Tankersley Inv. Co. v. Tankersley Inv. Co. ex rel. Tankersley

1949 OK 112, 210 P.2d 167, 202 Okla. 51, 1949 Okla. LEXIS 405

Opinions

ARNOLD, V. C. J.

. The principal question presented by this appeal is one of fact and that is the controlling question, as we view it.

That question is whether Earl Tank-ersley sold and Dan Tankersley bought Earl’s stock in the Tankersley Investment Company. For brevity the two will be referred to by their first names. Earl contends he did not sell or agree to sell. Dan contends they did agree and that he bought and fully paid for Earl’s stock, in complete compliance with the agreement.

It is our duty to affirm on the fact question unless we find the trial court conclusion to be contrary to the weight of the evidence. Payne v. Wade, 190 Okla. 222, 122 P. 2d 144, and Uhrina v. Mastako, 100 Okla. 294, 229 P. 196. And it is equally our duty to reverse if, we find that conclusion to be clearly against the weight of the evidence. Crabtree v. Standard Savings & Loan Association, 187 Okla. 189, 102 P. 2d 127, and Turban v. Douglass, 76 Okla. 78, 183 P. 881.

In such a case it is our duty to examine the record, weigh the evidence, and from an overall consideration of the record, in the light of the briefs and arguments, to determine whether the evidence supports the trial court conclusion.

The contest is between two brothers who for more than ten years operated together in prosperity and complete harmony, but who in depression times faced business bankruptcy and came to outspoken enmity towards each other. Dan, the older, founded the business life involved before the first World War, continued it after he returned from that service, and about 1926 took in the younger brother Earl as an equal partner. The productive business ac tivity was that of construction contracting.

From an humble beginning there was some prosperity, but not great wealth. Two corporations were formed, one the Tankersley Investment Company, to hold title to an apartment building in Tulsa, and another the Tankersley Construction Company to cover the productive business of the brothers. The dates of incorporation are unimportant, likewise the exact stock issuance details. There were enough stockholders for legal requirements. But for all practical purposes, and all purposes of this consideration, Dan and Earl each owned one-half of each corporation, and they worked together in harmony.

All went well with co-operation and congeniality until in the 1930’s when adversities came. In about 1934 Earl took federal employment in executive or administrative work for H.O.L.C. full time, while Dan continued work, giving his full time to and with the two corporations. Both brothers continued to draw money for personal use from the corporate funds and from the corporate bank account.

The financial condition of the two corporations went from bad to worse, and to very much worse, until both corporations came to be insolvent, and heavily involved, and as it then appeared, perhaps hopelessly insolvent.

That was the condition of the corporations in 1939. The apartment building was mortgaged for substantially more than it was worth and the Investment Corporation only awaited to be foreclosed out of existence. The Construction Corporation was in debt many thousands of dollars more than its assets with little construction work to be had.

Meantime the brothers had been separated in work as above stated, their relationship had become strained by Earl’s continuing checking against the corporate bank account. There were harsh words, and bitterness, and active hostility, and in late 1939 a complete break, and open enmity between the two brothers.

They could no longer operate together or tolerate each other, and it became apparent that the business or corporate affairs might go overboard entirely or that one of the brothers must buy out the other, and it was so stated between them, and so understood and agreed between them. Earl either was not interested, or not able to consider buying. Dan, with no other activity in mind, or available to him, did desire to carry on with the corporations.

Each of the foregoing facts is either conceded, or definitely shown without dispute, and we come down to consider what did or did not happen in the closing days of 1939, and the early part of the following year 1940.

We should now notice briefly the contentions of the parties. Both parties concede that there were negotiations in reference to sale by Earl and purchase by Dan, but Earl contends they never went beyond the state or stage of negotiation. Dan’s contentions are that he bought and paid for and took over the properties from Earl by agreement fully consummated. In further detail Dan contends that he requested Earl to list what he wanted as full consideration to get out of both corporations, and that Earl listed the following requirements:

(1) Release of a certain oil payment owned by him, but at that time pledged to a bank for his indebtedness to the bank of a little over $2000.00;

(2) A stated list of building machinery and equipment to start in the construction business for himself; and

(3) Payment of his personal income taxes, state and federal for 1939; and

(4) Dan to assume and release Earl .from all corporate debts, including Earl’s debt to the corporations of about $26,000.

Dan contends that he agreed to all that and made full and complete compliance, thereby paying Earl the full consideration agreed upon for his half of both corporations.

The extreme bitterness between the brothers was spiteful and severe. The testimony offered by each brother fully and vigorously supports his own theory and would completely vanquish and banish the advisory theory. Their own statements are so at variance that we have tried to give such statements full credence only when supported by outside physical facts or demonstrated truths.

In such a case there is splendid application of the rule giving special force to manifest physical situations, physical facts, common knowledge, and conceded facts or facts established by evidence beyond room for fair controversy. In Samulski v. Menasha Paper Co., 147 Wis. 285, 133 N.W. 142, it was held:

“The testimony of a witness or finding of a jury, contrary to manifest physical situations, common knowledge, or conceded facts, is efficiently impeached thereby.

“A physical fact, existent as matter of common knowledge or established by evidence beyond room for fair controversy, cannot be overcome by human testimony, opinion or theorizing.”

And in Schrager v. Foster, 108 N. Y. S. 240, it was held:

“A verdict based on a finding directly contrary to physical facts established by uncontradicted evidence cannot stand.”

In further reference to the above-stated contentions of the parties, the physical facts demonstrate that Dan did (1) borrow money personally and pay off Earl’s debt at the bank and obtain release of Earl’s oil payment at the cost of a little over $2,000, and had the oil payment returned to Earl, and (2) Dan delivered a stated list of building machinery and equipment to Earl which was picked up by a man representing Earl from a man representing Dan at Dan’s yard and it was receipted for and delivered to Earl, and (3) Dan did pay Earl’s income tax, state and federal, for 1939, and (4) Dan did assume, and ultimately paid, all of the debts, releasing Earl from any claim thereon, including releasing Earl from his debt to the corporation’s account of about $26,000. In addition thereto Dan took over and operated all of the properties to the exclusion of Earl, and with Earl’s full knowledge and consent excluded Earl from the bank account by going to the bank and withdrawing all checking authority from Earl.

In view of all the circumstances, we must consider both corporations together. That is, Dan either bought both corporations as he contends, or he did not buy either one, as Earl contends.

As a further physical fact, in 1940 Earl organized and incorporated his own construction business in the name of Builders Construction Company, using the equipment obtained from Dan mentioned in item (2) above, and during 1940 operated in direct competition with Dan as is demonstrated by their competitive bidding on several jobs, some of which Dan obtained and some iof which Earl obtained.

In view of these circumstances we cannot believe that nothing more than negotiations occurred between Dan and Earl. It is most strongly indicated that a complete trade of purchase and sala was made and concluded. This view is strengthened by the fact that for many months Earl made no claim to continued ownership or interest in any of the properties, and did not make such claim until after Dan had worked the properties out of debt or nearly so, and in the corporate name had obtained or entered into government construction contracts of great value, and until changing conditions had greatly increased the value of the apartment house in Tulsa.

There are some physical facts on which Earl relies. The principal one is that the stock certificates were not delivered to Dan, and that after the purported sale and purchase there were some corporate reports which still referred to Earl as the holder of that corporate stock. We think that is fully covered by Dan’s explanatory statements and by the physical facts, or undisputed facts, that through a number of years the brothers considered and handled the properties more as family properties than as corporations, and that they looked to the properties themselves rather than to the corporate structures as such.

Another fact relied upon by Earl is in reference to a former suit in which the construction company was involved, and in which there was a preliminary finding for Earl, after which Dan paid Earl an agreed sum by way of compromise and settlement. We have given that consideration, but in view of the exact circumstances, we find nothing therein to bar or estop Dan from prosecuting his contentions here, and nothing there to cast any additional burden or doubt on Dan’s theory or contention. It is still our duty to test the judgment here by the evidence here, and that we have done in reaching our conclusion.

We cannot escape the conclusion that the contentions of Dan are sustained by the great weight of the evidence when we consider the following: The definite insolvency by many thousands of dollars of each corporation in 1939; and with actual and expressed knowledge of both brothers; the vigorous hostility of the brothers which made it impossible for them to operate together as they had in the past; the imminent necessity that one of the brothers buy the other out and take over exclusively; the stated knowledge thereof and agreed acquiescence therein by both brothers; the inability or disinterest of Earl to be the one to take over which was communicated to Dan; the willingness of Dan to take over which was fully communicated to Earl; the negotiations as to terms; the several items of valuable consideration passing from Dan to Earl amounting in the aggregate to about $30,000, all received and retained by Earl; that these items either went to Earl as the consideration consummating the purchase and sale agreement as contended by Dan, or they went voluntarily to Earl without any consideration therefor passing to Dan, and at a time when their ill feeling was most serious; that Dan actually took over the properties and exclusive management thereof and excluded Earl therefrom, and specifically excluded Earl from the bank account with Earl’s knowledge and acquiescence; that for a substantial period of at least many months Earl made no claim to continuing rights or continuing ownership of an interest in the properties, or to continuing rights in the bank account, but, on the contrary, made voluntary statements against any such interest or claim; that during such period Earl incorporated and thereafter separately operated in direct opposition to and in direct competition with Dan, though Earl is now in the position of claiming that during such period he was always a full half owner with Dan in Dan’s business while owning exclusively his own competing business.

We have considered the testimony of all other witnesses, some of whom had dealings with the two brothers before and after the time of the disputed purchase and sale. We have undertaken to evaluate that evidence and all the evidence in the light of the known facts or undisputed facts.

Nor have we overlooked the findings of the trial court. We think it is apparent the trial court gave too much weight to the one fact of nondelivery of the stock certificate. In the ordinary purchase and sale of corporate stocks, where consummated purchase is asserted by one, but wholly denied by the one asserted to be the vendor, the retention by him of the stock certificate would be strong evidence. However, it is not so strong under the circumstances here shown and in view of the explanation given. Furthermore, the trial court in his determination went top far in separating the two corporations in considering whether a sale of one corporation was made in 1939. It is true this action only involves one of the two corporations. But they were so bound together and so handled in the ownership of these two brothers that we are convinced that our approach to the question is dictated as the proper course on account of the overall situation peculiar to the facts and relationships here shown.

From an examination of the entire record, we are convinced that the great weight of the evidence is with the contention of Dan and requires the conclusion that Earl sold his corporate interests entirely and received and retained the required and agreed consideration therefor, and that it is our duty to reverse the judgment appealed from and to remand the cause, with directions to render judgment in favor of the plaintiff in error Dan, and accordingly the judgment is reversed with such remand directions.

DAVISON, C.J., and WELCH, CORN, and O’NEAL, JJ., concur. GIBSON, LUTTRELL, HALLEY, and JOHNSON, JJ., dissent.