Hawley Coal Co. v. Bruce

• Decision Date: 23 January 1934
• Citation: 252 Ky. 455
• Parties: Hawley Coal Company et al. v. Bruce.
• Court: United States State Supreme Court — District of Kentucky

Page 455

252 Ky. 455

Hawley Coal Company et al. v. Bruce.

Court of Appeals of Kentucky.

Decided January 23, 1934.

1. Statutes. — Words and phrases in statute are used in their technical meaning, if any, and otherwise in their popular sense (Ky. Stats., sec. 460).

2. Statutes. — Clear and unambiguous language in statute will be held to mean what it plainly expresses.

3. Statutes. — Legislature, making no exception to positive terms of statute, is presumed to have intended to make none, and court cannot introduce exception by construction.

4. Statutes. — Power to create exceptions to statute by construction cannot be exercised, where words thereof are unambiguous and its purpose plain.

5. Statutes. — Exceptions to statute will not be recognized, unless necessary to avoid injustice, oppression, or absurd consequences.

6. Fraudulent Conveyances. — Statute invalidating transfers or assignments of "personal property" between spouses as to third persons, unless in writing, acknowledged and recorded like chattel mortgages, applies to intangible property, including corporation stock (Ky. Stats., sec. 2128).

Words "personal property" in Ky. Stats. sec. 2128, embrace all kinds of personal property, including intangibles, and word "assignment" is peculiarly applicable to intangible personal property.

7. Fraudulent Conveyances. — Transfer or assignment of corporation stock by husband to wife without acknowledgment and recordation held invalid as to third parties, including one suing husband on board bill (Ky. Stats., sec. 2128).

8. Corporations. — Individual's purchase of all stock of corporation suspends corporate franchise until stock is transferred to others, but does not dissolve corporation nor vest title to realty thereof in purchaser.

9. Corporations. — Corporate debts take precedence over individual debts of stock owner, whose only interest in corporation's assets is equity after paying its debts.

10. Corporations. — Sale of corporation's realty as property of sole stock owner to satisfy judgment sustaining attachment of his right, title, and interest therein held erroneous, where there was at least one creditor of corporation.

Appeal from Bell Circuit Court.

LOW & BRYANT and R.L. MADDOX for appellants.

ISHAM G. LEABOW and J.E. SAMPSON for appellee.

OPINION OF THE COURT BY JUDGE CLAY.

Reversing.

This action was originally brought in the Bell circuit court by Eliza Bruce against Walter E. Price to recover a board bill of $413.33. Attachment was issued and levied upon "all the right, title, interest, claim or demand of the defendant, Walter E. Price, in and to the certain tracts or parcels of land lying in Bell County, Kentucky," and belonging to the Hawley Coal Company.

Later on Mrs. Bruce filed an amended petition pleading that the Hawley Coal Company had closed its business as a corporation, and that the title to its property was in the defendant Price, and that the attached real estate was all the property real or personal belonging to the defendant, who was insolvent. Price, who was duly summoned, made no defense, and judgment was rendered sustaining the attachment, and ordering the real estate belonging to the Hawley Coal Company to be sold. Before the date of sale, Price died. At the sale Mrs. Bruce became the purchaser, and later on filed a second amended petition making the Hawley Coal Company, Mary E. Price, widow of Walter E. Price, and W.O. Pollard, parties defendant, and asking that the individual defendants be required to show what interest or claim they had in the property. After their demurrer had been overruled, the new defendants filed an answer denying the allegations of the petition and amended petition, and presenting several defenses, including the defense that the title to the attached property was in the Hawley Coal Company, and that Walter E. Price had no interest therein. After hearing the evidence, the chancellor set aside the former sale of the property, and adjudged that Walter E. Price was the sole owner of the stock of the corporation, that his property was subject to his individual debts, and ordered a sale of the land to satisfy Mrs. Bruce's judgment. From that judgment this appeal is prosecuted.

On the hearing there was evidence that on June 18, 1925, Walter E. Price, who then owned all the stock in the Hawley Coal Company, indorsed and transferred the certificates to his wife, in consideration of her giving a deed of trust on her land in Virginia to secure his indebtedness of $18,000 to the Citizens' Bank & Trust Company, and that under the arrangement appellant Pollard was to have 12 1/2 shares of the stock. The transfer or assignment is assailed on the ground that it was not acknowledged and recorded as required by section 2128, Kentucky Statutes, which reads as follows:

"A married woman may take, acquire and hold property, real and personal, by gift, devise or descent, or by purchase, and she may, in her own name, as if she were unmarried, sell and dispose of her personal property. She may make contracts and sue and be sued, as a single woman, except that she may not make any executory contract to sell or convey or mortgage her real estate, unless her husband join in such contract; but she shall have the power and right to rent out her real estate, and collect, receive and recover in her own name the rents thereof, and make contracts for the improvement thereof. A gift, transfer or assignment of personal property between husband and wife shall not be valid as to third persons, unless the same be in writing, and acknowledged and recorded as chattel mortgages are required by law to be acknowledged and recorded; but the recording of any such writing shall not make valid any such gift, transfer or assignment which is fraudulent or voidable as to creditors or purchasers."

It will be observed that the statute provides that a gift, transfer, or assignment of personal property...