Harvey v. Bank of Marrowbone

• Decision Date: 24 January 1918
• Citation: 200 S.W. 28,178 Ky. 793
• Parties: HARVEY v. BANK OF MARROWBONE.
• Court: Kentucky Court of Appeals

200 S.W. 28

178 Ky. 793

HARVEY v. BANK OF MARROWBONE.

Court of Appeals of Kentucky.

January 24, 1918

Appeal from Circuit Court, Cumberland County.

Suit by J. B. Harvey against the Bank of Marrowbone.From a judgment dismissing his petition, plaintiff appeals.Affirmed.

C. B Hicks, of Munfordville, and Baird & Richardson, of Glasgow for appellant.

P Sandidge, of Burkesville, for appellee.

MILLER J.

This is an appeal by J. B. Harvey from a judgment of the circuit court dismissing his petition in which he asked that the Bank of Marrowbone be required to issue him a certificate for five shares of its capital stock, and to account to him for the dividends on five shares of its stock from April 29, 1903.Harvey's claim grew out of the following facts: In 1903 the Bank of Cumberland and the Burkesville Banking Company were rival banks, doing business in Burkesville, and the Bank of Marrowbone was conducting a banking business at Marrowbone, in the same county.C. W. Alexander was president of the Bank of Cumberland, and S. J. Pace was the cashier of the Bank of Marrowbone.Upon the organization of the Burkesville Banking Company, prior to 1903, it was agreed among its promoters that no one of them should own more than five shares of stock.E. B. Pace subscribed and paid for five shares of stock, and requested appellant, Harvey, his nephew to subscribe for five additional shares in his own name; Pace stating that he would pay for them.This was done.Harvey subscribed for the stock, and Pace paid for it.

Alexander, the president of the Bank of Cumberland, originated a plan to obtain control of the Burkesville Banking Company for the purpose of liquidating its affairs and thus remove the competition to the Bank of Cumberland.The principal feature of this plan consisted in Alexander's buying quite a block of stock of the Bank of Marrowbone and exchanging it for stock in the Burkesville Banking Company, share for share.E. B. Pace approved the exchange, and on April 29, 1903, he assigned his certificate for five shares, had Harvey assign his certificate for five shares, and E. B. Pace delivered both certificates to S. J. Pace the cashier of the Bank of Marrowbone and received in lieu thereof a certificate in his own name for ten shares of stock in the Bank of Marrowbone.No question was made by Harvey at the time as to E. B. Pace's ownership of all the stock, and E. B. Pace so treated it, held it, and collected the dividends thereon until his death in April, 1915, a period of about 12 years.S. J. Pace, the cashier of the Bank of Marrowbone, who acted for Alexander alone, and not for the Bank of Marrowbone, in this transaction, died in 1905. J. E. Williams, the cashier of the Burkesville Banking Company, is also dead.On May 20, 1916, 13 years afterwards, Harvey instituted this action for the purpose above indicated against the Bank of Marrowbone, claiming that the bank held the five shares of stock for him as a continuing trust.It is not alleged that the appellee knew of Harvey's claim to the stock at the time it issued the new certificate to E. B. Pace.

The first paragraph of the answer is a traverse of the petition.In its second paragraph the Bank of Marrowbone alleged that Harvey was not the owner of the stock; that he held it in trust for his uncle, E. B. Pace, and surrendered it to him that he in turn surrendered it to the bank properly indorsed by Harvey, and that new stock was issued in lieu thereof to E. B. Pace; and that the transaction, which was thus closed, ended any trust relation that might have existed between Pace and Harvey, or between Harvey and the bank.In its third paragraph the bank alleged that it was not a party to the...