Brief Fact Summary. A wife received a paper which stated her husband’s present intention to give her 500 shares of stock. The husband did not physically possess the certificates, and he passed away before physically transferring the certificates to his wife.
Synopsis of Rule of Law. Due to the conclusive establishment of an intention on the part of the decedent to give the shares to the executrix, and certain circumstances preventing the actual delivery of the certificates, the gift was valid.
Issue. Was the note given to the executrix on her birthday sufficient to prove that a gift had been made during the decedent’s lifetime?
Held. Yes. Decree of the surrogate (lower) court affirmed.
Appellants, Herbert Cohn and another, argued to the court that the birthday note is evidence of an intent to make a gift in the future and does not constitute a present gift. The decedent stated to his wife, on her birthday, that the stock was at the firm and that he would get it as soon as possible. There is no evidence of fraudulent conduct on the part of the executrix. Also, no creditors were involved, the stock being owned by the decedent at the time of the birthday note.
In this case there was a satisfactory and reasonable excuse for not making the delivery of the stock certificates at the time of the birthday note. The Court noted that on the date of the birthday note, the decedent and the executrix were in New Jersey, while the certificates were in New York. Also, the stock certificates were in the firm name, which further complicated the delivery. The decedent was to enter into a new partnership on the day he died, which would have resulted in his acquisition of physical custody of the stock.
In this case there is enough evidence manifesting the decedent’s intent to make the gift of stock effective on the date of the birthday note. Therefore, in the absence of fraud or creditors rights, the gift was effective on that day.
Dissent. The dissent points out facts that were not mentioned in the majority opinion. Namely, that the stocks continued to be in the firm name for the purpose of controlling the election of directors of the American Sumatra Tobacco Company, and that decedent could have taken personal custody of his certificates in his name had he chosen to do so. Thus, the dissent would have held that the gift was not made, insofar as the firm retained custody of the certificates.
Discussion. The facts surrounding the purported gift will be of utmost importance in cases such as these. Here the Court found a way to uphold the decedent’s clearly expressed intent to give his wife a birthday present.