr.; J.D., Alice, and Judy agreed to dissolve A & D and disburse the funds among themselves. After payment of certain corporate debts, Judy received 50 per cent of the remaining funds. J.D. and Alice could not agree on the distribution of the remaining funds. Therefore, Harwood filed an interpleader action against Alice, J.D., and Judy. Camden Woodyard filed a motion to intervene as a party defendant. The record does not reflect when leave to intervene was granted by the trial court.
In their pleadings, Alice claimed the entire balance of the fund; J.D. claimed reimbursement for loans to A & D and to Alice for taxes, and a portion of the balance representing his ownership of 25 shares of A & D stock; Camden Woodyard claimed reimbursement for the same loans to A & D. In its pleading Camden Woodyard seeks relief against either Alice or A & D. The funds at issue belong to A & D and are in the hands of an escrow agent.
Alice first argues that the trial court erred in granting Camden Woodyard's motion to intervene because Camden Woodyard lacked any interest in the subject matter of the action.
Generally the denial or granting of a motion to intervene is within the discretion of the trial court and will not be disturbed on appeal unless there is an abuse of discretion. Walker County Dept. of Pensions & Security v. Mason, 373 So.2d 863 (Ala.Civ.App.1979).
In the instant case, Camden Woodyard claims an interest in the interpleaded funds pursuant to loans it made to A & D. Because of this claim, Camden Woodyard stands in the position of a creditor of A & D. Since A & D is dissolving as a corporation, Camden Woodyard is entitled to intervene to claim its interest in any remaining assets. Clearly, Camden Woodyard has an interest in the property which is the subject of the interpleader action. Therefore, the trial court did not abuse its discretion by allowing the motion to intervene.
Alice's next argument is that the trial court committed reversible error by refusing to allow testimony that A & D was a Subchapter S corporation because the original documents reflecting that fact were not introduced into evidence. The purpose of this testimony was to refute J.D.'s testimony that he owned 25 shares of A & D stock and that Alice owned 225 shares of A & D stock at the time of A & D's dissolution in 1982. We hold that even if the trial court should have allowed this testimony, the refusal to do so is not reversible error. See Rule 45, A.R.App.P. Alice was allowed to introduce into evidence form 1120S, which was A & D's income tax return for the year ending September 30, 1982. This return included a schedule K-1, which indicated that Alice owned 250 shares of stock in A & D. Alice's accountant testified on the basis of that schedule that Alice owned 250 shares of stock in A & D. The only fact that Alice was not allowed to admit into evidence was that A & D was a Subchapter S corporation. This did not substantially affect her rights; therefore, it was harmless error if an error at all.
Appellant's remaining arguments concern three issues: (1) whether the trial court's holding that J.D. owns five per cent of A & D stock is contrary to the evidence; (2) whether the award to J.D. of $11,038.89 is supported by legally sufficient evidence; (3) whether the award to Camden Woodyard of $16,714 is supported by the evidence and/or precluded by the Statute of Frauds.
When a trial court, sitting without a jury, hears ore tenus evidence, its findings of fact, if supported by the evidence, are presumed to be correct and will not be disturbed on appeal unless they are plainly and palpably wrong. Chaffin v. Hall, 439 So.2d 67 (Ala.1983).
Alice argues that the only evidence supporting the finding that J.D. owns five per cent of A & D stock is the contradictory and uncertain testimony of J.D. The fact that a...
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