Robinson-Pettit Co. v. Sapp

• Decision Date: 22 October 1914
• Citation: 169 S.W. 869,160 Ky. 445
• Parties: ROBINSON-PETTIT CO. v. SAPP ET AL.
• Court: Kentucky Court of Appeals

169 S.W. 869

160 Ky. 445

ROBINSON-PETTIT CO. v. SAPP ET AL.

Court of Appeals of Kentucky.

October 22, 1914

Appeal from Circuit Court, Ohio County.

Action by J. G. Sapp and others against the Robinson-Pettit Company. From a judgment for plaintiffs, defendant appeals. Affirmed.

Barnes & Smith, of Hartford, for appellant.

Ernest Woodward, of Hartford, for appellees.

HOBSON C.J.

The Ohio County Bank was incorporated in the year 1909 with a capital stock of $15,000. Z. Wayne Griffin held ten shares of the stock of the par value of $1,000. Griffin fell in debt to the Robinson-Pettit Company, and on August 13, 1909, he transferred the stock to it, delivering to it the stock and the following writing:

"Know all men by these presents that I, Z. Wayne Griffin, for value received, have bargained, sold, assigned, and transferred, and by these presents do bargain, sell assign, and transfer unto Robinson-Pettit Company 10 shares of stock, standing in my name on the books of the Ohio County Bank, Hartford, Ky. and do hereby constitute and appoint ______ true and lawful attorney, irrevocable, for me and in my name and stead, to sell, assign, transfer, and set over all or any part of said stock; and for that purpose to make and execute all necessary acts of assignment and transfer, and one or more persons to substitute with like full power, hereby ratifying and confirming all that my said attorney or his substitute or substitutes shall lawfully do by virtue hereof.

In witness whereof, I have hereunto set my hand, the 13th day of August, 1909.

Z Wayne Griffin.

Witness:

J Thos. Schorch.

Nelson B. Freedhouse."

Subsequently the bank failed, and this action was brought against the Robinson-Pettit Company as a stockholder to enforce the double liability under section 595, Ky. St., which provides:

"The stockholders of each bank organized under this article shall be individually responsible, equally and ratably, and not one for the other, for all contracts and liabilities of such bank to the extent of the amount of their stock at par value in addition to the amount of such stock; * * * and no transfer of stock shall operate as a release of any such liability existing at the time of such transfer. * * *"

The Robinson-Pettit Company defended the action, insisting: (1) That it only held the stock as a pledge to secure its debt; (2) that the stock had not been transferred to it on the books of the bank and had never been presented for transfer; (3) that the transfer of the stock to it was fraudulent. The circuit court gave judgment in favor of the plaintiff. The defendant appeals.

1. The testimony for the Robinson-Pettit Company by three of its officers is to the effect that the stock was turned over to it by Griffin simply to secure its debt, and that they were to sell the stock and account to him for the proceeds. On the other hand, Griffin testifies that it was an absolute transfer; the company taking the stock at $1,000, its par value, and crediting him by this sum on his debt. In this he is sustained by the ledger of the Robinson-Pettit Company, a copy of the entries in the ledger having been filed in the action; and he is also sustained by the testimony of the officers of the bank. The stock, at the time it was transferred, had a book value of $1.20, and it was supposed to be worth something above par. Griffin went into bankruptcy after he had transferred the stock, and the Robinson-Pettit Company, in proving up their claim against the bankrupt estate, credited it by $1,000 for this stock, making no mention that the stock was held as a pledge, or explanation about the credit. It thus took the chance of making what it could out of the stock, if sold above its par value. We give some weight to the finding of the chancellor on a question of fact; we do not disturb his finding where, on the whole record, the truth is doubtful; and, in view of the fact that the transfer is absolute on its face, we cannot disturb the chancellor's finding, supported, as it is, by the circumstances and the conduct of the Robinson-Pettit Company.

2. Sections 545 and 546, Ky. St., provide:

"The

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