## Facts

- A family corporation owned nearly 1,000 acres of land; the father was the controlling shareholder, and his three children were minority shareholders.
- By 1987, each child held 9.08% of the corporation’s shares (27.24% total), reflected in the corporate stock book and associated certificate stubs.
- For estate-planning purposes, the father directed the corporation’s accountant to implement annual stock gifts to the children, and tax documents (including Schedule K-1s and gift-related filings) reflected increasing ownership for the children and decreasing ownership for the father.
- Various corporate documents and correspondence also reflected the children’s larger ownership interests as reported for tax purposes.
- No additional stock certificates were issued, endorsed, or physically delivered to the children for the later purported gifts; the formal stock book did not reflect ownership beyond the original shares.
- A dispute arose when the father sought to sell corporate real property, which under the bylaws required a 90% ownership vote; the children opposed the sale.
- The father asserted the later gifts were never completed and proceeded to convert the corporation to an LLC, eliminating the 90% approval requirement and enabling the desired transaction.
- The children sued for declaratory relief that they owned 44% collectively based on the alleged gifts and sought to bar the father from denying the transfers through equitable doctrines.
- The trial court ruled for the father, finding donative intent but no legally effective delivery, and rejected estoppel-based theories.

## Issues

1. Whether repeated tax reporting, corporate acknowledgments, and donative intent can establish a valid inter vivos gift of certificated corporate stock without issuance/endorsement and delivery of stock certificates or other legally sufficient delivery.
2. Whether the father was equitably estopped from denying completion of the stock gifts based on prior representations and years of tax and corporate reporting.
3. Whether Virginia recognizes quasi-estoppel as a basis to bar a party from taking a position inconsistent with prior benefit-seeking conduct.

## Decision

- The Supreme Court of Virginia affirmed.
- The court held the additional stock gifts were not completed because the shares were never delivered in the manner required by law.
- The court held the trial court did not abuse its discretion in declining to apply equitable estoppel on these facts.
- The court expressly declined to recognize quasi-estoppel as a doctrine in Virginia.

## Legal Principles

- A valid inter vivos gift requires donative intent, delivery that relinquishes dominion and control, and acceptance; for certificated stock, delivery generally requires endorsement and delivery of the certificate (or a legally recognized equivalent).
- Tax treatment and informal acknowledgments of ownership (including K-1s and gift-related filings) do not substitute for legally sufficient delivery and do not, by themselves, change legal ownership.
- Equitable estoppel requires a material representation (or concealment), reasonable reliance, and detriment; its application is discretionary and reviewed for abuse of discretion.
- Virginia does not recognize quasi-estoppel; parties seeking estoppel relief must satisfy traditional equitable-estoppel elements.

## Conclusion

Virginia enforced strict delivery requirements for inter vivos gifts of certificated corporate stock, holding that extensive tax and corporate reporting consistent with an intended gift could not complete the transfer absent legally sufficient delivery; the court also affirmed denial of equitable estoppel and refused to adopt quasi-estoppel.


Knop v. Knop, 297 Va. 553, 830 S.E.2d 723 (Va. 2019)