Frazier v. Okla. Gas & Elec. Co.

• Decision Date: 22 September 1936
• Docket Number: Case Number: 25214
• Citation: 63 P.2d 11,178 Okla. 512,1936 OK 524
• Parties: FRAZIER et al. v. OKLAHOMA GAS & ELECTRIC CO.
• Court: Oklahoma Supreme Court

1936 OK 524

63 P.2d 11

178 Okla. 512

FRAZIER et al. v. OKLAHOMA GAS & ELECTRIC CO.

Case Number: 25214

Supreme Court of Oklahoma

Decided: September 22, 1936

Syllabus

¶0 1. APPEAL AND ERROR - Conclusiveness of Judgment and Findings in Jury-Waived Case.

In a law case tried before the court without the intervention of a jury, the judgment and findings of the court have the same force and effect as the verdict of a jury, and will not be disturbed by this court where there is any competent evidence reasonably supporting it.

2. GIFTS - Requisites of Valid Gift Inter Vivos.

The requisites of a valid gift inter vivos are: First, a donative intent on the part of the donor; second, an actual delivery of the subject-matter of the gift unless it be a chose in action, like a certificate of shares of stock or evidence of indebtedness, in which case the delivery must be of that variety of which it is most capable; and, third, the donor must strip himself of all ownership and dominion over the subject-matter of the gift.

3. CORPORATIONS - Stock Certificate Only Prima Facie Evidence of Ownership in Person to Whom Issued.

A stock certificate is but prima facie evidence of ownership in the person to whom issued, and is not conclusive, and the facts as to the true ownership may be shown, unless estoppel prevents.

4. SAME - GIFTS - Evidence Held not to Establish Completed Gift of Corporate Stock Inter Vivos by Parents to Children.

Record examined, and held, that the determination by the trial court that plaintiffs have failed to establish a completed gift, inter vivos, of corporate stock, is reasonably supported by competent evidence.

Appeal from District Court, Oklahoma County; Lucius Babcock, Judge.

Action by Emma Thelma Frazier et al., minors, by B.C. Brigham, guardian, et al., against the Oklahoma Gas & Electric Company. Judgment for defendant, and plaintiffs appeal. Affirmed.

Louis A. Reilly, for plaintiffs in error.

R.M. Campbell, Rainey, Flynn, Green & Anderson, and M.M. Gibson, for defendant in error.

OSBORN, V. C. J.

¶1 This is an appeal from a judgment of the district court of Oklahoma county in a consolidated action; the plaintiffs in error, hereinafter referred to as plaintiffs, are as follows: Emma Thelma Frazier, Ivan Emit Frazier, George Hubert Frazier, minors, by B.C. Brigham, guardian of the estates of such minors, B.C. Brigham, as administrator of the estate of Joe Jasper Frazier, a deceased infant, and Colbert Curtis Frazier, a minor who reached his majority pending the action. Separate actions were instituted by each of the plaintiffs against the Oklahoma Gas & Electric Company, hereinafter referred to as defendant, in which it was alleged that plaintiffs were the owners of certificates of stock issued by defendant in February and May, 1927, which stock had been given to them by their parents, G.W. Frazier and Mrs. Louella Frazier. It was alleged that the defendant company had illegally canceled said stock certificates and reissued said shares of stock to persons other than the plaintiffs. Plaintiffs prayed for a restoration of their rights as stockholders in the defendant corporation or in the alternative for money judgments in the sum of $10,250 each, with interest. Defendant filed a general denial in each of the actions. Upon a showing that the allegations of the pleadings were identical in each of the cases, they were consolidated.

¶2 The cause was tried to the court, and judgment was rendered for defendant, and plaintiffs have appealed.

¶3 G.W. Frazier and his wife, Mrs. Louella Frazier, the parents of plaintiffs, owned an 80-acre farm near Seminole. Oil was discovered on the farm and production started in October, 1926. From that time until production ceased in 1930 the parents of plaintiffs collected in oil royalties a sum in excess of $250,000. As the income began to accumulate, plaintiffs' parents began to purchase stock in the defendant corporation. The purchases were made at intervals during a period from February to May, 1927, and totaled $100,000. Two hundred shares of the par value of $100 per share were purchased and issued in the name of G.W. Frazier. Thereafter a like amount was purchased in the name of Mrs. Louella Frazier; thereafter 100 shares were purchased in the names of each of the six minor children. (No action was filed on behalf of Wiley Earl Frazier, the oldest son.) Stock certificates were issued in the names of each of the children for the stock so purchased, but possession of the certificates was retained by the parents. Dividend checks were issued in the names of the children, but were cashed by the parents and the proceeds used for general family purposes. At the time the stock was purchased the oldest child was 19 years of age, the youngest six years of age. In October, 1927, the parents sold the stock standing in the names of the children by indorsing the names of the children to the respective stock certificates, and with the proceeds of the sale, purchased in the name of each child 100 shares of 7 per cent. cumulative preferred stock of the par value of 100 per share in the Empire Gas & Fuel Company. Certificates of stock wore issued in the names of each of the children. On this transaction a profit of $1,095 was made, but no accounting for said profit was made to the children. The funds were used to pay family expenses. Dividends received upon this stock were likewise retained by the parents, with the exception of certain dividends accruing on the stock in the name of the two oldest children. In May, 1928, the stock of the Empire Gas & Fuel Company standing in the names of the children was sold by the parents and 100 shares of preferred stock in the Liberty Royalty Company was purchased in the names of each of the children. A profit of $2,600 was realized on this transaction, which amount was not credited to the children, but was expended by the parents. It appears that no dividends were received on the last-mentioned stock since January, 1930. B.C. Brigham was appointed guardian on May 14, 1931. Petitions were filed in the instant case on September 23, 1931, or approximately four years from the date of the disposal of the stock of the defendant corporation. Plaintiffs, in open court, tendered the stock of the Liberty Royalty Company to the defendant.

¶4 It is the theory of plaintiffs that the purchase of $10,000 worth of stock of the defendant corporation by the parents and the registration of such ownership upon the books of the corporation and the issuance of stock certificates in the names of the respective children, pursuant to a plan of the parents to make a gift of such stock to the children, constituted a valid and irrevocable gift, inter vivos, of such stock without actual manual delivery of such stock to the minors or a formal acceptance of such gift by them at the time. It will not be necessary at this time to refer to other propositions urged by plaintiffs.

¶5 The theory of defense in the trial court and in this court is that the stock was at all times owned by the parents, therefore, plaintiffs cannot complain of its transfer by the parents.

¶6 This is a law action which was tried before the court without the intervention of a jury, and we will not reverse the judgment if there is any competent evidence reasonably supporting it.

¶7 The general rule is that to constitute a valid gift inter vivos there must be a donor competent to make it; freedom of will on his part; an intention on his part to make it; a donee capable of taking the gift; the gift must be complete, and nothing left undone; the property must be delivered by the donor, and accepted by the donee; the gift must go into immediate and absolute effect; the gift must be gratuitous; and the gift must be irrevocable. Harmon v. Kerns, 169 Okla. 290, 36 P.2d 898. See, also, Jonte. v. English, 171 Okla. 291, 40 P.2d 646; In re Widener's Estate, 130 Okla. 154, 265 P. 763; York v. Trigg, 87 Okla. 214, 209 P. 417; Fouts v. Nance, 55 Okla. 266, 155 P. 610, L. R. A. 1916E, 283; Manning v. Maytubby, 42 Okla. 414, 141 P. 781.

¶8 In the case of Bankers' Trust Co. v. Bank of Rockville C. T. Co. (N.J.) 168 A. 733, 89 A. L. R. 697, it is said:

"The requisites of a valid gift inter vivos are: First, a donative intent on the part of the donor; second, an actual delivery of the subject-matter of the gift unless it be a chose in action, like a certificate of shares of stock or evidence of indebtedness, in which case the delivery must be of that variety of which it is most capable; and, third, the donor must strip himself of all ownership and dominion over the subject-matter of the gift." (Citing cases.)

¶9 In the case of In re Kaufman's Estate (Pa.) 127 A. 133, it is said:

" 'To make a valid gift inter vivos there must be a clear, satisfactory, and unmistakable intention of the giver to part with and surrender dominion over the subject of the gift with an intention to invest the donee with the right of disposition beyond recall, accompanied by an irrevocable delivery.' Packer v. Clemson, 269 Pa. 1, 112 A. 107.

"The absolute control must be vested in the donee (Maxler v. Hawk, 233 Pa. 316, 82 A. 251, Ann. Cas. 1913B, 559; Ashman's Estate, 223 Pa. 543, 72 A. 899), and, if all dominion is not divested, the proposed gift is incomplete (Walsh's Estate, 122 Pa. 177, 15 A. 470, 1 L. R. A. 535, 9 Am. St. Rep. 83). There is no presumption of any intention to give (McConville v. Ingham, 268 Pa. 507, 112 A. 85), and the purpose to do so, followed by an actual or constructive delivery, must be shown (Yeager's Estate, 273 Pa. 359, 117 A. 67), and the burden of proving both of the necessary elements rests on the alleged donee (Maxler v. Hawks, supra; King v. King, 273 Pa. 351, 116 A. 892). The quantum of testimony required is not, however, so great where, as here, the relation of parent and child exists. Northern Trust Co. v. Huber, 274 Pa. 329, 118 A. 217;

...