Seehorn v. Gaugh

• Decision Date: 24 November 1928
• Docket Number: No. 26376.,26376.
• Citation: 11 S.W.2d 750
• Parties: THOMAS J. SEEHORN, Administrator of Estate of GEORGE G. GAUGH, v. WALTER W. GAUGH and GEORGE M. GAUGH, Appellants, and KARALEE RANKIN.
• Court: Missouri Supreme Court

11 S.W.2d 750

THOMAS J. SEEHORN, Administrator of Estate of GEORGE G. GAUGH, v. WALTER W. GAUGH and GEORGE M. GAUGH, Appellants, and KARALEE RANKIN.

No. 26376.

Supreme Court of Missouri. Court en Banc.

November 24, 1928.

Appeal from Jackson Circuit Court. — Hon. O.A. Lucas, Judge.

AFFIRMED.

Hackney & Welch for appellants.

(1) By the delivery and recording of their deed to the Queen City Building and Investment Company on June 11, 1917, under the agreement with their father, that they should own all capital stock of the corporation, Walter and Mort Gaugh became the equitable owners of all of the stock whether transferred to them or not. This on the principle that equity regards that as done which ought to have been done. 1 Pomeroy, Eq. Juris, (2 Ed.) secs. 364, 368; Story, Eq. Juris, secs. 64g, 1212; 14 C.J. 402, 403, sec. 545; Martin v. Martin, 250 Mo. 539; Thomas v. Malone, 142 Mo. App. 197; White v. Land Co., 49 Mo. App. 450; Rogers v. Mining Co., 154 Fed. 606; Bates v. Wilson, 14 Colo. 140. (2) By affixing his signature to the assignment of the stock certificates, even if the assignments were in blank, this having been done contemporaneously with the delivery of the deed, the surrender of the old certificates for 77 shares, and the issuance of these two new certificates for 38½ shares each, was a disavowal by Judge Gaugh of any right in himself to the shares of stock represented by the two certificates, and coupled with his agreement that the boys should own all of the stock, constituted an express trust in their favor as the beneficial owners of this stock and converted him into a mere trustee for his sons as to this stock. No delivery of the stock to the sons was necessary to complete this trust.

So that whether Judge Gaugh retained the possession of the certificates or whether the names of the appellants were written in the respective assignments, is wholly immaterial. The trust and the equitable rights thus created became fully declared and executed and vested at the time. Certificates of stock are, by our statute (Sec. 9743, R.S. 1919), declared to be personal property. Express trusts in personal property may be declared by parol and proven likewise. Harris Banking Co. v. Miller, 190 Mo. 640; Rollestone v. Nat. Bank of Commerce, 299 Mo. 57. (3) There was no resulting or other trust in favor of Judge Gaugh in any of the property standing in appellants' names and conveyed by them to the corporation. Hunnell v. Zinn (Mo.), 184 S.W. 1156; 30 Cyc. 143; Stevenson v. Haynes, 220 Mo. 199; Bender v. Bender, 281 Mo. 473. (4) If appellants did not obtain title to the stock in accordance with their agreement, a resulting trust arose in their favor in the land conveyed to the corporation. In making the conveyance of their land to the corporation, it is clearly established by the evidence, that appellants did not intend the same as a gift either to the corporation or to their father. The sole consideration for the conveyance was that they should receive and own all the capital stock of the corporation. If, therefore, by reason of any informality of their agreement with their father, or by reason of any inaction on their part or on their father's part, it could be held that they did not become the owners of the stock, the entire consideration of their transfer to the corporation failed and a resulting trust in the land so conveyed arose in their favor. 2 Pomeroy, Eq. Juris. (2 Ed.) sec. 981, pp. 1433-1436; 1 Perry on Trusts (4 Ed.) sec. 126, pp. 145, 146; 39 Cyc. 115, 104; Bennett v. Hutson, 33 Ark. 762. (5) The corporation having received the conveyance and retained the property in pursuance of the agreement of its stockholders, that appellants should own all the capital stock, thereby became a party to and was bound by this agreement. It was the corporation's duty, if it held onto the property, to see that the stock was placed on its books in the names of the appellants as the rightful owners thereof. (6) The finding and decree of the trial court that the stock certificates in question were owned by Judge Gaugh and in his safe deposit box at the time of his death, and that they were thereafter removed therefrom by appellants, is not only against the weight of the evidence but is not supported by any credible evidence. This finding rests on the unsupported testimony of Karalee Rankin. Her testimony on the subject of the contents of this box, as well as on every other important point on which she testified, will be found on examination so very unreasonable, so inordinately improbable, as to stamp it as wholly unworthy of belief. (7) Respondents are bound by the testimony of Walter Gaugh as to what he took from the safe deposit box. Respondents placed Walter Gaugh on the witness stand as their witness and twice inquired of him as to what he took from the safe deposit box. They vouched for the credibility of this witness by placing him on the witness stand and are bound by his testimony to the effect that he did not take the stock certificates from the box. Manchester Bank v. Harrington (Mo.), 199 S.W. 242; Claflin v. Dodson, 111 Mo. 195; Rodan v. St. Louis, 207 Mo. 408. (8) The decree is inequitable. If the decree rendered by the trial court is permitted to stand, it convicts the father of appellants of perpetrating a fraud upon them in inducing them to convey their real estate to the corporation and in appropriating to his own use and depriving the appellants of the purchase price of their real estate so conveyed.

A.N. Gossett, Ira B. Bruns and John I. Williamson for respondent Seehorn.

(1) The law and the evidence support the finding of the court below. (2) The deed from respondent to George M. Gaugh was properly cancelled. Respondent in her amended petition offered to do equity and to conform to any order to be made by the court. That is all that equity requires of her. Peak v. Peak, 228 Mo. 536; Haydon v. Railroad, 222 Mo. 134; Custer v. Shackelford, 225 S.W. 455. (3) Because of their conduct in respect to suppression of evidence, interference with and concealment of decedent's property, every and the strongest presumption should prevail against appellants in this case. Pomeroy v....