Donsavage's Estate, In re

• Citation: 420 Pa. 587,218 A.2d 112
• Parties: In re ESTATE of Benjamin DONSAVAGE, Deceased. Appeal of Helen MOCKLER, Executrix of the Estate of Benjamin Donsavage, Deceased.
• Decision Date: 22 March 1966
• Court: United States State Supreme Court of Pennsylvania

Page 112

218 A.2d 112

420 Pa. 587

In re ESTATE of Benjamin DONSAVAGE, Deceased Appeal of Helen MOCKLER, Executrix of the Estate of Benjamin Donsavage, Deceased.

Supreme Court of Pennsylvania.

March 22, 1966.

Edward E. Hosey, Plymouth, John H. Hibbard, Wilkes-Barre, for appellant.

Nelson A. Bryan, John F. O'Malley, Joseph P. Olexy, Wilkes-Barre, for appellees.

Before BELL, C.J., and MUSMANNO, JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ. JONES, Justice.

Benjamin Donsavage, (decedent), died, testate, on January 15, 1964, survived by a wife and three children. Decedent's will, after providing a bequest of tools and sporting equipment to a non-relative, left the rest of his assets 'to my estate' and appointed one Helen Mockler as the 'administrator' of his estate. ¹ This will was probated and letters testamentary issued to Helen Mockler.

On April 14, 1964, the personal representative filed an inventory of the estate. Decedent's widow and children, (petitioners), then petitioned the Orphans' Court of Luzerne County for a citation upon the personal representative to show cause why she should not file a supplemental inventory ² to include therein, as assets of decedent's estate, certain specifically identified stock of twelve different corporations. The personal representative answered this petition and a hearing was held before the court. After hearing, the court directed the personal representative to include the stock in a supplemental inventory. From that decree the personal representative has appealed. ³

At the hearing which led to the instant decree, the court considered two issues: (a) whether the personal representative should file a supplemental inventory and (b) the ownership of the stock vis-a-vis the estate and the personal representative as an individual. Initially, the propriety of such procedure must be determined. In Rogers Estate, 379 Pa. 494, 495, 496, 108 A.2d 924 we said: 'In the settlement of a decedent's estate disputed title to property should not be determined upon exceptions to an inventory and appraisement which happens not to include the property claimed on behalf of the estate. The function and object of an inventory and appraisement in a decedent's estate is to fix Presumptively the existence of property in the possession of the fiduciary and the value thereof. This is only Prima facie evidence of ownership and value. Such listing does not affect the true ownership and value. (authorities cited). The question of ownership is of interest to creditors, federal and state taxing authorities, and others. Such title, therefore, should not be finally determined until after an audit, with due statutory notice * * *. Nonetheless, the proper procedure is as we have hereinabove indicated and is, therefore, to be followed.' See also: Higbee v. Koziol, 383 Pa. 116, 118, 117 A.2d 707. Rogers and Higbee would proscribe the procedure followed in the court below. However, by an amendment to the Fiduciaries Act of 1949, supra, the teaching of Rogers and Higbee was nullified: ⁴ 'Objections to the inventory may be made by Any party in interest at any time up to and including the time fixed by rule of court for making objections to the first account of the personal representative. Such objections in the discretion of the court may be heard at the audit of the account. Objections to the inventory also may be made in the form of objections to the account.' (Art. IV, § 405, added 1956, Feb. 23, P.L. (1955) 1084, § 3, 20 P.S. § 320.405). Section 405 gives wide latitude to the court in determining When objections to the inventory may be heard and the procedure adopted by the court below was clearly within its discretion.

The petitioners, objecting to the inventory filed, averred, inter alia: (1) that 'at the time of his death, (decedent) was the owner of the following listed corporate common stocks registered in his name: (followed by a list of stock); (2) this stock was an asset of decedent's estate which had not been inventoried. By way of answer, the personal representative averred, inter alia: (1) that, while the stock was registered in the decedent's name, 'at the time of his death' he did not own them; (2) that the stock was not an asset of the decedent's estate; (3) that on January 12, 1964--three days prior to his death--decedent had endorsed in blank the stock certificates and had delivered them as a gift to the personal representative As an individual and that such certificates had remained in her exclusive possession until decedent's death.

The petitioners' case rested solely upon those portions of the petition and answer--offered and received in evidence--which contained an admission that at the time of his death the stock certificates were registered in the decedent's name and had been in decedent's possession until three days prior to his death; from such registration and recency of conceded possession, the petitioners contend, flows a Presumption of ownership sufficient to establish a Prima facie case. It was the petitioners' burden to prove Ownership of the securities by the decedent when he died; ⁵ if and when petitioners sustained such burden it then became the burden of Mrs. Mockler to come forward with evidence to establish the validity of the alleged gift inter vivos to her of the stock: Henes v. McGovern, 317 Pa. 302, 309, 311, 176 A. 503; Carr Estate, 371 Pa. 520, 523, 92 A.2d 213.

The fact that, at the time of death, stock is Registered in the name of the decedent and was, concededly, possessed by him three days prior to his death gives rise to a Presumption, rebuttable in nature, that the Ownership of the stock was in the decedent. ⁶ Cf: Great Northern Ry. Co. v. Sutherland, 273 U.S. 182, 188, 47 S.Ct. 315, 317, 71 L.Ed. 596; Cummings Estate, 153 Pa. 397, 400, 25 A. 1125; Heller, Exrs v. Fabel, Exrx., 290 Pa. 43, 48, 138 A. 217; Wohleber's Estate, 320 Pa. 83, 84, 85, 181 A. 479, 101 A.L.R. 829; 14 C.J. § 709; 18 C.J.S. Corporations § 264, pp. 730, 731. Common sense dictates that, once it has been established by competent evidence or by admission, that stock certificates were registered in the decedent's name when he died and in his possession so shortly before he died, the person who disputes decedent's ownership of the stock at that time must come forward with evidence to sustain such lack of ownership. Cf: Thomas v. Waters, Admr. et al., 350 Pa. 214, 220, 221, 38 A.2d 237. In so ruling, the court below was correct.

Petitioners, having shown that all the disputed stock was registered in decedent's name and in his recent possession, then Helen Mockler had the burden of going forward with evidence to show that she, not the decedent, owned the stock when he died; more specifically, she then had the burden of proving that the decedent, with donative intent, had delivered, either actually or constructively, the securities to her and that the decedent had divested himself of and invested her with the requisite dominion over the stock: Brozenic Estate, 416 Pa. 204, 206, 204 A.2d 918; Hosfeld Estate, 414 Pa. 602, 605, 202 A.2d 69; Pronzato v. Guerrina, 400 Pa. 521, 526, 527, 163 A.2d 297. To establish such a gift inter vivos the evidence must arise not only from legally competent witnesses but also be clear, direct, precise and convincing: Brozenic Estate, supra, 416 Pa. at 207, 204 A.2d 918; Petro v. Secary Estate, 403 Pa. 540, 543, 170 A.2d 325; Parkhurst Estate, 402 Pa. 527, 167 A.2d 476.

Helen Mockler's case was based upon certain oral testimony, the stock certificates the certain portions of her answer offered and received in evidence. The stock certificates had been endorsed by the decedent with the spaces on such certificates provided for the insertion of the dates and the names of the transferees left blank; the time of endorsement of such certificates and the possession of such certificates at the time of death was dependent upon oral testimony which will be discussed infra. The fact that decedent had endorsed the certificates in blank Per se is neither controlling nor indicative of the existence of an intent that such endorsement operate as a gift: Carr Estate, 371 Pa. 520, 528, 92 A.2d 213; Thomas v. Waters, 350 Pa. 214, 38 A.2d 237; Brown's Estate, 343 Pa. 230, 22 A.2d 821; Packer v. Clemson, 269 Pa. 1, 4, 112 A. 107. Cf: Chapple's Estate, 332 Pa. 168, 173, 2 A.2d 719, 121 A.L.R. 422.

While endorsement of the certificates in blank by the decedent Plus the possession of such certificates by Helen Mockler at the time of decedent's death would raise a presumption of ownership ⁷ yet the fact of possession of such certificates by Helen Mockler has not been proven on this record by evidence of the necessary qualitative standard. It is clear beyond question on this record that, until three days before his death, the stock certificates were in decedent's possession and the possession and ownership by decedent of such certificates until such a short time before his death raises a presumption that such possession and ownership continued until his death, at least until it has been established by clear, direct, precise and convincing testimony that there had been a change in such possession and ownership: Kaufmann's Estate, 281 Pa. 519, 532, 127 A. 133; Tradesmen's National Bank & Trust Co., Admr. v. Forshey, 162 Pa.Super. 71, 56 A.2d 329; Ryan v. MacDonald et al., 151 Pa.Super. 607, 30 A.2d 662. A status once established is presumed to continue until the contrary is shown: Zuback v. Bakmaz, 346 Pa. 279, 282, 29 A.2d 473. The record indicates that, after the death of the decedent, the physical possession of the stock certificates was in Helen Mockler but the question arises how did she obtain possession? While she claims that she received possession of these certificates three days prior to his death from the decedent by a hand delivery of them to her as a gift, such claim is not supported, as we shall demonstrate infra, by any competent testimony. Such portion of...