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Chase Manhattan Bank v. O''Connor

Decided: February 6, 1964.

THE CHASE MANHATTAN BANK, AS ADMINISTRATOR WITH THE WILL ANNEXED OF NORMAN E. OLIVER, DECEASED, PLAINTIFF, STATE OF NEW JERSEY, BY ARTHUR J. SILLS, ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, INTERVENOR,
v.
HARRY W. O'CONNOR, AS EXECUTOR OF THE LAST WILL OF HARRY L. O'CONNOR, DECEASED, ET AL., DEFENDANTS



Matthews, J.s.c.

Matthews

Plaintiff instituted this action pursuant to N.J.S. 2A:16-50 et seq. , for a declaratory judgment determining that it is entitled to certain shares of common stock of defendant H.C.L. Corporation (hereinafter referred to as Corporation), a corporation in dissolution, and stock of the defendant Universal Match Corporation (hereinafter referred to as Universal), and to the proceeds of redemption of certain preferred stock of Corporation and to the dividends declared on the shares of the common stock of Corporation and Universal. Plaintiff is the administrator c.t.a. of the estate of Norman E. Oliver, deceased. Defendants O'Connor and Sellin filed a cross-claim with their answer in the action asserting that Charles H. O'Connor was the owner of the aforementioned shares of stock, proceeds of redemption and dividends involved in this action, and further claiming that such property is payable to them in their respective fiduciary capacities. The State of New Jersey intervened in the action seeking a judgment escheating the shares of stock, the value of the proceeds of redemption, and dividends accrued on those shares owned by Jacques L. Boisse standing in the name of Charles H. O'Connor. Defendants Universal and Corporation have filed an answer which in effect impleads the shares of stock, proceeds, and dividends.

The shares of stock of the corporation with which we are here concerned were originally issued to Norman E. Oliver and Jacques L. Boisse. Oliver was the president of the corporation. On August 14, 1925 Corporation issued its certificate No. C 242 in the name of Charles H. O'Connor for 375 shares of common stock. The records disclose that these 375 shares had their source as follows: 188 thereof out of 2 certificates for 100 shares each standing in Oliver's name, and 187 thereof out of certificates then standing in Boisse's name. On October 14, 1925 Corporation issued certificate No. C 262

for 690 shares of common stock in the name of Charles H. O'Connor. These shares had their source in a certificate for 690 shares issued June 1, 1925 to Norman E. Oliver.

On August 14, 1925 Corporation issued its certificate No. P 201 for 75 shares of 8% cumulative preferred stock of the corporation in the name of Charles H. O'Connor. These shares had their source as follows: 37 thereof out of a certificate for 500 shares dated May 29, 1925 and issued by the Corporation to Norman E. Oliver, and 38 thereof out of a certificate issued in the name of Jacques L. Boisse. On October 14, 1925 Corporation issued certificates numbered P 221 for 150 shares and P 222 for 5 shares of 8% cumulative preferred stock, each in the name of Charles H. O'Connor. These shares had their source in a certificate for 150 shares dated June 1, 1925 issued in the name of Norman E. Oliver, and a certificate for 5 shares dated June 1, 1925 and issued in the name of Norman E. Oliver. In 1956 and 1957 Corporation redeemed the aforesaid shares of preferred stock issued in the name of O'Connor at the rate of $37.886 per share including dividends. Cash dividends upon the common stock have been paid only for the years 1958 through 1961. In 1959 a one-for-one common stock dividend was declared and paid by the Corporation. Pursuant to that declaration, a certificate for 1,065 shares of common stock was issued by Corporation in the name of Charles H. O'Connor and has been retained in its possession since the issue date.

In 1961 Universal purchased all the assets of Corporation, and as the purchase price therefor paid and delivered to Corporation 1 3/4 shares of Universal common stock for each outstanding share of Corporation's common stock. Upon dissolution of Corporation, liquidating dividends for distribution of the shares of Universal common stock and of additional stock received as a stock dividend were declared. Pursuant thereto, Universal transferred and delivered to Corporation 3,791.4 shares of Universal common stock by certificates in the name of Charles H. O'Connor, which Corporation has at all times retained in its possession. Corporation has also retained

in a separate bank account the proceeds of sale of the fractional shares of Universal common stock and cash dividends paid by Universal on those shares standing in the name of O'Connor.

Both Oliver and Boisse are dead. Charles H. O'Connor died intestate on February 13, 1936, leaving as his next of kin Robert K. O'Connor, W. Scott O'Connor, Harry L. O'Connor and James O'Connor, his brothers. Robert K. O'Connor, W. Scott O'Connor, Harry L. O'Connor and James O'Connor each died testate leaving a last will which was admitted to probate. Defendant Marguerite C. Sellin was named executrix under the wills of Robert K. O'Connor and W. Scott O'Connor, respectively. Defendant Harry W. O'Connor was named executor under the will of Harry L. O'Connor. Defendant Elizabeth O'Connor was named executrix under the will of James O'Connor. Each executor and executrix so named has duly qualified and continues to act in his or her respective capacities. All of the certificates of stock standing in the name of O'Connor were found well after the death of Oliver, Boisse and O'Connor in a steel file safe in the business offices of Corporation. This safe had been the property of Corporation since the time of its organization in 1924, and had been moved successively from each of the offices maintained by Corporation during its existence.

Under these facts plaintiff contends that the shares of stock represented by the certificates in question, having their source in the original Oliver shares, are the property of Oliver's estate, both legally and equitably. No claim is asserted by plaintiff as to the certificates which had their source in certificates for shares originally owned by Boisse. It is as to these latter shares that the State of New Jersey claims its right of escheat. Defendants O'Connor and Sellin contend that all of the shares in question were the property of Charles H. O'Connor and, therefore, properly deliverable to them to be administered as part of their respective estates.

Plaintiff argues that since the certificates representing the shares of stock issued in the name ...


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