In re the Judicial Settlement of the Account of Proceedings of Cohn

Shearn, J.:

This appeal involves the validity of a gift of certificates of stock, effected by the execution and delivery of an instrument of gift, unaccompanied by actual delivery of the certificates.

On September 20, 1911, the decedent, Leopold Cohn, a resident of the city of New York but then temporarily residing with his family at West End, N. J., wrote out and delivered to his wife, in the presence of his entire family, on his wife’s birthday, the following paper:

“ West End, N. J., Sept. 20,1911.

“ I give this day to my wife, Sara K. Cohn, as a present for her (46) forty-sixth birthday (500) five hundred shares of American Sumatra Tobacco Company common stock.

“ LEOPOLD COHN.”

The donor died six days after the delivery of this instrument. At the time of the gift the donor was the owner of 7,213 shares of the common stock of the American Sumatra Tobacco Company, but the stock was in the name and possession of his firm of A. Cohn & Co. and deposited in a safe deposit box in the city of New York, which was in the name of and belonged to the firm. This firm consisted of the donor, his brother Abraham, and his nephew Leonard A. Cohn, and was dissolved by the death of Abraham Cohn on August 30, 1911. Prior to that time the firm had 18,033 shares of the Sumatra stock in certificates of 100 shares each, standing in the firm name. On December 20, 1910, the stock had been charged off on the books and was not an asset of the firm after that time. The testator was entitled to forty per cent or 7,213 shares of the stock held in the firm name, but there had never been an actual delivery of the certificates by the firm to the donor in his lifetime. Just prior to his death the donor and agreed to enter into a new partnership and he was to contribute some of the shares to a new firm as an.asset. On September 22, 1911, two days after the delivery of the instrument of gift, the donor directed his counsel to hurry the new partnership agreement, because he wished to get the Sumatra stock belonging to him, which was to be delivered when the new partnership agreement was signed, which matter was to be closed on September 26, 1911, the day the donor died. The execution and delivery of the instrument of gift was established by the testimony of the two daughters of the donor, who were present at the time .of its delivery, and their testimony is to the effect that their father handed the paper to the mother, in the presence of the whole family and said he gave it to her as a birthday present, that he had not possession of the stock, but as soon as he got it he would give it to her. Some stress is laid by the appellants upon the testimony that the donor “ said that he could not give her the stock because it was in the company, but as soon as he could get it he would give it to her,” which it is claimed evidences an intent to make a gift in the future instead of a present gift. This contention is completely overborne by the wording of the instrument itself, which reads: “ I give this day; ” also by the plain intention of the donor to make a birthday gift to his wife, the birthday being the day on which the instrument of gift was executed and delivered. When the donor explained that he could not “ give ” her the stock that day “ because it was in the company ” and said that “ as soon as he could get it he would give it to her,” it is quite obvious that he meant that he could not deliver the stock that day but would as soon as he could get it.

There being no rights of creditors involved, no suggestion of fraud, the intention to make the birthday gift being conclusively established, the gift being evidenced by an instrument of gift executed and delivered to the donee on her birthday, and ever since retained by her, and the circumstances surrounding the making of the gift affording a reasonable and satisfactory excuse for not making actual delivery of the certificates at the time the gift was made, there was in my opinion a valid and effectual gift of the certificates mentioned in the instrument of gift.

There is no doubt that it has been held in a long line of cases in this State that delivery of the thing given is, as a general rule, one of the essential elements to constitute a valid gift. (Beaver v. Beaver, 117 N. Y. 421; Young v. Young, 80 id. 422.) But it is equally true that the rule requiring actual delivery is not inflexible. (Matter of Van Alstyne, 207 N. Y. 298; McGavic v. Cossum, 72 App. Div. 35; Matter of Mills, 172 id. 530; affd., 219 N. Y. 642.) In Beaver v. Beaver (supra) it was said that the delivery may be symbolical, as where the donor gives to the donee a symbol which represents possession. It was held in McGavic v. Cossum (supra), where an instrument of gift of bonds was delivered, that actual delivery of the bonds was excused where the only reason for not making delivery was the feeble condition of the donor and the fact that the bonds were in the custody of a bank in a nearby city. It was said in Matter of Van Alstyne (supra): “ The delivery necessary to consummate a gift must be as perfect as the nature of the property and the circumstances and surroundings of the parties will reasonably permit. * * * It is true that the old rule requiring an actual delivery of the thing given has been very largely relaxed, but a symbolical delivery is sufficient only when the conditions are so adverse to actual delivery as to make a symbolical delivery as nearly perfect and complete as the circumstances will allow.”

As the rule requiring delivery is clearly subject to exceptions, in order to apply it correctly in varying circumstances resort should be had to the reason for the rule. Under the civil law delivery was not requisite to a valid gift, but it was made a requisite by the common law as a matter of public policy, to prevent mistake and imposition. (Noble v. Smith, 2 Johns. 52, 56; Brinckerhoff v. Lawrence, 2 Sandf. Ch. 400, 406.) The necessity of delivery where gifts resting in parol are asserted against the estates of decedents is obvious; but it is equally plain that there is no such impelling necessity when the gift is established by the execution and delivery of an instrument of gift. ¡ An examination of a large number of cases in this State discloses the significant facts that (1) in every case where the gift was not sustained, the gift rested upon parol evidence; and (2) in every case of a gift evidenced by the delivery of an instrument of gift, the gift has been sustained. In the former category are included the cases of Beaver v. Beaver (supra); Matter of Van Alstyne (supra); Jackson v. Twenty-third Street R. Co. (88 N. Y. 520); Young v. Young (supra); Matter of Crawford (113 N. Y. 560); Curry v. Powers (70 id. 212); Gannon v. McGuire (160 id. 476); Champney v. Blanchard, 39 id. 111). In the latter category are included Hunter v. Hunter (19 Barb. 631); Matson v. Abbey (70 Hun, 475; affd., as to the gift, 141 N. Y. 179); McGavic v. Cossum (supra); Matter of Mills (supra).y In Young v. Young (supra) there was a writing but it was not an instrument of gift; it was a mere declaration of the donor that the bonds were the property of the donee and expressly reserving an interest in the donor. While the court said in Bidden v. Thrall (125 N. Y. 572), in sustaining a gift causa mortis where there was both a writing and delivery, that the writing alone "was not sufficient, it is to be noted that the written instrument was not delivered to the donee. It is interesting to note that in Matson v. Abbey (supra), sustaining a gift evidenced by an instrument of assignment without delivery of the property assigned, the court quotes with approval the statement of the English law in Irons v. Smallpiece (2 Bam. & Aid. 551, 552) made by Abbott, C. J.: “ I am of opinion that by the law of England, in order to transfer property by gift, there must either be a deed or instrument of gift, or there must be an actual delivery of the thing to the donee.” Based upon decisions in numerous other jurisdictions, it is stated in 20 Cyc. 1197 that: “ The general rule is that a gift of property-evidenced by a written instrument executed by the donor is valid without a manual delivery of the property.” I am inclined to think that this is a broader statement than the New York cases would justify, especially in view of Matter of Van Alstyne (supra), for it does not assume a delivery of the instrument of gift. But in view of the decision of this court in McGavic v. Cossum (supra) it seems to me beyond serious question that the delivery of the instrument of gift in the instant case constituted a good symbolical delivery. In the McGavic case a woman owning bonds which had been deposited by her in a bank for safekeeping during an illness from which she died three weeks later gave to her niece the original memorandum of the purchase of the bonds indorsed with the following statement:

“ Poughkeepsie, November 23, 1901.

“ I have this day given my niece, Fannie H. McGavic, bond 2000 Reg. 4 per cent. " DELIA C. ROBINSON.”

Mr. Justice McLaughlin said: “ We are of the opinion that the plaintiff was entitled to the bonds; that what was done constituted a good gift, inter vivos. Actual delivery, by reason of the illness of the owner of the bonds, and their possession at that time by the bank, was physically impossible, but there was present, as evidenced by the writing of the deceased, not only the intention to then give, but also the intention to then deliver the thing given. The owner did all she could do in this respect. It was a good constructive or symbolical delivery, and this, under the circumstances, was sufficient to vest good title in the plaintiff.,' (14 Am. & Eng. Ency. of Law [2d ed.], 1021, and cases cited.) ” In the instant case, on the day the gift was made at West End, N. J., the certificates of stock were in a safe deposit box in New York city. Furthermore, there were the complications above referred to in the partnership relations and in the fact that the certificates were in the partnership strong box, made out in the name of the firm. These were circumstances and surroundings tending to excuse manual delivery and- to make a symbolical delivery effective. In addition, as was said by Mr. Justice McLaughlin in the McGavic case, “ there was present, as evidenced by the writing of the deceased, not only the intention to then give, but also the intention to then deliver the thing; given. * * * It was a good constructive or symbolical delivery.” The instrument of gift was a symbol which represented the donee’s right of possession.. It was no more revocable than an assignment. A gift has been judicialldefined as a voluntary transfer of property by one to another, without any consideration or compensation therefor. (Gray v. Barton, 55 N. Y. 68.) A voluntary transfer or assignment unaccompanied by manual delivery was upheld, as we have seen, in Matson v. Abbey (supra). It must, therefore, have been held irrevocable. There is no apparent reason why a gift evidenced by an instrument of gift duly delivered is any more revocable than an assignment without consideration. Both strip the donor of dominion over the subject of the gift and place in the hands of the donee evidence of right to possession.

Therefore, applying the rule of delivery in the light of the reason which gave birth to it, and finding here no possibility of fraud or imposition, and no doubt whatever concerning the intention of the donor, and finding full support in the precedent of McGavic v. Cossum (supra), it is my opinion that there was a good constructive or symbolical delivery, consisting of the delivery of the instrument of gift, and that the gift should be sustained.

The claim of the widow to the 500 shares of Sumatra stock is further resisted by the appellants on the ground that in two intermediate accountings of the widow as executrix and, with another, as trustees under her husband’s will, both of which accountings were made on applications for resignations by executors, the widow’s claim was not in any way referred to but was purposely kept out of the accounting, by advice of counsel. We are all of the opinion that theseeintermediate accountings and the decrees entered thereupon did not conclude the claimant from asserting her claim in this proceeding. There was a good reason for withholding the claim and the only result of so doing has been to enhance enormously the value of the estate. The widow .promptly made her claim to the other executors. Its validity could only be determined on a settlement of the accounts. 'The two intermediate accountings were merely for the purpose of allowing executors to resign. The question of the widow’s claim Was not necessary to the determination there involved. The only effect of these accountings on this claim was to set the Statute of Limitations running, for the executor must present his claim within six years from the first accounting. (Code Civ. Proc. § 2679.) While these intermediate accounts showed the entire 7,213 shares, or the proceeds thereof, as a part of the principal of the trust, the claimant was the recipient of the income therefrom and no rights accrued to any one else, nor did any one change his position in reliance upon the statement of that fact in the accountings.

The decree of the surrogate should be affirmed, with costs and disbursements to the respondents executrix and trustees, and disbursements of the special guardian, respondent.

Clarke, P. J., and Smith, J., concurred; Dowling and Page, JJ., dissented.