First Nat. Bank Of Richmond v. Holland

• Decision Date: 20 June 1901
• Citation: 39 S.E. 126,99 Va. 495
• Parties: FIRST NAT. BANK OF RICHMOND et al. v. HOLLAND.
• Court: Virginia Supreme Court

39 S.E. 126

99 Va. 495

FIRST NAT. BANK OF RICHMOND et al.

v.HOLLAND.

Supreme Court of Appeals of Virginia.

June 20, 1901.

GIFTS—CHOSE IN ACTION—DECLARATION OF HUSBAND.

1. A gift by husband to wife of stock is not affected by the dividends being passed to his credit on the books of the corporation, where the stock continued to stand in his name.

2. Acts 1897-98, p. 753, declaring a husband incompetent to testify for his wife in a proceeding by creditors to avoid a gift, does not prevent declarations of his, made when he was free from debt, inadmissible to prove a gift to his wife at such time.

3. Delivery of a certificate of stock with intent to transfer title by gift is effectual as an equitable assignment, though there is no indorsement and transfer on the books.

4. A certificate of stock, a chose in action, is not within Code, § 2414, declaring that no gift of "goods or chattels" shall be valid unless by deed or will, or unless the donee have actual possession.

Appeal from circuit court of city of Danville.

Suit by Berryman Green, trustee, against creditors of John W. Holland and against Ola F. Holland, to determine right to property as between such creditors and said Ola F. Holland. From a decree for said Ola F. Holland the First National Bank of Richmond and other creditors appeal. Affirmed.

E. E. Bouldin, Blackford, Horsley & Blackford, and Peatross & Harris, for appellants.

Berkeley & Harrison, Christian & Christian, and J. Sidney Smith, for appellee.

HARRISON, J. This controversy is be tween the creditors of John W. Holland, deceased, on the one hand, and Ola F. Holland, the widow of John W. Holland, on the other; and involves the title to 120 shares of the capital stock of the Merchants' Bank of Danville. The appellee, Ola F. Holland, claims the stock by virtue of a parol gift alleged to have been made to her by her husband prior to the creation of the debts, to the payment of which it is now sought to subject the stock. The claim of the appellee is resisted by the creditors upon the ground that no valid gift has been established, and in support of this general proposition several contentions are made, which will be considered in proper order.

It appears that in 1889 John W. Holland, then advanced in life, married the appellee, a comparatively young woman; that he was the owner of 120 shares of the capital stock of the Merchants' Bank of Danville, evidenced by a single certificate, No. 45, and that as early as January, 1892, he had delivered this certificate, without indorsement, to his wife as a gift to her of the 120 shares represented by it. It further appears that at the time of this transaction John W. Holland was a wealthy man, the value of the stock in question being but a small part of his estate, and that he was free from debt either as a principal or as surety for other persons. It further appears that on the 30th of January, 1892, the appellee bought and had delivered at her house an iron safe, with her name inscribed thereon, which she kept in her own room, and in which she placed, on that day, for safe-keeping, the certificate of stock No. 45; that no one but herself had the combination to this safe, or ever thereafter had in possession the stock scrip in question, or exercised any control over it. Some time in 1896 the appellee, having been advised that it was best to have the stock transferred to her on the books of the bank, produced the certificate for the counsel of her husband to write the assignment to her. This was done, and the assignment duly exe-cuted by the husband. It further appears that on January 2, 1897, the original scrip, No. 45, was delivered to the bank, and scrip No. 72, in the name of the appellee, issued in its stead, and her name entered on the books of the bank as a stockholder. Up to January, 1897, the stock had stood in the name of John W. Holland, and he had retained his position as one of the directors of the bank, and all dividends declared on the stock had been passed to his credit with the bank, or a check given him therefor.

It further appears that John W. Holland made his will on February 8, 1892, in which the following disposition was made of the stock in question: "I also give, devise, and bequeath unto my said wife one hundred and twenty shares of the stock of the Merchants' Bank of Danville, Virginia, now held and owned by me;" providing, further on, that the stock should be in no way subject to the control of his personal representatives, except so far as it might be their duty to transfer the same to his wife. This will was prepared by Judge Berryman Green, a learned lawyer, who had been for many years the intimate friend and counsel of the testator. After testifying in clear and positive terms that at the time of the execution of this will the stock certificate in question was in the possession of the appellee, and that John W. Holland then told him he had already given the stock to his wife, Judge Green says, in explanation of the stock being referred to in the will, that Mr. Holland wished to mention specifically all the property he had given to his wife, and that, being entirely solvent and free of debt, he did not desire to make the gift public, because it would involve the surrender of his position as one of the directors in the bank. It further appears that on January 1, 1897, John W. Holland, having become heavily involved as indorser for a brother, executed a deed of trust for the benefit of his creditors to Judge Berryman Green. In that deed the stock in question is thus referred to: "Whatsoever interest, if any, said party of the first part may have in one hundred and twenty shares of the capital stock of the Merchants' Bank of Danville aforesaid. This stock having been given and transferred to his wife, Ola F. Holland, and possession thereof delivered to her long prior to the execution of this deed, the party of the first part makes no claim thereto, and believes that he has no interest therein; but, with a view of protecting her as far as possible in the event of any claim being asserted thereto by creditors, said party of the first part hereby assigns, transfers, and sets over all interest, legal and equitable, whatsoever, that may be in him in said stock, and directs that the same shall not be sold or disposed of unless the other property herein conveyed shall be insufficient to meet and pay off the liabilities secured hereunder."

In the bill filed by Judge Green, trustee asking the court's aid in the administration of his trust, after setting forth the foregoing clause of the deed, he says: "In spite of this plain and explicit disclaimer of the said John W. Holland of any and all interest in the stock as above set forth, some of the creditors secured in said deed have, through their counsel, demanded that your orator, as trustee, shall take immediate charge of the said stock and apply the same to the debts secured, " etc. The foregoing facts are sufficient to make clear the several questions presented by appellants in contesting the validity of appellee's claim.

It is not necessary to pass upon the competency of Mrs. Holland as a witness in her own behalf, for, independently of her testimony, the fact of the gift of the stock as early as January, 1892, and the unqualified possession and exclusive control of the original certificate by Mrs. Holland until the same was surrendered and the new certificate issued in her name, is abundantly established by clear and conclusive evidence.

In the light of the convincing proof of the previous gift of the stock to the wife, the subsequent conduct of Holland in embracing the same property in his will and deed of trust is confirmatory, rather than derogatory, of her prior title. The language of the will, especially in view of Judge Green's explanation of the motive for mentioning the stock, and his testimony that prior to drafting the will the testator had advised him of the previous gift of this stock to his wife, makes it clear, we think, that it was not intended thereby to affect the previous gift, but to facilitate, in case of the testator's death, the due legal transfer of the stock on the books of the bank. The language of the deed of trust, which was made five years after the original gift, is a distinct and emphatic recognition of the gift as made long prior to the execution of the deed, and a disclaimer of all right to or interest in the stock. The language used in conveying the stock can bear no other construction than that, in the event of a successful adverse claim by creditors, the grantor desired to provide how the trustee should handle the stock to secure the best results for his wife. If, however, these instruments, made and executed by John W. Holland, subsequent to the gift of the stock, were susceptible of a different construction, they were his acts, and not the acts of his wife. She was not privy to either the will or the deed, and is not claiming under either, but holds her title superior to both, and her rights cannot be affected thereby. Nor could the payments of dividends to John W. Holland after the stock was given to his wife affect her right. The stock continued to stand in his name until January, 1897, and it was, therefore, natural that the dividends should be passed to his credit on the books of the bank. This may have been done with the wife's knowledge, and without objection on herpart; but, be that as it may, the circumstance is overcome by the clear proof of the gift

It is contended by the appellants that all statements made by the witnesses Berryman Green, W. W. Holland, and Mary S. Fowlkes of admissions made by John W. Holland that he had given the stock to his wife are inadmissible, because, if he were now living, he would be incompetent to testify to the same fact. It must be borne in mind that the statements of John W. Holland, sought to be excluded, were made by him when he was entirely free from debt. The question is, therefore, whether declarations of...