Straton v. Aldridge

Decision Date12 December 1939
Docket Number8959.
PartiesSTRATON v. ALDRIDGE et al.
CourtWest Virginia Supreme Court

Rehearing Denied March 16, 1940.

Syllabus by the Court.

Goodykoontz & Slaven and Fred Kopp, all of Williamson, for appellant.

Hogsett & Smith, of Huntington, for appellees.

FOX President.

The plaintiff, Mae Sullivan Straton, as administratrix of the estate of Joseph Butcher Straton, deceased, instituted her suit in the Circuit Court of Cabell County against the defendant, J. E. Aldridge, seeking a decree that she be adjudged the owner of three hundred seventy-five shares of the capital stock of the Big Huff Coal Company, a corporation, subject to the payment of certain sums of money admittedly due J. E. Aldridge arising therefrom, and asking that the certificate issued to said Aldridge for said stock be cancelled and a new certificate issued to her, and for general relief.

The bill is based upon the theory that the defendant Aldridge held the said stock under a trust relationship existing between him and its former owner, Joseph Butcher Straton. Upon bill, answer and proof taken before the court, a decree was rendered on the 17th day of February, 1939, in favor of the defendant Aldridge, and plaintiff's bill dismissed the court finding in its decree that the evidence failed to show an express trust between plaintiff's decedent, or the plaintiff in her own right, and the defendant as to the stock in controversy. From this decree plaintiff appeals.

About the 15th of December, 1930, Joseph Butcher Straton borrowed of the First Huntington National Bank the sum of $1500, and gave his note therefor with J. E. Aldridge as indorser. He deposited with said note as collatera l security therefor three hundred seventy-five shares of the capital stock of the Big Huff Coal Company, a corporation. On February 17, 1931, a payment of $100 was made on the note and a renewal for the balance, and there was also a renewal on May 18th.

On August 16, 1931, the note not being paid at its then maturity, the bank advertised a sale of the collateral aforesaid for the 31st of August. On that day, Straton came to Huntington from his home at Williamson, and he, together with Aldridge, went to the bank and secured a further renewal of the said obligation, Aldridge stating at the time that if the note should not be met at maturity, he would pay the same. The note matured on November 14, 1931, was not paid and the bank again advertised the collateral for sale to be made on December 1st, following, and both Straton and Aldridge were given notice thereof. On November 30th, the day before the proposed sale, Straton wrote a letter to Aldridge at Huntington, West Virginia, in the words and figures following:

"Mr J. E. Aldridge,

Huntington, West Virginia.

Dear Ed:

I would appreciate it very much if you would take up my stock and hold it for me as I am trying now to make a sale of a tract of land which I own in Mingo County, and I believe that I will be successful in doing so. We are waiting now to get a reply from the company which has the purchase under consideration.

I have insisted upon sale of this land here in the County and we have made the company a price of $16,000. This same tract of land sold a few years ago for $40,000.

I am sure you can handle this for me without any trouble and I will take care of it just as soon as I can.

Very truly yours,

J. B. Straton."

Aldridge states that this letter was received by him, but he does not recall whether it was before or after the sale of the stock mentioned therein. In regular course of mails he should have received it on the morning of December 1st. No reply was made to the letter, nor did any character of communication pass between Aldridge and Straton thereafter. On December 1, 1931, the shares of stock above mentioned were sold, immediately after banking hours, by an assistant cashier of the bank, and purchased by Aldridge for the sum of $375. On the day following, Aldridge paid to the bank the sum of $1409.51, covering the price paid for the stock and the balance due on the $1400 note and some expenses connected with the sale. On the 15th day of December, following, Aldridge presented the Straton certificate for said stock to the secretary of the Big Huff Coal Company, and had the stock transferred in his name, a certificate was issued to him therefor, and shortly after that time he was elected a member of the board of directors of the corporation. The property of the coal company consisted entirely of undeveloped lands, situated in Wyoming County, from which no income had ever been received, and while the stock was non-assessable, it was customary for the stockholders who could do so to make a voluntary contribution each year to pay their proportionate share of taxes assessed against the corporate property. It appears that Straton had not been able to pay his share of the taxes for the years 1928, 1929, 1930 and 1931, and that such share amounted to $1679.21, which amount Aldridge agreed to pay and afterwards paid; so that at the time of his purchase of the stock he had either paid or assumed the payment of the sum of $3,088.72. Later, he paid taxes which were assessed from year to year, so that his investment in the stock, according to a statement appearing in the record, which does not seem to be disputed, is, including interest, $4,753.48, as of the 28th of January, 1939. In addition to this, the corporation, in 1936, purchased 212.96 acres of land adjoining its original holdings, and, according to the plaintiff's bill, not denied, paid therefor the sum of $8,907.35, most of which consideration was borrowed, and for which Aldridge and others executed their note, and took a deed of trust on the property of the corporation to secure them on account thereof.

As stated above, Aldridge, on December 15, 1931, presented the Straton certificate for the three hundred seventy-five shares of stock to Harry H. Harvey, the secretary of the corporation, and asked that the certificate be cancelled and a certificate issued in his name for said stock, which was done. Harvey testifies: "When he brought the stock in, I asked him if he had any strings tied to it, and he said that he had agreed to let them have it back if they would reimburse him for what he had in it or what it cost him." Thomas W. Harvey, who was then president of the coal company, and who signed the certificate of stock issued to Aldridge, when asked if Aldridge, at that time, made any statement as to his ownership of that stock, testified: "He said he had taken it over, but had given Mr. Straton the privilege of taking it back upon the payment to him of what he had put in it or what it had cost him." When Aldridge testified, he was asked the following question, referring to the testimony of Harry H. Harvey: "Mr. Harvey has testified that at that time you made some statement to the effect that you bought the stock and was holding it for some relative,--Joe Straton,--and that you said you had agreed to let him have it back whenever he paid you what you had in it. Did you make any such statement as that to him? He answered: "No sir." He was then asked about the testimony of Thomas W. Harvey: "Tom Harvey said you made some statement about protecting Joe Straton, and that you said you bought the stock to protect Joe. Did you make any such statement as that?" To which he answered: "No sir." We have, therefore, the statement of Aldridge that he did not make certain statements to the Harveys. The question propounded with respect to the testimony of Harry H. Harvey closely follows, and the answer thereto plainly contradicts such testimony. The question in regard to the statement made by Thomas W. Harvey is not in close accord with Harvey's testimony, which was that Aldridge said "he had taken it over, but had given Mr. Straton the privilege of taking it back upon the payment to him of what it had cost him." The testimony in this case appears to have been taken before the court, and counsel probably did not have before them the transcript of the testimony. The contradictions of Aldridge are not entirely satisfactory, especially as to the statement of Thomas W. Harvey. However, Aldridge expressly states in other parts of his testimony that he did not comply with Straton's request, and did not take over the stock for him.

On March 10, 1932, the plaintiff, Mae Sullivan Straton, went to Huntington to see Aldridge. At that time, her husband was away from home, and letters had been received from him indicating that he contemplated taking his life. Mrs. Straton was then in need of money and asked Aldridge to loan her $500. He did not comply with her request, but indorsed her note on which she obtained this sum at the First Huntington National Bank, and which she afterwards paid. She states that during the conversation with Aldridge on this occasion, Aldridge told her that: "Mr. Straton had previously borrowed $2,000.00 from the First Huntington National Bank and that he had endorsed the note, and that Mr. Straton had put up 375 shares of Big Huff Coal Company stock and that he, Mr. Aldridge, had that stock and if ever I was able to take it up he would turn the stock back to me for just what he had in the note,--just what it cost him." The bill of complaint, with reference to this conversation, alleges Aldridge stated on this occasion "that she could redeem the stock for whatever it had cost him, whenever she was able to do so."

Joseph Butcher Straton died on March 13, 1932, three days after the Huntington conversation noted above, and plaintiff herein qualified as administratrix of his estate. Nothing was ever said about this stock until in November, 1937, some five and one-half years thereafter. So far as...

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