Court Opinion

ID: 8830537
Source: CourtListenerOpinion
Date Created: 2022-11-26 16:01:52.739642+00
Date Added: 2024-06-11T17:04:54.602623
License: Public Domain

PAGE, Circuit Judge
(dissenting). I am unable to agree with the majority opinion. The only contradiction in the record is between *728the letter of October 15, 1913, which says, “I inclose a-certificate for" 50 shares in your name,” and the testimony of Olson, who said, “Stock certificate No. 139 [the one in question] was issued on October 31, 1913.” The majority opinion, must have taken the statement of Olson as the basis for the following:
“The certificate of stock referred- to in the letter was a blank one, and the son assigned it to the father before it was filled out and executed by the bank. On October 31, 1913, this blank certificate was filled out and executed by the bank.”
Here is the evidence on that point, viz.:
Letter dated October 15, 1913, states: Olson said:
“I inclose a certificate * * * in “Stock certificate No. 139 was is-your name. * * * Mail to me at sued October 31, 1913.” . ' once by registered mail.”
Plaintiff testified: . Plaintiff testified:
“Stock was received. ♦ * * Im- “I received the letter shortly after mediately endorsed ■ the certificate. October 15, 1913.”
* * * I had possession of the stock only during the interim while receiving that letter,'and sending to my father the certificate and authority as requested.”'
When Henry W. Mahan, Sr., president of two banks, said “I enclose a certificate for 50 shares in your name,” it must be presumed that he used those words as they are ordinarily understood, namely, that he was sending the ordinary signed stock certificate. The letter had a typed postscript and a later one in the father’s own handwriting. Probably the mailing of the letter'was delayed. Originally, the date of the certificate might have been omitted, and afterwards supplied. Both of those things seem more probable than the conclusion that only a blank piece of paper was in the letter. If the paper, which, the letter said was a certificate, had in fact been indorsed by plaintiff before it was issued by the bank, then Olson,-the cashier, when he issued it, must have encountered a set of very unusual circumstances, viz. he was called upon to sign a certificate that had already been removed from the stock certificate book, and that, judging by the condition of the original letter in evidence in which the certificate was inclosed, had been folded, and already bore the indorsement-of the person to whom the bank was issuing it. It seems obvious, if those unusual conditions had existed, Olson would have told about'them on the witness stand, instead of simply giving the date borne by the certificate.
The father delivered to plaintiff a paper, and procured his signature thereon, on the statement that it was a certificate. If it was subsequently signed by the bank, why should not’the subsequent signing by the bank inure to the benefit of the plaintiff as of the day of its delivery by the letter to plaintiff? The bank treated his signature as sufficient authority to transfer the stock on its books. If plaintiff signed a blank, the bank officials knew it. In the case of Colton v. Williams, 65 Ill. App. 466, one Mary A. Gordon, during the lifetime of her husband, Joshua R. Gordon, was the owner of certain shares of bank stock, which stood on the books of the bank in her name. She died in 1874, leaving her husband as her sole heir. He never had the *729stock transferred upon the books to himself, and after 14 years he married another woman, whose married name was identical with that of the first wife, viz. Mary A. Gordon. In 1888 he went with his second wife to the bank and told the president of the bank that he-had given the stock to his wife, and that the bank officers should allow her to receipt for dividends, which was done. The court say:
“When he gave the stock to the second Mary A. Gordon, the appellant, the title by registry in the books of the bank already stood in that name. If the title to stock could only pass by conveyance, the substitution of one Mary A. Gordon for another would not suffice for that purpose, but a conveyance was not essential to that end; and when it was agreed that appellant was the person designated by that name on the books as the, stockholder, owning the shares given to her, and she was subsequently I treated as such, we think it was sufficient.”
It was held that there was a transfer of the stock to the second Mary A., notwithstanding the fact that the certificate was found among her husband’s papers in the safe in his store after his death. Mahan, Sr., did much more. He delivered the stock to plaintiff, and then, if defendants’ theory is to be accepted, he went to the bank and actually had the title changed on the records of the bank to plaintiff’s name.
Unquestionably, personal property, as well as real property, may be separated into two or more valuable interests. The whole tenor and effect of the letter is that Mahan, Sr., intended at that time to give the stock itself to plaintiff, and intended to retain the dividends thereon during his life for the purposes stated in the letter, and at the same time protect his right to the dividends by putting the stock, after it was properly vested in his son, in a sealed envelope in his deposit box, where the son was told he would find it at the father’s death. In Shepard v. Shepard, 164 Mich. 183, 201, 129 N. W. 201, 208, it is said:
“It is well settled that, if there has been an actual or constructive delivery of the subject-matter of the gifts, with the intent to vest title, the fact that the donor retains possession of the same for any purpose is'not sufficient to defeat the gift; nor is the gift defeated by the fact that the donor reserved to himself the use or income from the subject-matter of the gift.”
That the father intended to put the stock in the son’s name, have it indorsed by the son, and returned to him, so that he could have control of it during his lifetime for the sole purpose of securing and protecting his right to the dividends, separated from the interest in the stock given to the son, is very clear. The statements in the letter, such as, “I want to leave you something that shall be yours at my death,” and “I want to leave you SO shares in the Washington Park Bank to be delivered to you at my death,” mean nothing more, on reading the whole letter, than that the son’s realization of benefits from his stock was necessarily to be postponed until a time when the dividends would go with the stock, upon the father’s death, and that the stock, returned to and to be kept by the father for the sole purpose stated, would be found in a sealed envelope and delivered to the son at the father’s death. That language simply means that the impounded stock would then be released, not that the son was then to acquire title.
The majority opinion quotes from the postscript, viz.:
*730“You will note that I have attempted to divide $75,000, and have given your mother $100,000, so that she is sure of a good income, and will have more to divide when she is through than I had,”
and construes this language to mean that the value of the gifts was to be determined “when I am through.” As I read that sentence, it simply means that he had given $100,000 to his wife, and kept .only $75,000 to give, and which he was then giving, to the children, and that the mother would have, at her death, more to distribute to the children than he had to give to them, after he had given the $100,000 to the mother. The words “than I had” certainly cannot refer to the time of the death of the donor.
There are other elements in the letter that should not be ignored. After telling plaintiff, “I inclose a certificate for' 50 shares in your name,” he asked plaintiff to exercise three acts of ownership over the stock, viz. to indorse it, to sign an order to the bank to pay the dividends to the father, and to sign a proxy to the father to vote “your stock.” Subsequently, in December, 1914, the father recognized the son’s ownership by asking him for a second proxy to vote the stock, and the bank, both in 1914 and 1915, recognized plaintiff’s ownership of the stock by giving him notices of stockholders’ meetings.
The father caused the stock to be retransferred in January, 1916, and the majority opinion of the court says:
“The motive for the father’s subsequent action is not disclosed.”
It seems to me that the motive is found in plaintiff’s testimony, viz.:
“My father and mother’ were separated on July 16, 1916, that being the date of the decree. The estrangement came about the latter part of December, 1915. I took my mother’s part in the estrangement.”
The majority opinion further states:
“The possession of the stock certificate by the father is most significant.”
The letter clearly shows that there was one interest in the stock itself and another interest in the dividends, and it must not be forgotten that the dividends were drawn solely upon plaintiff’s order upon the bank to pay them to the father. Nor should it be forgotten that the-father voted the stock solely as proxy and agent for plaintiff. The possession of the stock, under such circumstances, was not at all significant of anything opposed to the theory of a gift to the plaintiff. There was no issuance of the stock unaccompanied by delivery and possession. Undeniably there was a delivery of a signed or'an unsigned certificate of stock into the possession of the plaintiff. That completed and ended that part of the transaction.
Thereafter plaintiff, under instructions of the letter, started another and wholly separate transaction, namely, the impounding of the stock with the father to protect the father’s rights to the dividends. For that purpose, and that purpose only, plaintiff indorsed it as his stock and sent it to his father. It is very significant that every act thereafter on the part of the father was a recognition of plaintiff’s ownership of the stock, until the taking sides with his mother in her difficulties with the father caused the father to break faith with his son and violate the trust under which he held the stock. •
*731The majority opinion cites Allen-West Com. Co. v. Grumbles, 129 Fed. 287, 63 C. C. A. 401. Upon the facts, that case is wholly different from the cáse at bar. I am convinced that the law of the Allen-West Case, applied to the facts of this case, will support plaintiff’s contention that there was a valid gift. It must be remembered that, as stated in the Colton Case, supra, there is no question of creditors here involved, as there was in the Allen Case. In the Allen Case there was no attempt to deliver the stock until after'insolvency. Grumbles kept the certificates, voted the stock, and drew the dividends by virtue of being the recorded owner of the stock on the books of the corporation, which never had notice of the so-called assignment. In the case at bar, the donor, upon the books of the bank, divested himself of all record interest in the stock, voted the stock by virtue of a power of attorney from the plaintiff, and drew the dividends by authority of a written order from plaintiff. The Allen Case lays down the broad general rule as follows:
“Among the indispensable conditions of a valid gift are the intention of the donor to absolutely and irrevocably divest himself of the title, dominion, and control of the subject of the gift in prassenti at the very time he undertakes to make the gift.”
Thereafter Judge Sanborn, delivering the opinion, reviews at great length a number of decisions bearing upon the question of what constitutes a valid gift inter vivos, and from that discussion and the authorities cited it is clear that delivery may be made and possession given in many ways. For instance, Judge Sanborn in his opinion says:
“In Grymes v. Hone, 49 N. Y. 17, 10 Am. Rep. 313, a gift by means of a. written assignment of -20 out of 120 shares of stock that werte evidenced by a single certificate was sustained.”
Again, the Allen Case says:
“In Banks’ Adm’r v. Marksberry, 3 Litt. 276, a gift by an assignment of the future income of a slave was held valid—without a delivery of the subjects of the gift.”
.Other authorities are cited to show that there are many substitutes for the strict and actual delivery' of the thing given.
In Opitz v. Karel, 118 Wis. 530, 95 N. W. 948, 62 L. R. A. 982, 99 Am. St. Rep. 1004, the Supreme Court said:
“The essential requirement in cases of gifts is that such a delivery shall be made as the nature of the subject sought to be bestowed reasonably admits of. Many of the strict .requirements to the transfer of property by gift, indicated by the earlier cases, have been removed or relaxed to give a freer exercise to such a disposition of property. This modification of the law applies to what may be the subject of a gift, as well as the manner of executing it.”
In Thomas’ Adm’r v. Lewis, 89 Va. 1, 15 S. E. 389, at page 398, 18 L. R. A. 170, 37 Am. St. Rep. 848, it is said:
“Delivery is essential. It may be either actual, by manual tradition of the subject of the gift, or, constructive, by delivery of the means of obtaining possession. Constructive delivery is always sufficient when actual, manual delivery is either impracticable or inconvenient.”
*732The subject matter of the delivery there was stock, bonds, etc., in a safety box. The.court further said:
“The delivery of the keys to Bettie Lewis, with words of gift, by her father, upon his deathbed, invested her with the same means of obtaining possession that Thomas [the father] had, and made her the owner, with title defeasible only by recovery or revocation of the donor, or by a deficiency of assets to pay creditors” [that was a gift causa mortis]; “and the mere existence in Stephen B. Hughes’ hands of a duplicate set of keys, for precaution against loss or accident, which he had no right or authority to use, did not) impair the validity of the gift which he did make to his daughter in his last moments, in the most unqualified manner.”
I am of opinion that there was a valid and completed gift to plaintiff.