PROPERTY DIVISION – MARITAL OR SEPARATE – GIFT OR SALE? — NOMINAL SALES WITH TOKEN CONSIDERATION. In an opinion concerning transfers of at least three kinds of stock from a family corporation to a husband, the Court of Appeals found gifts instead of sales, and reversed as plainly wrong the trial court’s classification of the stock as marital. This was in Sfreddo v. Sfreddo, 59 Va. App. 471, 720 S.E.2d 145, 26 VLW 984 (1/24/12). The stock of a family chemical business was owned by the husband, his brother and their mother. The circumstances created some confusion as to how much of a sale this was and how much it was actually a gift, but there seems to have been no question that the transfer was to the husband alone, and not to the couple. The corporate minutes labeled the transfer of “Triple S Co.” stock as a sale and there was token consideration reflected, and for that reason the trial court found it was not a gift, as husband had failed to prove corporate intent to make a gift. It sounded that way because the corporation issued new stock to him and redeemed the mother’s shares. That showed an intent of husband’s mother to make a gift of Triple S stock to him, and the trial court found no evidence that there was not delivery and acceptance. The Court of Appeals observed that there had been no evidence after the transfer of commingling, transmutation, or joint titling of the stock to the couple. This was not good enough for the trial court, and it found no showing by the husband of corporate donative intent. The appellate court differed. Since the corporation is but a fictitious entity, the intent of the Board of Directors is necessarily the intent of the corporation, the Court of Appeals said. It found corporate intent to give the shares clearly present, and the trial court decision clearly wrong and unsupported by the evidence. The Court of Appeals chose to disregard the corporate-minutes labeling and the token consideration in view of other circumstances. Using the corporate minutes the Court of Appeals found that the redemption of the mother’s stock was followed by the sale of 200 shares to the husband at a $1.00 a share, which was not at all fair market value. Not only that, but husband’s new shares would constitute half the company. When half the company was sold in 2003 it went for $1.5 million, and that supported a finding that the remaining 200 shares were worth $7,500 per share on the date of trial. Not only that, but all three directors testified that they considered the transfer a gift, and the trial court itself had specifically found that the mother’s intent as to the shares she conveyed was to make a gift, so intent was proved by clear and convincing evidence and the trial court was plainly wrong to find no gift. Nominal consideration makes no difference because the Court of Appeals, to find a valid sale, is looking for a “bargained-for” exchange. The Court recited a lot of corporate law principles, with ample citations, including the one that intent of the sole stockholder can evidence intent of the corporation. Though the husband also contended on appeal that the trial court erroneously valued his stock in “APS Investments,” which he owned with his brother, the Court of Appeals upheld the valuation because all APS owned was a single piece of property and one bank account, and considering the value of the stock, the trial court had been well within its discretion.