## Facts

- Warren Potter owned 1,370 shares of Potter-Casey Company stock.
- After executing his will, Potter endorsed a certificate representing 1,000 shares in favor of his daughter, H. Marcia Potter.
- Potter placed the endorsed certificate in a sealed envelope with a letter stating he had transferred the stock to her and wrote directions that the envelope was to be delivered to her upon his death.
- Potter delivered the sealed envelope to J. A. Casey, a business associate, instructing Casey to deliver it to Marcia after Potter’s death.
- Potter did not later reclaim the envelope, alter the instructions, or otherwise exercise control over the stock.
- After Potter died, Casey delivered the envelope and certificate to Marcia.
- The estate’s administrator sued Marcia to recover the certificate for the estate, asserting the transaction was an ineffective testamentary transfer.

## Issues

1. Whether a valid inter vivos gift of personal property is made when the donor delivers the property to a third person with instructions to deliver it to the donee upon the donor’s death.
2. Whether such a transfer is invalid as an attempted testamentary disposition when the donor’s intent is a final, irrevocable transfer and the donor retains no control or right of recall.
3. Whether instructions such as “only in case of the death” negate a present transfer of ownership or merely postpone possession and enjoyment.

## Decision

- The Minnesota Supreme Court affirmed judgment for the donee, Marcia Potter.
- The court held that personal property may be validly given by delivery to a third person for delivery to the donee at the donor’s death when the donor intends a final disposition, parts with all control, and reserves no right to recall.
- The court concluded the endorsed stock certificate was an absolute and irrevocable inter vivos gift, not a testamentary disposition, and therefore was not part of the estate.

## Legal Principles

- A present gift of personal property may be completed by delivery to a third party to hold for the donee, with the donee’s possession and enjoyment postponed until the donor’s death, if the donor:
  - parts with dominion and control,
  - reserves no power of revocation or recall, and
  - intends the transfer as a final disposition.
- Postponing delivery to the donee until the donor’s death does not, by itself, make the transfer testamentary if ownership is intended to pass presently.
- Language directing delivery “upon” or “only in case of” the donor’s death may be construed as postponing possession rather than conditioning or negating a present transfer, where the donor’s intent and relinquishment of control show an irrevocable gift.
- The doctrine permitting delivery of a deed to a third party for later delivery at death, vesting present title with postponed enjoyment, applies by analogy to personal property when the required elements of gift are satisfied.

## Conclusion

The court held that the donor’s endorsed stock certificate, delivered to a third party with irrevocable instructions to deliver it to the donee upon the donor’s death, constituted a completed inter vivos gift because the donor made a final disposition and retained no control or right to reclaim the property.


Innes v. Potter, 153 N.W. 604 (Minn. 1915)