Rafield v. Johnson

• Decision Date: 08 May 1975
• Citation: 314 So.2d 695,294 Ala. 235
• Parties: Conrad W. RAFIELD, Jr. v. Allen A. JOHNSON, Jr., as Executor, etc., et al. SC 938.
• Court: Alabama Supreme Court

Page 695

314 So.2d 695

294 Ala. 235

Conrad W. RAFIELD, Jr. v. Allen A. JOHNSON, Jr., as Executor, etc., et al.

SC 938.

Supreme Court of Alabama.

May 8, 1975.

Rehearing Denied June 5, 1975.

John S. Foster and W. W. Conwell, Birmingham, for appellant.

William K. Murray, James J. Robinson, Birmingham, for appellees.

BLOODWORTH, Justice.

This is an appeal by defendant Conrad W. Rafield, Jr. from a final and a supplemental decree of the Circuit Court of Jefferson County, rendered in favor of the plaintiffs. We affirm.

The decrees order Rafield to execute an irrevocable trust in favor of his children, Margot Rafield and Conrad W. Rafield, III, the corpus to consist of a five-percent interest in the Birmingham Coca-Cola Bottling Company, a partnership, and the proceeds from the sale of five shares of stock of Crawford Johnson & Company, a corporation. The decrees also require Rafield to account for and pay over to the trust all partnership distributions from the Birmingham Coca-Cola Bottling Company and all dividends from Crawford Johnson & Company received by him from April 12, 1967, until the date of the decree. (A $5,000.00 fee for complainant's attorney was also assessed against Rafield as part of the court costs.)

The corpus of the trust came to Rafield as a gift in April, 1967, from Mr. and Mrs. Allen A. Johnson, Sr., the parents of Caroline Johnson Rafield, Rafield's former wife. The trust indenture which Rafield was ordered to execute for the benefit of his children was prepared in December, 1968, by Rafield's attorney at Rafield's request.

Plaintiffs, Mrs. Allen A. Johnson, Sr., Allen A. Johnson, Jr., and First National Bank of Birmingham, brought this action to enforce the alleged trust as executors of the estate of Allen A. Johnson, Sr., deceased. Mrs. Allen A. Johnson, Sr., also sues individually and as next friend of her grandchildren, the minor plaintiffs, Margot Rafield and Conrad W. Rafield, III. The First National Bank of Birmingham also sues as named trustee of the written trust indenture.

The issue tried and presented to the trial court, sitting without a jury, was whether the gift of the stock and partnership interest to Rafield from Mr. and Mrs. Allen A. Johnson, Sr., was absolute or whether it was conditioned upon Rafield's express promise to place the property in an irrevocable trust for the benefit of his children, the Johnsons' grandchildren.

In his final decree, the trial judge expressly found, Inter alia:

'* * *

'The Court finds that the gift was conditioned upon the parol understanding between the grantors and the donee that a trust for the benefit of the said minors would be established and that the said donee, Conrad Rafield, Jr., was in full accord with this condition and agreed to execute a trust agreement, in writing, which was prepared for his signature and which he has refused to execute.'

In the supplemental decree, the court found, Inter alia:

'The Court expressly finds that Complainants' Exhibit 3 is a copy of an Indenture of Trust which embodies those basic terms and conditions of trust specified by and among the donors, Mr. and Mrs. Allen A. Johnson, to be the terms of the Trust to be established by their son-in-law, Conrad W. Rafield, Jr., for his children and the donors' grandchildren, Conrad W. Rafield, III, and Margot Rafield, and contains all of the terms, conditions, powers and authorities agreed to by Respondent Rafield as a condition for accepting said partnership interest from Mr. and Mrs. Allen A. Johnson. * * *'

On this appeal, the sole issue raised by Rafield's assignments of error, and the arguments addressed thereto, is whether or not the evidence is sufficient to support the findings of fact upon which the trial court's decree is based. No contention is made that a gift of personal property cannot be subject to an oral condition or that an oral condition such as the one in the instant case cannot be specifically enforced.

At oral argument, counsel for Rafield contended that the judgment did not conform to the pleadings. Regardless as to whether this is true or not, the judgment is supported by the evidence. No objection to evidence outside the scope of the pleadings has been called to our attention. Thus, it would appear that the issues presented by the evidence and decided by the trial judge were tried with the implied consent of Rafield. Under these circumstances the failure, if there be such, of the evidence to conform to the pleadings does not affect the result of the trial of these issues. Rule 15(b), A.R.C.P.

The instant lawsuit arose out of the following factual context.

In April, 1967, while Rafield and the Johnsons' daughter Caroline were still married, the Johnsons invited them to their home for dinner. At this time the Johnsons informed the Rafields that they were going to give Conrad W. Rafield, Jr., five shares of stock in Crawford Johnson & Company and a five-percent interest in the Birmingham Coca-Cola Bottling Company, three shares and three percent from Mrs. Johnson and two shares and two percent from Mr. Johnson.

These companies own the local Coca-Cola franchise and operate related businesses. The businesses were founded by Crawford Johnson, Sr., who had two sons, Crawford, Jr., and Allen, Sr. Forty percent of the business passed to each son and the remaining 20 percent to a family in Tennessee. The ownership ratio between Crawford, Jr., family and Allen, Sr., family remained the same until Rafield received his stock and partnership interest.

Subsequently, a five-share stock certificate naming Conrad W. Rafield, Jr., as owner, was delivered to Rafield at his company office, and the partnership books were changed to reflect his five-percent interest therein.

In June, 1970, the Rafields were divorced for the third and final time. In early 1973, Rafield sold the five shares of stock to one James Lee, the chief competitor of Crawford Johnson & Company and the Birmingham Coca-Cola Bottling Company. This lawsuit followed. (Lee was originally a defendant but was dismissed when he agreed to sell the stock to the estate of Allen Johnson, Sr.)

To support the findings of the trial court, the appellees rely principally on the testimony of Mrs. Allen Johnson, Sr. Caroline Johnson Rafield, and attorney William Bew White.

Mrs. Johnson and Mrs. Rafield both testified that on the night the Johnsons told the Rafields of their intention to make the gift, Rafield expressly agreed that as a condition of the gift, he, Rafield, would put the property in an irrevocable trust for Caroline Rafield also testified that, after the gift was made, her former husband stated on numerous occasions that he was going to create the trust and on one occasion told her that he had done so.

the benefit of his children, Margot and Conrad, III.

Mrs. Allen A. Johnson, Sr., recounted a conversation with her former son-in-law (in early 1973 after the death of Allen Johnson, Sr.) in which Rafield asked her for a loan and told her that without the loan he would have to sell the stock although it was not his to sell.

Attorney William Bew White and his law firm have represented the Johnson family companies, the members of the family, and company employees for many years. He testified that in December, 1968, he prepared an irrevocable trust indenture at Rafield's request which was never executed by Rafield. The trust indenture named First National Bank of Birmingham, as trustee, and Margot Rafield and Conrad Rafield, III, as beneficiaries. The trust corpus was the Crawford Johnson & Company stock and the Coca-Cola partnership interest.

The trust indenture was found by the trial court to contain the terms to which Rafield agreed with Mr. and Mrs. Allen Johnson, Sr., and is incorporated in the decree. It is the trust indenture which Rafield has been ordered by the...