210 Wis. 474 | Wis. | 1933
Prior to the year 1920 Siegfried Heller was engaged in business in the city of Milwaukee as an individual. In May of that year he incorporated the S. Heller Elevator Company. The authorized capital stock of said corporation was 1,000 shares of the par value of $100 each. Mr. Heller assigned and turned over to the corporation all of the assets of his individual business. For such assets he received 890 shares of stock. The remainder of the authorized shares were taken by two employees. Mr. Heller caused 390 shares to be made out in his own name, 300 shares in the name of Caroline Heller, his wife, 100 shares in the name of Leo, and 100 shares in the name of Siegfried, Jr. Mr. Dite, an accountant who from time to time served Mr. Heller and also the corporation, filled out the stock certificates pursuant to instructions given by Mr. Heller. They were dated May IS, 1920, and were thereafter signed by Mr. Heller as president and Mr. Freede as secretary of the corporation. The three certificates made out in the names of Mrs. Heller, Leo, and Siegfried, Jr. were left in the stock certificate book which was kept in the corporation’s vault used also by Mr. Heller. Mr. Freede testified that on the day before Christmas in 1920 Mr. Pleller took out the three certificates and took them home with him. At the first hearing held in September, 1930, Mrs. Heller testified that she didn’t see the stock certificates until after Mr. Heller’s death. In response to a cpiestion by her attorney as to whether she did not remember that her husband came home one Christmas and gave the stock to her she answered: “That is so long ago.” However, at the hearing held in December, 1931, Mrs. Heller, over the objection of
In 1921 the authorized capital stock of the corporation was increased to $200,000 and a stock dividend of thirty-six per cent, on the capital stock was declared. Three hundred and sixty shares of stock were issued as stock dividends. A certificate for 320 shares which represented a thirty-six per cent, dividend on all of the 890 shares standing in the names of Mr. Heller and the three other members of his family was issued to Mr. Heller. So far as this stock dividend is concerned Mr. Heller was treated by the corporation, of which he was the controlling and dominating figure, as the owner of 890 shares of stock. The accountant also testified that he made out the stock dividend certificates in the name of Mr. Heller pursuant to his request. Contemporaneously with the issuing of the stock dividend mentioned the two employee stockholders were permitted to purchase 140 shares of stock for $14,000. After this there remained 500 shares of authorized stock unissued.
In 1922 a second stock dividend of thirty-three per cent, was declared by the corporation. A certificate for 236 shares was made out in the name of Mr. Heller, which was a thirty-three per cent, dividend on the original 390 shares issued to him, plus tire 320 stock dividend shares issued to him in 1921. A certificate for 100 shares was made out in the name of Mrs. Heller and a certificate for thirty-three shares was made out in the name of each of the boys. The accountant wrote out all of those certificates at the request
The stockholders’ meetings were very informal and apparently no record thereof was made at the time. The meetings appear to have consisted of conversations between Mr. Heller and the two other stockholder employees. Mr. Heller prepared memoranda concerning the meetings which were handed to Mr. Dite, who wrote up the minutes. Neither Mrs. Heller, nor Leo, nor Siegfried, Jr. ever attended any of the stockholders’ meetings. They were never notified’ of any of the meetings, never gave any proxies or powers of attorney, and never receipted for any stock on the stubs of the stock record book.
Mr. Pleller died on February 9, 1924, a resident of Milwaukee county, leaving a last will and testament which was thereafter admitted to probate in which Caroline Heller was nominated as executrix. The estate was duly probated and the inheritance tax determined. The inventory listed 946 shares of the capital stock of the S. Heller Elevator Company. In the inheritance tax proceedings the 500 shares of stock made out in the names of Mrs. Heller and the two boys were listed as gifts “made within six years prior to the death of the . . . donor” and were taxed pursuant to the provisions of sec. 72.01 (3), Stats. 1923. The inheritance taxes were paid under protest. Thereafter sec. 72.01, sub. (3), was declared unconstitutional by the supreme court of the United States in Schlesinger v. State of Wisconsin, 270 U. S. 230, 46 Sup. Ct. 260, 70 Lawy. Ed. 557. In 1929 the legislature enacted ch. 365, now sec. 72.26, which permitted refunds of taxes paid under that part of sub. (3) of sec. 72.01 declared unconstitutional and void, upon verified petition setting forth the necessary facts and a showing that the gift involved was not made in actual contemplation of death of the donor or was not intended, to
At the conclusion of the hearing herein the county court made its findings of fact which were in part as follows:
“2. That no consideration was ever paid or given by either of said parties to Siegfried Heller for said stock.
“3. That all dividends declared on said stock were kept by said Siegfried Heller, and that Siegfried Heller continued to vote said stock at all meetings of the company thereafter.
“4. That neither Caroline Heller, Leo Heller, nor Siegfried Heller, Jr., ever attended any corporate meetings of the S. Heller Elevator Company, and none of said persons ever voted any of said shares of stock or ever executed any proxies therefor.
“5. That no receipts were ever signed by Caroline Heller, Leo Heller, and Siegfried Heller, Jr., either on the books of such company for such stock certificates or other-. wise.
“6. That said stock was never delivered by said Siegfried Heller to the said Caroline Heller, Leo Heller, and Siegfried Heller, Jr., or either of them, but that said stock was kept by Siegfried Heller in his possession up until the time of his death, and he exercised all the rights of ownership therein during his lifetime.”
The court found as conclusions of law:
“1. That there was no delivery of such stock or certificates by the said deceased in his lifetime to any of (the) persons named in said certificates.
“2. That the ownership of said stock by such transfers was vested in Caroline Heller, Leo Heller, and Siegfried Heller, Jr.”
The court further found that the petitioners were entitled to an order directing a refund of the inheritance taxes paid amounting to $3,362.14, which amount included the inheritance tax assessed against certain stock listed in the inventory which was in the name of said deceased but which the petitioners asserted should have been issued to them.
Numerous cases are cited by counsel relating to the effect of mere transfers of stock on the books of corporations. Some of the cases hold that a change of title is effected simply by transferring stock on the books of a corporation even though the transferor retains the certificates in his possession and does not deliver them to the transferee. Roberts’ Appeal, 85 Pa. St. 84; Chicago Title & Trust Co. v. Ward, 332 Ill. 126, 163 N. E. 319; Barnhouse v. Dewey, 83 Kan. 12, 109 Pac. 1081; Thomas v. Thomas, 70 Colo. 29, 197 Pac. 243. Other cases hold that until the certificate, reissued in the name of the transferee, is actually delivered to him by the transferor, the transferee merely has nominal title to the certificate issued in his name and the transfer on the books of the corporation is ineffectual to perfect a gift where the donor retains the certificate, unless he constitutes himself a trustee for the donee. Swan v. Swan’s Ex’rs (1923) 136 Va. 496, 117 S. E. 858; Casteel v. Flint (1900)
If the present proceeding involved a transfer of stock issued to Mr. Heller arid delivered by him to the corporation for transfer and reissue to the members of his family without delivery of such certificate to the transferees, we would have to hold that sec. 183.01, Stats., is controlling. That section provides among other things as follows:
“Title to a certificate and to the shares represented thereby can be transferred only:
“(a) By delivery of the certificate indorsed either in blank or to a specified person by the person appearing by the certificate, to be the owner of the shares represented thereby; or
“(b) By delivery of the certificate and a separate document containing a written assignment of the certificate or a power of attorney to sell, assign, or transfer the same or the shares represented thereby, signed by the person appearing by the certificate to be the owner of the shares represented thereby. Such assignment or power of attorney may be either in blank or to a specified person.”
In the present case we have, a situation where the alleged donor was the sole owner of a successful business which he conducted as an individual. He transferred all of his individual business assets to a corporation formed by him. Pursuant to his instructions stock was issued in his name and certain stock certificates were made out in the names of his wife and sons. The latter certificates, as found by the court, were never delivered to the persons named therein but were retained either in the possession of the corpora
As hereinbefore stated, the amended petition also prayed for a refund of certain taxes paid with respect to certain stock which stood in the name of Mr. Heller at the time of his death. It was’ contended that such stock, assessed at the sum of $23,880, was wrongfully and erroneously issued as a stock dividend to Mr. Heller in 1921 when it should have been issued to Mrs. Heller and the boys as dividends on the stock which they assert had been theretofore given to them. When the said stock was listed in the inventory by Mrs. Heller as executrix, no objection to such inclusion was made by any one. No objection to its inclusion as a
By the Court. — Order reversed, with directions to dismiss the petition.
