Innes v. Potter

• Decision Date: 09 July 1915
• Docket Number: No. 19357[230].,19357[230].
• Citation: 130 Minn. 320,153 N.W. 604
• Parties: INNES v. POTTER.
• Court: Minnesota Supreme Court

130 Minn. 320

153 N.W. 604

INNES

v.POTTER.

No. 19357[230].

Supreme Court of Minnesota.

July 9, 1915.

Appeal from District Court, Aitkin County; B. F. Wright, Judge.

Action by Irvine Innes, as administrator with will annexed of the estate of Warren Potter, deceased, against Helen Marcia Potter. From judgment for defendant, plaintiff appeals. Affirmed.

Syllabus by the Court

Defendant's father, now deceased, delivered to one Casey an envelope containing a certificate of corporation stock with an assignment to defendant indorsed thereon, with directions in writing to Casey to deliver the certificate to defendant ‘only in case of’ his death. After his death Casey delivered the certificate to defendant.

Where a grantor executes a deed of real estate and deposits it with a third person to be delivered by him to the grantee after death of the grantor, and reserves to himself no right to control or recall the instrument, the transaction is a valid one and full and complete title is vested in the grantee after death of the grantor.

Similar rules apply to personal property, and the owner of personal property may make a valid gift thereof with the right of enjoyment in the donee postponed until the death of the donor, if the subject of the gift be delivered to a third person with instructions to deliver it to the donee upon the donor's death, and if the donor parts with all control over it, reserves no right to recall, and intends a final disposition of the property given.

The gift in this case is within the rule. The test of a ‘gift,’ as distinguished from a will, is that, in case of a gift some interest vests at once in right. The gift in this case was not testamentary in character and it was valid.

The direction to the trustee to deliver to the donee ‘only in case of the death’ of the donor is not decisive of testamentary character. Nor is the statement of the donor that he wants to ‘leave’ certain property to the donee. Fryberger, Fulton & Spear, of Duluth, for appellant.

Thwing & Rossman, of Grand Rapids, for respondent.

HALLAM, J.

[1] 1. Warren Potter was the owner of 1,370 shares of stock, of the par value of $100 a share, in the Potter-Casey Company, a business corporation of Aitkin county. In 1910 he was a man advanced in years. He had made a will some years before. In the meantime his business associate, Mr. Casey, had died and his estate had been probated. There was ‘considerable noise’ about the amount of his property, and a substantial inheritance tax had been paid. On December 27, 1910, after some talk with J. A. Casey, son of his former associate, in which deceased stated that he wanted to leave a certain amount of property to his daughter, he took a certificate of 1,000 shares of stock of the Potter-Casey Company, indorsed upon it an absolute assignment to the defendant, and wrote a letter addressed to her in which he stated that he had transferred this stock to her, and making certain requests. The certificate, with the indorsement upon it, and this letter he inclosed in an envelope, securely sealed it, and indorsed thereon the following:

‘The Certificate No. 1 for 1,000 m shares to be sent by Registered letter to H. Marcia Potter if not Present or Handed to her, taking her Receipt for the same. _____. These certificates to be held by J. A. Casey and delivered to the above parties only in case of the death of

‘Warren Potter.’

This he then delivered to J. A. Casey, and Casey held it until Mr. Potter's death. Deceased never mentioned the matter to Casey again, and never exercised nor attempted to exercise any control over the stock. Warren Potter died in February, 1914. After his death, J. A. Casey delivered the envelope and its contents to the defendant. She opened the envelope and took therefrom the letter and the certificate. Potter's will was admitted to probate, and plaintiff was appointed administrator with the will annexed. He commenced this action to recover possession of the certificate of stock or its value. The trial court found that defendant owned the stock, that deceased intended to and did relinquish all control over the stock and all rights in it, that he intended to and did give the stock to defendant, and intended that the gift take effect at once on the delivery to Casey, but that the right of defendant to the beneficial enjoyment thereof was postponed until the death of deceased.

[2] 2. The first question is this: Is it competent for a person to make a gift of personal property by delivery of the subject of the gift to a trustee where delivery by the trustee to the donee and beneficial enjoyment by the donee are postponed until the death of the donor?

As to deeds of real estate the law in this state is well settled. Where a grantor executes a deed and deposits it with a third person, to be delivered by him to the grantee after the death of the grantor, and reserves to himself no right to control or recall the instrument, the transaction is a valid one and full and complete title is vested in the grantee after death of the grantor. Haeg v. Haeg, 53 Minn. 33, 55 N. W. 1114;Wicklund v. Lindquist, 102 Minn. 321, 113 N. W. 631;Dickson v. Miller, 124 Minn. 346, 145 N. W. 112. This is true even though the enjoyment of the estate granted is postponed until the death of the grantor, and even though the deed thereof expressly reserves a life estate in the grantor (Ekblaw v. Nelson, 124 Minn. 335, 144 N. W. 1094), and even though the grant is subject to the contingency that the grantee survive the grantor, or to any contingency, as long as it is one over which the grantor has no control (Thomas v. Williams, 105 Minn. 88, 117 N. W. 155).

[3] 3. Anciently there was no such thing recognized in law as an expectant estate in personal property. This was because of the perishable nature of such property, its movable characteristics, and its insignificance. An exception was early made in favor of chattels real. Manning's Case, 8 Co. (Eng.) 94b; Lampet's Case, 10 Co. (Eng.) 46b. But in that case only as to interests created by will, and when merely the use of the chattel was given to the first legatee. 2 Bl. Com. 398. The exception was later extended from chattels real to chattels personal under like restrictions. 2 Bl. Com. 398; 1 Eq. Cas. Abr. (Eng.) 360. These limitations one by one dropped away. In chancery before the close of the seventeenth century it was settled that a bequest of an expectant estate in goods to another was good, whether the goods or the use of the goods were given to the first legatee. Hyde v. Parrat, 1 P. Wms. (Eng.) 1. And in recent times it has not been necessary in England that limitations of this sort be made by will. They are equally good when made by deed of trust. Child v. Baylie, Cro. J. (Eng.) 459; 2 Bl. Com. 398.

Perishable chattels are said to constitute an exception to the rule, particularly chattels the use of which consists in their consumption. But the reason given is one of construction, the theory being that the gift of such articles for life must have been intended as an absolute gift, since one could not use without consuming the property. Andrew v. Andrew, 1 Col. 686; Randall v. Russell, 3 Meriv. 190; Evans v. Iglehart, 6 Gill & J. (Md.) 171; Henderson v. Vaulx, 10 Yerg. (Tenn.) 30;German v. German, 27 Pa. 116, 67 Am. Dec. 451.

The doctrine that personal property may be limited by way of remainder after a life interest created at the same time was early recognized in the United States. 2 Kent, Com. (13th Ed.) *352, 353, and notes; Executors of Moffat v. Strong, 10 Johns. (N. Y.) 12; Langworthy v. Chadwick, 13 Conn. 42. The disposition of the later cases has been to dispense with all fictitious distinctions between transfers of real and personal property and to apply the same rules to both, except where distinctions are founded upon some substantial principle of law or are required by some statutory enactment. In this...