Court Opinion

ID: 5253113
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:19:32.173114+00
Date Added: 2024-06-11T08:27:58.610397
License: Public Domain

Page, J. (dissenting):
In my opinion there was not a valid gift inter vivos of the 500 shares of stock of the American Sumatra Tobacco Company by the testator to Sara K. Cohn. In order to arrive at a clear understanding of the transaction it is essential that we should bear in mind the situation of the parties, the conditions under which the stock was held, and the actions of the testator with reference thereto, before and after the delivery of the paper to his wife on September 20, 1911. A brief resumé of the material facts is as follows:
The stock stood on the books of the American Sumatra Tobacco Company in the name of the copartnership of A. Cohn & Co. and until December 28, 1910, was an asset of the corporation. On that date the stock was allotted to the copartners, as their individual property, that is the proportion to which each partner was entitled was charged against his contribution to the capital account and proper entries made transferring the stock from the capital account of the firm to the credit of the individual members. Thus Abraham Cohn was credited with 9,466 shares, the testator with 7,213 shares and Leonard A. Cohn with 1,352 shares. The shares were not physically delivered nor transferred on the books of the corporation, but remained in the safe deposit box in the city of New York in the firm name. Any one of the partners, however, at any time, could have taken his proportion of the stock which was in certificates of $100 each and caused the same to be transferred to himself, individually, but by reason of the desire to control the election of directors from which they obtained a business advantage,. they allowed the stock to remain in the firm name. Abraham Cohn died in August, 1911, and the two surviving partners began liquidation óf the firm’s business. Negotiations were opened for the organization of a copartnership, consisting of the testator, Leonard A, *400Cohn and one Lichtenstein. The testator agreed to contribute some of this stock as an asset to the new copartnership, and as it required 7,000 shares to secure the election of a director, the testator’s holdings were to be kept intact, so that the new copartnership should have the benefit thereof. The testator died suddenly on the 26th day of September, 1911, the day upon which the articles of copartnership were to have been signed. Prior to that time the testator had been in good physical condition and was attending to the business of liquidating the affairs of the old firm and the organization of the new copartnership at his place of business in New York city. When the paper was delivered to his wife, the daughters testified that the testator said: “ That he could not give her the stock because it was in the company, but as soon as he could get it he would give it to her.” From the foregoing fact, I am of opinion that the attempted gift was invalid. There was no delivery of the stock either actual or constructive. The testator still retained dominion and control over it for use in the business of the new copartnership.
The rules by which the validity of gifts inter vivos must be tested are thus stated in Beaver v. Beaver (117 N. Y. 421, 428), cited with approval in Matter of Van Alstyne (207 id. 298, 306): “ The elements necessary to constitute a valid gift are well understood and are not the subject of dispute. There must be on the part of the donor an intent to give, and a delivery of the thing given, to or for the donee, in pursuance of such intent, .and on the part of the donee, acceptance. The subject of the gift may be chattels, choses in action, or any form of personal property, and what constitutes a delivery may depend on the nature and situation of the thing given. The delivery may be symbolical or actual, that is, by actually transferring the manual custody of the chattel to the donee, or giving to him the symbol which represents possession. * * * But delivery by the donor, either actual or constructive, operating to divest the donor of possession of and dominion over the thing, is a constant and essential factor in every transaction which takes effect as a completed gift. * * * The intention to give is often established by most satisfactory evidence, although the gift fails. Instruments may be ever so formally executed by the donor, pur*401porting to transfer title to the donee, or there may be the most explicit declaration of an intention to give, or of an actual present gift, yet unless there is delivery the intention is defeated. Several cases of this kind have been recently considered by this court. (Young v. Young, 80 N. Y. 438; Jackson v. Twenty-third St. Ry. Co., 88 id. 520; In re Crawford, 113 id. 560.) ”
In the present case the writing, taken alone, would seem to show the intention of the donor to make an actual present gift, for he says, “ I give this day to my wife,” yet the delivery of the writing was accompanied by the statement “ that he could not give her the stock because it was in the company, but as soon as he could get it he would give it to her.” There is, therefore, a clearly expressed intention to give at a future day, and the acts of the testator showed an intention to retain the dominion and control of the stock, meanwhile, in himself.
A gift inter vivos has no reference to the future, while a gift causa mortis has reference to a condition subsequent. The latter before the happening of the condition is revocable, while the former is irrevocable. Some confusion has arisen in the cases from a failure to recognize this distinction between these two forms of gift. A gift is a voluntary transaction without consideration. Until the donor has divested himself absolutely and irrevocably of the title, dominion and control of the subject of the gift, he has the power to revoke, and a court of equity will not compel him to complete his gift. (Curry v. Powers, 70 N. Y. 212; Lehr v. Jones, 74 App. Div. 54.) When a chose in action has been delivered to a purchaser in good faith and for a valuable consideration, he acquires a good title in equity, although no assignment has been made, and a court of equity will compel the transfer of the legal title. There is no such right in the donee of an incomplete gift. He has paid nothing for it, and as long as the donor retains the title, dominion or possession of the subject of the proposed gift, the donee has no standing in any court to enforce the gift. (Johnson v. Spies, 5 Him, 468.)
The respondents claim, however, that the delivery of this paper writing was a constructive delivery of the stock, and argues that the above rules only apply to gifts inter vivos *402where the evidence of the gift rests in parol, and that where there is a writing which evidences the donor’s intention, the courts will give effect to the delivery of the writing as a constructive delivery of the subject of the gift. This, however, in my opinion, is not the law. The writing must be such as to transfer the right of possession. There may be a symbolic delivery, or there may be a constructive delivery, but whether it be symbolic or constructive, it must be such a delivery as divests the donor with title, dominion and right of possession, and it must be the best delivery that can be made under the circumstances of the case, having due regard to the character of the property. The respondents rely upon two cases decided by this court. (McGavic v. Cossum, 72 App. Div. 35; Matter of Mills, 172 id. 530; affd., 219 N. Y. 642.) In the first case the subject of the gift was two $1,000 United States government bonds known as “ 4 per cent Registered.” These bonds were in the custody, for safekeeping, of the bank in Peekskill, N. Y., through whom she purchased them. She being seriously ill at her residence gave to the plaintiff the original memorandum of purchase of the bonds delivered to her by the bank, and across the back of which she indorsed the following: “Poughkeepsie, November 23, 1901. I have this day given my niece, Fannie H. McGavic, bond 2000 Reg. 4 per cent,” and signed her name. The donor died shortly thereafter and it was held that “ Actual delivery, by reason of the illness of the owner of the bonds, and their possession at that time by the bank, was physically impossible, but there was present, as evidenced by the writing of the deceased, not only the intention to then give, but also the intention to then deliver the thing given. The owner did all she could do in this respect. It was a good constructive or symbolical delivery, and this, under the circumstances, was sufficient to vest good title in the plaintiff.”
In the instant case there was no physical or other impossibility to the actual delivery of the stock; it stood in the name of the company; but the stock to the extent of 7,213 shares was the property of the testator and it had been so held merely as a matter of business convenience of the old copartnership and at the time was so held, pending the formation of a new copartnership, when it might be desirable to hold all the *403certificates of the stock in solido for the same business advantages. This latter consideration, in my opinion, was the controlling cause of the failure to make an immediate delivery of the stock, and the reason why the testator retained possession, dominion and control of the certificates. In Matter of Mills (supra) the testator was in California, the stock was in the possession of his son in New York, and this court said the stock which was the subject of the gift was “ in possession of one of the donees, and no further act of Mr. Mills could make his possession more complete.” And as to the daughter, we held that the delivery of the stock to the son for and on behalf of the daughter was a good delivery.
I have been unable to find that the courts in this jurisdiction have held, heretofore, that it is only where a parol gift is sought to be established that delivery is essential, and that where the intention to give is evidenced by a writing delivery is not necessary. Among the cases cited in the prevailing opinion as tending to sustain the proposition that the requirement for delivery of the thing given is limited to oral gifts, will be found cases where gifts evidenced by a writing have been declared invalid. It will also be found that many of those cases relate to gifts causa mortis and not to gifts inter vivos. So far as this State is concerned, it is in my opinion settled: “ Delivery by the donor, either actual or constructive, operating to divest the donor of possession of and dominion over the thing, is a constant and essential factor in every transaction which takes effect as a completed gift. Anything short of this strips it of the quality of completeness which distinguishes an intention to give, which alone amounts to nothing, from the consummated act, which changes the title. The intention to give is often established by most satisfactory evidence, although the gift fails. Instruments may be ever so formally executed by the donor, purporting to transfer title to the donee, or there may be the most explicit declaration of an intention to give, or of an actual present gift, yet unless there is delivery the intention is defeated.” (Beaver v. Beaver, supra.)
The writing given to Mrs. Cohn did not purport to assign, transfer or set over to her the stock. It was not a deed or instrument of gift that divested the testator of possession over *404and dominion of the stock. That it was not intended that it should do so is clearly shown by the subsequent acts of the testator.
In my opinion the decree should be modified by declaring the attempted gift void and sustaining the objections to the account to that extent and the executors and trustees be surcharged with the proceeds of the said 500 shares of stock, and that the same forms a part of the principal of the trust estate.
Dowling, J., concurred.
Decree affirmed; with costs and disbursements to respondents executrix and trustees, and disbursements of special guardian, respondent.