Appeal
from Superior Court, Guilford County; Clement, Judge.
Civil
action by the Security National Bank, administrator c. t. a
of the estate of Sara Sternberger Margolius, and others
against Sigmund Sternberger, trustee and individually, and
others, wherein defendants filed a cross-action. From a
judgment for plaintiffs on the pleadings, defendants appeal.
Affirmed.
Where
members of family by agreement placed corporate stock
inherited by them with one member as trustee to be held
intact, with purpose of keeping stock in immediate family
but stock was owned on corporation books in names of
individual members, who voted stock and received dividends
individual members held entitled to possession of
certificates as against trustee, since "simple,"
"passive," or "dry" trust, not an
"active" or "special" trust, was created.
This
was a civil action brought by the plaintiff, Security
National Bank, administrator c. t. a. of the estate of Sara
Sternberger Margolius, upon issuing summons and filing a
complaint against Sigmund Sternberger, claiming it was the
owner and entitled to the immediate possession of 1,680
shares of stock in the Revolution Cotton Mills, and, before
the time for answering had expired, the said defendant made a
motion that David Margolius, Meyer Sternberger, Rosa
Sternberger, and Jeanette Sternberger Baach be made parties
plaintiff or defendant so that the rights of all interested
parties might be fully determined. Upon hearing of said
motion before the clerk, and upon agreement of attorneys
representing all parties, the court ordered that David
Margolius and Meyer Sternberger be permitted to make
themselves parties plaintiff, and that Rosa Sternberger and
Jeanette Sternberger Baach be made parties defendant.
The
plaintiffs then filed an amended complaint adopting the
complaint originally filed, and in addition thereto alleging
that Meyer Sternberger was the owner and entitled to the
immediate possession of 1,680 shares of stock in the
Revolution Cotton Mills. The defendants, Sigmund Sternberger,
trustee and individually, Rosa Sternberger, and Jeanette
Sternberger Baach, filed an answer and cross-action denying
that the Security National Bank, admininstrator c. t. a. of
the estate of Sara Sternberger Margolius, and David Margolius
had any right, title, or interest in and to said stock, and
that Meyer Sternberger was not entitled to the immediate
possession of the 1,680 shares of stock, as alleged, and the
defendants asked for affirmative relief alleging that the
3,360 shares of stock claimed to be owned by the plaintiffs
was included in a block of stock consisting of 8,790 shares
owned by the members of the immediate family of H.
Sternberger, deceased, and asked that $25,200 cash dividend
paid to the Security National Bank, administrator c. t. a. of
the estate of Sara Sternberger Margolius, be declared to be
the property of the immediate family of H. Sternberger,
deceased.
The
plaintiffs in due time filed an answer to the cross-action
denying the allegations of the defendants in their answer and
cross-action, and prayed for relief as contained in the
original and amended complaints. On the call of the case for
trial, both plaintiffs and defendants moved the court for
judgment upon the pleadings. After hearing argument upon the
motions, the court overruled the defendant's motion and
sustained plaintiff's motion for judgment on the
pleadings. Judgment was accordingly signed, from which
defendants appealed to the Supreme Court.
The
plaintiff, in the original complaint, alleges:
"That
the plaintiff, Security National Bank, is authorized and
empowered by law to act as administrator, executor and in
other fiduciary capacities. That on or about the 19th day
of October, 1933, the plaintiff Security National Bank, was
duly appointed by the Clerk of the Superior Court of
Guilford County as Administrator c. t. a. of the Estate of
Sara Sternberger Margolius, who died testate on or about
the 15th day of October, 1933. That the said Sara
Sternberger Margolius left a last will and testament, which
has been duly probated in common form in the Superior Court
of Guilford County, a copy of the same being attached
hereto, marked Exhibit A, and asked to be read as a part of
this complaint. That the plaintiff is advised, informed and
alleges that the said Sara Sternberger Margolius was at the
time of her death, the owner of 1,680 shares of the capital
stock of the Revolution Cotton Mills, a Corporation
organized under the laws of the State of North Carolina,
with its principal office in the County of Guilford in said
State. That the plaintiff is advised, informed and alleges
that the defendant is now in possession of the certificates
representing the aforesaid 1,680 shares of the capital
stock of the Revolution Cotton Mills, and although the
plaintiff has demanded that said certificates of stock be
delivered to it as Administrator of said estate, the
defendant has wrongfully declined and refused to deliver
the same. That the plaintiff is entitled to the immediate
possession of stock, to the end that it may administer said
estate as it is by law required to do.
Wherefore,
the plaintiff prays that the Estate of Sara Sternberger
Margolius be adjudged the owner of the aforesaid 1,680 shares
of the capital stock of the Revolution Cotton Mills and that
judgment be entered in this cause directing the defendant to
surrender to it the immediate possession of the certificates
for said 1,680 shares of the capital stock of the Revolution
Cotton Mills now in his possession, and that the plaintiff be
granted such other and further relief as to this Court may
seem just and proper."
In the
amended complaint (after other parties were made plaintiffs,
by consent) the
plaintiffs allege: "That David Margolius is the husband
of Sara Sternberger Margolius, and the sole legatee and
devisee of her last will and testament. That the said David
Margolius is the beneficial owner of the 1,680 shares of the
capital stock of Revolution Cotton Mills described and
referred to in the original complaint in this cause, subject
to the administration of the Estate of the said Sara
Sternberger Margolius. That the plaintiff, Security National
Bank, Administrator, is entitled to immediate possession of
said stock, and that none of the defendants has any interest,
legal or equitable, therein. That the plaintiff, Meyer
Sternberger, is the owner of 1,680 shares of capital stock of
the Revolution Cotton Mills, which is now in possession of
the defendant Sigmund Sternberger. That the plaintiff Meyer
Sternberger has demanded the surrender and delivery of said
stock to him by the defendant, Sigmund Sternberger, and the
said defendant has wrongfully refused to deliver the same to
said plaintiff. That the said Meyer Sternberger is the sole
and exclusive owner of said stock, and that none of the
defendants has any legal or equitable interest therein.
Wherefore, these plaintiffs pray: (1.) That the relief prayed
for in the original complaint be granted. (2.) That the
plaintiff, Meyer Sternberger, be adjudged the owner of 1,680
shares of the capital stock of the Revolution Cotton Mills,
the certificates for which are in the possession of the
defendant, Sigmund Sternberger, and that judgment be entered
in this cause directing said defendant to surrender to the
said plaintiff immediate possession of the certificates for
said stock. (3.) That the plaintiffs be granted such other
and further relief as to the Court may seem just and
proper."
The
will of Sara Sternberger Margolius is dated January 28, 1933,
and, after her death, duly admitted to probate. The material
item 2 is as follows: "All the rest and residue of my
estate of whatsoever kind and wheresoever found (including
all my stock, and all my interest in stock, in Revolution
Cotton Mills, whether standing in my name, or held by me
personally or not) I give, devise and bequeath absolutely and
in fee simple to my husband, David Margolius."
The
defendants, in their answer, allege among other things
"That on or about the 5th day of January, 1923, for a
valuable consideration, Meyer Sternberger, Sigmund
Sternberger, Jeanette Sternberger, and Sigmund Sternberger,
Trustee, entered into a written agreement, same being duly
signed by all of the parties thereto, in words and figures as
follows: 'North Carolina-Guilford County. Whereas, our
Father, H. Sternberger, whom we all loved and adored, did, on
or about the 1st day of June, 1915, in consideration of the
sum of One Dollar ($1.00) and in the further consideration of
mutual love and affection, sell, transfer, and assign unto
each of us one hundred and sixty-eight (168) shares of stock
in the Revolution Cotton Mills; and, Whereas, it being the
desire of each and all of us to keep said stock intact and
within our immediate family, in accordance with the known
wish of our beloved Father, we did enter into a written
agreement on or about the 28th day of December, 1918, wherein
and whereby all of the aforesaid stock belonging to each and
all of us was placed with Sigmund Sternberger, Trustee, as
was and is evidenced by a certain written agreement made and
entered into by and between each of us on aforesaid date,
to-wit, the 28th day of December, 1918; and,
"'Whereas,
Sigmund Sternberger owned thirty-nine (39) shares of said
stock in addition to the aforementioned 168 shares; and,
Whereas, a certain stock dividend has been declared by the
Revolution Cotton Mills; and Whereas, Sigmund Sternberger
is now the owner of 2,070 shares of said stock; Meyer
Sternberger is the owner of 1,680 shares of said stock;
Jeanette Baach is the owner of 1,680
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