145 Ky. 756 | Ky. Ct. App. | 1911
OPINION op the Court by
Affirming on original and reversing on cross-appeal.
In May, 1904, there "was organized in Paducah a trading corporation known as the Old Kentucky Manufacturing Co. This corporation was organized to deal in proprietary stock foods. The affairs of the company were controlled by a hoard of directors and a general manager. The directors were H. R. Lindsey, H. C. Overby and Charles-R. Allcott. John W. Bebout was a stockholder and the general manager of the company, and to him was entrusted practically the management and control of the company. Under his direction and immediate supervision the affairs of the company were conducted until ' in May, 1909, when he was called upon by the stockholders and officers to render a detailed statement of the affairs of the company. About that time he was taken sick, and not until June first was the statement as to the condition of the company’s affairs rendered by him. In this statement he charged to his personal account about $8,000, $4,200 of which he claimed represented accounts owing by the company for merchandise and supplies which had not been paid or credited by him, and $3,800 thereof was represented as having been added to the merchandise sales account for the purpose of making it
In accordance with this arrangement the deed was executed, the notes signed, the stock transferred and delivered, and the matter closed. But after the lapse of a short-time he and his wife instituted a suit against the company and its directors above named, in which they sought to have the deed set aside, and the notes can-celled, and the whole transaction nullified, on the ground that, under threats of a criminal prosecution they were forced to convey the property and sign the notes as indicated, and that, in ignorance of the law and his rights, they had yielded to the urgent demands of the directors of the company and conveyed their property and signed the notes solely to avoid a criminal prosecution. They insisted that, while the entries made upon the books by Bebout were irregular, and, as he expressed it, for the purpose of juggling the company’s affairs in such a way as that it would appear to be in a prosperous condition and making money, he had in fact done no wrong and had not misappropriated any of the company’s money; that his padding of the invoices had the effect only of making it appear that the company had made more money than it in fact had; and that his failure to transfer certain accounts to the suspense account was simply a violation of the instructions which he had received from the directors as to the way in which these accounts should be kept; and that, while he had reported sales in excess of what they really were, the company had not been injured because he had accurately accounted for all monies which he had
Proof was taken in support of the respective claims as made by the pleadings, and upon submission the chancellor .found in favor of the defendants as to the execution of the deed and the transfer of the stock, but held that the evidence showed that plaintiff and his wife had surrendered the house and lot and the seventy-five shares of stock in settlement of Bebout’s indebtedness to the company, and that there was no consideration for the execution of these two notes. He accordingly directed that they be coneelled. Prom this judgment the plaintiffs have prosecuted an appeal, and the defendants have, prosecuted a cross appeal.
Two questions are raised: First, it is insisted that there was no privy examination of the wife in the execution of this deed, and, therefore, she is not bound by its terms; and second, it is urged that, as Bebout and his wife were forced under the threat of immediate prosecution to convey to the company their house and lot, this conveyance should be set aside. For appellees, on their cross appeal, it is urged that the execution of the deed and the notes and the transfer of the stock evidenced one contract and agreement or understanding; that either they were the free and voluntary acts of Bebout, or else he was forced to sign them; that they are entitled to have the trade upheld in its entirety or else it should be set aside as having been procured by means not countenanced by the law.
Disposing first of the question of the privy examination of the wife, the évidence shows that this aeknowladgment was taken in a storeroom. Bebout wrote the deed himself and he and his wife took it to Alleott’s storeroom. He had previously signed it. A young lady who was a notary was called upon to take their acknowledgment. Mr. Alcott testified that after Bebout acknowledged the deed he walked with him toward the other end of the store, and while they were some distance, away from the notary and Mrs. Bebout, her acknowledgment was taken. As opposed to his testimony Bebout and his
“Parties will not be permitted to show under the allegation of a mistake that the certificate was not in the form of or as required by law, or that the clerk was out of the county when he took the acknowledgment. When the certificate is regular and proper on its face, and admitted to be signed, and the deed acknowledged before one authorized to take the acknowledgment, what the clerk states as to when it was acknowledged, and the manner of acknowledgment, can not be assailed on the idea that the clerk has made a mistake, and parol proof allowed to contradict the legal effect of the certificate by showing that the clerk certifying took the acknowledgment somewhere else, or that the husband was present when the deed was acknowledged by the wife, or that the clerk failed to read and explain the contents of the deed to her.”
The principle announced in this case was approved in the later case of Tichenor v. Yankee, 89 Ky., 508, in which the court says:
“Undoubtedly, the officer may sometimes fail to fully discharge his duty, but the desired stability of title to real estate, and the protection of purchasers and the public, demanded the adoption of the statute.
Individual, hardships will occasionally result from the enforcement of any law, however salutary, and it would be exceedingly hazardous, as well as productive of much litigation, to permit the validity of such conveyances to depend upon parol evidence as to their due execution. If the certificate may be thus questioned as to whether the officer has done his duty, then the future vendee, however remote, has no protection. This court construed this statute in the case of Cox v. Grill, 83 Ky., 669, and it was there held that the Legislature, in providing that the certificate of an officer might be called in question for a mistake on his part, did not apply to the •form or manner of acknowledgment of a deed of a married woman. If made before a proper officer, then his certificate as to when and how it was acknowledged can not be assailed by parol testimony contradicting it, and showing that it was elsewhere acknowledged, or that the husband was present, or that the clerk failed to explain it to the wife. By virtue of the statute, it can not
Again, in the case of Keith, et al. v. Feder, Silberg & Cole, 16 Rep., 588, this same principle was recognized in the following language:
“Under the provision of section 17, chapter 81, General Statutes, ‘no fact officially stated by an officer in respect of a matter about which he is required by law to make a statement in writing, either in the form of a certificate, return or otherwise, shall be called in question, except upon the allegation of fraud in the party benefitted thereby, or mistake on the part of the officer, unless in a direct proceeding against the officer or his sureties.’
“This provision has been interpreted by this court in a number of cases, and the decisions are uniform in holding that the certificate of the officer can not be contradicted by parol evidence.
“It is of immeasurable importance that protection should be given to purchasers in the transmission of title to realty. If the details of the manner in which the officer took acknowledgment of the feme covert can be inquired into and its validity questioned and the certificate destroyed by parol evidence proving there was not a privy examination, or that he did not explain the contents and effect of the instrument, it would make doubtful and insecure the titles to a vast amount of realty. It would invite litigation, destroy the confidence in the verity of the records of conveyances of realty and rob innocent purchasers. It would be opening a rich mine of fraud and perjury. It would produce a feeling of insecurity and unsafety in many peaceful and happy homes in the country.”
Under these authorities, it is apparent that the effort on the part of appellants to attack the validity of the conveyance on the part of Mrs. Bebout upon the ground that she was not subjected to a privy examination is of no avail, and the chancellor corréctly held that she was bound by the acknowledgment, and her interest in the title to the property passed.
This leaves for our consideration the larger and controlling question in the case, to-wit, were the deed and notes procured by the appellees through fear brought about by a threat on their part to institute criminal proceedings against Bebout in the event he did not
He says he was coerced into making the settlement which he did. They say that he was not. He introduced his brother and brother-in-law, and some circumstances which, it is claimed for him, corroborated his testimony, to the effect that he was coerced or forced into making this settlement. When these statements which the witnesses say the appellees made are viewed and weighed in the light of the attendant circumstances, there is nothing in them that conflicts in the slightest degree with appellee’s testimony to the effect that the settlement and adjustment of appellant’s differences with the company
The chancellor correctly held the deed valid and that appellees were, by the assignment of the stock, invested with the title thereto. EDe erred in holding, however, that the two notes which were executed by appellant to appellees and the company were without consideration. The judgment upon the original appeal is affirmed, and upon the cross appeal it is reversed, with instructions to the chancellor to enter a judgment setting aside the cancellation of these two notes.