Stipe v. First Nat. Bank of Portland
| Decision Date | 06 September 1956 |
| Citation | 301 P.2d 175,208 Or. 251 |
| Parties | Arthur C. STIPE, Maxine Jean Fisher, Phyllis Mary Olsen, Respondents, v. FIRST NATIONAL BANK OF PORTLAND, a National Banking Corporation, executor of the Estate of Arthur Stipe, deceased; Harry Pierce Beach, a minor; Sharon Olsen, a minor; Allen Stipe, a minor; Patricia Stipe, a minor, and James R. Stipe, a minor, Appellants, and Evelyn M. Mackey; Ella Russell; Nettie Stipe, Defendants. |
| Court | Oregon Supreme Court |
P. A. Schwabe, Portland, argued the cause for appellants. On the brief were Maurice D. Sussman and Haas & Schwabe, Portland, for First National Bank of Portland, and DeArmond, Goodrich, Foley & Gray, Bend, for A. C. Goodrich, guardian ad litem for appellants Harry Pierce Beach, Sharon Olsen, Allen Stipe, Patricia Stipe, and James R. Stipe.
Owen M. Panner, Bend, argued the cause for respondents. On the brief were McKay & Panner, Bend.
Before WARNER, C. J., and TOOZE, LUSK, BRAND and PERRY, JJ.
This is a suit brought to compel the First National Bank of Portland, as Executor of the Estate of Arthur Stipe, deceased, to deliver to plaintiffs certain shares of the capital stock of the Bend Furniture Company, on Oregon corporation, hereinafter referred to as the 'Company', and for a further decree declaring plaintiffs to be equal owners of said stock free and clear of any interest of the defendants herein. From a judgment in favor of plaintiffs in accordance with the prayer of their complaint the bank and other defendants appeal.
The plaintiffs, Arthur C. (Bud) Stipe, Maxine Jean Fisher and Phyllis Mary Olsen, are the children of the late Arthur Stipe and of his former wife, Nettie Stipe. Because of the similarity of the father's name with that of his son, we shall hereafter refer to Mr. Stipe, deceased, as 'Arthur' and to his son when necessary as 'Bud', a name by which he was commonly known.
Arthur died testate November 22, 1953, leaving a substantial estate. He nominated the defendant First National Bank of Portland, hereinafter called the 'Bank', as executor of his estate. In this capacity the Bank is now in possession of the shares of Company stock which are the subject matter of this litigation.
The five minor defendants, Harry Pierce Beach, Sharon Olsen, Allen Stipe, Patricia Stipe and James R. Stipe, are children of one or the other of the plaintiffs and hence grandchildren of Arthur Stipe and Nettie Stipe and legatees and devisees under their grandfather's last will and testament.
The defendants Evelyn M. Mackey, Ella Russell and Nettie Stipe, all of whom defaulted below, are likewise beneficiaries under Arthur's will.
It is the contention of plaintiffs that in 1934 Arthur and Nettie Stipe entered into a property settlement agreement as an incident to their then pending suit for divorce; that as a part of this settlement, Arthur then and there executed a trust declaration whereby he transferred to Frank S. McGarvey, President of the Lumbermen's National Bank of Bend, Oregon, 105 shares of the capital stock of the Bend Furniture Company, in trust, for the use and benefit of his three children, who are the plaintiffs herein.
The plaintiffs represent that their Exhibit No. 2 is an exact copy of the original trust declaration executed by their father in 1934. The exhibit tendered and admitted is a typewritten copy upon which Arthur's attorney, Jay H. Upton, now deceased, had inserted in pencil the signatures and all other matter appearing in longhand on the original document and is as follows:
'Trust Agreement
'Know All Men By These Presents, that I, Arthur Stipe, the owner of 105 shares of the capital stock of the Bend Furniture Company, a corporation, do hereby sell, assign, transfer and set over unto Frank S. McGarvey, President of the Lumbermens National Bank of Bend, Oregon, and to his successor in such office, as Trustee, 105 shares of this capital stock of the Bend Furniture Company, a corporation, for the use and benefit of the three minor children of Nettie Stipe and Arthur Stipe, viz: Maxine Jean Stipe, now aged 19 years; Arthur Cole Stipe, now aged 16 years; and Phyllis Mary Stipe, now aged 13 years.
'To Have And To Hold The Same in Trust for the use and benefit of the said Maxine Jean Stipe, Arthur Cole Stipe, and Phyllis Mary Stipe, in equal portions, under the following terms and conditions, to wit:
'Upon the death of this assignor, Arthur Stipe, the said Trustee shall surrender the certificate of stock for the 105 shares to said Corporation and shall cause to be issued to said three children a Certificate of stock of 35 shares each, but if at said time, any of said children have died and have left no children, then the 105 shares shall be divided to the one or more of said three children remaining alive, but if either of said children have died leaving children of their own, then the portion which said child would have received, if alive, shall become the property of the children of said deceased child, and said grandchildren of the said Arthur Stipe, provided their parent is dead, shall be entitled to take the number of shares of stock which their parent would have received had he or she been alive at the time of the death of the said Arthur Stipe and this transfer is subject to the further reservation and condition that during the lifetime of the said Arthur Stipe, he shall be entitled to any and all dividends that may accrue or be declared upon the same, and that said beneficiaries shall have no right to receive any dividends from the earnings of said stock during the life of the said Arthur Stipe, and the said Arthur Stipe also reserves the right to vote said stock and all thereof at any and all meetings of the stockholders of said corporation, and that said Trustee has, upon the execution of this Assignment, executed and delivered to the said Arthur Stipe an irrevocable Power of Attorney authorizing and giving to the said Arthur Stipe the sole right to vote said stock at any and all meetings of the stockholders of said corporation.
'In event the said Bend Furniture Company, a corporation, should sell a major part of its holdings or assets and a capital dividend should be declared for that or any other reason, then the proceeds of said capital dividend shall be paid to the Trustee and the said Trustee shall hold and invest the same paying the income therefrom to the said Arthur Stipe, during his lifetime, and at his death, pay the proceeds of said capital dividend or dividends to the beneficiaries as their interest may appear.
'In Witness Whereof, the said Arthur Stipe has hereunto set his hand and affixed his seal this 27th day of June, 1934.
'[Signed] Arthur Stipe
State Of Oregon
County of Deschutes}
'Be It Remembered, that on this 27th day of June, 1934, before me, the undersigned, a Notary Public in and for said County and State, personally appeared the within named Arthur Stipe, who is known to me to be the identical individual described in and who executed the within instrument and acknowledged to me that he executed the same freely and voluntarily.
'In Witness Whereof, I have hereunto set my hand and official seal the day and year last above written.
'[Signed] Jay H. Upton
'Notary Public for Oregon
'My Commission expires:
Mar. 19, 1937'
Plaintiffs further claim that since 1934 the original trust res 105 shares has been increased by 674.94 shares because of certain stock dividends declared thereon. They argue that as beneficiaries of the trust, they are the owners in equal amounts of the 779.94 shares now held by the Bank and ever since their father's death have been entitled to the possession of said shares.
At all times subsequent to June 27, 1934, to Arthur's death, he was a dominant figure in the Company's business.
The Company's stock certificate books show that two days after the alleged trust agreement was made, i. e., June 29, 1934, Arthur transferred 105 shares of Company stock to 'F. S. McGarvey, President, Lumbermen's National Bank, Trustee'. This transfer was evidenced by stock certificate No. 20. The same record further shows that on December 30, 1936, Certificate No. 20 was transferred by McGarvey, as said trustee, to 'A. Stipe'. Stipe in turn had Certificate No. 22 issued to himself for the 105 shares. Certificate No. 22 was in Arthur's possession at the time of his death as were certificates evidencing ownership of 674.94 additional shares which had been issued by the Company at various times as stock and optional dividends on the original 105 shares.
If Arthur did in fact create a trust in 1934 as is claimed by plaintiffs, then it is obvious that in order to legally effectuate a return of the 105 shares to himself in December, 1936, the decedent had to revoke the trust agreement, if it was in fact revocable. On the other hand, if it was not revocable, then the trust corpus and all accruals thereon are still impressed with the terms of the trust and must be delivered by the Bank to the plaintiffs.
The appealing defendants contend:
(1) That there is no evidence that the alleged trust agreement had been effectively executed and performed. This they premise upon a claim of improper admission of secondary evidence in the absence of the production of the original of the trust instrument and a representation that Arthur never parted with the ownership of the 105 shares mentioned in the trust agreement; and
(2) That if the trust agreement is held to have been effectively executed, there is no evidence that it continued in effect to and was in force at the time of Arthur's death in November, 1953. This view has its origin in defendants' claim that the trust was revocable at will and the possession by Arthur of the 105 shares at the time of his death was the result of such a revocation; and
(3) That if it be found that the trust was in full force and effect at the time of Arthur's death, it applied to no more than the original 105 shares...
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