Kintzinger v. Millin

• Decision Date: 18 September 1962
• Docket Number: No. 50654,50654
• Citation: 254 Iowa 173,117 N.W.2d 68
• Parties: David N. KINTZINGER, and James W. Millin, Sr., Executors of the Estate of LaVern G. Millin, Deceased, and James W. Millin, Sr., Individually, Appellants, v. Bernice P. MILLIN, Chloe M. Calkins and Willard D. Calkins, Co-Executor of the Estate of LaVern G. Millin, Deceased, Appellees.
• Court: Iowa Supreme Court

Page 68

117 N.W.2d 68

254 Iowa 173

David N. KINTZINGER, and James W. Millin, Sr., Executors of the Estate of LaVern G. Millin, Deceased, and James W. Millin, Sr., Individually, Appellants, v.Bernice P. MILLIN, Chloe M. Calkins and Willard D. Calkins, Co-Executor of the Estate of LaVern G. Millin, Deceased, Appellees.

No. 50654.

Supreme Court of Iowa.

Sept. 18, 1962.

Kintzinger & Kintzinger, Dubuque, and Zastrow, Noah & Smith, Charles City, for appellants.

O'Connor, Thomas, McDermott & Wright, Dubuque, and William Chatterton, Madison, Wis., for appellees.

GARFIELD, Chief Justice.

This is a probate proceeding involving the validity of testator's inter vivos gift of 3700 shares of corporate stock to his son, James W. Millin, one of three co-executors under the will of LaVern G. Millin, deceased.Following trial to the court it was decreed the gift was invalid because the stock was not delivered to the donee.He, as an executor and individually, together with David W. Kintzinger, another executor, has appealed.

The issues arose upon an application of Kintzinger and James W. Millin, executors, and Millin, individually, for authority to sell preferred stock of Western Printing & Lithographing Co.(herein called 'Western' or 'the company') in order to pay debts, taxes and costs of administration.The largest of these items is the federal estate tax.Bernice P. Millin, testator's divorced wife to whom the preferred stock was bequeathed, Chloe M. Calkins, daughter of Bernice and testator (she is also a sister of James W. Millin), and Willard D. Calkins, Chloe's husband, as the third coexecutor, filed objections to the application.They alleged the 3700 shares of Western common stock was rightfully part of testator's residuary estate and it was chargeable with the liabilities of the estate before resort could be had to the preferred stock bequeathed to Bernice.

By reply to the above objections, applicants-appellants alleged in part that testator did not own the 3700 shares of common stock when he died October 21, 1959, but had made a completed gift of it to his son James W. in January of that year.

Most of the evidence offered on the trial consisted of depositions of Western's officers in an attempt to establish there were valid restrictions against ownership of the stock by nonemployees.Testator was a retired employee of Western but his son James was never connected with it.The trial court, as indicated, placed his decision on the sole ground the gift to James failed for want of delivery of the stock and found it unnecessary to decide the validity of the claimed restrictions on its transfer.

I.On January 8, 1959, testator LaVern G. Millin and his son James went to a bank in Dubuque, where LaVern lived, and saw Mr. Peryon, vice-president.Testator had with him an envelope containing 17 certificates representing 3700 shares of Western common stock.He asked Peryon to witness his signature on the certificates and send them to Western at Racine, Wisconsin, so they might be transferred to his son.Testator signed the transfer form on each certificate, leaving blank the name of the transferee, and Peryon signed each of them as a guarantor of testator's signature.Testator asked the banker to transfer the certificates to James and instruct Western to mail them to his son.

Peryon wrote and signed a letter on the bank's letterhead to Western as testator directed.The latter read it and was given a copy.He was satisfied with the letter which, with the certificates, was mailed to Western at Racine the same day.The letter read, 'We are enclosing herewith 3700 shares of stock issued in the names of L. G. Millin and LaVern G. Millin, who are one and the same person.Please reissue these shares in the name of James W. Millin and forward same to him at 1069 Lombard Ave., St. Paul, 5, Minnesota.We understand this transfer has already been discussed with you.'

Mr. Benstead, a top officer of Western, wrote testator in Dubuque on January 12, acknowledging receipt of the bank's letter and the stock certificates, declining to transfer the stock and asserting that when testator was in Racine the preceding week it was understood testator intended to assign certain of his common stock to a trustee with the understanding Western's treasurer would vote the stock and it would be sold back to Western after testator's death.'When such a trust * * * is completed, we will be glad to transfer your stock, but to transfer it pursuant to the letter from the bank is, first contrary to our agreement with you and, second, the request comes from a party not in interest.We would be disposed to return your certificates with this letter but inasmuch as they are endorsed and in negotiable form, we will hold them in safe keeping, awaiting your advice as to their disposition.'

On January 17, 1959, Mr. Kintzinger, as attorney for testator and his son James, wrote Benstead.Essential parts of the letter are: 'Mr. Millin wants his said stock transferred to his son, James W. Millin sr., and enclosed herewith as your authority for completing said transfer is a separate Assignment of Stock, duly executed by Mr. Millin, which together with the assignments already signed by him, should give you ample legal authority to complete the assignment immediately. * * *

'Mr. Millin does not desire to establish a trust as proposed by you at the present time, nor does he or his son propose to work against the interests of you or the company in any way.

'If there is any legal reason why this transfer should not be completed promptly by you, please advise me the details of same.If there is some agreement, as you speak of in your letter, please let me know all of the details.Mr. Millin does not understand that he agreed to set up a trust as suggested by you, but his understanding is that he was merely discussing the matter with you and that he did not make any binding agreement supported by consideration.

'Please issue the new stock certificate promptly and send it to me as attorney for James W. Millin, Sr.'

Enclosed with Kintzinger's letter to Benstead was an 'Assignment of Stock,' dated January 16, 1959, signed by LaVern G. Millin in Kintzinger's presence and with his signature guaranteed by the Dubuque bank previously referred to.Body of the assignment reads: 'FOR VALUE RECEIVED, Lavern G. Millin, also known as L. G. Millin, does hereby sell, assign and transfer unto James W. MillinSr., 1069 Lombard Ave., St. Paul 5, Minnesota thirty-seven hundred (3,700) shares of Common Stock of the Western Printing and Lithographing Co.(Racine, Wisconsin) standing in my name on the books of said corporation represented by various Stock Certificates which have recently been forwarded to the corporation for transfer, and I do hereby irrevocably constitute and appoint _____ attorney to transfer the said stock on the books of the within named Company with full power of substitution in the premises.'

On January 29 Benstead wrote Kintzinger a letter, sending a copy to testator, his son and daughter.The letter is too long to reproduce here.It expresses surprise testator would attempt to transfer his stock to a nonemployee of the company without giving an employee the right to vote the stock and again urges creation of a trust 'in a manner consistent with the wishes of the company as to the ultimate disposition of the stock.'

Benstead testified in his deposition it was a condition of owning the stock that it would be offered back to the company if the employee became employed by a competing company and that upon the employee's death it would be offered back to Western in a manner suitable to the employee.There is no claim testator was ever employed by a competing company.There is other evidence the stock was to be offered back to Western if the owner merely left its employ before reaching retirement age.There was no restriction on transfer of the stock in the articles of incorporation or bylaws or on the stock certificates themselves prior to July 26, 1960, when the articles were amended to provide for different classes of stock and changing the corporate name to Western Publishing Co., Inc.There was no written agreement between the company and testator or other stockholder restricting transfer of the stock.

The week before testator and his son went to the Dubuque bank on January 8they visited the company office in Racine.Benstead testified testator told him then he was not going to live long and had 'enough stock here to take care of my wife and children and I would like to get the thing settled.I want to have Jim act for me in the matter.'(After he and Bernice were divorced testator married Nancy Elizabeth who survived as his widow.)According to Benstead he told testator he might accomplish his purpose by setting up trusts for his heirs that would carry out his wishes and not violate the conditions under which he owned the stock, Benstead showed him a trust agreement he had made regrading his own stock and testator said that was satisfactory to him as a means of accomplishing his purpose.

After testator's stock certificates were sent the company three quarterly dividends on it were declared and paid to testator before he died October 21, 1959.

On July 13, 1960, the three executors, the widow, the divorced wife, the son and daughter, who include all the heirs and beneficiaries under the will, signed a written consent that the 3700 shares be forthwith transferred absolutely and delivered to the son James 'in accordance with the assignment of said shares made to (him) by LaVern G. Millin under date of January 16, 1959.'James, in turn, assigned 1110 shares to his sisterChloe M. Calkins.The company then (July, 1960) transferred 2590 shares to James and 1110 to Chloe.

The attitude of the company toward transfer of the stock to James prior to July, 1960, was thus expressed by Mr. Benstead, 'We object to James owning stock, not as an individual, but...