Summary
In Jackson v. Twenty-third Street Railway Co. (88 N.Y. 526) the rule applicable here was stated as follows: "The delivery must be such as to vest the donee with the control and dominion over the property, and to absolutely divest the donor of his dominion and control, and the delivery must be made with the intent to vest the title of the property in the donee.
Summary of this case from Shea v. CrofutOpinion
Argued March 2, 1882
Decided April 11, 1882
Osborn E. Bright for appellant.
Henry Stanton for respondent.
The plaintiff, as executor of the will of Sidney A. Youmans, deceased, brought this action to compel the defendant to issue to him thirty shares of its capital stock, which the complaint alleged his testator Youmans, in his life-time, had purchased of the defendant. The defendant denied that Youmans had purchased the stock, and alleged that the stock was the property of Jacob Sharp. It was undisputed upon the trial that Sharp paid for the stock, but the claim of the plaintiff was that Sharp had given the stock to Youmans, and the sole controversy of law and fact upon the trial was whether a legal and valid gift of the stock had been made as claimed. The undisputed facts show that Youmans married a niece of Sharp, and he and his wife, such niece, lived in the family of Sharp and adopted a child in whom Sharp took a special interest. Youmans never paid a cent for the stock to Sharp or the company. At the time Sharp paid for it, on the 11th day of July, 1872, the treasurer of the company issued a receipt as follows: "Received from Mr. Sidney Youmans $2,250, being in full for thirty shares of the capital stock of the Twenty-third Street Railway Company." This receipt found its way into the possession of Youmans. It does not appear how it got there; there is no evidence and I think no inference that it was delivered to him by Sharp. It was probably sent to him in some way in the ordinary routine of business by the treasurer of the company. The stock was entered upon the stock books, as we may infer, in the name of Youmans. At the time this was done he was not present, and Sharp told the treasurer to set aside thirty shares in the name of Youmans and that he would let him know whether to deliver it to him and what to do with it at some future time; and Sharp subsequently said to Youmans that he had set aside thirty shares of the stock which he intended for the adopted child. After the thirty shares had thus been set apart, Sharp told Youmans that he could make the number of shares but twenty-seven, and that as the receipt had been made out to him for the shares, he would want an order from him for the three shares, and he then obtained from him, on the 19th of May, 1873, the following order addressed to the president and treasurer of the railway company: "Gentlemen, please transfer three shares of the stock now held by me in the Twenty-third Street Railway as Mr. Jacob Sharp may direct. Respectfully, Sidney A. Youmans."
The certificate of stock was never delivered to Youmans, but remained in the office of the company, as directed by Sharp. After the stock had been put in the name of Youmans, and a dividend had been declared, Sharp told him that he must go to the office for the dividends; that he had the dividends made out in his name and they would support the child, or help support it, and in this way the dividends were paid to Youmans until the time of his death, by Sharp's direction. The wife of Youmans, Sharp's niece, died after this stock had thus been placed in his name, and he married a second wife, and that wife has ceased to take care of the child.
These are all the material facts appearing in the case; they are undisputed, and from them it must be determined, whether a valid gift of this stock was made to Youmans; and I think it very clear that there was not. Delivery is essential to constitute a valid gift. The delivery must be such as to vest the donee with the control and dominion over the property, and to absolutely divest the donor of his dominion and control, and the delivery must be made with the intent to vest the title of the property in the donee. The intent is a necessary element of the transaction. Delivery, without intent to vest the title in the donee, could pass no title to him. Here it may be admitted that the payment of the money by Sharp, the entry of the stock on the books of the company in the name of Youmans, and the delivery to him of the receipt of July 11, 1872, would have been sufficient to constitute a delivery of the stock to Youmans, and sufficient to make a valid gift thereof to him, if such had been the intention of Sharp; but it is clear that such was not the intention. He did not, in any event, intend to vest the title in Youmans for himself; his intention was to create a trust for the benefit of the child, in whom he took the special interest. He did not intend that Youmans should control the shares of stock; he directed that they should be retained by the treasurer of the company, subject to his future control and direction. Youmans drew the dividends by his special direction and consent, for the support of the child. It may be true, in a legal sense, that it was not necessary for Youmans to have the certificate of stock in order to constitute him a stockholder, but among business men the certificate of stock is regarded as representing the stock and the title thereto. Such is the common understanding, and Sharp undoubtedly supposed when he retained the certificate that the stock remained subject to his control. The fact that Youmans did not, during his life, nearly seven years, call for the certificate of stock shows quite clearly that he did not regard himself as the owner of the stock; and that Sharp claimed to have the control and disposition thereof appears from the fact that he assumed to dispose of three shares thereof, after the certificate for the thirty shares had been executed. It is true that he applied to Youmans for an order to transfer these three shares, but that was merely a matter of form, because Youmans held the receipt and the shares appeared upon the books of the company in his name. That was a mere matter of book-keeping. Therefore, I conclude that there was no delivery of the stock, within the meaning of the law, to Youmans, with the intent to vest the title in him and give him the control thereof, and hence there is no reason, in law or justice, why the plaintiff in this action should recover, and thus probably defeat the benevolent purpose which actuated Sharp when he caused this stock to be set apart.
This defense is available to the defendant. It cannot be compelled to deliver the certificate to the plaintiff, unless Youmans owned it or was entitled to it. It did not hold the certificate as bailee for Youmans, but as bailee for Sharp.
The judgment should be reversed and a new trial granted, costs to abide event.
MILLER, DANFORTH and TRACY, JJ., concur.
FINCH, J., reads for affirmance; ANDREWS, Ch. J., concurs.
The dissenting opinion of FINCH, J., was not handed down.
Judgment reversed.