White v. White

• Decision Date: 24 May 1929
• Citation: 229 Ky. 666
• Parties: White v. White.
• Court: United States State Supreme Court — District of Kentucky

229 Ky. 666

White v. White.

Court of Appeals of Kentucky.

Decided May 24, 1929.

1. Trusts. — Where father had stock transferred to son on corporation's books to enable family, in event of father's death, to hold stock until it could be sold for its reasonable value, son held stock as trustee for his father.

2. Corporations. — Where father had stock transferred to son on corporation's books, but father retained possession of certificates and did not deliver them, title did not pass.

3. Partnership. — Evidence held sufficient to warrant findings to effect that father and son were not partners in oil and gas business, or in certain land or leases, and that son was not entitled to share in profits of the operation of land leases or arising from the operation of any drilling outfit.

4. Witnesses. — Where defendant's son was dead at time testimony was given, defendant was not competent witness to testify that receipt from defendant to his son for $2,000 for interest in drilling rig was never delivered.

5. Sales. — Evidence held sufficient to establish delivery of receipt from defendant to his son for $2,000 for defendant's one-half interest in drilling rig owned by defendant and others.

Appeal from Boyd Circuit Court.

A.F. BYRD, A.N. CISCO and LESLIE W. MORRIS for appellant.

MARTIN & SMITH for appellee.

OPINION OF THE COURT BY DRURY, COMMISSIONER.

Affirming in part and reversing in part.

We shall refer to the appellant as the defendant, because that is the position he occupied in the trial court, and to his son, the appellee, T.R. White, we shall refer as the plaintiff. The trial court by its judgment made six findings:

(a) That the defendant owed the plaintiff $2,500 for a one-half interest in a drilling rig and set of tools.

(b) That the defendant owed plaintiff $3,300 with interest from July 28, 1922, upon a note.

(c) That plaintiff and defendant were not partners in the oil and gas business.

(d) That they were not partners in the Arnett land or leases.

(e) That plaintiff is not entitled to share in the profits from the operation of the Arnett land or leases.

(f) The plaintiff is not entitled to share in the profits arising from the operation of the drilling outfit.

All six of these findings are before us for review.

Findings (a) and (b), which were favorable to the plaintiff, have been brought here by appeal prosecuted by the defendant, and findings (c), (d), (e), and (f), which were favorable to the defendant, have been brought here by a cross-appeal prosecuted by the plaintiff.

THE FACTS.

John G. White, Sr., has for some years been engaged in drilling and prospecting for oil and the promotion of oil drilling and prospecting companies. On April 6, 1921, his brother, Bev. White, was shot and killed by one John Bailey. See Bailey v. Com., 193 Ky. 687, 237 S.W. 415. The defendant, who at the time resided at Ashland, upon the death of his brother, Bev. White, left his employment to a great extent and devoted almost the whole of his time toward assisting in the prosecution of the man who had killed his brother, attending all of the trials of the accused and taking an active part in the prosecution, which resulted in the conviction of the accused, whose punishment was fixed at life imprisonment in the penitentiary. At the time of the death of Bev. White, brother of the defendant, the defendant, had a son, John G. White, Jr., who was at that time living in Chicago, Ill. Upon obtaining information of the murder of his uncle, John G. White, Jr., wired his father, the defendant, for funds sufficient to enable him to come to the assistance of his people. Upon receipt of his wire the defendant complied with his request, wiring to him the money desired. Upon receipt of the money John G. White, Jr., came to Kentucky. Upon his arrival he joined with his father, the defendant, in assisting in the prosecution of the murderer of his uncle, Bev. White, accompanying his father to all of the trials of the accused and assisting his father, the defendant, in every manner possible. The feeling between the White and Bailey families was bad. Trouble between them was ever immient. It was thought that the defendant would be killed. In fact, he thought so himself. It appears that at that time the defendant was a man some 60 years of age. He was the father of a large family, which consisted of his wife, who at the time was suffering from tuberculosis, and nine children, four of whom were infants of tender years. His whole estate consisted of $75,000 worth of the capital stock of the Boyd Oil & Gas Company, a corporation, and a one-half interest in a string of oil drilling tools.

The defendant was greatly interested in the success of the Boyd Oil & Gas Company. He had organized it. The whole of his estate was invested in its capital stock. Since its organization, he, being its vice president and general manager, had devoted the whole of his time and labors towards its interests. While it was the owner of valuable assets, consisting of gas and oil land and leases, yet it was at this time in only fair financial condition. Its capital stock was of only little value, if any. Its future success, as well as the future value of its capital stock, depended upon its continuance until operating conditions became better and more profitable. These facts the defendant well knew. The capital stock owned by the defendant appeared upon the books of the corporation in his name. In the event of his death, in the settlement of his estate, it would have been necessary to have sold this $75,000 worth of capital stock owned by him. It would have brought nothing. Thus, the family of the defendant would have been left penniless. These facts the defendant also realized. So, in anticipation of death, in an effort to avoid such a situation, so he says, the defendant took the whole of his stock in the Boyd Oil &amp Gas Company to its secretary and treasurer, Mr. Benjamin H. Saunders, and had it transferred and assigned to his son, John G. White, Jr. It appears that his son, John G. White, Jr., had no knowledge or information of this assignment of the stock to him until some time afterwards, when the defendant advised him of it. It is clearly shown by the evidence that the defendant in making this transfer and assignment of the stock to his son, John G. White, Jr., did not intend to divest himself of his interest therein or to relinquish the control and ownership of it, but only assigned and transferred this stock to his son, John G. White, Jr., to enable his family, in the event of his death, to hold the stock until it could be sold for its reasonable value. It was only for the protection of his family that the transfer and assignment were made. This fact is clearly shown by the record. The defendant did not ever deliver this stock to his son, after it had been assigned and transferred by him, but kept the whole of it in his safe and in his own possession. In fact, that such were the conditions and purposes of the transfer and assignment of the stock to John G. White, Jr., is not questioned by the plaintiff. Clearly, under the facts and circumstances shown by the record, John G. White, Jr., held the legal title to this stock only as trustee for his father, the defendant. All of the parties interested considered this to be true. After the transfer and assignment of the stock, the defendant continued to act as vice-president and general manager; he voted the whole of this stock at all stockholders' meetings, and all parties, including the stockholders of the Boyd Oil & Gas Company, considered him as the owner of this stock.

We have stated that the defendant also owned a one-half interest in an oil drilling outfit. At the time of the transfer of the stock in the Boyd Oil & Gas Company to his son, John G. White, Jr., the defendant also transferred and assigned to his son his one-half interest in the oil drilling outfit, executing to him the following writing:

                     "$2,000.00                       4/22/21
                

"Received of John G. White, Jr., Two Thousand Dollars. Cash in hand paid for my one-half interest in full of set or Drilling Tools and Boiler and Engine and all other Tools owned by myself and Kelly and Clarence Williams now on the Lore Lease on Mine Fork in Magoffin County, Ky.

                                       "(Signed) John G. White."
                

It is admitted by the record that the transfer and assignment of the oil drilling outfit was at the same time and upon the same conditions as was the transfer and assignment of the stock in the Boyd Oil & Gas Company. Although it is recited in the writing that the defendant received in consideration of this transfer the sum of $2,000, yet it is admitted that he did not receive one cent as consideration for the transfer. This receipt the defendant testifies was never delivered by him to his son, John G. White, Jr., but it, as well as the stock assigned to him, was placed by the defendant in a drawer of his desk and there remained.

Since John G. White, Jr., was accompanying his father to the trials and assisting in the prosecution of John Bailey, it was feared, as was later true, that he, as well as his father, would be killed by the Baileys. So, in view of this situation, the defendant again...