Opinion ID: 1692738
Heading Depth: 1
Heading Rank: 2

Heading: Richard Hail Brown:

Text: He contends that nearly all the stock owned by B-D was purchased in his name. (He was apparently the managing partner of the B-D Company and when various acquisitions were made, they were usually purchased in his name.) Bateh, Sr., was very active in the buying and selling of stock and Brown regarded Bateh, Sr., as the one with the greatest knowledge of buying and selling of stocks in the partnership. (However, during the testimony of Charles Morton, the bookkeeper for SECO at the time of the transaction in question, it was stated that from 1962 to 1970 only 10% or 15% of Bateh, Sr.,'s time was devoted to the joint interests of Brown and Bateh.) When he discussed with Bateh, Sr., the acquisition of the 119,968 shares, he was pretty sure that he told him that the stock was bought in Brown's name and that nearly all of the stock owned by B-D was bought in his name. The $30,000 given by Joe and Fred to Bateh, Sr., was a loan to Bateh, Sr., for the use of the partnership; therefore, Joe and Fred have no legal claim to the stock. He knew that Bateh, Sr., put the loan in his sons' names, but he did not know until a year later that the transaction was on the books that way; that on the page of the ledger of B-D Company where a ledger card was labeled notes payable, there were entries First National Bank of Birmingham and several other places where money was borrowed. The ledger sheet showed Joe Bateh, Jr., $30,000. There was written on this same page a note in Ms. Cole's (a secretary-bookkeeper) handwriting asking, When is interest payable? He never instructed either Ms. Cole or Charles Morton to accrue and reflect interest on any of the accounts payable, and he never gave Ms. Cole any instructions whatsoever on bookkeeping. It was the practice of B-D Company that when the partners would loan money to B-D, it would be entered in the books as an account payable. It was customary at B-D that Bateh, Sr., could write himself a check on the money owed him by B-D or to draw a check any time when there was a loan on the books outstanding to either him or a member of his family. Later, when there was sufficient funds in the B-D account, the checks would be cashed. It was not the custom of B-D to pay interest on loans to B-D by the partners or members of the Bateh family. (It appears that, in the transaction in question, Bateh, Sr., did not draw any checks payable to Joe or Fred for the $30,000 advanced to him.) The first time he heard from the Bateh family that they were claiming stock in their own name, rather than as part of the partnership, was in June or July of 1969. He did admit, however, that in 1967 there was some conversation between Bateh, Sr., and himself regarding letting the boys (Joe and Fred) have some preferred stock in SECO. It was August of 1967 when the conversation arose about Joe and Fred wanting SECO stock in their own names. Bateh, Sr., had stated that some stock ought to be given to his boys for the loan. Several months later, the stock question arose again. At this time, he volunteered to give Bateh, Sr., some preferred stock (a $20,000 share certificate) for his sons. When this conversation took place concerning giving the boys stock, preferred stock was discussed. Bateh, Sr.'s only complaint about the stock was that it was not callable, but the voting rights were never mentioned by Bateh, Sr., at this time.