KENNETH S. SCOVILLE, Administrator De Bonis Non of the Estate of CARRIE VAIL, Deceased, Appellant,
VAIL INVESTMENT COMPANY, a Corporation, THIRZA J. GARVEY, HARRIETT E. LEECH, GEORGE M. VAIL and ROBERT W. VAIL, Appellees
APPEAL from a judgment of the Superior Court of the County of Pima. E. W. McFarland, Judge. Judgment affirmed.
Messrs. Moore & Romley, for Appellant.
Messrs. Conner & Jones, Mr. Tom K. Richey and Mr. Paul J. Cella, for Appellees.
[55 Ariz. 488] LOCKWOOD, J.
By agreement of the parties, the three appeals which are discussed in the opinion were presented to the court for consideration as a whole. Based upon the rule that the trial court is presumed to have found every fact necessary to sustain its judgment that may reasonably be deduced from the evidence, the general factual situation may be stated as follows, with more details given as this opinion requires.
Carrie Vail, hereinafter called deceased, had for many years been a resident of Pima county. She had been married twice, and by the first marriage had one child, Maude Vail Merriam, and by the second four [55 Ariz. 489] children,Thirza J. Garvey, Harriett E. Leech, George M. Vail and Robert W. Vail. In 1932 she was a widow approximately seventy-three years of age, and possessed property, real and personal, of the value of about $125,000. In that year she consulted with Tom K. Richey, who had been her attorney for a number of years, as to how she could make disposition of her property so that after her death there would be no expense of probate which, if the estate was handled in the ordinary manner, would amount to some ten or twelve thousand dollars. She also told Richey that if she disposed of her property by will her children would press her from one side or the other to change its terms, and she wanted to put it beyond her power to make a change, in order to avoid such pressure and the necessary unpleasant conditions arising therefrom. Richey suggested that the best way would be to organize a corporation, turn her property over to it in consideration of all of its stock, and then have the stock issued as she might wish.This, he said, might be in one of two ways, (a) the stock might be issued to her immediately and she might then endorse the certificates and place them in the hands of a third party irrevocably, for delivery after her death, or (b) she might agree with the corporation that all of the stock should be issued in accordance
with her orders, and then make on order distributing the stock in the way she wanted, and turn it over to some person so its delivery was irrevocable, and the stock could then be issued in accordance with the order to the parties designated therein, after her death. She adopted the last of the two plans, and in accordance therewith in November, 1932, the Vail Investment Company, hereinafter called the company, was incorporated with an authorized capital stock of $50,000, devided into 50,000 shares of the par value of $1 each. At the organization meeting [55 Ariz. 490] of the company three shares were actually issued, one each to Mrs. Vail, Thirza J. Garvey, her daughter, and Dan E. Garvey, her son-in-law, who were elected directors and constituted the entire board. Mrs. Vail was then elected president and treasurer of the company, and Garvey secretary. By resolution of the board of directors it was provided that deceased, as treasurer, should place the funds of the company on deposit in a designated bank, and that she should have sole and irrevocable power and authority to draw on such funds. At the same time she submitted a written offer to the company, which reads as follows:
"To the Board of Directors of
"Vail Investment Co.,
"I hereby offer to sell, transfer and assign unto your corporation all of the following described real and personal property, to-wit:
"(Here follows a description of real estate and an enumeration of eight promissory notes aggregating $70,000, each secured by mortgage).
"For and in consideration of which you shall issue and deliver as I may order same, 49,997 shares of the capital stock of your corporation, fully paid and non-assessable."
Thereupon the board of directors accepted the offer and by resolution
"... the President and Secretary were instructed and empowered to issue 49,997 shares of the capital stock of this corporation to the order of Carrie Vail, upon delivery of proper instruments of conveyance by the said ...