Title: In Re Estate of Paulson
Citation: 219 N.W.2d 132
Docket Number: 8964
State: north-dakota
Issuer: north-dakota Supreme Court
Date: June 13, 1974

219 N.W.2d 132 (1974) In the Matter of the ESTATE of Irene E. PAULSON, a/k/a Elizabeth I. Paulson, a/k/a Irene Paulson, Deceased. Helen P. KOLOUCH, Appellant, v. Kathryn E. BOND et al., Appellees. Civ. No. 8964. Supreme Court of North Dakota. June 13, 1974. *133 Bair &amp; Brown, Mandan, for appellant. Wattam, Vogel, Vogel &amp; Peterson, Fargo, for appellees. HATCH, District Judge. In April 1968, Irene E. Paulson transferred 729 shares of Forum Publishing Company stock that she owned in her own right to herself and her three children, John D. Paulson, Kathryn E. Bond, and Helen P. Kolouch, in joint tenancy and in the following manner: The transfer was effected when Irene signed the old certificates and endorsed on them that new certificates were to be reissued as above set forth. John was present when this was done. He then delivered the stock to the president of the corporation who issued new certificates in joint tenancy in the manner ordered by Irene. The new certificates were returned to Irene and they remained in her possession during her lifetime. Irene received all of the dividends from the stock after the transfer and until her death. There was no gift tax return filed. Irene died testate on May 5, 1970, and her will was offered for probate in county court, Cass County, North Dakota. The will had been executed March 1, 1957, and left the residuary estate, after payment of taxes and debts, to Irene's children, share and share alike. No mention of the Forum stock was made in the instrument. Her husband was living at the time Irene made and executed the will and, in paragraph 5 of said will, she stated she made no bequest to her husband, in accordance with his wishes, but that she had certain joint tenancy accounts in her name and the name of her husband and she realized that this property would pass to her husband, if he survived her, free of the will. The 729 shares of stock in joint tenancy were not listed as assets of the estate but were shown for purposes of taxation only; the stock was given a value of $300 per share. Helen commenced an action in county court to have the shares made part of the *134 assets of the estate and to have said shares reappraised. There were other contentions raised in county court that are not germane to this appeal. The county court ruled adversely to Helen, refusing to make the stock part of the assets of the estate or to compel a reappraisal of the stock. Helen appealed to the district court where the matter was tried to a jury. The jury returned a verdict holding that the transfer in joint tenancy of the certificates of stock in the Forum Publishing Company by decedent to herself and her three children in joint tenancy was valid and that the value of the non-voting stock was $374 per share, and the value of the voting stock was $748 per share. Helen raised the following three contentions by this appeal: As part of Helen's first contention, she alleges that the court erred in giving the following instructions: Helen further alleges the trial court erred in refusing to give instructions requested by her that in substance stated that there must be a valid delivery or passing of control of the stock certificates and that there can be no gift where the donor retains possession and control of such stock during her lifetime. The court will treat the contentions of Helen in the order above set forth. First. Was the transfer of the shares of stock in the Forum Publishing Company an invalid gift inter vivos because of the lack of intent to make a gift, lack of delivery to the donees during the lifetime of the donor, and because of the retention of possession and profits of said stock by the donor during her lifetime? A gift is a transfer of personal property made voluntarily and without consideration. § 47-11-06, N.D.C.C. In re Kaspari's Estate, 71 N.W.2d 558 (N.D. 1955), sets forth the following requisites for a valid gift inter vivos: (1) an intent to give; (2) delivery of the gift, either actual or constructive, and (3) an acceptance of the gift by the donee. Helen asserts that the facts in this case show that the transfer of the stock is invalid as a gift inter vivos as there was no donative intent on the part of the donor, no actual or constructive delivery of the stock to the donees, and that there was no acceptance of the stock manifested by said donees. Irene had physical possession of the stock certificates up to and including the time of her death; she received and used the income derived from the stock; and no gift tax return was filed by her. This, coupled with Irene's will leaving all *135 of the residue of her estate to her children in equal shares caused Helen to conclude that no gift was intended and that the stock is properly a part of the assets of Irene's estate and should be distributed in accordance with Irene's will. Helen supports these contentions with the following authorities: 23 A.L.R.2d 1171; In re Muckle's Estate 35 N.Y.S.2d 391 (Sup.1942); Reid v. Cromwell, 134 Me. 186, 183 A. 758 (1936); Lyons v. Freshman, 124 Mont. 485, 226 P.2d 775 (1951); In re Bush's Trust, 249 Minn. 36, 81 N.W.2d 615, 82 N.W.2d 221, (1957) [latter two cases deal with Uniform Stock Transfer Act, which Act was repealed in North Dakota in 1965 when the Uniform Commercial Code was adopted]; Kuebler v. Kuebler, 131 So. 2d 211 (Fla.App.1961); Buffaloe v. Barnes, 226 N.C. 313, 38 S.E.2d 222 (1946); McGillivray v. First Nat. Bank, 56 N.D. 152, 217 N.W. 150 (1927); and In re Berzel's Estate, 101 N.W.2d 557 (N.D. 1960). In Reid, Kuebler, and Buffaloe, the purported donees testified that the donor in each case clearly informed them that delivery was to take effect upon the donor's death. Neither McGillivray nor Berzel involved joint tenancy transfers. Both cases involved property held between a decedent and another person in the disjunctive. A thorough reading of both cases shows that neither is in point. In the instant case, a joint tenancy was expressly created. Section 47-02-06, N.D.C.C., provides as follows: There is no dispute that the stock certificates in question were issued to decedent and her children as joint tenants. A gift of personal property in joint tenancy must, because of the very nature of the act, be differentiated from gifts of personalty not in joint tenancy. An examination of the essential elements of a gift inter vivos as applied to the facts in this case is necessary. Intent. Irene instructed John to endorse on the original stock certificates her order to have new certificates issue to herself and her children in joint tenancy. She signed the old certificates, gave them to John and requested that he have new certificates issued as per her instructions on the old certificates. This John did by handing over the old certificates to the president of the Forum Publishing Company. New stock certificates were issued as per Irene's instructions. The aspect of fraud or undue influence was not a part of this action. What additional manifestations of a donative intent could reasonably be desired? Certainly Irene's actions cannot be out-of-hand declared to be frivolous. She was following a procedure her husband had utilized when he made a similar gift of stock to his children during his lifetime as was testified to at the trial. From a reading of the entire case, the aspect of intent to make a gift has not been rebutted. Indeed, Irene stated in her Last Will and Testament that the property she held in joint tenancy with her husband would pass to him, should he survive her, as his sole property "free of the will". This would *136 indicate that she had knowledge of the consequence of placing property in joint tenancy. Delivery. When the new stock certificates were issued in the names of the decedent and her children as joint tenants, they became co-owners of the stock. It was stated by the Illinois Supreme Court in Frey v. Wubbena, 26 Ill. 2d 62, 185 N.E.2d 850, 856 (1962): The language contained in Bunt v. Fairbanks, 81 S.D. 255, 134 N.W.2d 1, 3, seems especially apropos in the instant case: Acceptance. Bunt, supra, also states as follows, to wit: We then have a set of rules which apply to gifts of property in joint tenancy that is somewhat at variance with an absolute gift where the donor does not retain an interest. The Frey and Bunt cases, supra, are compatible with North Dakota law. To hold otherwise in this case would be to subject to attack all joint-tenancy ownership of property and thereby create unwarranted chaos, litigation, and expense. As the instructions of the trial court that are complained of are in keeping with the applicable law as determined by this court, they are proper instructions and the refusal to give the instructions Helen requested was proper and necessary. Helen states that it was error for the trial court to refuse to admit conversations with the deceased regarding the transferring of the stock certificates. Helen made an offer of proof to the court that, had she been allowed to testify as to her conversation with her mother, said testimony would show: Section 31-01-03, N.D.C.C., provides: Helen was not called to testify by the opposite party. Helen cites St. John v. Lofland, 5 N.D. 140, 64 N.W. 930, a decision rendered by this court in 1895. The St. John case did not involve a conversation with a person and a "testator or intestate", but related to a conversation between a debtor of intestate's estate and a deceased administratix. The court held that such a conversation was admissible and not violative of the statute then existing. Such statute [§ 5260, Dakota Territory Compiled Laws, 1887] had language similar to that in the present § 31-01-03, N.D.C.C., including the following: St. John is distinguishable then from the instant case in that St. John did not involve an attempt to testify to a conversation with a deceased testate or intestate. Helen also cites Keller v. Reichert, 49 N.D. 74, 189 N.W. 690 (1922), to support her position. This case holds that heirs and other parties may testify regarding conversations with a decedent in connection with proof and probate of a Last Will and Testament of a deceased. This case did not involve a dispute where judgment could be entered for or against any executor, administrator, heirs at law, or next of kin. The instant case does involve a dispute that necessitates a judgment to be entered against the estate and an heir or heirs. If Helen prevailed, she would have received assets of a greater value than she would receive were the joint-tenancy transfer to be upheld, and John would have his interest depleted in value. Helen also cites Trengen v. Mongeon, 206 N.W.2d 284 (N.D.1973), an action brought to set aside a conveyance of land to joint tenants by the vendors. One of the vendees was deceased. The action was not one by or against executors, administrators, heirs at law, or next of kin, but was an action between the vendors and the surviving vendee. The deceased vendee's estate was not involved. The court, in Trengen held that conversations with the deceased vendee about the land transaction were admissible. This was a proper ruling under the circumstances in Trengen, which is distinguishable upon the facts from the instant case. In discussing § 31-01-03, N.D.C.C., this court, in Knoepfle v. Suko, 108 N.W.2d 456 (N.D.1961), stated that the "dead man's statute" is to be strictly construed and its words not to be given a meaning which, to any extent, extends their literal and ordinary connotation. Applying this *138 ruling to the instant case, the facts herein permit the invocation of the statute without giving the words therein anything more than their literal meaning. In Bonogofsky v. Kraft, 92 N.W.2d 179, 182 (N.D.1958), this court stated: If the transfer was not a valid gift, then an implied or constructive trust must have been intended. The elements of fraud and undue influence were expressly stated by Helen not to be part of the issues in the instant case. In Bodding v. Herman, 76 N.D. 324, 35 N.W.2d 561, 563 (1948), this court stated: In Wildfang-Miller Motors, Inc. v. Miller, 186 N.W.2d 581 (N.D.1971), in paragraph 1 of the syllabus, this court held: Helen offered no evidence to show fraud, duress, or undue influence on the part of anyone, or a fiduciary duty that was violated. Helen next contends that the district court erred in permitting counsel for the estate to argue matters not in evidence. She contends counsel argued that he had been counsel for the Forum Publishing Company for 25 years and that the reason the stock was divided between voting and non-voting stock was to place the voting stock in the hands of those working at the Forum. John worked at the Forum. His sister did not. Counsel for the estate asserts he argues these matters as fair inferences from the testimony of Helen and from the information contained in Helen's Exhibit No. 1. This exhibit shows the ownership of the stock in the Forum Publishing Company. It does not state whether or not those owning voting stock work for the company. *139 Helen testified that: Neither Exhibit No. 1 nor Helen's testimony would lead one to infer that only those working at the Forum were owners of the voting stock. Indeed, the exhibit displays the fact that Helen and her sister Kathryn own voting stock in the Forum Publishing Company and neither of them work for the corporation. Counsel's argument, unsupported by any exhibit or the facts in the case, constituted independent testimony by counsel for the estate. State v. Nyhus, 19 N.D. 326, 124 N.W. 71 (1909), is cited by Helen to bolster her argument that counsel for the estate committed reversible error in making his argument. In Nyhus, the court did hold that argument of counsel, unsupported by any evidence and timely objection taken thereto, was grounds for a new trial. Nyhus was a criminal case and counsel for the State argued to the Jury that the State was entitled to a conviction for rape "in view of the fact that you have before you two girls whose lives have been ruined by this defendant". Counsel for the defendant immediately objected. The trial court did not specifically charge or caution the jury to disregard the statement nor did it reprimand the attorney or comment in any way on the impropriety of the statement. The court did instruct as to disregarding misstatements of counsel and that the jury was only to consider what the evidence was and not the statements of the attorneys. This instruction was held insufficient to overcome the damaging effect of the improper statement. This court, in State v. Knudson, 21 N.D. 562, 132 N.W. 149 (1911), in paragraph 2 of the syllabus, held, in pertinent part: The particular argument of estate's counsel that is objected to, and the objection and the court's ruling thereon, are as follows: The argument was unwarranted, as it is unsupported by the evidence in the case. However, we do not believe that the improper argument could have affected the verdict. The language contained in Hoffer v. Burd, 78 N.D. 278, 49 N.W.2d 282, 294-295 (1951), as it applies to this same type of issue, seems appropriate in this case, that is: In the instant case, there was more than sufficient evidence to justify the verdict without counsel's comments. For the reasons stated, the judgment of the trial court is affirmed. ERICKSTAD, C.J., and TEIGEN, KNUDSON and PAULSON, JJ., concur. VOGEL, J., deeming himself disqualified; LARRY HATCH, District Judge, Third Judicial District, sitting in his stead.