Winborne v. McMahan

• Decision Date: 28 February 1934
• Docket Number: 130.
• Citation: 173 S.E. 278,206 N.C. 30
• Parties: WINBORNE v. McMAHAN.
• Court: North Carolina Supreme Court

173 S.E. 278

206 N.C. 30

WINBORNE v. McMAHAN.

No. 130.

Supreme Court of North Carolina

February 28, 1934

Appeal from Superior Court, McDowell County; Schenck, Judge.

Civil action by J. W. Winborne against Eva H. McMahan administratrix of W. H. McMahan, deceased. From an adverse judgment, defendant appeals.

Affirmed.

W. H McMahan died intestate on the 9th day of January, 1931, and his wife, Mrs. Eva H. McMahan, was duly appointed and qualified as administratrix of his estate. The plaintiff alleged that on the 20th day of February, 1929, he was the owner of twelve shares of the common capital stock of the Blanton Feed Company, a corporation doing business in McDowell county, and that on said date he sold said stock to the deceased, W. H. McMahan, for the sum of $1,200; that said deceased failed and neglected to pay for said stock prior to his death; and that in due time the plaintiff filed a claim with the defendant for said sum. Upon denial of liability this suit was instituted against the estate. The defendant filed an answer denying the vital allegations in the complaint.

At the trial of the action J. W. Pless testified that he was a former law partner of the plaintiff and that there had been certain preliminary negotiations between the deceased McMahan, and the plaintiff and the witness with respect to the sale of said stock. The witness said that the deceased "told me he wanted to be the owner of the business so that he could take such course with it as he desired. He talked with me about being desirous of making whatever changes, the sale of the property, the changing of the business, that occurred to him. He said that in making these changes he did not wish to be responsible to any one and therefore he wished to own all this stock. *** When I was in court here he got Mr. Winborne and me together, at his instance, and said he desired to take this stock and he wished us to have par for it and six per cent. interest or that which would amount to six per cent. interest. Par was $100.00 per share. He was to pay us as was agreed then, the $3,000.00 for this stock, that is to Mr. Winborne, Mrs Winborne and me for the whole of this stock. It was held, as I explained, in this manner and he was to take over the stock. *** Mr. Winborne stated that he would accept that for that which he represented. Mr. McMahan had been informed by me before and knew that my stock was up at the First National Bank as collateral security to a note which the bank held against me, and in this conversation when the transaction was being closed it was stated that all the stock, as I recall, was in the bank and he was to take the stock out of the bank. He said he would take the stock out of the bank. *** No time was fixed that I know of. It was an agreement that went into effect then. *** He was to pay the bank for this stock and take it up. I went and arranged with the bank so that I could take my stock and credit my note for the amount he was to pay for it. Mr. McMahan agreed to pay this price for the stock to the bank to obtain our stock. We agreed that we would have nothing further to do with the business and that he could do as he pleased with it. Absolutely, we agreed to accept the amount to be paid by Mr. McMahan to the bank as payment for that stock. No other conditions at all were mentioned." The vice president and cashier of the bank testified that in February, 1929, the bank held twelve shares of the capital stock of the Blanton Feed Company issued to J. W. Winborne, and that the stock was held as collateral for indebtedness to the bank. All said certificates were signed in blank by the stockholders. The witness further testified that after the 20th of February, 1929, that he had a conversation with the deceased Mr. McMahan and that "he told me he had bought the stock of Mr. Pless and Mr. Winborne, all of it, *** and that he would take it up as soon as he had funds available. Mr. Winborne came in and told me he had sold his stock to Mr. McMahan; *** that Mr. McMahan was to pay him $100.00 per share, and when paid the certificate was to be delivered to him and his note credited with the amount received. The bank agreed to do that. The stock was to have been taken up by Mr. McMahan. The stock certificate is still at the bank. Since that time *** the bank would have transferred that stock and delivered it to Mr. McMahan upon the completion of the arrangement Mr. Winborne described to me." This witness further testified that after the death of Mr. McMahan, that there was a director's meeting at the bank and that Mr. E. H. McMahan came to the meeting and in going over the affairs of the estate said "that the estate owed Mr. Pless and Mr. Winborne $3,000 *** for a contract entered into between W. H. McMahan and Mr. Pless and Mr. Winborne." This witness further testified that the deceased, prior to his death, in discussing his business affairs referring to the stock of the Blanton Feed Company, "told me he had contracted to acquire it all. He told me he had entered into a contract, whether it was written or verbal I don't know, with Mr. Pless and Mr. Winborne to buy their stock and when he acquired that stock then he would own the whole of it."

The president of the bank testified that Mr. E. H. McMahan "came in there to see about some notes which the estate owed there and he gave an account of the liabilities and assets and in it he said they owed Mr. Pless and Mr. Winborne $3,000.00. *** That was after the death of his father."

The plaintiff testified that in February, 1929, following the conference between the witness and Mr. Pless and the deceased that he went to the bank and told the vice president and cashier that he had sold the stock and instructed him "to deliver the stock on the payment of the purchase price." Witness further testified that he had filed a claim for $1,200 against the estate, and that Mr. E. H. McMahan had written a letter to the effect that the estate would not pay the claim.

Mr. E. H. McMahan, attorney at law, and son of deceased, testified that he had never acknowledged the validity of the claim of the plaintiff against the estate, and that he had never stated to the plaintiff that the estate would vote the stock issued to the plaintiff in a stockholders' or directors' meeting. The testimony of defendant tended to show that the deceased had never purchased the stock but was merely negotiating with the plaintiff and that no stock had ever been delivered to the deceased in his lifetime by the plaintiff, and that consequently the estate was not liable.

Two issues were submitted by the court, as follows:

(1) "Did the defendant's intestate, W. H. McMahan, contract with the plaintiff, J. W. Winborne, to purchase the twelve shares of stock of Blanton Feed Company owned by him (Winborne), as alleged in the complaint?"

(2) "What amount, if anything, is the defendant indebted to the plaintiff?"

The jury answered the first issue "Yes," and the second issue "$1,200.00 with interest."

From judgment upon the verdict, the defendant appealed.

Guy Weaver, of Asheville, and Edward H. McMahan, of Morganton, for appellant.

Robt. W. Proctor and J. W. Pless, Jr., both of Marion, for appellee.

BROGDEN Justice.

The exceptions and assignments of error present...