EQUITABLE TRUST CO.
Suit to enforce for the benefit of a decedent's estate an agreement to assign certain shares of stock to decedent during her life time. The Court of Chancery, Bramhall, V. C., 95 A.2d 470, entered judgment for defendant, and plaintiff appealed. The Supreme Court, Tunnell, J., held that agreement for assignment to decedent of certain shares of stock in fee simple was supported by her unwritten agreement to relinquish her rights in certain shares held in trust by corporation which was defendant's alter ego.
Cause remanded with directions.
Defendant, who was owner of clear majority of stock of corporation in which bulk of remaining shares were owned by defendant's family, and who admitted domination of corporation in all its operations, could not urge any distinction between himself and corporation as basis for defeating agreement to assign stock.
Appeal from a judgment of the Court of Chancery declining to enforce for the benefit of decedent's estate an agreement to assign certain shares of stock to decedent during her lifetime, on the ground that there was no consideration for the promise.
Stephen E. Hamilton, Jr., Wilmington (H. Albert Young, Wilmington, on the brief), for appellant.
Joseph Donald Craven, Wilmington, for appellee.
SOUTHERLAND, Chief Justice, and WOLCOTT and TUNNELL, Justices, sitting.
Hugh F. Gallagher, the defendant, during the whole period with which this suit is concerned, has been the president, the majority stockholder, and one of the three members of the board of directors of Union Park Motors, Inc., a corporation engaged in the automobile business at Wilmington, Delaware.
Margaret C. Kane, a cousin of defendant, was for a number of years employed by Union Park Motors, Inc., and up until her death she remained its trusted and valued employee. She was the corporation's secretary-treasurer and one of the members of the board of directors. Since 1936 Miss Kane had owned one share of stock in the corporation.
In 1941 the defendant, out of his personal holdings of Union Park stock, made a gift to Miss Kane of an interest in 19 shares. The instrument of gift was in the form of an assignment to Union Park Motors, Inc., as trustee, to hold the stock for Margaret
C. Kane for her life, and upon her death to assign it, free of the trust, unto three named sons of the defendant.
As of September 27, 1946, another instrument was prepared for defendant by defendant's counsel of record in this cause, in an attempt to enlarge Miss Kane's stock holdings. This instrument was duly signed and sealed in triplicate by defendant in his individual capacity, by Union Park Motors, Inc., by Margaret C. Kane, and, because of an interest in certain terms of the agreement which are of no concern to us, by Catherine Gallagher, defendant's sister. However, no new or other stock certificate was issued to Margaret C. Kane or to anyone in her behalf prior to her death on the 18th day of January, 1947.
Letters were not at once taken out on Margaret C. Kane's estate, and for a time there was some uncertainty as to whether the Equitable Trust Company, which was named in the will as executor, would serve or would renounce. While matters so stood, the defendant made a visit to the Kane home, where he obtained both Margaret C. Kane's copy of the 1946 agreement and also Catherine Gallagher's copy, which [34 Del.Ch. 78] Miss Kane had been keeping because Miss Gallagher had no safe deposit box. After some interval defendant destroyed all three copies. So far as the record shows, although the paper was, as stated above, prepared by defendant's attorney, no copy of it, either signed or unsigned, thereafter remained in existence.
In due course Equitable Trust Company qualified as executor and demanded the 19 shares of stock which it claimed were right-fully Margaret C. Kane's at the time of her death. Upon defendant's refusal to deliver or to account for non-delivery, suit was commenced in the Court of Chancery. Plaintiff claimed the right to recover, either on the theory of a completed gift or on the ground that there was an enforceable contract. It prayed ...