Thomas v. Thomas

• Decision Date: 04 April 1921
• Docket Number: 9587.
• Citation: 197 P. 243,70 Colo. 29
• Parties: THOMAS v. THOMAS.
• Court: Colorado Supreme Court

197 P. 243

70 Colo. 29

THOMAS v. THOMAS.

No. 9587.

Supreme Court of Colorado, En Banc.

April 4, 1921

Error to District Court, City and County of Denver; C. C. Butler Judge.

Action by Lizzie M. Thomas against Theodore H. Thomas. Judgment for plaintiff, and defendant brings error.

Affirmed.

Burke and Denison, JJ., dissenting.

George C. Manly, of Denver, for plaintiff in error.

Edwin W. Hurlbut, of Denver, and Thornton H. Thomas, of Nederland for defendant in error.

TELLER, J.

Defendant in error had judgment in an action to recover from plaintiff in error the proceeds of a sale of shares in a mining company which stood in her name on the books of the company the certificate for which, however, had been left in a safe used jointly by her husband and the plaintiff in error.

The substance of the errors assigned is that the finding and judgment of the court are contrary to the law and the evidence.

The plaintiff's cause of action is that defendant, without authority therefor, sold stock which belonged to her and refused to account for the proceeds.

The answer admits that the shares sold formed a part of a block standing in plaintiff's name on the books of the corporation, but alleges that they were transferred to her by her husband for convenience only, he being still the owner. It admits also that the stock in question was transferred to defendant on the books of the corporation, but denies that it was done wrongfully. The other matters of defense were struck out on motion. The only question, then, to be determined, is as to the ownership of the stock sold.

The court adopted special findings of the jury: (1) That plaintiff's husband made her a gift of the stock; (2) that the transfer to her was not colorable merely.

Mr Drumm, who bought one-half of the shares in question testified that defendant told him the shares belonged to plaintiff (abstract, p. 36). Defendant wrote to his brother (folio 373, quoted in opinion of trial court, p. 29, Supp Ab.) that he told Drumm that plaintiff wished to sell 1,000 shares; that, if Drumm would take 500 shares, he, defendant, would take 500 shares, 'and he bit and the deal was made.'

It is not disputed that the stock was transferred to plaintiff on the books of the company by order of her husband the original owner of it. Defendant being aware of the transfer and the purpose for which it was made, and having, according to his own written statement, sold the stock as plaintiff's, with what propriety can he now assert that, as a matter of law, it was not hers? Was not the trial court fully justified in holding that, as against defendant, at least, the stock belonged to plaintiff?

But, regardless of defendant's admissions, the judgment is right; the undisputed evidence showing a completed gift. The essentials of a gift inter vivos are: (1) A clear and unmistakable intention to make the gift; and (2) the consummation of such intention by those acts which the law requires to divest the donor, and invest the donee with the right of property. 20 Cyc. 1194, 1195. In this case the intent of the donor is established both by his testimony on the trial and his order to transfer the shares. As has often been stated, a gift is completed when the donor transfers to the donee dominion over the property. Such transfer must be according to the nature of the res. It may be actual, or constructive and symbolical. Brown v. Brown's Adm'r, 43 Ky. (4 B. Mon.) 535; Pennington v. Gittings, 2 Gill & J. (Md.) 208; Pitts v. Mangum, 2 Bailey (S. C.) 588; Gannon v. McGuire, 160 N.Y. 476, 55 N.E. 7, 73 Am.St.Rep. 694. A delivery of possession, with intent to pass a present right of property, is a completed gift. Young v. Young, 80 N.Y. 422, 36 Am.Rep. 634.

The question being as to what acts shall establish a passing of title, there is, and in the nature of things can be, no difference between the evidence necessary to prove title in case of a sale and in case of a gift.

In a sale title to shares passes by transfer on the corporation's books, and the certificate evidencing ownership is not necessary to the ownership. Waterworks Co. v. Holme, 49 Colo. 412-428, 113 P. 501. When shares have been transferred on the corporation books the title has passed, and the transferee is a shareholder. Valleyview Co. v. Whitehead, 66 Colo. 237, 180 P. 737. This is the general rule.

In Colton v. Williams, 65 Ill.App. 466, a husband holding shares of stock as an heir of his first wife notified the corporation which issued the stock that he had given the shares to his second wife. Her name being identical with that of the first wife, it was considered unnecessary to make a transfer on the books. The husband having died, the first wife's certificate being found among his papers, his executors claimed the shares.

In affirming the judgment which sustained the gift the court says:

'The title to stock is created by registry in the books of the corporation. The certificate is not the stock itself, but only evidence of the ownership of the stock. It has value only as such evidence, and, apart from the shares which it represents, it is utterly worthless. It is not essential, and a registered stockholder may exercise all his privileges without it. * * * Cook on Stock and Stockholders, § 10; Beach on Private Corporations, § 972. * * * Whether the findings of the certificate in that place [deceased's safe] was sufficient to justify a conclusion that it had never been delivered, and overcome his statement that he had given the stock to her, we deem it needless to inquire, since the delivery of the certificate was not essential to the transfer.'

That the rule which applies to sales of shares should apply to gifts of shares, as above asserted, is conclusively established by the case of Robert's Appeal, 85 Pa. 84. A gift of $100,000 worth of stock in the Pennsylvania Railroad Company had been made by a man to his niece, the stock transferred upon the company's books, and the certificates retained by the donor. They were found in an envelope in his safe after his decease. The stock was claimed by the executors of the donor's will. The Pennsylvania Supreme Court held that the transfer on the books was a complete conveyance of the shares to the donee, and that the retention of the certificates by the donor was immaterial, inasmuch as he could not change the ownership of the shares evidenced by their registry, without consent of the donee. The court said:

'It is to be observed at the outset that here was a complete, perfect, and absolute transfer of the legal title to Miss Foster. The shares were transferred to her on the books of the company, by direction of the owner, and new certificates were taken out in her name. The plaintiff stands in no need of legal or equitable remedies to

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