Ferer v. Aaron Ferer & Sons Co.
| Decision Date | 08 June 2007 |
| Docket Number | No. S-05-730.,S-05-730. |
| Citation | 732 N.W.2d 667,273 Neb. 701 |
| Parties | Aaron M. FERER, Appellant, v. AARON FERER & SONS CO., a Nebraska corporation, et al., Appellees. |
| Court | Nebraska Supreme Court |
James D. Sherrets, Theodore R. Boecker, Jr., and Jason M. Bruno, of Sherrets & Boecker, L.L.C., Omaha, for appellant.
Steven E. Achelpohl, Omaha, for appellee Aaron Ferer & Sons Co.
Michael A. Nelsen, of Hillman, Forman, Nelsen, Childers & McCormack, Omaha, for appellees Matthew Ferer and Whitney Ferer.
In 1995, Harvey Ferer decided to make a gift of stock in the family corporation, Aaron Ferer & Sons Co., to each of his three sons. Stock certificates and transfer documents were prepared, signed, and placed in the company safe, and corresponding notations were made in the stock record books. Before the stock certificates were presented to his sons, however, Harvey decided later in 1995 not to give any stock to one of his sons. The question presented in this appeal is whether Harvey made a completed gift of stock to that son sometime in 1995.
Aaron Ferer & Sons Co. (hereinafter AFSCO) is a family-owned business engaged in metals trading. Harvey, who managed AFSCO for most of his adult life, had three sons: Aaron Ferer, Matthew Ferer, and Whitney Ferer. The appellees, Matthew and Whitney, have worked for AFSCO virtually their entire adult lives. The appellant, Aaron, worked for AFSCO until he terminated his employment on September 27, 1995.
In late 1994, Harvey met with Aaron, Matthew, and Whitney to discuss, among other things, the future of AFSCO. Harvey announced his plans to start making annual gifts of AFSCO stock to each of his three sons, up to the annual gifting limit. At this meeting, Harvey handed each of his sons a stock certificate representing 11,764 shares and explained that he would give a similar gift each year, so long as the sons remained actively involved in and employed at the company. At the time of this gift, all three sons were actively involved and employed at AFSCO.
On June 30, 1995, Harvey and Matthew met with two attorneys from the Erickson & Sederstrom law firm (E & S). At this time, Harvey informed one of the attorneys, Charles Sederstrom, that he was "contemplating" making a gift of stock to each of his sons for 1995, similar to the gift he made in 1994. After this meeting, pursuant to Harvey's instructions, Matthew contacted E & S and requested that stock certificates be filled out and forwarded to AFSCO.
As a result of the June 30, 1995, meeting and Matthew's request, Connie Bitzes, a legal secretary for E & S, was asked to prepare four unsigned stock certificates and an unsigned stock power. At that time, E & S maintained at its office four maroon books that contained the blank AFSCO stock certificates and stock stubs and also contained the stock stubs or receipts for AFSCO stock certificates that had previously been issued. E & S did not have any presigned stock certificates or stock powers, nor did it have a facsimile signature stamp for any of the officers or directors of AFSCO.
Accordingly, when AFSCO wanted to issue new stock certificates, an AFSCO representative would contact E & S, which would then prepare both an unsigned stock power and the unsigned stock certificates with the corresponding stock stubs. The stock certificates would be removed from the maroon books and, along with the stock power, sent to AFSCO. In addition to sending AFSCO the stock power and stock certificates, E & S would request that both the stock power and the original stock certificate, from which the gift stock originated, be returned to E & S.
The stock stubs from the newly issued stock remained in the maroon books and provided the following information: the number of shares issued on that particular stock certificate, to whom the certificate was issued, and the stock number of the original stock certificate from which the shares originated. At the time E & S prepared and issued the new stock certificate, it would mark "cancelled" on the stock stub corresponding to the original stock certificate which was the original source of the stock gift, even though the original stock certificate had not yet been returned to E & S. Once the original stock certificate and the signed stock power were returned, E & S would attach the stock power and stock certificate to the corresponding stock stub in one of the maroon books.
Consistent with the above-described procedure, and in accordance with Matthew's request, E & S sent a letter addressed to Matthew, dated July 6, 1995, attached to which was an unsigned stock power and four unsigned stock certificates. Bitzes testified that although the date on the stock certificates and the stock power was February 2, 1995, neither the stock power nor the certificates were in existence on that date, but were actually prepared by her on July 6, 1995. Bitzes further testified that although she had not yet received Harvey's original stock certificates, she marked "cancelled" on the stock stubs in the maroon books.
The July 6, 1995, letter explained that the issuance of the four stock certificates had been noted in "the stock record book" (the four maroon books). The letter also directed Harvey to return his original stock certificate so that it could be canceled. It was necessary that Harvey's original stock certificate be returned and canceled because Harvey's original certificate was the source from which he was going to be giving his sons their gifts of stock. The letter further instructed Harvey to sign and return the enclosed stock power. The stock power stated:
FOR VALUE RECEIVED, the undersigned hereby assigns and transfers by gift unto Matthew D. Ferer 11,764 shares, Aaron M. Ferer 11,764 shares and Whitney H. Ferer 11,764 shares of the common capital stock of Aaron Ferer & Sons Co., a Nebraska corporation, standing in the name of Harvey D. Ferer on the books of said corporation represented by certificate No. 0460. The undersigned does hereby irrevocably constitute and appoint the Secretary of the corporation as attorney to transfer the stock on the books of the corporation with full power of substitution in the premises.
Dated this 2nd day of February, 1995
__________________________________
Harvey D. Ferer
Matthew received the unsigned stock certificates, showed them to Harvey, and then, pursuant to Harvey's instructions, acquired the necessary signatures on the stock certificates and locked them in the company safe.
In approximately 1993, Aaron began expressing his dissatisfaction with his employment at AFSCO. During this period of time, Aaron frequently voiced his complaints and his desire to leave the company in the presence of Harvey, Matthew, and Whitney. On September 27, 1995, Aaron terminated his employment with AFSCO.
In late September or early October 1995, Matthew and Harvey again met with Sederstrom. Both Sederstrom and Matthew testified that during this meeting, Harvey specifically told Sederstrom that he was not going to be making any gifts of stock to Aaron for 1995 because Aaron no longer worked for AFSCO. Sederstrom told Harvey that if he was not going to be giving Aaron the gift of stock, then Harvey needed to return to E & S his original stock certificate and the new stock certificates and stock power that had been sent to him. Harvey told Sederstrom that he would return these items to E & S.
Matthew testified that in late 1995 or early 1996, Harvey told him and Whitney that Aaron would not be receiving a stock gift for 1995 and that Matthew should return the stock certificate that had been drawn up in Aaron's name to E & S. Accordingly, on January 17, 1996, Matthew sent to E & S the certificate and a letter requesting that the certificate be canceled and reissued in Harvey's name. The letter explained that the certificate should be canceled and reissued, as the stock had not been gifted to Aaron because Aaron had left the company. Upon receiving the stock certificate and the letter, E & S stamped "cancelled" on the certificate, placed it in one of the four maroon books, and reissued the shares back to Harvey.
The record is clear that the stock certificate was returned to E & S on January 17, 1996. However, the record is less clear as to when Harvey's stock power and original stock certificate were returned to E & S. Bitzes testified that she did not know when these items were eventually returned, but testified that when they were returned, they were placed in the maroon books. In this regard, Sederstrom testified that although he did not know the exact date that the stock power and original stock certificate were returned, the items could have come back at anytime between October 1995, when he told Harvey to return the items, and January 17, 1996, the date of Matthew's letter requesting the cancellation of the certificate in Aaron's name.
A substantial amount of evidence was presented at trial relating to Harvey's alleged desire that AFSCO stock be held only by family members who are actively employed in the business. Matthew testified that from 1986 to 1995, Harvey had expressed at various times to Aaron, Matthew, and Whitney that the only way they would receive stock from Harvey would be if they were actively employed and involved in the company. Aaron testified that he was aware of Harvey's "general philosophy" that if one of them was not actively working at the company, they would not get a gift of stock, but claims that this was not "a hard and fast rule."
Harvey's will, which was executed in 1994, provided that Aaron would not inherit...
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...intention to make a gift is not clearly manifested, subsequent acts may aid in clarifying that intention.” Ferer v. Aaron Ferer & Sons Co., 273 Neb. 701, 732 N.W.2d 667, 674 (2007) ; see In re Chapple's Estate, 332 Pa. 168, 2 A.2d 719, 721 (1938) ; see also 38A C.J.S. Gifts § 16 at 203 (200......
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