decided: October 30, 1975.
IN RE ESTATE OF PAUL M. MILLER, DECEASED. APPEAL OF ROBERT A. REESER, EXECUTOR OF THE ESTATE OF HAROLD H. REESER
Adam B. Krafczek, Robert K. Boland, Austin, Speicher, Boland, Connor & Giorgi, Reading, for appellant.
Jay N. Abramowitch, Miller & Murray, Reading, for appellee, Bank of Pa., testamentary co-trustee under will of Paul M. Miller, deceased.
Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Roberts, Pomeroy and Nix, JJ., concur in the result. Manderino, J., dissents.
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Paul Miller died testate on April 14, 1972. Harold Reeser, as executor,*fn1 filed a first and final account. The Bank of Pennsylvania, as co-trustee*fn2 with Mr. Reeser under the terms of the will, filed objections to the account for Mr. Reeser's failure to include in the inventory proceeds in the amount of fifty thousand dollars resulting
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from the sale of certain stock.*fn3 Mr. Reeser contended that the proceeds comprised an inter vivos gift from decedent to himself. The court below excluded most of Mr. Reeser's testimony as incompetent and determined that no gift had been made. This appeal followed.
The estate has the burden of initially showing prima facie ownership of the proceeds. See Donsavage Estate, supra; Cutler's Estate, 225 Pa. 167, 73 A. 1111 (1909). The proceeds in dispute resulted from the sale of stock registered in Mr. Miller's name and in his physical possession until seven weeks before his death. Mr. Miller authorized the sale of the stock and endorsed the stock certificate eight days before he died. Registration of the stock in his name and in his recent possession gave rise to a presumption sufficient to establish prima facie ownership in the estate. The burden then shifted to appellant to rebut the presumption and to establish by clear and convincing evidence that a valid gift was made. Donsavage Estate, supra; Martella Estate, 390 Pa. 255, 135 A.2d 372 (1957); Brightbill v. Boeshore, 385 Pa. 69, 122 A.2d 38 (1956); Weaver v. Welsh, 325 Pa. 571, 191 A. 3 (1937).
Appellant argues that Mr. Reeser should have been found fully competent to testify in regard to the circumstances surrounding the transfer of the stock certificate from decedent to Mr. Reeser. The court below found the witness incompetent under the Dead Man's Act. Act of 1887, P.L. 158, § 5(e), 28 P.S. 322.*fn4 The
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court, however, made findings of fact supported by competent evidence that Mr. Miller had endorsed the stock certificate without naming any transferee and that Mr. Reeser had possession of the stock upon death of Mr. Miller. We indicated in Donsavage Estate, supra, that where endorsement of the certificate in blank is coupled with possession, the transfer is prima facie valid for the purpose of rendering the donee's interest not adverse to that of decedent. Such a showing is not necessarily sufficient to conclusively establish a gift by requisite proof but will permit the testimony to be heard. Cf. Thomas v. Waters, 350 Pa. 214, 219, 38 A.2d 237 (1944); Carr Estate, 371 Pa. 520, 92 A.2d 213 (1952). The ruling in Donsavage Estate has been followed by lower courts in recent years. See Beard Estate, 22 Fiduc.Rep. 438 (1972); Thompson Estate, 23 Fiduc.Rep. 45 (1972), reversing 22 Fiduc.Rep. 430 (1971).
Mr. Reeser and Mr. Miller, close friends, both widowed, spent most of their time together. When Mr. Miller was hospitalized several months before his death, Mr. Reeser assisted him in taking care of his affairs and visited him daily. Seven weeks before Mr. Miller died, he gave up possession of the stock certificate to Mr. Reeser, who had possession at Mr. Miller's death. Shortly before death, Mr. Miller endorsed the certificate naming no transferee and authorizing the sale of the stock.*fn5
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Mr. Stauffer, the treasurer of the Bank of Pennsylvania, testified that Mr. Reeser brought the certificate to the bank two days before decedent's death and instructed Mr. Stauffer to use the proceeds from the sale to purchase a certificate of deposit for fifty thousand dollars in the joint names of decedent and Mr. Reeser and to place the remaining several thousand dollars in decedent's own checking account. Appellee argues that the resulting inference that explanatory words accompanied the transfer to Mr. Reeser defeats the presumption of a prima facie gift because in earlier cases this Court explained that where the parties are not strangers but are more intimate, in the absence of proof of explanatory words accompanying the voluntary delivery an intention to give may be presumed. Chapple's Estate, 332 Pa. 168, 170, 2 A.2d 719 (1938); Weaver v. Welsh, 325 Pa. at 580, 191 A. at 8. Here, any such explanatory words would be consistent with a presumption of an intention to give. Mr. Reeser's testimony was competent in full and ought not to have been excluded from the factfinder's consideration. It still remains to be determined whether, accepting the testimony, there was sufficient evidence which might have supported a finding of a valid gift.
The success of a claim against a decedent's estate depends upon a clear and convincing showing of an intention to make an immediate gift and, where a joint tenancy is intended, such actual or constructive delivery as to invest in the donee so much dominion or control of the subject matter of the gift as is consonant with a joint interest or ownership therein. Parkhurst Estate, 402 Pa. 527, 167 A.2d 476 (1961); Amour Estate, 397 Pa. 262, 154 A.2d 502 (1959). Even accepting all of Mr. Reeser's testimony, the evidence reveals that no gift was completed before decedent's death.*fn6 The Bank had received
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only oral instructions from Mr. Reeser as to what was to be done with the proceeds of the sale of stock. It received no instructions from Mr. Miller directly. No certificate was purchased or even authorized by Mr. Miller to be purchased in joint names prior to death. The Bank was not authorized to do anything with the proceeds and properly held them in escrow. Decedent's sudden death precluded completion of a gift, if such was intended. The court below therefore was correct in sustaining objections to the account and directing the appellant to file a supplemental inventory including the proceeds as an asset of the estate.
Decree affirmed. Costs on appellants.