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In Re Estate of Toigo

MARCH 24, 1969.

IN THE MATTER OF THE ESTATE OF LAURA H. TOIGO, DECEASED. JEROME B. TOIGO, APPELLANT,

v.

WALTER W. ROSS, JR., SPECIAL GUARDIAN AD LITEM-ADMINISTRATOR PRO TEM OF THE ESTATE OF LAURA H. TOIGO, DECEASED, RICHARD E. SHEA AND JEROME B. TOIGO, CO-EXECUTORS OF THE ESTATE OF LAURA H. TOIGO, DECEASED, HARRY HULL TOIGO, II, HARRIS TRUST & SAVINGS BANK, AS GUARDIAN OF THE ESTATE OF HARRY HULL TOIGO, II, A MINOR, APPELLEES.



Appeal from the Circuit Court of Kendall County, Sixteenth Judicial District, to the Appellate Court of Illinois, Second District; the Hon. ROBERT J. SEARS, Judge, presiding. Reversed and remanded with directions.

PRESIDING JUSTICE MORAN DELIVERED THE OPINION OF THE COURT.

This case arose out of a series of tragic events in which three members of one family died within a nine-month period. The controversy involves 900 shares of the common stock of the Pepsi-Cola Aurora, Elgin and Joliet Bottling Company, a family corporation.

In June, 1965, there were 2,500 shares of the company stock outstanding, 999 shares held by Pompey J. Toigo, the father and President of the company, 900 shares held by Laura Toigo, the mother and Secretary of the company, 300 shares held by Harry Toigo, the elder son, 300 shares held by Jerome Toigo, the younger son and petitioner in this case, and 1 share held by one Harry Hull, father of Laura.

The father, Pompey Toigo died in June, 1965, leaving his wife a sufficient number of shares to give her 52 percent of the outstanding shares and dividing the remainder equally between his two sons. In effect, the father's will gave Laura Toigo another 400 shares, making her total 1,300 shares. Subsequently, Harry Toigo died on January 23, 1966. He was only 30 years of age at the time and he left surviving him his wife, Judith Toigo, who was then pregnant. On September 23, 1966, Judith Toigo gave birth to their only child, Harry Hull Toigo II.

Within a period of about six months then, Laura Toigo, the mother, had lost her husband and elder son, and Jerome Toigo, a young man of about 21 years of age, was quickly forced into the management of the company.

Laura Toigo had cancer since 1959, and was about to enter the hospital for another operation on the evening of February 4, 1966. During that day, to discuss various corporate problems, she met with her son, Jerome Toigo, and with Richard Shea, a Certified Public Accountant who had handled the tax and accounting work of the company since 1957. She stated to Shea that the will of her deceased son, Harry, provided that his company stock went into a trust for the benefit of his yet unborn children. She expressed concern that her son, Jerome, would not have control of the company and said, "In order to assure Jerome complete control of the corporation . . . I am giving this stock certificate to him." Thereupon she took her stock certificate, representing 900 shares of the corporation and signed the same on the back. Shea then witnessed her signature and Laura Toigo gave the certificate to her son, Jerome. Jerome in turn gave the certificate to Shea who was returning to his office in downtown Chicago, which was near the office of the attorneys who represented the firm. Shea was to deliver the certificate to the attorneys so that the transfer could be made on the corporate record books.

Instead, Shea put the certificate in his office safe and did not deliver it to the attorneys. The stock certificate was given back to Jerome Toigo by Shea in December, 1966, and at the time of these proceedings the certificate was in the possession of Jerome Toigo.

On the night of February 4, 1966, Laura Toigo entered the hospital, never to return. She died February 23, 1966, leaving a will which appointed Richard Shea and her son, Jerome Toigo, as coexecutors of her estate and bequeathed her property "to my lawful descendants living at the time of my death per stirpes and not per capita."

Following the opening of the Estate of Laura Toigo, the attorney representing the coexecutors prepared their inventory. He testified that in preparing the inventory he consulted with certain banks, reviewed his notes and discussed it with Jerome Toigo. He did not, however, discuss the inventory with Shea. On Friday, December 9, 1966, the last day for filing of the inventory, the attorney appeared at the office of Shea and stayed only long enough to obtain Shea's signature. The attorney, himself, testified that he did not remove his coat and stayed only a few minutes. Shea signed the inventory but did not read it. The attorney then proceeded to Aurora and had a brief visit with Jerome Toigo, during which time Jerome Toigo signed the inventory but, again, did not read it. In fact, the inventory was signed under oath by both executors and included, as an asset of Laura Toigo, the 900 shares of stock in the bottling company which are here involved.

On June 14, 1967, the coexecutors filed their motion for leave to amend the inventory by deleting therefrom the 900 shares of stock in the bottling company on the ground that those shares were not an asset of Laura Toigo at the time of her death. The motion also requested the appointment of a Special Guardian ad Litem and the court granted a portion of the motion by appointing a guardian.

After hearing evidence, the trial court entered an order denying the motion to amend upon the grounds that the motion represented a claim against the Estate of Laura Toigo and was, therefore, barred by statute as a result of the failure to file in apt time, and further, that the coexecutors had not proved by clear and convincing evidence that Laura Toigo made a gift of the stock certificate to her son, Jerome, prior to her death. This appeal followed.

During oral argument, upon inquiry by this Court as to the whereabouts of the certificate of stock in question, we were informed that the certificate was not made a part of the record. Counsel stipulated that if the certificate were present it would disclose (1) that it represented 900 shares of the company stock in Laura Toigo's name, (2) that it was endorsed in blank by Laura Toigo, (3) that no date was entered on the certificate as to the time of the alleged assignment, and (4) that there was no dispute as to the signature of Laura Toigo being witnessed by Shea.

Section 8-309 of the Uniform Commercial Code (Ill Rev Stats 1965, c 26, § 8-309), states:

"An endorsement of a security whether special or in blank does not constitute a transfer until delivery of the security on which it appears or if the endorsement is on a separate document ...


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