Larson v. Larson, 2017 MT 299

Florence and Ed Larson formed D & D Land Co.; by 2008 Florence owned a 51% voting interest and sons Dwight and Doug owned the balance.
Florence, concerned about nursing-home costs and wanting the farm to remain viable, decided in late March–early April 2008 to transfer virtually all her D & D shares to Doug; she signed stock certificates (April 1, 2008) and an agreement (April 4, 2008) allowing her to remain president and receive living expenses.
Attorney Bjelland prepared the certificates and an Agreement; the signed certificates were mailed to Bjelland but he failed to cancel older certificate numbers as noted in corporate practice.
After the transfers, Dwight removed Florence to Billings, initiated guardianship/conservatorship proceedings, and filed suit alleging undue influence by Doug and that the transfer was invalid.
Medical experts later diagnosed Florence with progressive cognitive decline; testimony conflicted on whether she had capacity in late March–early April 2008.
The Ninth Judicial District Court found Florence competent at the time, found Doug did not exert undue influence, found the gift inter vivos was complete upon delivery and acceptance, and entered judgment for Doug; the Montana Supreme Court affirmed.

Issue	Plaintiff's Argument (Dwight)	Defendant's Argument (Doug)	Held
1. Did Doug exercise undue influence over Florence to obtain the gift?	Doug pressured and exploited Florence’s cognitive deficits; medical evidence shows dementia at the time.	No specific acts of coercion; lawful family influence permitted; Florence expressed independent reasons for transfer.	Affirmed: no undue influence; plaintiff failed to prove specific acts or overcome presumption of capacity.
2. Was the transfer actually a contract (consideration present via the Agreement), making it unenforceable?	The April 4 Agreement shows the shares were consideration for Doug’s promise to provide living expenses; contract lacked corporate authorization/consideration.	Argument was not raised below; appellate review barred.	Declined to consider on appeal as issue was not preserved.
3. Was the gift of stock valid (donative intent, delivery, acceptance)?	Transfer defective because old certificates were not marked “void” per bylaws; thus delivery/cancellation insufficient.	Florence had donative intent; she signed and delivered certificates and Doug accepted; procedural certificate cancellation is internal corporate formality.	Affirmed: elements of gift inter vivos satisfied; failure to mark old certificates did not invalidate irrevocable gift.

Blackmer v. Blackmer, 165 Mont. 69, 525 P.2d 559 (Mont. 1974) (presumption of competency; burden on challenger to prove undue influence or incompetence)
Murphy’s Estate, 43 Mont. 353, 116 P. 1004 (Mont. 1911) (capacity is judged at time of the instrument’s execution)
Gross v. Gross, 239 Mont. 480, 781 P.2d 284 (Mont. 1989) (court will not void a completed gift because the donor later changes their mind)
Harwood v. Glacier Elec. Coop., 285 Mont. 481, 949 P.2d 651 (Mont. 1997) (internal corporate bylaws and procedures are not equivalent to state statutory law for invalidating transfers)