Commentaries on American Law (1826-30)
Chancellor James Kent
Of Title to Personal Property, by Gift
TITLE to personal property by transfer by act of the party, may be acquired by gift, and by contract.
There has been much discussion among the writers on the civil law, whether a gift was not properly a contract, inasmuch as it is not perfect without delivery and acceptance, which imply a convention between the parties. In the opinion of Toullier,1 every gift is a contract, for it is founded on agreement; while, on the other hand, Pufendorf had excluded it from the class of contracts, out of deference to the Roman lawyers, who restrained the definition of a contract to engagements resulting from negotiation. Barbeyrac, in his notes to Pufendorf, insists, that upon principles of natural law, a gift inter vivos, and which ordinarily is expressed by the single term gift, is a true contract; for the donor irrevocably divests himself of a right to a thing, and transfers it gratuitously to another, who accepts it, and which acceptance, be rationally contends, to be necessary to the validity of the transfer. The English law does not consider a gift, strictly speaking, in the light of a contract, because it is voluntary, and without consideration;2 whereas a contract is defined to be an agreement upon sufficient consideration to do, or not to do, a particular thing;3 and yet every gift which is made perfect by delivery, and every grant, are executed contracts, for they are founded on the mutual consent of the parties, in reference to a right or interest passing between them.
There are two kinds of gifts: 1. Gifts, simply so called, or gifts inter vivos, as they were distinguished in the civil law; 2. Gifts causa mortis, or those made in apprehension of death. The rules by which they are governed are different, and quite distinct, and they were taken from the Rowan law.
1. Gifts inter vivos have no reference to the future, and go into immediate and absolute effect. Delivery is essential, both at law and in equity, to the validity of a gift, and it is the same whether it be a gift inter vivos, or causa mortis. Without actual delivery the title does not pass. A mere intention, or naked promise to give, without some act to pass the property, is not a gift. There exists the locus paenitentiae so long as the gift is incomplete, and left imperfect in the mode of making it; and a court of equity will not interfere and give effect to a gift left inchoate and imperfect.4 The necessity of delivery has been maintained in every period of the English law. Donatio perficitur possessione accipientis, was one of its ancient maxims.5 The subject of the gift must be certain, and there must be the mutual consent and concurrent will of both parties. It is, nevertheless, hinted or assumed, in ancient and modern cases,6 that a gift of a chattel, by deed or writing, might do without delivery, for an assignment in writing would be tantamount to delivery. But in Cot teen v. Missing7 a letter to executors expressing a consent that a specific sum of money be given to a donee, was not a sufficient act in writing; and it was held not to be a gift of so much money in their hands, because the consent was not executed and carried into effect, and a further act was wanting in that case to pass the money. The Vice Chancellor held, that money paid into the hands of B., for the benefit of a third person, was countermandable so long as it remained in the hands of B. A parol promise to pay money as a gift is not binding, and the party may revoke his promise,8 and a parol gift of a note from a father to a son, was held not to be recoverable from the executors of the father.9
Delivery in this, as in every other case, must be according to the nature of the thing. It must be an actual delivery so far as the subject is capable of delivery. It must be secundum subjectam materiam, and be the true and effectual way of obtaining the command and dominion of the subject. If the thing be not capable of actual delivery, there must be some act equivalent to it. The donor must part, not only with the possession, but with the dominion of the property.10 If the thing given be a chose in action, the law requires an assignment, or some equivalent instrument, and the transfer must be actually executed. Therefore, where a donor expressed by letter his intention of relinquishing his share of an estate, and directed the preparation of a release of the personal estate, and he died before it was executed, it was held, that his intention, not being perfected, did not amount to a gift.11
When the gift is perfect, it is then irrevocable, unless it be prejudicial to creditors, or the donor was under a legal incapacity, or was circumvented by fraud. A pure and perfect gift into r vivos was also held by the Roman law to be in its nature irrevocable; and yet in that law it was nevertheless revocable for special reasons, such as extreme ingratitude in the donee, or the unexpected birth of a child to the donor, or whets sufficient property was not left with the donor to satisfy prior legal demands.12 The English law does not, and cannot indulge in these refinements, though it controls gifts when. made to the prejudice of existing creditors.
By the statute of 3 Henry VII. e. 4, all deeds of gifts of goods and chattels in trust for the donor, were declared void; and by the statute of 13 Eliz. c. 5, gifts of goods and chattels, as well as of lands, by writing or otherwise, made with intent to delay, hinder and defraud creditors, were rendered void, as against the person to show such fraud would be prejudicial. These statutes have been reenacted in this state,13 and doubtless the principle in them, though they may have not been formally or substantially reenacted, prevails throughout the United States. All the doctrines of the courts of law and equity, concerning voluntary settlements of real estates, and the presumptions of fraud arising from them, are applicable to chattels, and a gift of there is equally fraudulent and void against existing creditors.14 Voluntary settlements, whether of lands or chattels, even upon the wife and children, are void in these cases, and the claims of justice precede those of affection.15 The English cases were extensively reviewed and considered in the case of Reade v. Livingston;16 and the doctrine of that case had not only been previously established in the state of New Jersey,17 but it has since been explicitly recognized by the Supreme Court of this state,18 and by the Supreme Court of the United States, and it prevails equally in other states.19 A voluntary conveyance, if made with fraudulent views, would seem to be void, even as to subsequent creditors, but not to be so, if there was no fraud in fact.20
It has been said by the elementary writers,21 that the statute of 13 Eliz. does not extend to voluntary settlements of property, which a creditor could not reach by legal process, in case no settlement had been made, such as choses in action, money in the funds, &r.; and therefore that a voluntary settlement of that species of property must be good against creditors, even if made by an insolvent debtor. The difficulty se reaching that species of personal property was discussed and considered in the case of Bayard v. Hoffman.22 The cases were found to be contradictory, and the question unsettled; but there appeared to be much good authority, and much strong reason for the opinion, that personal property not tangible by execution at law, could be reached by the assistance of a Court of Equity. Without such assistance, there would be great temptations to fraudulent alienations; and a debtor, under the shelter of it, might convert all his property into stock, and settle it upon his family, in defiance of his creditors, and to the utter subversion of justice. In Spader v. Davis,23 the Court of Chancery assisted a creditor at law to reach personal property which the debtor had previously conveyed away in trust. That case was affirmed upon appeal;24 and the language of the Court of Errors was, that a court of equity would assist a judgment creditor at law in discovering and reaching personal property which had been placed in other hands, and that it made no difference whether that property consisted of choses in action, or money, or stock. This disposition of the Courts of Equity to lend assistance in such cases, was afterwards checked by the argument and opinion in Donovan v. Finn,25 where the Chancellor held, that the doctrine of equitable assistance to a judgment creditor at law, to enable him to reach choses in action of his debtor, was to be restricted to special cases of fraud or trust; and that without some such specific ingredient, the case was not of equitable jurisdiction.
2. Gifts causa mortis have been a subject of very frequent and extensive discussion in the English courts of equity. Such gifts are conditional like legacies, and it is essential to them that the donor make them in his last illness, and in contemplation and expectation of death, and with reference to their effect after his death, and if he recovers the gift becomes void.26 The apprehension of death may arise from infirmity, or old age, or from external and anticipated danger.27
The English law on the subject of this species of gift, is derived wholly from the civil law. Justinian was justly apprehensive of fraud in these gifts, and jealous of the abuse of them, and he required them to be executed in the presence of five witnesses. We have not adopted such precautions, though it has been truly declared, that such donations amount to a revocation pro tanto of written wills; and not being subject to the forms prescribed for nuncupative wills, they were of a dangerous nature. By the civil law they were reduced to the similitude of legacies, and made liable to debts, and to pass for nothing, and to be returned, if the donor recovered, or revoked the gift, or if the donee died first.28 It was a disputed point with the Roman civilians, whether donations causa mortis, resembled a proper gift, or a legacy. The final and correct opinion was established, that a gift inter vivos was irrevocable, but that a gift causa mortis was conditional, and revocable, and of a testamentary character, and made in apprehension of death.29 The first case in the English law on the subject of gifts causa mortis, was that of Jones v. Shelby30 in 1710, in which the Lord Chancellor ruled, that a donatio causa mortis was substantially a will, with a like revocable character during the life of the donor. Afterwards, in Drury v. Smith,31 a person, in his last sickness, gave a 100 pound bill to a third person to be delivered to the donee, if he died, and this was held to be a good gift, and Lord Hardwicke subsequently32 approved of that decision. In Lawson v. Lawson,33 and in Miller v. Miller,34 a delivery to the wife as donee was held good; but in the last case it was held, that a note of hand not payable to bearer, and being a mere chose in action, to be sued in the name of the executor, did not pass by delivery, or take effect as a gift causa mortis. The delivery of bank notes which circulated as cash, was held at the same time to be a valid donation, and the same point has been since established.35
But the case of Ward v. Turner,36 was that in which the whole doctrine was, for the first time, fully and profoundly examined in the English Court of Chancery; and Lord Hardwicke gave to the subject one of his most elaborate and learned investigations. He held, that actual delivery was indispensable to the validity of a gift causa mortis, and that a delivery to the donee of receipts for south sea annuities, was not sufficient to pass the property, though it wag strong evidence of the intent. The delivery of the receipt was not the delivery of the thing. He examined very accurately the leading texts of the civil law, and the commentators on the point, and concluded, that though the civil law did not require absolute delivery of possession in every kind of donation causa mortis, that law had not been received and adopted in England in respect to those donations, only so far as the donations were accompanied with actual delivery. The English late required delivery throughout, and in every case. In all the chancery cases, delivery of the thing was required, and not a delivery in the name of the thing. In Jones v. Shelby, a symbol was held good, but that was in substance the same as delivery of the article, and it was the only case in which such a symbol had been admitted. Delivery of a symbol in the name of the article was not sufficient. The delivery of the receipts was merely legatory, and amounted to a nuncupative will, and was a breach of the statute of frauds.
Symbolical delivery is very much disclaimed by Lord Hardwicke in this case, and yet he admits it to be good when it is tantamount to actual delivery; and in Smith v. Smith,37 it was ruled, that the delivery of the key of a room, containing furniture, was such a delivery of possession of the furniture, as to render the gift causa mortis valid. Ch. J. Gibbs said, that was a confused case; but the efficacy of delivery, by means of the key, was not a questionable fact.
The doctrine of this species of gift, was afterwards disc mussed with ability and learning, in Tate v. Hilbert.38 Lord Loughborough pressed the necessity of actual delivery to the efficacy of such a gift, except in the case of a transfer by deed or writing. He held, that where a person in his last sickness, gave the donee his check on his banker, for a sum of money, payable to bearer, and he died before it was realized, it was not good as a donatio causa mortis, for it was to take effect presently, and the authority was revoked by his death. He likewise held, that where the same person, at the same time, gave to another donee his promissory note for a sum of money, that was not good as such a gift, for it was no transfer of property. So, where a person, supposing himself in his last sickness, caused India bonds, bank notes, and guineas, to be sealed up and marked with the name of the donee, with directions to have them delivered after his death, and still retained possession of them, it was held,39 that there was no delivery, and the act was void as a gift causa mortis, for there must be a continuing possession in the donee until the death of the donor, and he may revoke the donation any time before his death.
The cases do not seem to be entirely reconcilable on the subject of donations of choses in action. A delivery of a note, as we have seen, was not good, because it was a mere chose in action; and yet in Smallgrove v. Baily,40 the gift of a bond causa mortis, was held good, and passed the equitable interest; and Lord Hardwicke afterwards, in the great case of Ward v. Turner, said he adhered to that decision; and the same kind of gift has been held in this country to be valid.41
By the admirable equity of the civil law, donations causa mortis were not allowed to defeat the just claims of creditors, and they were void as against them, even without a fraudulent intent.42 It is equally the language of the modern civilians, that donations cannot be sustained to the prejudice of existing creditors.43
1. Droit Civil Francais, tom. 5. Des Donations entre vifs, sec 4, and 5 and n. 1.
2. Droit des Gens, liv. 5, ch. 3, s. 10, note 6.
3. 2 Blacks. Com. 442.
4. Antrobus v. Smith, 12 Vesey, 39.
5. Jenk. Cent. p. 109. case 9. Bracton de acquirendo rerum Dominio, lib. 2. p. 15, 16.
6. Flower’s case, Noy’s Rep. 67. Irons v. Smallpiece, 2 Barnw. & Ald. 551.
7. 1 Maddock’s Ch. Rep. 176.
8. Pearson v. Pearson, 7 Johns. Rep. 26.
9. Fink v. Cox, 13 Johns. Rep. 145.
10. Hawkins v. Blewitt, 2 Esp. Rep. 663. Noble v. Smith, 2 Johns.Rep. 52.
11. Hooper v. Goodwin, 1 Swanston, 486.
12. Code, lib. 8, tit. 56. De revocandis Donationibus, l. 10. Ibid. l. 8. Code, lib 3. tit. 29. De insufficiosis Donationibus. Puf. Droit des Gens., Par. Barbeyrac, tome 2, 43, note.
13. L. N.Y. sess. 10. ch. 44.
14. Bayard v. Hoffman, 4 Johns. Ch. Rep. 450.
15. This sentiment is strongly inculcated and sententiously expressed by Cicero, (De Off. 1. 14.) Videndum est igitur, ut ea liberalitate utamur, quae proxit amicis, noceat nernini. Nihil est enim liberale, quod non idem justum.
16. 3 Johns. Ch. Rep. 481.
17. Den v. DeHart, 1 Halsted’s Rep. 450.
18. Jackson v. Seward, 5 Cowen, 87.
19. Sexton v. Wheaton, 8 Wheaton, 229. Hinde v. Longworth, 11 ibid. 199. Thompson v. Dougherty. 12 Serg. & Rawl. 448. Parker v. Procter, 9 Mass. Rep. 390. Bennet v. Bedford, 11 Ibid. 421. Meserve v. Dyer, 4 Greenleaf, 52.
20. Reade v. Livingston, 3 Johns Ch. Rep. 501, 502. Bennet v. Bedford Bank, 11 Mass. Rep. 421. Damon v. Bryant, 2 Pickering, 411. But according to the case of Meserve v. Dyer, 4 Greenleaf 52, a deed cannot be impeached for fraud, by a person who was not a creditor at the time of the conveyance; and a party whose claim at the time rested in damages for a tort, and which damages had not been ascertained, admitted, and made certain by judgment, was not such a creditor. This case contradicts the conclusion to be drawn from the language of the other cases; (for it was not a direct ground of decision in any of them;) and as far as it denied to the claimant the benefit of his character as a creditor at the time of the conveyance, it is not is harmony with the cases of Fox v. Hills, 1 Conn. Rep. 295. and Jackson v. Myers, 15 Johns. Rep. 425. The reasoning of the court on the principal point, was reserved for another case involving the same question, and which is not yet reported. In this state of the authorities, we must consider the general question involved in them as remaining to be definitively settled in our American jurisprudence.
21. Atherly on Marriage Settlements, 220. 1 Roberts on Fraudulent Conveyances, 421, 422.
22. 4 Johns. Ch. Rep. 450.
23. 5 Johns. Ch. Rep. 280.
24. 20 Johns. Rep. 554.
25. 1 Hopkins, 59.
26. Swinb. 18. Drury v. Smith, 1 P. Wms. 404. Blount v. Burrow, 1 Vesey. jun .546.
27. Dig. 39. 6. s, 3, 4, 5, 6.
28. Inst. 2. 7. l. Code, 8. 58. 4.
29. Dig. 39. 6. 2. and 27. Inst. 2. 7. t. Vide Dig. lib. 39. tit. 5. De Donationibus, and tit. 6. De mortis causa Donationibus, for the Roman law at large on the subject.
30. Prec. in Ch. 300.
31. 1 P. Wms. 404.
32. 3 Atk. 214.
33. 1 P. Wms. 440.
34. 3 P. Wms. 356.
35. Hill v. Chapman, 2 Bro. 612.
36. 2 Vesey, 431.
37. Str. 955.
38. 2 Vesey, jun. 111. 4 Bro. 286.
39. Bunn v. Markham, 7 Taunton, 224.
40. 3 Atk. 214.
41. Wells v. Tucker, 3 Binney, 366.
42. Dig. 39. 6. 17.
43. Voet Com. ad Pand. 39. 5. sect. 20. Pothier, Traite des donat entre vifs, sect. 3. art. I. sect. 2. Toullier’s Droit Civil Francais, tom. 6. p. 733.