Gifts Contemplating Death
Cases
Duffield v Elwes
Court of Chancery (1827) 1 Bli.(N.s.) 497;
LOoRD ELDON: . . . The principle which is applied in the decision of this case, is the principle upon which Courts of Equity refuse to complete voluntary conveyances. No Court of Equity will compel a completion of them, and throughout the whole of what I have now read, the donor is considered as a party who may refuse to complete the intent he has expressed; but I think that is a misapprehension, because nothing can be more clear than that this donatio mortis caus!i must be a gift made by a donor in contemplation of the conceived approach of death,-that the title is not complete till he is actually dead, and that the question therefore never can be what the donor can be compelled to do, but what the donee in the case of a donatio mortis caus!i can call upon the repre sentatives, real or personal, of that donor to do; the question is this, whether the act of the donor being, as far as the act of the donor itself is to be viewed, complete, the persons who represent that donor, in respect of personalty-the executor, and in respect of realty-the heir-at-law, are not bound to complete that which, as far as the act of the donor is concerned in the question, was incom plete; in other words, where it is the gift of a personal chattel or the gift of a deed which is the subject of the donatio mortis causa, whether after the death of the individual who made that gift, the executor is not to be considered a trustee for the donee, and whether on the other hand, if it be a gift affecting the real interest,-and I distinguish now between a security upon land and the land itself -whether if it be a gift of such an interest in law, the heir-at-law of the testator is not by virtue of the operation of the trust, which is created not by indenture but a bequest arising from operation of law, a trustee for that donee. I appre hend that really the question does not turn at all upon what the donor could do, or what the donor could not do; but if it was a good donatio mortis causd, what the donee of that donor could call upon the representatives of the donor to do after the death of that donor….
Birch v Treasury Solicitor
Court of Appeal [1951] Ch. 298; [1951] 1 T.L.R. 225; [1950] 2 All E.R. 1198; 94 S.J. 838
EvERSHED M.R.: . . . There remain accordingly the three sums to the credit of the deceased, namely: (1.) 55/. with the London Trustee Savings Bank, (2.) 646/. 11s. 2d. with Barclays Bank, Ld. and, (3.) 1,353/. ls. 8d. with West minster Bank, Ld. In considering these three cases the judge applied the test stated by Luxmoore, L.J., sitting as an additional judge of the Chancery Division, in Delgoffe v. Fader ([1939] Ch. 922, 928). “The test”, he said,” whether the delivery of the document constitutes a good donatio mortis causa of a chose in action depends on the answer to the question whether the document expresses the terms on which the subject-matter of the chose in action is held by the donor, or the terms under which the chose in action came into existence “.
Mr. Buckley … has relied upon this statement, and has con tended accordingly that in the case of a chose in action actual delivery of the document constituting the evidence or indicia of title must fulfil one, if not both, of the following conditions, namely: (1.) that production and delivery of the document must be essential to the recovery of the chose in action and; (2.) it must contain all, or all the essential terms of the contract out of which the chose in action arises. In the present case the documents in question are of course the relevant bank deposit books. For reasons which we shall have to consider presently it is claimed by Mr. Buckley that in no one of the three cases (save, perhaps, for the London Trustee Savings Bank as regards the first condition) were the conditions satisfied: for, so far as concerns the first condition, it is said by Mr. Buckley that the evidence called by him proved that, whatever might have been the strict contractual terms, the practice of the joint stock banks has not been to require production of the deposit book as a condition of withdrawal; and as far as concerns the second condition, not all the terms of the relevant contracts are to be found stated, or even referred to, in any of the books.
We have examined numerous authorities relating to this difficult subject matter. But, although it seems clearly established that there may be a valid donatio mortis causa of property other than such only as is capable of manual delivery, it must be confessed that there was, at any rate before Delgoffe v. Fader, no clear or precise statement of the limiting conditions applicable in such cases.
The English Law in regard to donationes mortis causa must be taken largely to rest upon the well-known judgment of Hardwicke, L.C., in Ward v. Turner ( (1752) 2 Ves.Sen. 431), and as appears from Lord Hardwicke’s judgment, the English law (derived at least in part from the civil law) is in many respects anomalous. It was indeed questioned at one time whether the old decisions supporting donationes mortis causa were consistent with the Wills Act, 1837, on the ground that they are in a sense testamentary in that full effect is not given to them until the donor’s death. Being before that date incomplete, the gifts are then (unlike other gifts or trusts) rendered perfect and complete by the law.
“A donatio mortis causa “, said Buckley, J., in In re Beaumont ([1902] 1 Ch. 892, 893), ” is a singular form of gift. It may be said to be of an amphibious nature being a gift which is neither entirely inter vivos nor testamentary. It is an act inter vivos by which the donee is to have the absolute title to the subject of the gift not at once but if the donor dies. If the donor dies the title becomes absolute not under but as against his executor. In order to make the gift valid it must be made so as to take complete effect on the donor’s death”.
Because of these peculiar characteristics the courts will examine any case of alleged donatio mortis causa and reject it if in truth what is alleged as a donatio is an attempt to make a nuncupative will, or a will in other respects not comply ing with the forms required by the Wills Act. Such, as we read it, was the case of Reddel v. Dobree ( (1839) 10 Sim. 244), where the donor stipulated that the box delivered to the claimant should be returned to him, the donor, every three months, thereby preserving to the donor an effective dominion over the contents which he could change from time to time. For the same reasons it is of the essence of a valid donatio that there should be” traditio “, that is, delivery in fact of the thing given to the donee. As Lord Hardwicke observed in the course of his judgment in Ward v. Turner, mere symbolic delivery will not suffice. It might, therefore, be supposed that there could be a valid donatio only of such subject matters as were capable of actual manual delivery. But this is clearly not the law. Thus (as Lord Hardwicke himself noted) where the thing given is of a bulky nature, the handing to the donee of the key of the box or place where the thing is kept will be sufficient and is not to be regarded as merely symbolic. So Lord Hardwicke summed the matter up by stating that it is impossible to make a donatio mortis causa ” without a transfer or something amounting to that”.
The question then is, where actual transfer does not or cannot take place, what will ” amount to that “? As a matter of principle the indicia of title, as distinct from mere evidence of title, the document or thing the possession or production of which entitles the possessor to the money or property purported to be given, should satisfy Lord Hardwicke’s condition. On this ground, in our judgment, the validity of a donation of money standing to the donor’s credit in a Post Office Savings Bank deposit, or a mortgage debt, should be sustained; and it appears to us irrelevant in such cases whether all the terms of the contract out of which a chose in action arises are stated in the document of title. . . .
In In re Dillon ( (1890) 44 Ch.D. 76)-which appears to be the only case in this court relevant to the present question-the problem arose in regard to a banker’s deposit note. The deposit note in fact stated all the terms of the con tract save the rate of interest then presently payable, but it contained upon the back of it a form of cheque. As appears from the argument, the real question which was raised was whether, because of the endorsed cheque form, the result was that the document, on the face of it a deposit note, was in truth no more than a cheque payable to bearer. If it were, there would be little doubt that it could not be the subject of a valid donatio. As Buckley, J., stated in In re Beaumont: ” in order that the gift may be valid it must, I think, be shown that the donor handed over either property or the indicia of title to property which belonged to him. His own cheque is not property; it is only a revocable order, such that if the banker acts on it, the donee will have the money to which it relates”.
The decision of the Court of Appeal in In re Dillon was, however, that the presence of the cheque form did not convert what would otherwise have been a deposit note, the indicia of title to the sum deposited, into a mere bearer cheque. The purpose of the cheque form, said Cotton, L.J. (at p. 81), “was so that when filled up and signed it may be preserved as a receipt and not that they make it a part of the bargain that they will not pay unless this cheque is signed and produced. . . . I cannot think that the requiring this cheque to be signed puts the account on any footing different from that of an ordinary deposit account so as to prevent the fund from being given away as a donatio mortis causa “. Then, at a later stage of his judgment, he uses the language upon which Mr. Buckley has mainly founded his argument: “The case of Duffield v. Elwes ( (1827) 1 Bli.(N.s.) 497) shows that there may be a good donatio mortis causa of an instrument which does not pass by delivery, and that the executors of the donor are trustees for the donee for the purpose of giving effect to the gift. The case of Moore v. Darton ( (1851) 4 De G. & S. 517) is very instructive as to the class of instruments which are subjects of donatio mortis causa. There a document was executed when a deposit of money was made. The mere fact of the deposit would create a debt: but the document, besides acknowledging the receipt of the money, expressed the terms on which it was held, and showed what the contract between the parties was. It was held that the delivery of that document was a good donatio mortis causa of the money deposited, and so, in
my opinion, was the delivery of the deposit note in the present case “.
In our judgment, and having regard to the circumstances of the case, Cotton, L.J., cannot be taken as laying down that in a case of alleged donatio of a chose in action such as a sum of money on deposit with a bank, the deposit note or book must contain all, or all the material terms of the contract. Neither Lindley, L.J., nor Lopes, L.J., gives any support in his judgment for that pro position. Both those judges confined themselves to disposing of the argument based on the endorsed form of cheque, and, having disposed of that argument, treated the deposit note as having been established by authority as a good subject matter of donation.
In our judgment, accordingly, Byrne, J., in In re Weston, and Luxmoore, L.J., in Delgoffe v. Fader, went further than was necessary in stating that a record of all the essential terms of the contract in the document handed over was a condition or test of the validity of the donation. For reasons which we have attempted to give, we think that the real test is whether the instrument “amounts to a transfer ” as being the essential indicia or evidence of title, possession or prod_uction of which entitles the possessor to the money or property purported to be given.
We must not, however, be taken to be casting any doubt upon the correct ness of the decision in Delgoffe v. Fader, for, as the judge observed upon the evidence before him, the deposit book there in question ” was in no way essential to be produced if the depositor had required to withdraw her money “. Further, the donor ” had no current account but she in fact operated her deposit account by making deposits and drawing cheques on it in the same manner as she would have operated a current account”….
What, then, is the evidence in this case as to the necessity for production of the books upon any withdrawal-for this, in the view we take, is the essential matter? In each case upon the face of the deposit book such production was beyond doubt made a term or condition of the deposit. But, as we have said, Mr. Buckley has contended that, whatever the strict contractual terms, as a matter of practice, at least in the case of the two joint stock banks, such pro duction was not required; and it is perhaps a matter of common knowledge (as we found to be the fact in Delgoffe v. Fader, that a so-called deposit account may by arrangement between banker and customer be operated much as a current account so that the deposit book is no more than an ordinary bank pass book.
What, then, is the evidence here? In the case of the London Trustee Savings Bank, Mr. Buckley did not, and could not, press the point far; for, according to the local actuary: ” Really we always insist on the production of the passbook except in exceptional circumstances where hardship may be caused-for instance with a lost passbook”. The requirements of the two joint stock banks, Barclays and Westminster, are no doubt less stringent. But in our opinion the evidence in the present case cannot be said to go anything like so far as that in Delgofje
v. Fader. The evidence is fairly summarized in the two questions and answers appearing in the cross-examinations of the respective witnesses from those banks : (1.) Q. ” … the bank is kind enough to its depositors on occasions to say ‘We will not trouble about it? ‘ ” (i.e., the rule that production is required to obtain any payment). A. “To stretch a point in their favour”. (2.) Q. ” … the rule is that the book must be produced … but … the bank is a little easy about the rule and is prepared to relax it from time to time? ” A. “I think that is a very fair way of saying it”.
Inthe result Mr. Buckley failed, in our judgment, to prove any such general practice as would lead to the conclusion that the contractual term as to produc tion of the book in either case had become a dead letter: and certainly there was no evidence of any particular arrangement with the deceased. We think accord ingly that in the case of both banks the condition stated on the face of the deposit books must be taken to have remained operative, i.e., that the book was and is the essential indicia of title and that delivery of the book ” amounted to transfer ” of the chose in action.
The result is that; in our judgment, the plaintiffs are entitled to succeed as to the deposits in all three cases, the London Savings Bank, Barclays Bank and Westminster Bank. And we think the result satisfactory, for it avoids, as it seems to us desirable to avoid, fine distinctions between moneys on deposit with the Post Office Savings Bank on the one hand and with trustee savings banks and joint stock banks on the other, where in the latter cases the deposit account is a true deposit account as distinct from an ordinary current account.
Casssidy v The Belfast Banking Company
Exchequer Division.
15 December 1887
[1888] 22 I.L.T.R 46
Palles C.B., Andrews J.
Nov. 8, Dec. 15, 1887
Palles, C.B.
The sole question which has been argued is, whether the deposit receipt issued by the defendants at their Coleraine branch to Samuel Gilmore, since deceased, can be the subject-matter of a valid disposition by way of donatio mortis causa. The receipt bears date the 18th of August, 1886; it is headed “Not transferable;” and by it the defendants acknowledge to have received from Mr. Gilmore £200 to his credit on deposit account. After the signatures of the bank manager and accountant there are the words: “This receipt must be produced at the above-named branch when payment of either principal or interest is desired.” The following statements, inter alia, are printed on the back of the receipt: “The rate of interest to be allowed from time to time will be posted up in the public offices of the company and no other notice will be given. No interest will be allowed on sums lodged for a shorter period than one month.” The receipt was endorsed by the deceased in the following words: “I endorse this receipt to Catherine Cassidy of Bovedy. Dated this 2nd Decr., 1886. Samuel Gilmore.” It was handed over, so endorsed, to the plaintiff. Upon the findings of the jury we must assume that it was so endorsed and handed over in contemplation of the donor’s death, and with the intention that it should take effect upon his death from his then existing illness, and upon that event only, and should then pass to the plaintiff the property in the money mentioned in it.
In Moore v. Darton (4 De Gex & Sm. 517) a similar question arose as to a receipt which had previously been given by the alleged donee to the deceased donor. This receipt was in these terme: “Received, the 22nd October, 1843, of Miss Darton £500, to bear interest at 4 per cent., but not to be withdrawn at less than six mouths’ notice. William Moore.” Knight Bruce, L.J., then Vice-Chancellor, in giving judgment, contrasts the receipt with a bond, the delivery of which would unquestionably constitute a good donatio. “It is true,” he says, “the delivery of a bond is not the delivery of that without which the debt would not have been a specialty. The delivery of an instrument creating a specialty debt, and without which it would not be a specialty, as in the case of a bond, would be sufficient for the purpose of a donatio mortis causa, and so Lord Eldon decides as to a mortgage. That, however, I agree does not go the length of deciding that delivery of the mere evidence of a debt would be sufficient. In this case there is something more. The document here has been called a ‘receipt’ and it is a ‘receipt’ in a sense; but it is not a ‘receipt’ in the ordinary acceptation of that term.” He then proceeds in language very applicable to the document before us: “It was a document contemporaneous, I take it, with the creation of the debt … a document which was delivered to the agent of the debtor himself. The debt was a debt carrying interest. A mere debt would have arisen from a loan without any writing; but it would not have been a debt carrying interest, without a contract to that effect. That particular contract, I agree, might have been entered into without writing, but, as it was created by writing, proof of the writing was essential to recover upon the contract. This writing was therefore, in a sense, essential to the proof of the contract, and it is this writing which was in substance delivered mortis causa to the person owing the money.” Every word used by the Lord Justice in reference to the receipt there applies to the document in the present case. It was a document contemporaneous with the debt, which was delivered to the creditor, and which was essential to the proof of the contract, although the contract was one which might have been entered into without writing; and further it was a document the production of which, under another of the endorsed terms, was essential before the money could be re-demanded. Mr. M’Laughlin endeavoured to distinguish that case from the present upon the ground that the donee there was the debtor himself, and that the transaction might be supported as a release of the debt. But, as there was no consideration, the release to work an extinguishment should have been under seal, and the decision can be supported only upon the ground, put by the Lord Justice, of its being a valid donatio. The distinction attempted to be drawn can, I think, fairly be pushed to this: that as the donee there could not, as donee, sue himself as debtor, the gift might be effectual without a legal transfer of the right to sue; but as a note payable to order can, although unendorsed by the payee, be the subject of a valid donatio, this distinction does not appear to me to be material. Witt v. Amis (1 Best & Smith, 109) was an action of trover for a policy of insurance and a deposit receipt signed by the manager of the Provincial Bank of England at Southampton, whereby the bank acknowledged to hold the sum of £400 as the money of Priscilla Floyd. The defendant claimed these documents under an alleged donatio mortis causa, and the jury having found that there was a gift in fact, the verdict was entered for her, subject to leave to move. In moving to enter the verdict, Parry, Serjeant, for the plaintiff, confined his application for a rule to the policy of insurance, not seeking to disturb the verdict as to the deposit note. A bill having been subsequently filed by Amos, the defendant (Amis v. Witt, 33 Beav. 619), against Witt the administrator, to whom the legal interest had passed, it was contended for Witt (and I think rightly) that the verdict at law had only determined the right to the papers. It was also contended that the right to the money secured by such instrument as was not transferable could not pass as a donatio. Lord Romilly overruled this contention, and held the plaintiff entitled to the deposit note and the money paid in respect of it, as a valid donatio mortis causa. In Moore v. Moore (L. R. 18 Eq. 474) an attempt was made to induce Hall, V.-C., to decline to follow Amis v. Witt. One of the subject-matters of the donatio there was a deposit receipt for £470 in the Derbyshire Bank. The exact form of the receipt, and whether it was itself the contract or only evidence of the contract of loan, does not appear. The present Lord Justice Lindley, who was counsel for the defendant, suggested that the note could not be the subject-matter of a donatio mortis causa, and that although Amis v. Witt had decided that it could be, such a decision was not warranted by the earlier authorities. Hall, V.C., said: “I said in the course of the argument, and to that I adhere, that it having been actually decided by the late Master of the Rolls in Amis v. Witt, I shall not disturb that decision. If that decision is to be disturbed it must be disturbed by a higher authority than mine;” and he ultimately supported the gift of the deposit note as a valid donatio mortis causa. Dunne v. Boyd (I. Rep. 8 Eq. 609) can hardly be relied upon as a decision, because in that case the Vice-Chancellor held upon the evidence that there was not a sufficient handing over of the document to constitute a valid donatio. During the argument before us I had a vague recollection of the very point having been decided in this country by Lord Chancellor Brady in an unreported case. Through the kindness of my friend, the Chairman of the West Riding of Cork (Mr. Ferguson, Q.C.), I have been referred to the case, and have procured copies of some of the proceedings from the Public Record Office. The case was Sutcliffe v. Sutcliffe, which was heard before Brady, L.C., on the 21st of January, 1863. The subject-matter of the donatio there was a sum of £400 which had been deposited by one Edward Sutcliffe in the Kilkenny branch of the Provincial Bank of Ireland on the 26th September, *47 1861. The cause petition stated the conditions upon which the deposit was received, and which do not appear to differ materially from those in the present case. By his decree the Lord Chancellor declared that the petitioner was entitled to the sum of £400 as a donatio mortis causa.
These cases are identical with the present, save in one respect; the receipt here contains the words “not transferable,” which do not appear to have been upon the documents in any of the cases I have referred to. The words are not, in my opinion, material. The receipt of course was not (and even if those words were absent could not have been) negotiable, in the sense of conferring upon a transferee by endorsement a better title than that of his transferor. If this was what was intended to be effected by the words they were useless. If, on the other hand, the words were an attempt on the part of the bank to render the money secured by the receipt inalienable, they were void; the bank could not, upon such a contract, prevent the money of the deceased in their hands being assignable by him; or in the absence of assignment, passing to his personal representative. Again, the money secured by the receipts in the various cases I have mentioned being choses in action, were, as the law then stood, incapable of assignment at law, and the words here express no more than was implied in the receipts in those cases.
For these reasons, we are of opinion that the verdict should stand.
We desire to guard ourselves against allowing this case to be regarded as a precedent for entertaining such an action in a Common Law Division. The transfer of the debt effected by the donatio mortis causa was not an assignment in writing, and therefore could not, even since the Judicature Act, have passed to the plaintiff the legal interest in the sum of money comprised therein. We think that its true operation was to pass the equitable interest only, and that such a transfer raised a trust by operation of law in the personal representative for the donee. It may be contended that the suit involves the execution of a trust, and as such should have been brought in the Chancery Division. Section 38 of the Judicature Act, however, clearly shows that the 36th section is directory only. We, therefore, have jurisdiction to determine the case, and after the expense of a trial has been incurred we are not inclined to put the parties to the cost of a transfer and hearing in the Chancery Division.
The personal representative of the deceased ought to have been a party to the suit, but this objection was not taken, and under any circumstances would be now too late. The verdict must consequently stand.
Andrews, J., concurred.
Mulroy, Deceased; McAndrew v Mulroy
Court of Appeal.
23 May 1924
[1924] 58 I.L.T.R 113
Molony L.C.J., Ronan, O’Connor L.JJ.
Molony, L.C.J.
In this case the Master of the Rolls came to the conclusion that on the evidence there was not a good donatio mortis causa, and, after a careful examination of the evidence, I am not disposed to differ from him. Three things are necessary for an effective donatio mortis causa, as was laid down in Cain v. Moon, [1896] 2 Q. B. D. 283 at p. 286: “First, the gift or donation must have been made in contemplation, though not necessarily in expectation, of death; secondly, there must have been delivery to the donee of the subject matter of the death; and thirdly, the gift must be made under such circumstances as show that the thing is to revert to the donor in case he should recover.” As regards delivery, it was established in Union of London and Smith’s Bank v. Wasserberg, [1915] 1 Ch. 195, that an inchoate or imperfect delivery of chattels may be sufficient for effectuating a donatio mortis causa. In that case the testator, when about to undergo a serious operation, expressed in the clearest way a desire to give his wife certain bonds to bearer, which he had in his locked box in the bank, and having discussed the matter with the assistant manager, he put his wife’s name on the outside of the parcel containing the bonds, and locked it up in his locked box, and having done this in presence of his wife, he left the box in the bank and gave his wife a list of the bonds, telling her to keep it safely. After they had reached home he gave his wife a bunch of keys which contained the key of the locked box, and told her to lock them up with the list of the bonds, which she accordingly did, in a drawer in her own room, of which she had always kept the key. The same day the testator went into a nursing home, where he shortly afterwards died; and it was held by Sargant, J., that the delivery of the key transferring to the wife a partial dominion over or part of the means of getting at the box, though not a sufficient delivery to support a gift inter vivos, was under the circumstances a sufficient delivery to effectuate a donatio mortis causa. Sargant, J., observed in the course of his judgment, p. 202: “With regard to the incident at the bank, the case of Cochrane v. Moore (25 Q. B. D. 57) shows that mere words of gift are not in themselves sufficient, but there must be delivery. If the testator had actually given the parcel to his wife, and she had handed it back to him for the purpose of safe custody, that would probably have been enough; but the facts are, I think, that the testator did not at any time during that incident part with the custody of the bonds.” The question of the effect of a redelivery of bank notes for the purpose of safe custody was discussed this year in the case of In re Hawkins, Watts v. Nash, [1924] W. N. 131. In that case the testator, on his death-bed, handed over to his niece bank notes for £5,000, and to her husband bank notes for £2,000, and clearly indicated that the money was to be theirs respectively after his death. The niece, after having got possession of the notes, asked the testator if she should put the envelope in his deed-box for safety against fire, and, upon the testator assenting, she took the key from a nail in the wall facing the testator’s bed, unlocked the box, placed the envelope in the box, which she replaced under his bed, and she hung the key upon its nail again. It was contended on behalf of the niece and her husband that there was such a complete delivery of the notes as was sufficient to constitute a valid donatio mortis causa to each donee, and that the redelivery of the notes to the testator for safe custody on behalf of the donees did not affect the previous gift. P. O. Lawrence, J., said, in delivering judgment: “The only difficulty lay in the question whether the placing the notes in the deed-box of the testator for safe custody destroyed the effect of the previous delivery by restoring to the donor possession of the notes.” Dealing with certain cases, including the case of In re Wasserberg, [1915] 1 Ch. 195, and Bunn v. Markham, 7 Taunton 244, he said: “In the present case the previous effectual delivery was unaffected by the subsequent part of the transaction, namely, the placing of the envelope, with the donor’s assent, in the deed-box by the donees for safe custody. The testator therefore was, until his death, merely the custodian of the notes for the donees. There was nothing in Bunn v. Markham inconsistent with the proposition that when once the gifts ( mortis causa ) were complete, the subsequent agreement by the donor to take back the notes for safe custody did not affect the prior gifts.” In the present case the deceased man, who was a confirmed invalid and died a few days afterwards, asked his brother, the defendant, with whom he lived, to bring him his cash-box; and it having been brought to him, he opened it with the key which was in the pocket of his waistcoat which he had at the end of his bed, and having opened it and taken out the three documents, he called the defendant to his side, and said: “Here, Jamesie, is all belonging to me, all my pro *114 perty; and I am sorry I haven’t more to give you; you were very good to me.” And he added: “You will do for me the same as you did for Kitty and Tom,” which was understood to mean to provide for Masses and a monument. Nothing else was said, but it does appear that the documents were put in the hands of the defendant. Had the defendant thenceforward retained possession of the documents there would have been strong evidence in favour of a donatio, but it appears that after the defendant had got possession of the documents he put them back into the box and that the deceased himself locked the box and, having locked the box, put the key back into his own waistcoat pocket, and then the defendant put away the box and restored the vest containing the key to where it had previously been at the foot of the bed. All this happened within a couple of minutes, and the effect of the transaction is that, notwithstanding the gift, the deceased man had exactly the same dominion over the property that he had before. If the defendant had asked to be allowed to put the papers back in the box for safe custody, and the deceased had assented to this, Watts v. Nash (supra) shows that this would not have destroyed the effect of the gift; but the unexplained replacing of the document in the box immediately afterwards leads to the belief that the deceased never intended to part with the actual possession of the documents in such a way as to lose dominion and control of them during his life. The case is one of some difficulty, and I hesitated in coming to a conclusion; but on the whole I cannot bring myself to differ from the Master of the Rolls in his conclusion, and consequently I think the appeal ought to be dismissed.
Ronan, L.J.
I have very great difficulty in this case. Donatio mortis causa depends on the intention with which certain acts are done, and the first matter we must try to ascertain is the intention with which the acts were done here. (He reviews the evidence.) He did not hand him the box with the documents in it. That is a very important distinction between this and other cases. He handed him the very documents themselves. Beyond all doubt, if the transaction ended there, there was on the evidence a good donatio mortis causa. But a donatio mortis causa can be revoked by the donor just as a legacy can; and the question in this case appears to me to be whether this complete donatio mortis causa was revoked. It could have been revoked by an act or statement of the donor showing that he intended to destroy the effect of what he had done and to resume the entire control of the property himself. No further statement by him was proved. Taking the evidence as a whole, I am not satisfied that there is anything proved sufficient to show that the donor said or did anything to revoke the gift he had already made. However, my view is immaterial, the majority of the Court holding the other way.
O’Connor, L.J.
I am of opinion that the appeal should be dismissed. Counsel for the appellant asks us to split the transaction into two—the one a transfer of the possession of the documents to his client, and the other a retransfer of them from his client to Michael on the terms of Michael keeping them on trust for the appellant. If this were the effect of the transaction, the case would be within the authority of the case in the Weekly Notes, to which we have been referred. That, however, is not my view of the matter. The whole business took only a couple of minutes or so; when it was all over, the position of the documents and the indicium of the control over them were precisely where they always were. The momentary tradition of the documents into the hands of James seems to me quite consistent with its being done for the purpose of showing to James the property the deceased intended to give him, and of enabling James afterwards to claim them. For, I think, there was an intention to benefit James; but that is a different thing from transferring the possession to James. The transfer of possession is the element necessary; it is, in my opinion, not alone not established by the evidence, but is negatived by the evidence, taken as a whole.
In re M’Wey; Ryan v. Cashin and Costello.
[1928] IR 491
Meredith J. 491
The defendant, Margaret Cashin, claims that she is entitled to £300 India 51/2 per cent. Stock and £400 3 per cent. Local Loans Stock, on the ground that what, in the indorsement of claim in the originating summons, are described as receipts for the said stock were delivered to her by the deceased shortly before his death as a donatio mortis causa of the said stock.
It is not unimportant to observe that the receipts are not, strictly speaking, receipts for the stock, but only receipts for the consideration paid for the stock. Thus the so-called receipt for the £400 3 per cent. Local Loans Stock is a receipt for the sum of £252 10s., which was the consideration for the purchase at 631/8 of £400 interest or share in the said stock. It appears from the receipt that the stock had been transferred on the date therein mentioned to the deceased. Consequently, quoad the property in respect of which the donatio mortis causa is claimed, the document is simply a memorandum or statement of particulars of the “interest or share” in the stock that was transferred to the deceased on the date mentioned.
The defendant, Margaret Cashin, was cross-examined on her affidavit, and I had some doubt in my own mind if, on her evidence in the box, the intention to make a donatio was quite clear. However, that point was not contested, and the only point raised on the facts was that the gift was intended to take effect immediately and unconditionally. But the point seems to me to be disposed of by the directions of the deceased not to sell until after his death. I therefore hold that the deceased gave Margaret Cashin the receipts intending to make a donatio mortis causa.
The question accordingly is whether, or not, that intention alone was sufficient notwithstanding the nature of the property in each case a share or interest in certain stock made transferable in a specified Bankand notwithstanding the nature of the actual thing delivered, which was in each case a mere memorandum. To hold that it is sufficient would, in my opinion, be to hold that the case of Ward v. Turner (1) is no longer good law. But the authority of that case was recognised by the House of Lords in Duffield v. Elwes (2), and was followed in Moore v. Moore (3), and, as was held in the last-mentioned case, so I hold in this, that the receipts in question here do not differ substantially from the receipts for the South Sea Annuities, which were the subject matter in Ward v. Turner (1). In re Andrews (4) belongs to the same line of authorities.
If the executors of the donor are to be held trustees for the donee for the purpose of giving effect to the gift simply because a document is handed to the donee giving particulars of a share or interest in stock that had been purchased, the intention being clear, much of the learning and of the subtle distinctions in the cases on donationes mortis causa must be regarded as obsolete. Where the executors have been held to be trustees, it is not because the donor himself had made himself a trustee, but because he had made an incomplete gift and because the doctrine, that equity will not assist a volunteer by completing an incomplete gift, does not apply to a donatio mortis causa. But there must in the first instance be something which merely requires to be completed in order to perfect the legal title.
I have only to add that in Duckworth v. Lee (5) all the members of the Court of Appeal in Ireland were agreed that the doctrine of donatio mortis causa was not to be extended. There has always been a distinction between the English law on this subject and the Roman law as it existed in the time of Justinian, and if Ward v. Turner (1) were not to be held to govern this case then it seems to me that the law would be extended so as to efface the distinction.
Mary J. Anderson, deceased
Anderson v Anderson
High Court.
20 January 1938
[1938] 72 I.L.T.R 47
Johnston, Gavan Duffy JJ.
Johnston, J.:
I should like first to congratulate counsel on each side on their very clear and succinct argument. Everything possible has been said by Mr. MacCarthy and by Mr Brereton Barry. Having considered the arguments carefully I think that Judge Sealy’s decision was correct and should be upheld, but not exactly upon the grounds upon which it was given. All the essential elements to sustain a donatio mortis causa exist in this case and I am quite satisfied on Mr. MacCarthy’s analysis of the evidence and the authorities cited that the gift constituted a valid donatio mortis causa. McGonnell v. Murray, I. R. 3 Eq. 460, on which Mr. Brereton Barry relies, was based on very different facts from those in this case. I can well understand the distinction that should be made between a deposit book in a private bank and a deposit book issued by a great State department such as the Post Office. In a sense such a book has statutory authority. Such a distinction has been drawn in England. The appeal must therefore be dismissed.
Gavan Duffy, J.:
I also think that Judge Sealy’s decision should be upheld. I think that there was a valid transfer of the property from the deceased and that there is no evidence to support a resulting trust for the donor. The respondent was in some difficulty owing to the non-production of the book, but it would be unfair to decide against him on that ground when the Post Office after the death of the deceased recognised his claim.
Anna Thompson, Deceased
Goff v Duffield
High Court.
24 June 1927
[1929] 63 I.L.T.R 17
Meredith J.
Meredith, J.
Hard cases, as has often been said, make bad law. This is an extremely hard case, and it is with the most sincere regret that I feel coerced to hold that the intended donatio mortis causa cannot be sustained. The deceased, Miss Anna Thompson, had a fair amount of property, but, for reasons which she stated to a friend, she felt under a moral obligation to dispose of the greater part in a particular way. She had, however, as she stated, a sum of £78 of her own in the Post Office for a certain purpose. It is her dealing in respect of this small sum that has most regrettably been questioned.
The deceased was on terms of intimate friendship with Miss Duffield, and when on her death bed sent for her. When Miss Duffield called some one else was with the deceased, and she said she would call again. But that evening she received news of the serious illness of a nephew in England, and in consequence left for England on the following morning. When she returned some days later she at once called to see Miss Thompson and then learned that she had just died. What happened in the meantime in respect of the £78 is told in the affidavit of Kate Leavy, the servant maid of the deceased, as follows:— “She gave me the box, which was locked, and told me to keep it for Miss Annie Duffield until she came back from England and then to give it to her. She told me to tell Miss Duffield that the box and everything in it was to be hers (Miss Duffield’s) except one sovereign which was to be given to Miss Duffield’s sister. She told me to be particular and see that I gave it to no one save Miss Annie Duffield herself. She also gave me the key of the box. She told me to get the picture of the Norsemen in the sitting room and give it to Miss Duffield. I took the box away and papered it up and left it downstairs in my room. I also got the *17 picture and papered it up. Several times afterwards Miss Thompson asked had I the box safe, and repeated her instructions that I was to keep it for Miss Annie Duffield and give it to her the moment she came back from England, and then I was to give it into her own hands. She seemed specially anxious that her instructions should be carried out. Before Miss Thompson gave it to me, as stated above, the box was kept in a press, from which I took it and brought it to her. I saw Miss Thompson wrap up two sovereigns in the tissue paper that I brought to her, and I also saw her lock the box.”
It appears from the affidavit of Miss Duffield that when the box was handed over to Miss Duffield on her return from England and opened by her it was found that on the top of the tray there was a Post Office Savings Bank Book in a Post Office envelope, which showed a sum of £78 standing to the credit of the deceased, who was the depositor marked therein. Several affidavits were filed, but the facts just stated are all that bear on the one question that has been raised, namely, whether or not the handing of the mahogany box and key to Kate Leavy, who then took them in charge according to her instructions, was a constructive delivery of the £78 to Miss Duffield. That there was an intention to make a donatio mortis causa was not disputed. But that is not sufficient. In the case of McWey, decd.; Ryan v. Cashin, 62 Ir. L. T. R. 161, which I decided last term, I referred to authorities on that point.
The difficulty in the case arises from the fact that Kate Leavy was the servant of the deceased, and that she did not do anything more than take the mahogany box in charge according to the instructions of her mistress with a view to performing a future act which would constitute an actual delivery of the box and a constructive delivery of the £78, and which future act, as events turned out, could only, as a matter of fact, have been performed on the return of Miss Duffield after the death of Miss Thompson. Even if Kate Leavy had wired to Miss Duffield that she had the box in charge for her on her return, and if Miss Duffield had wired a direction to leave the box at her (Miss Duffield’s) house, then, although I do not think Miss Thompson meant to specify the return from England otherwise than casually and at the earliest practicable opportunity, yet I think the proper thing for Kate Leavy to do in such circumstances would be to seek Miss Thompson’s further instructions, and I think she would be entitled to say: “No; you must only deliver the box into Miss Duffield’s own hands on her return.” If that is so it is inconsistent with the box having been received by Kate Leavy in the first instance as agent for Miss Duffield. Or, to take other hypothetical circumstances, suppose that when Miss Duffield first called Kate Leavy had known the intentions of her mistress and had communicated them to Miss Duffield and had undertaken to take charge of the box for her if received, and if the deceased had simply given the box to Kate Leavy for Miss Duffield, and Kate Leavy had then taken it to her room and parcelled it up for Miss Duffield, then, in that case, there could not, I think, be any doubt but that there would have been a delivery.
I consider, therefore, that Mr. Dickie, in his able argument, went too far in contending that the fact that Kate Leavy was the servant of the deceased precluded her from acting as agent for Miss Duffield. But, without going that length, I think it clear that mere instructions by a mistress to a servant, and mere obedience to these instructions on the part of the servant, are not sufficient to make the servant an agent of a third person, just because what is directed to be done is intended for the benefit of such third person. Delivery, actual or constructive, is necessary to constitute a valid donatio mortis causa and “a mere delivery to an agent, in the character of agent for the giver, would amount to nothing”: Farquharson v. Cave, 2 Coll. 356, at page 367. I should be glad to seize on any point in the evidence which would enable me to hold that when the box was delivered to Kate Leavy she was divested, in respect of the transaction in question, of her character as agent for the donor and invested with the character of agent for the donee, but I can find absolutely none.
The case of Moore v. Darton, 4 De G. & Sm. 517, at p. 520, was strongly relied on by Mr. Barry for the defendant, and on the facts of that case as reported I fail to distinguish it from the present. That case, unlike the present, was tried on old evidence, and particularly having regard to the fact that the question as to agency was not the main point argued—it is not unlikely that some material fact beyond what appears in the report was put in evidence. Anyway, the learned Vice-Chancellor held on the evidence that the document in question was placed in the hands of the donor’s maid as agent for *18 the donee. No doubt he goes on to say, “with an intention, which appears to me sufficient, to constitute its delivery a donatio mortis causa. ” I do not think this can mean “with an intention sufficient to make the handing of the document to the donor’s maid a constructive delivery to the donee,” for that would be contrary to the authorities. I think it only means “with an intention sufficient to make what, on the evidence, appears to be a delivery to the donee a donatio mortis causa. ” The emphasis is on the latter words; the point as to delivery having been already dealt with. The case as to the class of instruments which are subjects of a donatio mortis causa (In re Dillon, 44 Ch. D. 76, at p. 82) is a valuable authority, but, as reported, it does not seem of assistance on the question of the agency of a person who was primâ facie only agent for the donor.
The question as to agency in dispute in this case cannot be dealt with in one way when it arises in respect of a donatio mortis causa and in a different way when it arises in any other case; and in no other case could the mere handing of a box by a person to his or her own servant with instructions in a certain event, or at a future date, to hand it over to a third party, and the mere taking of the box in charge by the servant in accordance with the instructions, be a delivery of the box, or a constructive delivery of something to which any of the contents of the box refers, to the servant as agent for the third party. In Farina v. Home, 16 M. & W. 119, which was a case of delivery of goods within the meaning of s. 17 of the Statute of Frauds, Parke, B., said:—“This warrant is no more than an engagement by the wharfinger to deliver to the consignee, or anyone he may appoint; and the wharfinger holds the goods as the agent of the consignor (who is the vendor’s agent), and his possession is that of the consignee, until an assignment has taken place and the wharfinger has attorned, so to speak, to the assignee, and agreed with him to hold for him. Then, and not till then, the wharfinger is the agent or bailee of the assignee and his possession that of the assignee, and then only is there a constructive delivery to him.” A similar question arises sometimes in the case of goods alleged to be delivered under circumstances constituting a valid pledge at common law. In Dublin City Distillery, Ltd. v. Doherty, [1914] A. C. 823, at p. 852, Lord Parker of Waddington said:— “When the goods are not in the actual possession of the pledger, but of a third party as bailee for him, possession is usually given by a direction of the pledger to the third party requiring him to deliver them to, or hold them on account of, the pledgee, followed either by actual delivery to the pledgee or by some acknowledgment on the part of the third party that he holds the goods for the pledgee.” It is the last words that are material in the present case. Here, after Kate Leavy took the box in charge, nothing followed to show that she retained the box otherwise than as agent of the deceased to carry out the instruction to hand them to Miss Duffield on her return.
For these reasons I must hold that the intended donatio fails.
I allow all parties their costs out of the general estate and £5 5s. preliminary costs to Miss Duffield.
Mills v. Shields and Kelly.
Gavan Duffy P. [1948] IR 367
GAVAN DUFFY P. :
18 May
I think the plaintiff has established a valid donatio mortis causa. The late Alfred Mills handed certain valuables to Father Celestine Kelly, O.D.C., asking him to give the parcel to the donor’s brother (and there is no doubt that he meant Dr. Ernest Mills of Johannesburg) in case anything happened to the donor when he went away to be treated at a nursing home, and Father Kelly promised to give the parcel to the brother; he understood that the contemplated treatment was dangerous. Shortly afterwards the donor gave Father Kelly another package to put with the first. Alfred Mills was suffering from neurosis and about three weeks later he set out for Dublin reluctantly from Loughrea, got out of the train soon after starting in the morning and, having arranged with a friend to go with him by car to Dublin next day, because he was afraid to travel alone, went for a walk by himself and took his own life on the evening of the same day. He had told one witness that he was going to Dublin to see a specialist and another that he was going for a rest; I cannot be certain that he meant to go to a nursing home, but it is clear that, in pursuance of advice that he had received, he was making the journey in the hope of finding a cure for a very oppressive form of neurosis, most probably through some pathological treatment. The substance of the direction that accompanied his donatio was that the gift was to become effective if he should die when he went away for treatment; and on a fair view of the evidence I think that is what happened, for I think this was the journey in contemplation. I follow the decision of Lord Tomlin in Wilkes v.Allington (2), in holding that the donatio is not defeated by the fact that the donor, having set out for Dublin, did not die, as he had feared, from treatment in a nursing home, but from another cause.
It is immaterial whether or not Alfred Mills made his gift, as is now suggested, under the apprehension of being visited with an irresistible impulse to commit suicide; the surmise is easy to accept after the event, but the evidence is really quite inconclusive. This case is not one of intended suicide within the ban of Agnew v. Belfast Banking Company (3).
Mr. Micks, however, on behalf of the personal representative of the deceased man, stoutly contests the validity, for the purpose of donatio, of the donor’s delivery to his own agent. Now Father Celestine Kelly was the spiritual adviser of Alfred Mills, who placed the utmost confidence in him as a man; accordingly he chose the priest as his agent for the donatio and twice gave him valuables to transmit to Dr. Mills in South Africa, if the donor were to die under the contemplated treatment. In law Father Celestine was clearly the donor’s agent; but he was a fiduciary agent, to take charge of considerable assets and see to their safe transmission to a distant country in the event of the donor’s death while away from home for treatment. Father Celestine therefore accepted a trust and, the implied power of revocation never having been exercised, he is trustee for the beneficial owner of the property, Dr. Ernest Mills. The case, I think, is indistinguishable on the facts from In re Korvine’s Trust, Levashoff v. Block (1), cited in White and Tudor’s Leading Cases in Equity (9th ed.), vol. 1, at p. 357, as the latest of a series of authorities for the proposition that an essential of a validdonatio mortis causa is a delivery of the subject of the gift to the donee for his own use or upon trust for another person,and I am happy to follow Mr. Justice Eve in sustaining thetraditio.
There remains for further argument the question whether certain of the valuables delivered, including stock and share certificates, were capable of passing, for the purpose ofdonatio mortis causa, by the simple delivery proved here.
Mills v. Shields. (No. 2).
Gavan Duffy P. [1950] IR 21
GAVAN DUFFY P. :
26 Jan. 1949
I have already decided in favour of a gift mortis causaby the late Alfred J. Mills, but the question whether certain securities, representing his investments, effectively passed to the donee on the death of the donor by virtue of histraditio of stock and share certificates and savings certificates stood over for further evidence and argument. The securities are:1, certain savings certificates of Saorstát Éireann; 2, certificates, in Mr. Mills’s name, of shares in ten companies registered, under the Companies Acts, in Ireland; and 3, certificates, in his name, of stock or shares in fourteen companies registered, under the Companies Acts, in England. I omit securities in respect of which the plaintiff, as donee, now makes no claim.
The savings certificates were issued in 1929 and 1930, but I understand that the Savings Certificates Rules, 1926, described as “Conditions regarding the issue of Savings Certificates,” apply to them. Art. 47 (2) of the Rules requires any dispute as to the actual ownership of a certificate, arising between the Minister for Posts and Telegraphs and any person claiming to be entitled, to be referred to the Registrar of Friendly Societies for final decision. Accordingly, I think the donor’s contract with the Post Office requires the plaintiff to resort in the first instance to the Minister, and then, if the claim is rejected, to the Registrar. Useful notes on the corresponding jurisdiction and decisions in England will be found in Halsbury’s Complete Statutes of England, vol. 17, tit. “Savings Banks,” at pp. 654, 675, 761-2.
Various things in action have been held to pass under gifts mortis causa, but the nature of the particular right involved must determine the document or documents whereof delivery is requisite for a good gift mortis causa.The delivery of a negotiable instrument is capable of passing, on the donor’s death, the rights which the document carries; but, as to non-negotiable instruments, it is desirable to distinguish vouchers for money, as to which a clear principle can be extracted from case law, in their relation to giftsmortis causa, and documents embodying other things in action(such as stock and share certificates), for where these are concerned I find the law harder to ascertain from the cases: see, in this connection, Jenks’s “Digest of English Civil Law,”3rd edn., pars. 2063, 2064.
As to vouchers for money, a term in which I include mortgage deeds and other documents of title to a payment of cash, I think the accepted principle is that the delivery of a document of title, acknowledging a sum of money to be payable to the donor, can effectively pass his rights, by way of gift mortis causa, provided that the document expresses the terms on which the money is payable and shows, at least, the essentials of the contract between the donor and the party liable to pay: see the judgment of Cotton L.J., at p. 82, in In re Dillon, Duffin v. Duffin (1),as adopted in In re Weston, Bartholomew v. Menzies (2),per Byrne J.
In England that principle has been accepted in such cases as In re Richards, Jones v. Rebbeck (3), by Eve J., in favour of a traditio of Victory Bonds, and Darlow v.Sparks (4), by Bennett J., in favour of a traditio of savings certificates issued by the British Government.
In Delgoffe v. Fader (5), Luxmoore L.J. rejected, for the purpose of a gift mortis causa, the delivery of a book equivalent to a mere bank pass book; in doing so he reiterated the test prescribed by Cotton L.J. and Byrne J., but he also stressed the fact that the book was not essential to the recovery of the money to which it related; and counsel for the plaintiff suggest, as a sufficient alternative condition to that of the principle of In re Dillon, Duffin v. Duffin (1)where the document handed over is not negotiable, that the delivery, by way of gift mortis causa, of a document essential to the recovery of the donor’s claim makes a traditio effective in equity, and that, a stock or share certificate being a document of that character, the plaintiff is entitled to succeed.
The feature here relied upon by the plaintiff has undoubtedly found favour from time to time in the Courts;
obviously, where a contract is evidenced by a single paper writing, the document is often likely to answer, or fail to answer, the test, whether one asks if it sets out the whole contract or whether one asks if it is essential to recovery on the contract. Cassidy v. Belfast Banking Co. (1) is, perhaps, the best case for the plaintiff’s test. There Palles C.B. emphasised the fact that the deposit receipt in question was essential to the proof of the contract. At the same time, he expressly grounded his judgment on that of Knight Bruce V. C., in Moore v. Darton (2), which Cotton L.J., in In re Dillon, Duffin v. Duffin (3), found very instructive to illustrate the rule that a document expressing the terms of a contract was a good subject-matter when delivered by way of gift mortis causa; in fact, that was one of the two authorities upon which the Lord Justice formulated his principle: that authority upheld the donatio of a receipt for money, repayable on six months’ notice, with interest at 4%, as the document itself showed.
One other feature of Cassidy’s Case (1) deserves notice. The deposit receipt, while showing interest to be payable, stated that the rate of interest would be posted up in the bank’s offices and that no other notice would be given; yet the delivery of the document was upheld for a giftmortis causa. I observe that in In re Weston, Bartholomewv. Menzies (4), the delivery was upheld of a document which, while failing to set out the entire contract, did disclose the essentials of the contract. I shall have to consider whether I can say as much of the donor’s stock and share certificates here, if the same principle applies to a document which is not a voucher for money.
I think the most instructive case in Ireland is Duckworthv. Lee (5), in the Court of Appeal, where an attempt to sustain the delivery of an IOU as effective for a giftmortis causa was unanimously condemned. The document was a mere memorandum, and imperfect at that, for it said nothing about interest, which the debtor had agreed to pay. Ashbourne C., stating that in all the cases cited where the gift mortis causa had been upheld the document delivered was essential to the recovery of the debt, gave as instances a policy of assurance, a bond, a mortgage deed, and a deposit receipt, cases in which I notice that the document embodied the whole contract, or substantially the whole contract, of the parties; he then mentioned Moore v. Darton (2) (as also did FitzGibbon and Walker and Holmes L.JJ.), pointing out that there the receipt was evidence of the entire debt and of all the terms of the loan, it proved all the terms of the contract, and, as the contract was created by writing, proof of the writing was essential to recovery upon the contract. Walker L.J. said:”The delivery of the thing must carry with it some property, or the delivery must be of some writing which contains special terms or conditions attaching to the debt which it proves, and which must be carried out and proved in seeking its enforcement.” Holmes L.J. said that there are “simple contract debts to which the parties have by memorandum in writing attached special conditions as to bearing interest, the mode of payment, and the steps to be taken before payment can be enforced; in such cases the document may be regarded as essential evidence to establish the debt, inasmuch as it contains the terms of the contract which could not otherwise be proved; and it is possible to hold without an infringement of the principle governing this branch of the law that by the delivery of such a document in anticipation of death there may be a transfer of the debt to take effect upon death.”
Thirty years earlier in M’Gonnell v. Murray (1), Walsh M.R. at p. 471, rejecting the donatio of a savings bank book, had done so because the book did not embody the terms of the contract between the depositor and the bank.
There seems to be no reason why equity should lend its aid on any easier conditions to validate the traditio of a share certificate than those on which it validates the traditioof a voucher for money, where a gift mortis causa is asserted; I think the same underlying principle must govern, and, if so, the cases just cited do not suggest to me that equity will recognise as sufficient the handing over of a document essential to recovery of the donor’s claim, unless it shows all the material terms of the contract. But, before I examine the nature of the stock and share certificates and the company law affecting them, I wish to refer briefly to the case law for choses in action other than a right to money.
The authorities upon gifts, or attempted gifts, mortis causa of that species of choses in action during the last two centuries are strangely scanty. It is conceded that delivery by way of gift mortis causa of a mere stock receipt is ineffective; and Irish law on this topic has followed English precedent. ( Ward v. Turner (2); In re M’Wey, Ryan v.Cashin and Costello (3).) Hall V. C., in Moore v. Moore (4),held equally ineffective the delivery of scrip certificates for stock in an English railway company, stating that he thought the railway stock not substantially distinguishable from South Sea Annuities, but he did not advert to the difference between the stock receipts for South Sea Annuities and the railway scrip certificates, the first as being mere receipts for the money paid and the others, authentic documents of title. One subject-matter of the gift mortis causa asserted in In re Weston, Bartholomew v. Menzies (1) was a certificate of shares, convertible into money, of a building society, and Byrne J. said that he was unable to distinguish that certificate from “an ordinary certificate of railway stock, like that which was dealt with in Moore v. Moore (2)”;so the claim of the donee of a share certificate failed, as the donee’s claim to a provisional share certificate had in that case failed, as if each of them had got nothing better than a mere receipt for the consideration money, as in Ward v. Turner (3).
Then Kekewich J., in In re Andrews, Andrews v. Andrews (4)rejected, for a gift mortis causa, a Post Office savings bank investment certificate, which appears to have shown the essentials of the bargain. I confess that I find the learned Judge’s reasoning hard to follow; he said that he rejected the claim “on principle and authority” and because a Judge of first instance ought not to go beyond In re Dillon, Duffin v. Duffin (5) and In re Weston, Bartholomew v.Menzies (1). In In re Lee, Treasury Solicitor v. Parrott (6),Astbury J. questioned this case and, basing himself on In re Dillon, Duffin v. Duffin (5) upheld for a gift mortis causa the delivery of an exchequer bond deposit book; he said that the document was the only document of title existing. The judgment does not advert to the fact that the book did not fully set out the donor’s rights, for the holder was entitled, though the book did not say so, to get a bond on application and on surrendering the book, and until such an application and surrender the bond would not actually come into physical existence at all. However, the book did certify the donor to be the registered holder of bonds for £100.
If this brief survey of cases directly concerned with the legal position of gifts mortis causa of documents representing things in action other than a right to money gives a fair picture of the relevant case law, that position is manifestly rather obscure. One further case, In re Craven’s Estate, Lloyds Bank v. Cockburn (No. 1) (7), might from the reports of it have been of service to the plaintiff, but it proves to be of no avail. An English bank in Monaco held securities there for an English lady of English domicile, who in expectation of death caused the bank to transfer the securities into the name of her son, the donee, and upon her death the transaction was upheld by Farwell J. as a good gift mortis causa. The case might have served the plaintiff here very well, if the securities included English share certificates, and at my request, the plaintiff’s solicitors have now obtained a copy of the affidavit evidence before the Court; in fact, I have postponed this judgment in order to see that evidence. From a copy of defendant’s affidavit it now appears that the securities, worth more than £5,000, consisted, not of investments in England, but of “bearer” certificates of stock and shares from Argentina, Brazil, Sweden, China and Japan (see In re Wasserberg (1)) and one New York certificate, endorsed by the donor and transferable by endorsement.
While this case gives no help, In re Andrews, Anrews v.Andrews (2), and In re Lee, Treasury Solicitor v. Parrott (3),are inconclusive, and, as I read Moore v. Moore (4) and In re Weston, Bartholomew v. Menzies (5), the investments failed to pass to the donees because their certificates were assimilated to stock receipts per incuriam (as I venture to think).
I turn for light to the leading case of Duffield v. Elwes (6),where delivery of a judgment, a bond, and mortgage deeds, effected a good gift mortis causa. Lord Eldon’s analysis has to be read at length; here I shall note that he cited a decision by Lord Hardwicke to the effect that deliverymortis causa of a bond for £100 passed on the donor’s death the equitable, not the legal, interest in the bond (pp. 534-5), and that he examined a judgment by Lord Mansfield on a gift by will of a mortgage debt and held (pp. 541-3) that, though the particular will did not pass the mortgaged land, equity would enable the legatee of the debt to call for a conveyance. He then explained “. . . provided you lay the foundation in the intent of the gift, that the debt is well given . . . and then, as the result of that interest so given, you say that the party who has the land becomes in equity a trustee for the person entitled to the money . . .”So, in the case before him, the delivery of the material documents raised a trust, by operation of law, which a Court of equity would execute. No difference in principle emerges between the documents requisite, on a gift mortis causa, to a transmission by operation of law of an equitable interest in money or in land; the reasoning is not confined to money claims, the fate of the stock receipts, not being documents of title, in Ward v. Turner (1) is cited, and I think the principle enunciated, mutatis mutandis, fitted things in action not being money claims, when Lord Eldon, closing his speech, said:”In the one case, the bond and mortgage are delivered; in the other the judgment . . . is deliveredwith that, the evidences of the debts are all delivered.The instrument containing the covenant to pay is delivered. They are all delivered in such a way that the donor could never have got the deeds back again.” I think it is a fair paraphrase to say, with Cotton L.J. and Byrne J., that the terms on which the moneys were payable were expressed and the essentials of the contract shown, by the documents delivered.
It remains to consider what exactly the donor did hand over to the Reverend Celestine Kelly as agent for the donee. He gave him, besides coins and currency notes and some securities with which I am not concerned, a number of certificates; each of these documents, other than the savings certificates certified the donor to be the proprietor of certain stock or shares in an Irish or an English company, subject to the company’s memorandum of association and articles (or, in the cases of two Irish companies, subject to their articles), and every certificate (except that of Williams & Woods, Limited, an Irish company) purported to make its production to the company a condition precedent to the registration of a transfer of the donor’s interest. While the Irish companies are governed by the Companies (Consolidation) Act, 1908, the Companies Act, 1929, for England has to be borne in mind where the English companies are concerned; most of them, in fact, have registered their articles or amended articles under that Act.
The plaintiff relies on the position of a member (whether shareholder or stockholder) under company law, and the position under the Act of 1908 can be summarised in a few words. I shall confine myself to shareholders. A shareholder in any of the companies in question is the registered holder of an aliquot undivided part of the capital of an incorporated body, established to make profits; his share certificate isprima facie evidence of his title, so is the appropriate entry in the company’s register. The memorandum and articles bind the company and its members as if signed and sealed by all, with covenants by each member and his personal representative to observe all the provisions of the memorandum and articles; hence, they are the company’s fundamental contract with its members and also regulate the members’ reciprocal rights; they must be registered and are open to inspection and a member can get a copy from his company; members and persons dealing with a company have constructive notice of its memorandum and articles.
Shares are transferable by a member, in manner provided by the articles, and by his personal representative; the company is not to be embarrassed by the entry on the register of notice of any trust and a company’s articles often purport to exempt it from recognising any equitable claim to a share. But the deposit of a share certificate without any instrument of transfer effects an equitable charge, at least if accompanied by notice to the company, because the deposit implies an agreement to execute a transfer.
I am told that the position is, practically, the same in England under the Companies Act, 1929, except that s. 63 of that Act effectively vetoes the registration of a transfer without an instrument of transfer, for the protection of the Revenue: Re Greene (deceased), Greene v. Greene and Others (1); but s. 63 has the following proviso:”Provided that nothing in this section shall prejudice any power of the company to register as shareholder . . . any person to whom the right to any shares in . . . the company has been transmitted by operation of law.”
Transmission by operation of law is precisely the species of devolution that will carry the plaintiff here, if anything can: see the judgment of Palles C.B. in Cassidy v. Belfast Banking Co. (2). Consequently, the absence of instruments of transfer from his donor’s traditio need not defeat him; indeed, a transfer seems inappropriate to a conditional and revocable assignment, intended, though not testamentary, to bear a donor’s signature springing into life only at the moment of his death. While I have not seen the articles of association of several of the companies, most of those put in evidence, English and Irish, require a common form of transfer, to be signed by transferor and transferee, and speak of transmission by operation of law where they contemplate death or bankruptcy; but, in the single case of Boots Pure Drug Company, Limited, with articles registered under the Act of 1929, I find art. 23, after the usual provision for transfers of shares, reflecting the proviso to s. 63 of the Act by providing (not in the collocation of death and bankruptcy) that nothing in the article is to prevent the company from registering as a member any person to whom
shares have been transmitted by operation of law. In my view, however, whatever the articles say, all the companies, English and Irish, would have to recognise the transmission by operation of law, if the plaintiff can succeed in establishing it.
As I see the matter, one obstacle stands in the plaintiff’s way, but a fatal one in a Court of first instance at least: the certificates given by the donor did not constitute “all the evidences,” in Lord Eldon’s phrase, of his contracts with the several companies; they stated instead where an inquirer was to look for the major text of those contracts, that is, in the memorandum and articles of each company, and confined themselves to fragments of the contracts.
The certificates which the donor handed over were, no doubt, the only evidence at his disposal of his title to the stocks and shares. By statute they constituted prima facieevidence of his good title in law, but nothing more. They declared that the title which they certified was subject to the company’s memorandum and articles (or to its articles); that declaration was otiose, because by statute the memorandum and articles are made the vital documents, since they are the fundamental contract between a company and its members, who are deemed to have covenanted to observe the contract. It is true that a man buying the same securities on the stock exchange will assume the fasciculus of multifarious obligations on either side, involved by acquiring membership, to be the normal obligations, which in practice do not alarm him; but, in fact, a memorandum and articles may cover a very wide range of incidents and conditions, so that a new member may incur liabilities and acquire rights quite outside his ken, if he has not read and understood his contract, and those rights and liabilities he can find out only by inspecting the memorandum and articles. The certificate assured the donee of the donor’s title to so many shares of a given value or to so much stock in a particular company, but apart from that, gave him no ideaor only a vague ideaof the essential conditions attached, of the donor’s covenants with the company, of the company’s obligations towards the donor. Even to tell a man that his shares will carry a five per cent. preferential and cumulative dividend is far from divulging all the material contents of a memorandum and articles of association.
In this particular case neither the donee nor his agent, the actual recipient of the certificates, was resident in Dublin or London where the missing information was obtainable. The plaintiff himself lived in South Africa and the recipient in the West of Ireland, so that, if the intended transmission
were effective, the donee was to be bound by a number of contracts whereof, as the certificates in effect told him, he could discover the remaining stipulations, not figuring in the certificates, if he took the trouble to write to the registered offices of the companies or to have a search and a précis made at the Registry in London or Dublin. It would be very convenient to allow a share certificate to be good subject-matter for a gift mortis causa and we are nowadays impatient of formalities, but the impediment here looks to me very much more serious than it was in Cassidy’s Case (1) where the document delivered did disclose the whole contract, except the variable rate of bank interest, which the donee was told to go from time to time to the bank to ascertain; and that case was decided before Cotton L.J. had formulated his principle, though I respectfully agree with the decision.
The result is that I feel constrained on the authorities, as I understand them, to hold that the plaintiff has failed to make out his title, as donee mortis causa, to the stock and shares represented by the certificates which the donor handed to Reverend Celestine Kelly and, admittedly, he cannot sustain a gift inter vivos of those securities.
Re Bibiana Foran, Deceased:
Lenihan and Others v O’Mahony and Another
High Court.
27 January 1950
[1950] 84 I.L.T.R 187
Gavan-Duffy P.
Gavan-Duffy, P.:
In this case I hold that the deceased lady, Mrs. Foran, gave to Mr. Dee the Deposit Receipt on a contingent trust in favour of the donees. I attach no importance to the fact that it was to be brought back to be endorsed, or that she postponed details of the payment of the balance. She had parted with possession of the document, and the gift to the beneficiaries was complete as regards £1,500 of the money on Deposit. But the document must be such as to show real terms of the contract. It can effectually pass a right if it is complete. But here it is incomplete; it does not state the rate of interest. This, I think, is essential. The rate of interest may be readily ascertained; but it should appear on the contract itself, or show how it was to be ascertained. It may be at the current rate of interest, but it does not say so. I hold on all points in favour of the beneficiaries, save as regards the form of the Deposit Receipt. But this is incomplete. Therefore, I must hold that in this case the intended donation fails. I am reluctant to do so, but I think the observation of Luxmoore, L.J. in Delgoffe v. Fader at p. 928 leaves me no choice. This document does not contain all the terms of the contract. I find, therefore, in favour of the defendants, and allow all parties their costs out of the estate.