Adams v. Merced Stone Co

Brief Fact Summary.

Thomas allegedly verbally conveyed to his brother, Samuel, an interest in debt owed by Samuels’ Merced Stone Co. There is no evidence of the conveyance, besides Samuels testimony. Upon Thomas’ debt, Samuel took Thomas’ interest in debt. Thereafter, Plaintiff, the executor of Thomas’ estate, brought suit to obtain Thomas’ interest in debt. The trial court found for Defendant. Plaintiff appealed.

Synopsis of Rule of Law.

A verbal conveyance of a gift is invalid except when the donor actually delivers the means of attaining access and control of the gift to the donee, given the gift can actually or symbolically be delivered.

Facts.

Samuel Prather was on the board of directors and leadership at Merced Stone Co., Defendant. Through Samuel’s position in the company, Samuel had access to Defendant’s financial books and statements. Defendant owed a substantial amount of money to Thomas Prather, Samuel’s brother. When Thomas’ death was approaching, Thomas allegedly made a verbal gift conveyance to Samuel of the debt Defendant owed Thomas. Thomas was aware that Samuel worked in a position of leadership with Defendant and that Samuel had access to the financial documents to change the creditor’s name to Samuel. Nevertheless, there is no evidence that Thomas actually conveyed Samuel his interest in debt, besides Samuel’s testimony. When Thomas died, Samuel took Thomas’ interest with Defendant. Adams, Plaintiff, executor of Thomas’ estate, initiated this action against Defendant seeking to recover Thomas’ interest in debt. The trial court held for Defendant, and Plaintiff appealed. 

Issue.

Whether a verbal gift is unenforceable except when the donor actually delivers the means of attaining access and control of the gift to the donee, given the gift can actually or symbolically be delivered.

Held.

Yes, a verbal gift is unenforceable except when the donor actually delivers the means of attaining access and control of the gift to the donee, given the gift can actually or symbolically be delivered.

Discussion.

A verbal conveyance of a gift is invalid except when the donor actually delivers the means of attaining access and control of the gift to the donee, given the gift can actually or symbolically be delivered. In this case, when Thomas had allegedly verbally conveyed his interest in debt to Samuel, Thomas knew the position Samuel held with Defendant, being capable of changing the name to Samuel in the Defendant’s financial documents. Nevertheless, the record does not contain any evidence that Thomas actually discussed the means to give Samuel his interest in debt, such as requesting him to actually change the name in Defendant’s financial documents. Thomas did not provide Samuel with a means to execute symbolically or actually to obtain the gift. Therefore, the trial court’s judgment is reversed.