Full opinion text
OPINION IN LIEU OF FORMAL FINDINGS UNDER RULE 52 F.R.CIV.P. GROOMS, District Judge. After sundry preliminary hearings, the trial of this action began on May 17, 1965, and was concluded on July 27, 1966. Sixty days were devoted to the taking of evidence, the transcript of which, excluding exhibits, covers 9662 pages. Depositions received in evidence cover 6012 pages, not including exhibits. Over 1600 exhibits were tendered and most of them admitted in evidence. The Court files, six in number, contain 1450 pages. The briefs extend to a total of 1850 pages. Certain of the defendants and cross-defendants have provided the Court with proposed Findings and Conclusions of 288 pages. The Court’s penciled notes made during the course of the trial are 152 pages in length. These statistics are recited neither for the discouragement nor the enlightenment of those who must read them, nor for the elicitation of sympathy for the Court from the sheer size of the undertaking which has devolved upon it, but to account for the length of the opinion which follows, the time required for its preparation, and the resulting delay in' its issuance. In the hope that perhaps the areas of decision, both as to facts and law, may be more succinctly detailed, the Court has chosen to state the facts chronologically and narratively, with the law applicable thereto, rather than in the usual numerical sequence common to Rule 52 findings and conclusions. To avoid repetition, the facts found as to any issue are to be taken and considered as found as to any other issue to which they may be applicable. In formulating its opinion, the Court has given careful consideration to the evidence and exhibits, the oral arguments, the excellent briefs, the entire proceedings, and issues submitted to it. The results speak for themselves. HISTORY OF THE BELCHER ENTERPRISES TRUSTS AND ESTATES The W. E. Belcher Lumber Company was founded by W. E. Belcher, Sr. during the early part of the century and was operated as a sole proprietorship until 1941. The Lumber Company (herein referred to as the Corporation) was incorporated in 1941 as the W. E. Belcher Lumber Company, Inc. The incorporators, who were also the original directors and stockholders, were issued 1,000 shares of stock of a par value of $50.00 per share, and were as follows: W. E. Belcher 996 shares Brady Belcher 1 share H. H. Maxwell 1 share A. Roland Belcher 1 share W. E. Belcher, Jr. 1 share W. E. Belcher was president, Brady Belcher — vice-president, and Roland Belcher — secretary. Upon the death of W. E. Belcher in 1945, Brady Belcher became president and has continued to serve as such. The original directors, other than W. E. Belcher, Sr., have continued to serve in that capacity, with the exception of Roland Belcher who retired from participation in the company business in 1949. Mrs. Robena Davis and Mrs. H. H. Maxwell have served as directors since that year. Mr. Belcher, Sr. was survived by five children and his widow, Mrs. Ella Belch-er. These children in order of birth are: Brady, Mrs. Ruby Maxwell, A. Roland, W. E., Jr., and Mrs. Robena Davis. Prior to 1949 all of the 996 shares of stock in the Corporation was transferred to the children of W. E. Belcher — the government accepting an estate valuation of $650.00 per share on the transfers. In 1949 the stock was held as follows: Brady Belcher 201 shares Mrs. H. H. Maxwell 199 shares Mr. H. H. Maxwell 1 share A. Roland Belcher 200 shares W. E. Belcher, Jr. 200 shares Mrs. Robena Davis 199 shares Total ........ 1,000 shares The business of the Corporation had flourished by the time of the death of Mr. Belcher in 1945. Some 80,000 acres of timber land had been acquired, and the operation had grown from a small sawmill to an extensive plant at Centreville, Alabama, manufacturing various lumber products. On July 1, 1949, Roland conveyed 40 shares of his stock to the Corporation subject to an option to repurchase within ten years. On July 16, 1951, he conveyed to it 30 additional shares subject to a like option to repurchase. Neither option was exercised. The facts as to these options will appear in detail when the specific questions involving them are reached. On July 16, 1951, Roland by deed of trust conveyed his remaining 130 shares to the Birmingham Trust National Bank, as Trustee, under an inter vivos trust. The options to repurchase, together with certain other property, were also set over to said trust. On May 23, 1963, the Birmingham Trust sold 30 shares of the stock held by it in the trust to Fred H. Davis, the husband of Robena. The Corporation thereafter refused to transfer the ownership of this 30 shares upon its books. Title to this 30 shares is in dispute in this litigation. The facts as to the sale of the 30 shares will likewise appear later in these findings. Since the sale to Davis, W. E. Belcher, Jr. has transferred one share of his stock to his son W. E. Belcher, III. Mrs. Maxwell has transferred one of her shares to her daughter, Mrs. Fred Hallman. The 30 shares involved on the second sale by Roland were acquired upon the expiration of the option by the Belcher Lumber Sales Co., Ltd. The Belcher Lumber Sales Co. was formed in 1944 as a general partnership. This partnership entered into an “output” agreement with the Corporation, by which it was to act as a sales agency to the Corporation. The purchase price of lumber payable to the Corporation was 8% less than the sales price with a credit period of 15 days to the Sales Company. The partners contributed capital to the Sales Company in the amount of $100,-000.00 in the following percentages: Brady Belcher 34 % Mrs. H. H. Maxwell 16.5% A. Roland Belcher 16.5% W. E. Belcher, Jr. 16.5% Mrs. Robena Roby (Davis) 16.5% 100 % The general partnership continued until July 16, 1951, when, with the consent of all the partners, Roland’s interest was conveyed to the Birmingham Trust. On July 23, 1961, the Belcher Lumber Sales Company, Ltd., a limited partnership under the laws of Alabama, was estabiished and assumed the business of the existing general partnership. The Birmingham Trust became a special or limited partner. The percentages of ownership remained the same, but the capital was reduced by one-half, and the other one-half plus an earned surplus account of approximately $24,000.00 were set up in a paid surplus account. On January 1, 1952, all accounts were merged into a single partner’s account. On November 13, 1956, the Belcher Wood Products, Ltd. was formed for the purpose of purchasing non-merchantable timber products from the Corporation for conversion to wood chips for sale to paper manufacturers. The partners contributed $50,000.00 to the capital in the following percentages: Brady Belcher 20% Mrs. H. H. Maxwell 10% Mrs. Fred Hallman 5% Mrs. Ruby Maxwell Palmer 5% W. E. Belcher, Jr. 20% Mrs. Robena Davis 20% Birmingham Trust 20% Mrs. Palmer, not heretofore identified, is the daughter of Mrs. Maxwell. Birmingham Trust was and is a special partner. In 1959 Brady, W. E., Jr., Mrs. Maxwell and Mrs. Davis organized a corporation known as Engineered Structures, Inc. Each of the stockholders owns 25% of the stock. This corporation was organized to use the Corporation products in the manufacture of wooden structural members, principally roof trusses. The corporation did not i,ntend to pay dividends, and the Birmingham Trust declined an invitation to become a partner. In the 1940’s Brady Belcher, his wife Beulah, and his brother-in-law George Phillip White, an attorney, formed Brady Belcher Interests, Inc. This company owned a sawmill known as Silas Lumber Company. These parties were also the incorporators of the Belcher Motor Company and the Centreville Oil Company. The Belcher Investment Company is a partnership or joint venture organized in 1954 by Brady with a two-, thirds interest and by W. E., Jr. with a one-third interest. * Southern Pine Homes, Inc. was organized in 1954 by Brady, W. E., Jr., Lester Harris and Earl Furlong, with control resting equally in Brady and W. E., Jr. It was organized to engage in the house building business. All of the corporations referred to are Alabama corporations with their principal places of business in Centreville, Alabama. J. L. Bell Company, Inc. and Norris Furniture Corporation are Florida corporations, with their principal offices in Quincy, Florida, engaged in the manufacture and sale of furniture, respectively. The capital stock of these corporations was acquired in the name of Brady and W. E., Jr., who claim that the acquisition was as agents of the Sales Company. The Sales Company to a large extent, and the Corporation to a lesser, have financed these two corporations with alarming if not with disastrous results, and much of this controversy stems from this action. Those opposed to Brady and W. E., Jr. claim that they acted wholly without authority; that all of the transactions respecting said corporations were in fact the private undertaking of Brady and W. E., Jr. and not that of the Sales Company or Corporation. After the institution of this litigation Brady Belcher caused a Costa Rica Company to be organized for the exploitation of a timber contract with the government of Costa Rica. The stockholders appear to be the nominees of Brady who purportedly hold the stock for the W. E. Belcher Lumber Company. It is charged that this endeavor was undertaken without authority of the Board of Directors of the Corporation. In 1965 Forest Industries, Inc. was incorporated in Iowa with its principal place of business in Moline, Illinois, for the purpose of manufacturing boxes and crates. Brady and W. E., Jr. subscribed to 51% of the capital stock in the name of the Sales Company and again it is claimed without any notice to the other partners of the Sales Company. The Sales Company at the instance of Brady and W. E., Jr.. has extended very substantial credit to this company, which is averred to be insolvent. At the ti.me A. Roland Belcher established the trust referred to, which is known as Trust B, he also established another trust, known as Trust A. Plaintiff, Charles Donald Belcher, the only son of Roland and Charles’ mother, Mary Rogers Belcher, was the income beneficiary of Trust A. Trust A was to terminate and be paid over to Charles at age 25. He was granted power to invade the corpus with the consent of his mother. There remains only $1.00 in Trust A. In 1953 Trust B was amended to delay vesting in Charles until he attained the age of 25 as to one-half of the corpus, and until he attained the age of 30 as to the remainder. Roland reserved the income during his life. Thereafter the income was payable to Charles. Roland died February 7, 1959. The Birmingham Trust became his executor. Except for certain personal items, the testamentary estate poured over into Trust B. There were substantial debts of his estate, including estate taxes, since Trust B was included in the estate for estate tax purposes. Brady, W. E., Jr. and H. H. Maxwell are the trustees of the Estate of W. E. Belcher, Sr. Income from the trust was payable quarterly to the fi,ve children of W. E. Belcher, Sr. and his widow Ella Belcher. After Roland’s death his share was payable to the plaintiff. Except for a small distribution right after Mr. Belcher’s death, no distribution of income has been made from the trust. This has accumulated and now amounts to a very substantial sum. Failure to distribute this income has become a poi,nt of controversy in this action as well as in a separate action in the state court. HISTORY OF THE LITIGATION AND PARTIES This litigation was instituted by Charles Donald Belcher, a citizen of Florida, on March 31, 1964, against Birmingham Trust National Bank, a corporation. By amendment of June 14, 1964, the following were added as parties defendant : Brady Belcher, W. E. Belcher, Jr., Ruby B. Maxwell, H. H. Maxwell, Ruby M. Palmer, Julia M. Hallman, Robena B. Davis, W. E. Belcher Lumber Company, Inc., a corporation; Belcher Lumber Sales Company, Ltd., a limited partnership, whose general partners are Brady Belcher, W. E. Belcher, Jr., Ruby B. Maxwell and Robena B. Davis; Belcher Wood Products, Ltd., a limited partnership whose general partners are the same as those in the Sales Company with the addition of Julia M. Hallman and Ruby M. Palmer. On August 6, 1964, the defendant Birmingham Trust National Bank, as Trustee, filed a cross-claim against all the parties defendant added by the amendment of June 18, except the two partnerships, and added as other cross-defendants: Beulah White Belcher, Clara Dukes Belcher, Fred H. Davis, W. E. Belcher, III, Belcher Investment Company, Belcher Motor Company, Inc., Brady Belcher Interests, Inc., Southern Pine Homes, Inc., Centreville Oil Company, Inc., and Ella Belcher. On August 20, 1964, Mrs. Robena B. Davis filed a cross-claim against all the cross-defendants named in the Trustee’s cross-claim, including Mr. Davis, except her mother Ella Belcher. By amendment of the same date Birmingham Trust National Bank was made a cross-defendant to Mrs. Davis’ cross-claim. On October 7, 1964, cross-defendant Fred H. Davis filed a cross-claim against all the cross-defendants named by Mrs. Davis, including Mrs. Davis, but not including Beulah White Belcher, Clara Dukes Belcher, the Investment Company, the Motor Company, Southern Pine, or Centreville Oil. On May 13, 1965, Mary Rogers Belch-er, plaintiff’s mother, a citizen of Florida, intervened in the case as a party plaintiff adopting the allegations of the complaint of the plaintiff. PLEADINGS AND RELIEF SOUGHT The pleadings in this case are voluminous. The relief sought, except such as shown by the amplification encompassed by the order of April 13, 1965, and except such as sought by amendment since the pretrial order of May 14, 1965, is set out in the pretrial order. Plaintiff in his original complaint seeks an equitable accounting and related relief as to the Trustee, Birmingham Trust. He charges breach of duty by the Trustee Bank as follows: (1) failure to collect income; (2) failure to preserve the trust property; (3) failure to control assets; and (4) breach of duty of care in the administration of the estate. As to the other defendants plaintiff seeks an accounting for alleged damage done to the plaintiff’s interest in the trust estate. By i,ts cross-claim, as amended to date of the pretrial order, Birmingham Trust seeks the following relief: (1) a dissolution of the corporation, the Lumber Company; (2) a dissolution of the Sales Company and Wood Products partnership; (3) an accounting — (a) for sums owing to the Lumber Company in nine particulars, (b) upon dissolution for sums owing the two partnerships in twelve particulars, and (c) of funds of the estate and testamentary trust of W. E. Belcher, Sr.; (4) a declaration removing any cloud upon the Trustee’s title to any stock owned by it in the Corporation and the right to alienate same without limitation of the right of purchase by the Corporation; and (5) an indemnity or exoneration from the cross-defendants if it be held liable to the plaintiff. By an amendment of June 21, 1966, to its cross-claim, identified as the “Florida Lands amendment,” the Bank challenges the legality of the action of Brady Belch-er, the Corporation, W. E. Belcher, Jr. and Ruby Maxwell (the latter two concurring with Brady), respecting the two sales of stock by Roland Belcher, and the subsequent acquisition of the shares by the Corporation and the Sales Company, as well as their action which culminated in the sale to Fred Davis of 30 shares in 1963. The challenge includes an alleged violation of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.A. § 78j(b). The Court reserved a ruling on the objections to the allowance of that aspect of the amendment relating to the Securities Exchange Act. By a further amendment of June 29, 1966, the Bank seeks to establish a constructive trust on behalf of the Corporation in the Florida lands acquired by Brady Belcher allegedly with its corporate funds. It also seeks damages claimed to have been sustained on the sale of the 30 shares of stock to Fred Davis. Mrs. Davis by her amended cross-claim seeks the same relief sought by the Trustee in (1), (2), (3), (4) and (5), except she does not seek relief as to salary and small loan business income paid to her mother Mrs. Ella Belcher. As to an accounting on the dissolution of the partnerships she seeks the same relief as the Bank respecting loss or damage suffered by reason of a breach of the general partners’ failure to disclose the true state of facts of the financial condition of the partnerships, denying any dereliction on her part as a general partner. By a further amendment to her cross-claim filed June 30, 1966, Mrs. Davis seeks also to establish for the Corporation a constructive trust on the Florida lands. By his cross-claim Fred H. Davis seeks: (1) to require the Corporation to transfer the 30 shares of stock, which he purchased from the Bank as Trustee, and a removal of any cloud to his title thereto or his right to alienate same; and (2) a dissolution of the Corporation. The Court heard evidence on Forest Industries, Inc. and the Costa Rica Company, and acquisitions by that company and the claims respecting same are in issue. The defendants, other than Birmingham Trust and Mrs. Davis, enter a general denial of the right of the plaintiff to any relief. They also assert among other defenses that the plaintiff is without right to maintain this action without a joinder of the Bank, as Trustee, an indispensable party plaintiff, and that there should be a realignment of the Trustee with the plaintiff, and that when the parties are thus realigned the Court is without jurisdiction since the Trustee and the defendants are citizens of Alabama. Such defendants also charge that there is collusion between the Trustee and plaintiff benefici,ary. For answer to the complaint and to the cross-complaint of the Birmingham Trust National Bank, the defendant Robena B. Davis pleads (1) the general issue; (2) the statute of limitations; (3) laches; (4) waiver and estoppel; and (5) contributory fault on the part of the plaintiff and the intervenor. For answer to the complaint the Birmingham Trust National Bank pleads (1) the general issue, except as otherwise admitted in its written answer; (2) the statute of limitations; (3) laches; (4) waiver and estoppel; (5) as to any lack of diligence on its part, which it denies, it pleads the contributory fault on the part of the beneficiari.es and each of them; (6) ratification by the conduct of the Trust settlor, A. Roland Belcher, during his lifetime; and (7) to the extent that the plaintiff fails to sustain his claim against the defendants, it would not be liable to the plaintiff. For answer to the cross-clajm of the Birmingham Trust National Bank with respect to the dissolution of the Corporation and the partnerships, the cross-defendants, other than Robena B. Davis and Fred H. Davis, say that such relief is not within the scope of Rule 13(g) of the Federal Rules of Civil Procedure and that the cross-claimant is not entitled to any relief upon sai,d claims, and in the alternative the defendants say that if cross-plaintiff is entitled to any such relief it should be realigned with the plaintiff in this action, thereby defeating diversity jurisdiction. The defendants also plead: (1) lack of jurisdiction of the cross-claim under Rule 13(g) due to improper alignment; (2) failure to comply with the conditions of Rule 23(b); (3) the general issue; (4) statute of limitations; (5) laches; (6) waiver and estoppel; (7) ratification; and (8) contributory fault on the part of the plaintiff, intervenor and cross-complainants. The cross-defendants assert: (1) that said cross-claim of Fred H. Davis is not a legal cross-claim under Rule 13(g); and (2) when the claim is properly aligned the Court will be deprived of jurisdiction of the said claim insofar as dissoluti,on of the Corporation is sought. For the remaining answers, the defendants adopted all of the answers asserted to the counterclaim of the Birmingham Trust National Bank. At the outset the Court is met with the jurisdictional question above referred to both with respect to the claims asserted by the plaintiff to the plaintiff’s cause of action as well as to the claims lai,d in the cross-complaints. JURISDICTION Brady Belcher and those arrayed with him as defendants and cross-defendants filed motions to dismiss both the original suit and the cross-claims challenging, inter alia, the diversity jurisdiction of the Court. They insist that the defendant Birmingham Trust should be realigned with the plaintiff and that such realignment would place residents of Alabama on opposite sides in the litigation thereby destroying diversity. By orders of July 23 and September 21, 1964, the Court overruled the motions assailing jurisdiction. In initially disposing of the jurisdictional question on the motions the Court followed the five-four majority opinion in Smith v. Sperling, 354 U.S. 91, 77 S.Ct. 1112, 1 L.Ed.2d 1205, which held that the trial court should determine the issue of antagonism, between a party and the party sought to be realigned with him, “by the pleadings and the nature of the dispute.” The Court does not construe Smith v. Sperling as holding that if it be determined in the course of the trial on the merits that in fact there is no diversity its lack is proscribed by the Court’s initial ruling on the motion holding the presence of diversity from the pleadings and the nature of the controversy. In view of this construction the Court permitted the filing of answers both as to the original and cross-claims asserting the issue of jurisdiction. The parties have briefed the question at length. Plaintiff contends that Section 95 of Title 7 of the Code of Alabama, 1940, has conferred upon him substantive rights as beneficiary to maintain this action against his Trustee, Birmingham Trust. This section provides that: “A remainderman or reversioner of personalty may maintain an action against a wrongdoer for any injury going to destroy the existence or ultimate value of the property. In such cases the tenant in possession, and remainderman or reversioner, may sue jointly for the injury to the entire estate, the recovery being held under like limitations.” This section was applied in Mudd v. Lanier, 247 Ala. 363, 24 So.2d 550, where it was held that beneficiaries of trust shares of a corporation’s common stock had a right as contingent remaindermen to sue for cancellation of a consent decree, authorizing the issuance of preferred stock to another common stockholder in satisfaction of the latter’s money judgment against the corporation, where there was want of a valid consideration for the judgment. Where a trustee commits a breach of duty, third parties who benefit thereby or who participate therein and who are cognizant of such breach become trustees in invitum, and the beneficiary may hold them accountable separately or along with the trustee. Leach v. Gray, 201 Ala. 47, 77 So. 341; Saunders v. McDonough, 218 Ala. 207, 118 So. 389. This common law principle as to such third party liability finds lodgement in Title. 58, Section 44, Code of Alabama, which provides: “All persons aiding and assisting trustees of any character, with a knowledge of their misconduct, in misapplying assets, are directly accountable to the persons injured.” Rule 18(a), Federal Rules of Civil Procedure, provides: “A party asserting a claim to relief as an original claim, counterclaim, cross-claim, or third-party claim, may join, either as independent or as alternate claims, as many claims, legal, equitable, or maritime, as he has against an opposing party.” Rule 20(a) provides in pertinent part as follows: “All persons . . . may be joined in one action as defendants if there is asserted against them jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all defendants will arise in the action. A plaintiff or defendant need not be interested in obtaining or defending against all the relief demanded. Judgment may be given for one or more of the plaintiffs according to their respective rights to relief, and against one or more defendants according to their respective liabilities.” Rule 13(g) provides that: “A pleading may state as a cross-claim any claim by one party against a co-party arising out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim therein or relating to any property that is the subject matter of the original action. Such cross-claim may include a claim that the party against whom it is asserted is or may be liable to the cross-claimant for all or part of a claim asserted in the action against the cross-claimant.” Based upon the averments of his pleadings and under the Alabama statutes and decisions plaintiff has a substantive right of action agaipst the Bank and the other defendants, and may pursue his right in accordance with the procedures provided for in the above quoted rules, subject, of course, to the jurisdictional limitations upon this Court. The Court will not attempt to analyze the cases pro and con on the issue of jurisdiction and alignment. Limited by the sweep of certain general principles, each case must be posited at least upon its own pleadings and the nature of the controversy, if not upon the actual facts relating to jurisdiction. After reading and understanding the voluminous charges made by the plaintiff against the Bank, the briefs respecting the same, and after hearing the contentions of the parties, the Court concludes that the controversy between the plaintiff and the Bank is not feigned or collusive, but is actual and substantial, real and apparent. It is clearly apparent that if Brady Belcher and those arrayed with him had not been sued herein, the Bank could not seriously contend that there was no jurisdiction as between it and the plaintiff. It is equally clear that the controversy, so vigorously asserted, did not vanish with the appearance of the other defendants in the case. It is also contended that plaintiff must obtain relief against the Bank before he can pursue his claim against the other defendants. This contention overlooks the fact that plaintiff has the right to pursue the Bank and the other defendants jointly as well as separately. It also appears to ignore Rule 18(b) which in material part provides that “whenever a claim is one heretofore cognizable only after another claim has been prosecuted to a conclusion, the two claims may be joined in a single action; but the court shall grant relief in that action only in accordance with the relative substantive rights of the parties.” Plaintiff falls within the statutes and rules referred to. He could have maintained this action against the Trustee Bank, a citizen of Alabama, as sole defendant. He could have maintained it against the defendants added by the amendment of June 18, 1964, all citizens of Alabama, without joining the Trustee Bank. It follows that he can join them all in one action as here undertaken. Jurisdiction does not fail nor is realignment required because some of the cross-claims of the Trustee Bank are related to the wrongful transactions and occurrences upon which plaintiff relies in asserting that wrongs were committed to the trust estate and property by one or more of the individual defendants added by the amendment of June 18. Also in the picture is the fact that the Trustee Bank seeks relief by its cross-bill not sought by the plaintiff, as for example, the dissolution of the Corporation, on the ground among others that the Corporation was the agency through which the wrongs were committed by Brady and W. E., Jr., and one or more of the other defendants aligned with them. Although jurisdiction is not affected by the desirability of avoiding a multiplicity of actions, the fact that a joinder of claims as here undertaken will have that result attests the wisdom of the rules and principles of law permitting such joinder. The hearing on the merits confirmed the rightness of the Court’s ruling on the motions to dismiss respecting jurisdiction. Consequently, the Court finds in favor of jurisdiction both on the motions and the merits. It follows that having sustained the jurisdiction as between the plaintiff and the defendants, the jurisdiction on the cross-claims is likewise sustained since the cross-claims do not depend upon diversity. Childress v. Cook, 5 Cir., 245 F.2d 798. The Court has not overlooked Dryden v. Dryden, 8 Cir., 265 F.2d 870. That case under its facts does not in the Court’s opinion rule this case as a whole or the cross-claims seeking the establishment of constructive trusts and other relief. FLORIDA LANDS Although the oldest of the transactions involved in this litigation, the Florida lands were the last upon which evidence was taken. This was due to the fact that no other stockholder or officer of the Corporation knew that Corporation funds had been used by Brady Belcher to purchase such lands, until 1966. The claims of the Bank and Mrs. Davis based on the Florida lands were filed in June 1966. They seek to establish on behalf of the Corporation a constructive trust on these lands, and an accounting of profits derived therefrom. By deed dated May 2, 1950, and recorded in Okaloosa County, Florida, on July 17, 1950, and in Walton County, Florida, on July 19, 1950, Brady Belcher acquired title to 18,880 acres of land lying in those counties. -Of this land 200 to 250 acres have been sold. Title to the remainder is in Brady. The chronology of and the facts relating to the acquisition of the title to these lands are as follows: On July 11, 1950, two sight drafts were drawn on Brady Belcher — one by Ewell N. Clark in the amount of $5,000.-00, and one by the trustees of the Brit-ton Lumber Company, the seller of the lands, for $65,830.00, or a total of $70,-830.00. Each of these drafts was payable “to the order of the Bank of Florala, Florala, Ala.” The draft drawn by Clark was signed “as Trustee for Brady Belcher and the Trustees of Britton Lumber Co.” The draft drawn on behalf of the Trustees was signed by E. P. Rodwell, Jr. “as Trustee for Britton Lumber Company.” Clark was the attorney for Brady Belch-er. Rodwell in addition to being a Trustee was also an officer of the Bank of Florala. The occasion for handling the matter in this manner is explained in Mr. Clark’s letter of July 6, 1950, to Brady Belcher as follows: “. . . Mr. E. P. Rodwell, Jr., acting for the Trustees of Britton Lumber Company has authorized me to submit the following arrangement to you for consideration and acceptance: “(1.) Instead of the one draft on you in the amount of $70,830.00 now placed with the deed held by the Birmingham bank, Mr. Rodwell will forward two drafts to the said bank, one drawn by him for the Trustees of Britton Lumber Company for $65,-830.00 and one by me as trustee for you and said Trustees for $5,000.00, with instructions to said bank to deliver the deed to you upon payment of both drafts; “(2) I will hold the $5,000.00 in a separate trust account with the Bank of Florala until the marketability of the title can be reasonably determined by me; . . .” On July 12, the First National Bank of Birmingham wrote Brady that it had received from the Bank of Florala and then held these two drafts which were to be substituted for a draft for $70,-830.00 “with a deed attached which we received for collection about 60 days ago.” On July 14, Brady, who was the president and a director of the Corporation, W. E. Belcher Lumber Company, drew a check for $48,750.00 on the Corporation’s account at the Peoples Bank of Centreville payable to that Bank. This check on its back bears the notation, “B’ham. draft.” The proceeds of this cheek were used to purchase a draft in the amount of $48,750.00 on the Peoples Bank’s account with the First National Bank of Birmingham payable to the latter Bank. This draft bears a “paid” stamp of July 15, 1950, and a notation that it was used to pay an item held for collection, and was not a bank asset of the First National. On the same day the amount of the draft was charged by the First National to the Peoples Bank account with it. On July 14, the Bank of Florala wired the First National to reduce the larger of the two drafts to $64,019.73 and to release the deed upon payment of the drafts. This reduced the collection item to $69,019.73. On July 15 the deed was released to Brady Belcher, and the Bank of Florala’s account with the First National was credited with the latter sum. The purchase price of the land was $69,-019.73. The Corporation’s disbursement journal shows a debit to the local ledger and a credit to Peoples Bank in the amount of $48,750.00. The Corporation’s disbursement journal does not otherwise identify the person, corporation or account charged with the $48,750.00 disbursement. The local ledger is in fact a group of independent cards or sheets, and the testimony given by Brady and Furlong was to the effect that some of those local ledger cards were missing, and that the cards or sheets relating to the period preceding October 30, 1950, are missing, and that the cards or sheets pertaining to Brady’s personal participation in the local ledger are missing and cannot be found. Under present procedures if the Corporation was paying its own debt there would not be a charge to the local ledger. There is no evidence that the procedures have ever been different. The only debt owed by the Corporation to the Peoples Bank in July 1950, was the sum of $39.47, and an official of the First National was unable to locate any records which reflected an indebtedness of the Corporation to the First National as of July 15, 1950. The Corporation’s records do not reveal that the $48,750.00 check was applied to any corporate purpose. In answer to. plaintiff’s interrogatories given on February 10, 1966, Brady stated that he had paid $70,793.93 for the lands in Florida and that he did not recall obtaining funds from the Corporation for use in their acquisition, and that no records were found to indicate such to be the case. He made no mention of missing records. Upon further answers made pursuant to an order of the Court he answered that records had been located which indicated that at the date of the payment for the lands he was not indebted to the Corporation. Later when ordered to produce the records he failed to do so, claiming that those records were missing and could not be found. The evidence upon trial firmly established the fact that Brady was indebted to the Corporation on October 31, 1950, in the sum of $34,684.29, which, by entry made near the end of the Corporation’s fiscal year ending on that date was reflected as “cash on hand $34,684.29.” Others in the Corporation knew nothing of this indebtedness. The sum was paid on April 16, 1951, by a loan from the First National Bank of Birmingham. Brady was unable to state whether this sum constituted any part of the $48,-500.00, or for what purpose the latter sum was drawn from the Corporation. Finally Brady testified that he did not know where the money came from to buy the Florida lands, or whether or not he used Corporation funds for that purpose; and that he did not keep $70,-000.00 in cash lying around. There was no explanation of the source of the balance of the purchase price of $20,269.73. Brady had no recollection of paying any sums in connection with these lands other than the two drafts. These drafts were finally produced from Brady’s personal files. They bear the “paid” stamp of the First National Bank of Birmingham. The memorandum of Furlong, chief accountant of the Corporation, of November 12, 1958, made in connection with a Revenue Agent’s investigation confirms the fact that the deed to these lands was acquired by the payment of the two drafts. The credit files of the First National Bank of Mobile of July 12, 1950, reveal that that Bank refused Brady a loan for $50,000.00 to purchase the Florida lands. Although the records of the First National Bank show a credit on its account with the Bank of Florala on July 15 of the sum of $69,019.73, there is no like debit during the month of July 1950. There are no records of the Bank of Florala in evidence to show the transmittal of any funds from that Bank to the seller of the lands by debiting its account with the First National, nor are there any records showing disbursement from other accounts of the Bank of Florala. Considering the large amount of funds involved in the purchase of the Florida lands and in his indebtedness to the Corporation, Brady’s testimony as to the same reflects so much more adversely on his veracity than on the dimness of his memory that the Court cannot accept his testimony in those particulars. As initially stated, none of the other stockholders or officers of the Corporation knew that any of its money had been used by Brady to purchase the Florida lands. None of these individuals had any knowledge of the issuance of the Corporation’s check for $48,750.00. Although not technically trustees, the duties of officers and directors are analogous to those of trustees. They are required to act with fidelity and in good faith, subordinating their personal interests to the interests of the corporation. Holcomb v. Forsyth, 216 Ala. 486, 490, 113 So. 516. See statutory declaration, Title 10, § 21(97), Alabama Code. They occupy a quasi fiduciary relation to the corporation and its stockholders. Holcomb v. Forsyth; Ingalls Iron Works Co. v. Ingalls Foundation, 266 Ala. 656, 98 So.2d 30. The defense of laches and the statute of limitations must be weighed in the light of these relationships. Section 20 of Title 7 of the Code of Alabama, 1940, provides that “actions for the recovery of lands, tenements, or hereditaments, or the possession thereof, except as herein otherwise provided,” must be commenced within ten years. (Emphasis supplied) Section 42 of Title 7 provides that: “In actions seeking relief on the ground of fraud where the statute has created a bar, the cause of action must not be considered as having accrued until the discovery by the aggrieved party of the fact constituting the fraud, after which he must have one year within which to prosecute his suit.” The statute of limitations of ten years, Section 20, governs actions to establish resulting and constructive trusts. Haavik v. Farnell, 264 Ala. 326, 87 So.2d 629. Section 20 like other sections is subject to the additional period allowed by Section 42. Haavik does not hold to the contrary. In Haavik there was no occasion for applying Section 42 since the claim was within Section 20. Section 42 was applied in Averett v. Averett, 243 Ala. 357, 10 So.2d 16, where a bill for the cancellation of a deed was filed eleven years after the transaction, but within one year of the acquisition of knowledge of respondents’ claim. There the court said: “Treating the bill as one seeking relief upon the ground of fraud, these averments bring complainants within the one year limitation after discovery of the fraud. Code of 1940, Title 7, § 42. Parties so demeaning themselves as to keep those far from the scene of action, in the dark cannot set up lack of diligence, such as non-examination of records disclosing respondents’ claim of title derived as here alleged.” In Northwestern Land Association v. Grady, 137 Ala. 219, 224, 33 So. 874, 875, the court said: “The nature and purpose of this proceeding is to enforce a constructive trust in lands. In such a case, it has been held by this court that the statutes of limitations of three and six years as a defense, are not applicable, though the statute of ten years would be, if the case was not excepted from its operation by fraudulent concealment of the facts, or some other saving clause of the statute. Stoutz, Adm’r, v. Huger, 107 Ala. 253, 18 South. 126.” (Emphasis supplied) A corporate officer charged with wrongdoing of which the other directors and officers know nothing and whom he knows to be ignorant of the wrongdoing “cannot escape liability under the shelter of the statute of limitations.” Coxe v. Huntsville Gas Light Co., 106 Ala. 373, 17 So. 626; Greenleaf v. Profile Cotton Mills, 235 Ala. 530, 180 So. 582. In Hart v. The First National Bank of Birmingham, 373 F.2d 202, decided by the Fifth Circuit on February 20, 1967, there was involved a question of the ten year statute of limitations as applicable to a constructive trust. The court concluded its opinion by saying: “Finally, if the plaintiffs did not discover the sale to Ellinor because the banks fraudulently concealed the sale, Alabama Code, Title 7, § 42 (Recomp. 1958) extends the statute of limitations when there has been fraudulent concealment of any right of action. The period for suit in such instances of concealment is extended to run for one year from and after the date of notice or discovery of the fraudulent concealment. Mere ignorance of the cause of action is not sufficient to invoke this provision. Peters Mineral Land Co. v. Hooper, 1922, 208 Ala. 324, 94 So.2d 606; Fletcher v. First National Bank of Opelika, 1943, 244 Ala. 98, 11 So.2d 854; Hudson v. Moore, 1940, 239 Ala. 130, 194 So. 147.” In the cited Fletcher case the court said: “As was said in Tillison v. Ewing, 91 Ala. 467, 8 So. 404: ‘The ignorance must be superinduced by the fraud of defendant. In the absence of a fiduciary relation between the parties, imposing the moral and legal duty to disclose, there must be some act or conduct calculated to mislead or deceive, or to lull inquiry. Porter v. Smith, 65 Ala. 169; Holt v. Wilson, 75 Ala. 58.’ ” (Emphasis supplied) And in- Moore, where the doctor denied that he had knowledge that he had left a sponge in the abdomen, it was stated: “Where confidential relations exist, as between physician and patient, the duty to disclose may render silence fraudulent, but knowledge of the facts is a necessary element of fraudulent concealment.” (Emphasis supplied) No entry was made on the corporate books that would charge other stockholders and directors with knowledge that Brady had advanced himself $48,750.00 from corporate funds. The financial statements for 1950 do not show that Brady had advanced himself $48,750.00 by way of loan or otherwise. The fact of the use of the $48,750.00 was concealed from other stockholders and directors. The only means that they had of acquiring knowledge of the source of the funds was through Brady. The fact that the conveyance was recorded would give constructive notice that record title was in Brady, but these records did not disclose the source of the funds employed in making the purchase. As stated in the brief of the attorneys for Brady: “This [the funds used] became an issue for the first time in June 1966, after the records of the Belcher Companies, and of Brady Belcher personally, had been subjected to the most extensive and repetitive discovery examination by opposing lawyers and the accountants of Arthur Andersen & Company.” The basic facts rested in Brady’s personal files and in the files of third parties, none of which were available short of discovery in a court proceeding. The other stockholders and officers had a right to rely in good faith upon the books of accounts or reports made to the Corporation by its president. Section 21(31), Title 10, Code of Alabama, 1940. The defense of laches is not available to a director of a corporation when called upon to account for his wrongdoing not approved or acquiesced in by the corporation. Jacksonville Public Service Corp. v. Profile Cotton Mills, 236 Ala. 4, 180 So. 583. In Greenleaf, supra, the court said: “True, the bill does not expressly negative knowledge of the misconduct at the time of each and all of the infractions, but the facts averred show that its means of acquiring the knowledge were through the respondent who is charged with the wrongs and derelictions. In other words, limitations or laches could not be charged to this complainant so long as the respondent’s relation with it existed and which was not terminated until 1934.” In McKinstry v. Thomas, 258 Ala. 690, 700, 64 So.2d 808, 815, the court held: “Ignorance by complainants of their rights, and the existence of confidential relations qualify the consequences of what might otherwise be laches. Fowler v. Alabama Iron & Steel Co., 164 Ala. 414, 51 So. 393. Laches is founded upon acquiescence in the assertion of an adverse right for an unreasonable period of delay on the part of one who would assert it to the prejudice of the adverse party, and does not operate against a complainant on the averments of his bill which show that he had no previous knowledge of such right now sought to be enforced.” While in Hagood v. Knight, 257 Ala. 64, 57 So.2d 616, the court held: “Acquiescence involves actual or imputable knowledge. A person cannot be said to be guilty of laches until he has knowledge of the facts which entitles him to relief and thereafter manifests a want of diligence in asserting his rights.” Under these and other authorities the action as to the Florida lands is not barred by either laches or limitations. A review of the authorities in both Alabama and Florida reveals that the law with respect to the establishment of constructive trusts is substantially the same in both states. See Costell v. First National Bank of Mobile, 274 Ala. 606, 150 So.2d 683; Wadlington v. Edwards, 92 So.2d 629 (Fla.); and Doing v. Riley, 5 Cir., 176 F.2d 449, 457, where the court states the general rule with citation of Florida cases. The rule as stated in Costell is as follows: “It is a general rule in most jurisdictions that if the funds of one person are wrongfully used by another in the purchase of real estate in his own name, or in the improvement of his real estate, a constructive trust in the property purchased or improved will arise in favor of the one whose money was wrongfully used, whether the relation at the time of the misuse or misapplication of the funds was a fiduciary one, or that of employer and employee, or whether they stood to each other as strangers; >1 The rule applies as well to officers of a corporation. See 89 C.J.S. Trusts § 151, at 1066, 1067, where it was said: “Such principle has been applied with respect to impressing a constructive trust on profits derived from the conduct of a competitive business, the securing of a lease, or the purchase of property for the officer’s own account, especially where the officer wrongfully used corporate funds to purchase the property, . . .” There is no evidence that the monies used were subsequently repaid to the Corporation. Even so, this would appear to make no difference, nor would a constructive trust depend upon the general state of accounts between the officer and the corporation where the money has been used without the knowledge of the other directors. Shearer v. Barnes, 118 Minn. 179, 136 N.W. 861; Milner v. Rucker, 112 Ala. 360, 20 So. 510. Nor would the fact that the officer used his own or other funds as a part of the purchase price prevent the attachment of the trust to that proportion of the property and its profits measured by the amount of corporate funds so used in relation to the total purchase price, provided there is no doubt as to the proportion of funds actually invested. Shearer v. Barnes, supra. Whatever funds that were employed by the trustee must be traced into the property purchased. It must be shown that the funds can be located in some particular fund or property. Holloway v. Osteograf Co,, 240 Ala. 507, 200 So. 197. The relation between the seller of the lands and the First National Bank of Birmingham, which held the drafts for collection with deed attached, was that of principal and agent. Hutchinson v. National Bank of Commerce, 145 Ala. 196, 41 So. 143. By virtue of Section 33 of Title 47 of the Code of Alabama livery of seizin as at common law is dispensed with “and the property and possession of the grantor pass as fully by his conveyance as if seizin had been formally delivered.” The delivery of the deed by the First National as agent of the seller upon the payment of the drafts to the First National was just as legally effective as if delivered directly by the seller. As already seen the two drafts were payable to the Bank of Florala, and they were so paid by the First National Bank by crediting the former’s account with the latter in the amount of $69,019.73, the total purchase price of the property. Once the funds were traced to the First National, which held the deed, as agent of the seller and delivered it when the purchase price was paid by the payment of the drafts to the Bank of Florala as directed by the seller, the funds of the Corporation need not be further traced to satisfy the principle of tracing. To hold that it is necessary to trace these funds out of the Bank of Florala’s account at the First National into the hands of the seller, would be to go even beyond the “ear-marked” theory, which was long ago repudiated. Hanover National Bank v. Thomas, 217 Ala. 494, 498, 117 So. 42. Conjecture could be, but will not be, made as to how the Bank of Florala settled with the seller. The law is clear that when a vendor delivers a deed to his agent, it is the agent’s duty to deliver the deed in exchange for the purchase price. The agent’s receipt of the purchase price constitutes payment to the principal. 30 A.L.R.2d 805, 820. The chronological sequence and the juxtaposition of events coupled with the certain fact that $48,750.00 of the Corporation’s funds on deposit with the Peoples Bank of Centreville moved out of its account with that Bank to the First National Bank of Birmingham at the instance of Brady Belcher and was received by the latter Bank as a part of a larger sum in exchange for a deed to the Florida lands, which was delivered to Brady Belcher, leads but to a single conclusion that Corporation funds in that amount were used to acquire those lands. This conclusion is buttressed by the testimony as to the absence of any record or evidence of debt due from the Corporation to the First National Bank or use of the money for any corporate purpose. Brady could not, without the knowledge or authority of the other directors, thus satisfy any debt due him. Milner v. Rucker, supra. The testimony reveals the absence of any record or evidence of debt due Brady. In fact Brady owed the Corporation $34,684.29 at that time. As already noted, the Florida lands transaction came into this lawsuit in the later stages of the trial. This was at a time when the lines had become sharply and firmly drawn between the contending parties, and to have required the Bank as Trustee and Mrs. Davis to make demand upon W. E. Belcher, Jr. and Mrs. Maxwell and Mr. Maxwell to join with them in an action against Brady to establish a trust upon the lands, as a condition to the assertion of this claim, would mock reality. In Ellis v. Vandergrift, 173 Ala. 142, 152, 55 So. 781, 784, the court said: “No demand or request of the corporate authorities is required to be made, as a condition to suit by the stockholder, where it can be inferred with reasonable certainty that it would be refused, actually or virtually, or where, being the wrongdoers, a majority of the governing body would control the litigation so requested or demanded.” The Bank, as Trustee, and Mrs. Davis are entitled to have established on behalf of the Corporation a constructive trust upon the Florida lands to the extent of 48.750/69.019.73 of the interest and title of Brady Belcher and Brady Belcher Interests, Incorporated therein, and are entitled to an accounting as to any waste committed by them with respect to such land and of the net profits derived from the sale of said land, rents and income, and income otherwise received therefrom in the same proportion. Where an accounting is required the duty and manner of an accounting is clearly stated in Bynum v. Baggett Transportation Co., 5 Cir., 228 F.2d 566, at 573, as follows: “[H]aving the obligation to account, one whose accounts are demonstrated to be defective and inadequate must shoulder a substantial obligation diligently to make a correct account. “To account is to do just that. The one obliged to account does not fulfill his duty by supplying only that which the beneficiary requests, that which is conveniently accessible, or remaining silent in the face of the beneficiary’s inevitable difficulty in trying to construct or reconstruct accounts which ought to have been kept and available.” At the time of the hearing the latest accounting available on the Florida lands established income of $156,568.48 and expenses of $79,986.50 for the years 1950 through 1965. Brady executed a mortgage on the lands to the City National Bank of Tuscaloosa as security for money loaned him by that Bank. The exact balance due thereon is not shown, but as between Brady and the Corporation, the latter is entitled to be exonerated therefrom and relieved from all payments required to be made thereon, and upon a sale, or sales, thereof is entitled to have the proceeds due it freed from the lien of said mortgage and charged against the interest of Brady derived from said sale, or sales. Brady and his wife, Mrs. Brady Belcher, and Brady Belcher Interests, Incorporated will be required to execute and deliver to the Corporation a good and sufficient deed conveying to the Corporation an undivided 48.750/69.019.-73 interest in and to said lands not heretofore conveyed by them, all as more particularly described in the exhibits to the decree filed herewith. The master to be appointed by separate decree will receive evidence as to whether the Florida lands can be equitably divided between or among the owners to the end that the Court may determine whether a division or a sale may be required to afford complete relief to the Corporation. RAMSAY LANDS The Birmingham Trust, as Trustee, and Mrs. Davis seek, to the extent of one-fifth interest each, to establish a constructive trust on the Ramsay lands and an accounting of profits in like amount. In the early part of 1954, the First National Bank of Birmingham, as executor and trustee of the estate of Erskine Ramsay, received bids, on its offer of sale of about 7500 acres of land in fee simple and mineral rights to 2200 acres adjacent thereto located in Jefferson County, Alabama. The land was unimproved acreage with timber growing thereon. There were coal deposits on part of the land. The coal was of low grade and had not been subject to commercial development for many years. On January 12, 1954, the Sales Company at the instance of Brady Belcher made a bid of $201,666.66 for the Ramsay lands. This was the highest bid received by the Bank, and the Sales Company became the successful bidder. In July or August 1954, there was a “Saturday meeting,” consisting of the adult members of the Belcher family, who were general partners of the Sales Company and stockholders of the Corporation. At this meeting Brady informed those present that the Sales Company was the successful bidder for the Ramsay lands. He also gave them certain general information about the lands. H. H. Maxwell, husband of Ruby, was present at the meeting and stated in effect that neither his wife nor Mrs. Davis wished the Sales Company to participate in the purchase. Brady, who had made the bid for the Sales Company without the knowledge of the other partners except perhaps W: E., Jr., stated that having made the bid he did not feel that he could back out and that he would personally go through with the transaction, but that he would require the loan of some money from the Belcher companies for the down payment. Mrs. Davis denied any recollection of the Saturday meeting. However, prior to that meeting she was consulted as to whether she was interested in the purchase of the Ramsay lands. She discussed the matter with Mr. Maxwell, and admits she authorized him to advise Brady and W. E., Jr. that she wasn’t interested in going into the house building business. It appears that it was a part of the plans of Brady to develop part of the Ramsay land for homes. To carry out this development and to construct such homes it would require that the participants put up some additional money for the capital of a development corporation. Southern Pine Homes, Inc., with control in Brady and W. E., Jr., was subsequently organized as a development corporation, but has not functioned ip. that respect. After the Saturday meeting, Brady offered W. E., Jr. a third interest in the Ramsay lands. W. E., Jr. agreed to this participation, to be handled through a partnership known as the Belcher Investment Company. Following the Saturday meeting and on August 23, 1954, the Sales Company borrowed $130,000.00 from the Corporation. A distribution of $80,000.00 of this money was made to the partners of the Sales Company, with the limited partner, Birmingham Trust, receiving its pro rata share of 16%%, or $13,200.00. The balance of the $50,000.00 of the money so borrowed was loaned by the Sales Company to Brady and W. E., Jr. and used by them as down payment on the land. There was nothing said as to interest, if any, to be paid on this loan. On August 24, 1954, the First National Bank, as executor and trustee, conveyed by a single deed a one-third and a two-thirds interest in the Ramsay lands to W. E., Jr. and Brady, respectively, except 40 acres thereof which was conveyed directly to Southern Pine Homes, Inc. This deed was promptly recorded. The sale was closed by a total down payment of $53,666.66, and a purchase money mortgage of $148,000.00. By contract dated in December 1954, Brady and W. E., Jr. sold the timber on the Ramsay lands to Belcher Land and Timber Company, which was owned by the W. A. Belcher family of Birmingham, for $150,000.00, consisting of cash of $50,000.00 evidenced by check of December 30, 1954, and two notes of $50,-000.00 each dated March 1, 1955, and payable to the Belcher Investment Company. In the latter part of February or early March 1955, the two notes were purportedly transferred to the Corporation by Brady and W. E., Jr. On December 3, 1955, the mortgagor paid the two notes with interest at 4%%. The checks paying same were payable to Brady and W. E., Jr. and endorsed by them to the Corporation. The $50,000.-00 loan made by Brady and W. E., Jr. was repaid by the Belcher Investment Company to the Sales Company on January 28, 1955, without interest. At that time the Sales Company was paying interest on money which it had borrowed at the rate of 5%. On September 29, *1956, W. E., Jr. caused a check to be drawn on the Sales Company account at the First National Bank of Mobile to the order of the Belcher Investment Company. The proceeds of this check were also used to effectuate payment on the purchase mortgage debt. It was repaid on September 5, 1958. The check was for $1,400.00. The January 31, 1957, statement of the Sales Company lists the item of $1,-400.00 under “Notes Receivable” as “Belcher Investment Company $1,400.-00.” The October 31, 1955, statement of the Corporation lists the item of $100,000.00 under “Notes Receivable — W. A. Belcher Lbr. Co. — $100,000.00.” Through December 31, 1963, Brady and W. E., Jr. had realized a net gain from sales of timber and land of $207,-892.50. Since the date mentioned they have sold 437 acres to Southern Pine Homes, Inc. for $137,500.00, and it in turn sold the same land to T. C. McCarter for $151,000.00. There were certain other smaller sales. On December 2, 1953, Pomeroy and McGowin, forest managers, gave the First National Bank a written repor