Jackson v. American Bank & Trust Co., 4 Div. 915
| Decision Date | 18 February 1937 |
| Docket Number | 4 Div. 915 |
| Citation | 233 Ala. 486,172 So. 600 |
| Parties | JACKSON v. AMERICAN BANK & TRUST CO. et al. |
| Court | Alabama Supreme Court |
Appeal from Circuit Court, Covington County; Robt. S. Reid, Judge.
Suit in equity by J.A. Benton against the American Bank & Trust Company and others. J.A. Benton having died pending the suit Mrs. C.E. Jackson, as administratrix of the estate of J.A Benton, deceased, became the complainant. From a decree sustaining demurrers to the bill as amended, complainant appeals.
Reversed and remanded.
Powell & Fuller, of Andalusia, for appellant.
Powell Albritton & Albritton, of Andalusia, and John W. Lapsey, of Washington, D.C., for appellee RFC.
Appeal from a decree sustaining demurrers to a bill in equity as last amended.
It appears from the amended bill, construed most strongly against the pleader, that in 1930 J.A. Benton was the owner of and held a certificate, No. 207, for stock in Opp Cotton Mills, par value $2,000; that by indorsement of a transfer on the stock certificate it was assigned to American Bank & Trust Company of Opp, and thereafter, on October 2, 1930, said transferee surrendered this certificate, caused same to be canceled, and a new certificate, No. 234, issued to American Bank & Trust Company; that this new certificate was assigned by the holder as collateral security to Andalusia National Bank; and still later, July 17, 1932, that bank assigned the same to Reconstruction Finance Corporation as collateral security for a loan to said Andalusia National Bank. The stock is now so held.
The purpose of the bill is to have the surrender and cancellation of the certificate of stock, No. 234, cancellation of the transfer on the books of the corporation, and issuance of a new certificate to the administratrix of the estate of J.A. Benton, who has died pending the suit.
The original bill filed October 31, 1931, in which American Bank & Trust Company and Opp Cotton Mills were sole respondents, proceeded on the theory of a fraudulent procurement of the transfer of complainant's stock. However, in other sections were averments of mental incapacity of the complainant, assignor. This bill went out on filing a "substitute bill" December 1, 1932. This bill brought in the receiver of Andalusia National Bank. A further amendment June 6, 1933, with lettered sections, brought in Reconstruction Finance Corporation as a party respondent. A still later amendment, October 12, 1933, amended certain sections of the substituted bill.
After the administratrix became complainant, January 13, 1935, she further amended the bill, and finally amended this amendment, September 28, 1935.
The substituted bill, with all later amendments, constituted the amended bill to which demurrers interposed by Reconstruction Finance Corporation were sustained. Hence, this appeal.
The gravamen of the bill as thus amended is the alleged insanity of J.A. Benton. The averments of the bill on this issue are challenged by appellees on the ground that the averments of insanity are not sufficiently specific, and especially lacking in clear averment that said decedent was insane when he made the transfer in 1930.
In section 1, amendment of October 12, 1933, it is averred "*** that at the time the signature of said J.A. Benton to the said certificate was procured, the said J.A. Benton did not possess sufficient mental capacity to understand the nature and consequence of his acts; *** did not have sufficient mental capacity to know and understand what he was signing and that since the transfer of said certificate was signed the said J.A. Benton has not had sufficient mental capacity to recall or remember anything of the circumstances connected with the signing of the certificate, if he in fact signed same."
And in section 2: "Your complainant further avers that the said J.A. Benton obtained nothing of value on the said certificate; that at the time the said certificate purports to have been signed and at the time the said certificate was transferred on the books of the Opp Cotton Mills, continuous in the interim, and subsequent thereto, was non compos mentis, not having sufficient mental capacity to understand and appreciate the consequences of his acts in such or in any business transaction; that said transfer was fraudulent, without consideration and void."
Quite clearly, these and other like averments show insanity, non compos mentis, mental incapacity to contract at the time he made the transfer, signed the transfer on the certificate, upon which a transfer on the books, a new certificate, and all later assignments were based. The original assignment of 1930 is the only one in which J.A. Benton is alleged to have participated in any way.
By this act, and the authority it conferred, he passed his property interest, that of a stockholder in the corporate enterprise, unless mentally incapacitated to contract.
But, if insane in such sort, under the long-established rule in Alabama the transaction was utterly void, the property is still his wherever found, and this, regardless of notice of insanity, or the passing of evidence of ownership to bona fide holders for value without notice of his ownership.
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