Opinion ID: 1317933
Heading Depth: 1
Heading Rank: 3

Heading: Compliance With the Uniform Stock Transfer Act

Text: The court of appeals correctly concluded that the settlor failed to comply with the provisions of the Uniform Stock Transfer Act, C.R.S.1963, 31-11-1, et seq. See Sparkman v. Exchange National Bank, supra . The question which we must resolve is the legal effect of the failure to comply with transfer formalities on the trust relationship. Technical concepts of title and title transfer have not been generally used as a basis for vitiating a trust and as a means of defeating the intent of the settlor. See, e.g., In re Estate of Brenner, Colo.App., 547 P.2d 938 (1976); Hageman v. First National Bank, 32 Colo.App. 406, 514 P.2d 328 (1973); Smith v. The James Irvine Foundation, supra ; Hausfelder v. Security-First National Bank, 77 Cal.App.2d 478, 176 P.2d 84 (1946); Home for Destitute Crippled Children v. Boomer, 308 Ill.App. 170, 31 N.E.2d 812 (1941) (refusing to apply Uniform Stock Transfer Act); Kintzinger v. Millin, 254 Iowa 173, 117 N.W.2d 68 (1962) (same); Johnson v. Johnson, 300 Mass. 24, 13 N.E.2d 788(1938). The court of appeals recognized that the Uniform Stock Transfer Act provides a method whereby a person who was the intended transferee of an unendorsed stock certificate may compel specific performance of the duty to complete the endorsement. Sparkman v. Exchange National Bank, supra ; C.R.S.1963, 31-11-9. Moreover, the obligation may be enforced against the settlor's personal representative. See Reinhard v. Sidney B. Roby Co., 110 Misc. 152, 179 N.Y.S. 781 (1920). The transfer of the stock would then fully comply with the statute. Necessary elements for the invocation of the remedial provision of the Uniform Stock Transfer Act are the owner's intent to transfer such certificate or shares, and the absence of an agreement to the contrary. C.R.S.1963, 31-11-9. The evidence supported the trial court's determination that Sarah Sparkman, the settlor, had the requisite intent, and we will not disturb that finding on appeal. See Estate of Granberry v. Baker, 30 Colo.App. 590, 498 P.2d 960 (1972). Respondent contends that the trust agreement provision regarding registration of the securities in the settlor's name was an agreement to the contrary. We conclude that even if the registration provision would have initially barred invocation of the remedial section of the statute as an agreement to the contrary, the registration provision of the trust agreement was subsequently modified. The settlor's initial grant of the power to re-register the stocks, and her eight-year acquiescence in the use of such power by the trustee modified the registration provision of the original agreement. In 1964, the bank re-registered the stocks in its own name as trustee, using the blank assignment forms endorsed by the settlor. The parol evidence rule presents no barrier to a subsequent modification by conduct. See Hatch v. Fritz, 48 Colo. 530, 111 p. 74 (1910); In re Estate of MacDonald, 4 Ariz.App. 94, 417 P.2d 728 (1966). Nor does the Statute of Frauds bar a finding of subsequent modification where the trust relation was previously established by a written document signed by the settlor, and where the settlor signed assignments in blank to carry out the terms of the trust. See C.R.S. 1963, 59-1-18. As thus modified, the agreement does not bar application of C. R.S.1963, 31-11-9 against the personal representative of the settlor. Accordingly, we reverse the decision of the court of appeals and remand with directions to affirm the judgment of the trial court.