Printer Friendly

THE ART OF GIVING: Deathbed Gifts and Gifts Inter Vivos.

The doctrine of donatio mortis causa, often referred to as 'DMC' or a deathbed gift, is as nebulous as it is old. Originating in Roman law, DMC is an anomaly in English law as it falls outside the requirements of both the Statute of Frauds 1677 and the Wills Act 1837. (1) In addition, DMC is an exception to the rule that there is no equity to perfect an imperfect gift. (2) However, as a deathbed gift is often made by a vulnerable donor behind closed doors, without witnesses or written evidence, the doctrine is open to abuse and the courts have rightly stressed that DMC must not be used as a device to validate ineffective wills.

Most gifts, particularly those of art, are made in the absence of formal requirements or documentary evidence. The key requirement to effecting a valid DMC is that the donor must take some steps to deliver the gift to the donee, despite the fact the gift is not complete until the donor dies. This requirement will be considered in greater detail below, but in the context of an international art world, it is easy to see how a DMC, and evidencing the delivery requirement, may be further complicated where the donor has for example loaned the work at issue to an exhibition abroad, or has sent the work out on sale or return. As the art world is notoriously opaque, and gifts of art are often made informally between friends and family, the application of the DMC doctrine to art is particularly difficult.

Whilst there is a significant body of case law relating to chattels, choses in action, (3) and property, (4) the doctrine of DMC continues to challenge members of the judiciary who often have difficulty justifying how a rule which wholly undermines protections against fraud still has a place in common law. As Jackson L.J. said, "I must confess to some mystification as to why the common law has adopted the doctrine of DMC at all." (5) As we shall see, the response to this has been to restrict the application of the doctrine to cases where there is unequivocal evidence of a gift. First though, let us look at the elements of a DMC, before considering each in turn.

A DMC is a lifetime gift, conditional upon death so that once the donor dies, the gift takes full effect. For a deathbed gift to be valid and binding, the gift must: be made in contemplation of impending death; be conditional on death; (6) and finally, there must be a parting with dominion over the subject matter of the gift.

MADE IN CONTEMPLATION OF IMPENDING DEATH

The donor's death is of course central to the doctrine. Whereas gifts which are conditional simply on death are testamentary in nature and therefore subject to the onerous requirements relating to wills, in the more restrictive context of a DMC, the donor must be in contemplation of an impending death of a specific kind, such as a fatal illness, a dangerous medical treatment or a dangerous journey. (7)

So how imminent does impending death have to be? The recent case of King v. Chiltern Dog Rescue (8) sought to rein in the expansion of the doctrine of deathbed gifts and overturned the decision in Vallee v. Birchwoocf in which four months had lapsed between the making of the gift and the death of the donor. In Vallee v. Birchwood, Gaunt Q.C. held that there was no objective measure of whether a donor's death was 'impending' and that it was sufficient that the purported donor contemplated his death at the time he made the DMC. (10) In King v. Chiltern, Jackson L J. held that this was too ambiguous and that four months was too long. Death usually meant a matter of days. (11) On that basis, he held that Vallee v. Birchwood had been wrongly decided as the donor had ample opportunity to make a will. (12)

CONDITIONAL ON DEATH

A DMC is distinct from an inter vivos gift as it is valid and complete only when the donor dies. As a result, the donor reserves the right to revoke the gift and if the donor does not die soon enough, the gift will lapse automatically.

To an extent, case law would indicate that the fact that the gift is conditional on death need not be expressly stated and the donor's intention that the gift is conditional on death may be implied or inferred from the circumstances in which the gift was made. (13) Sir John Leach in Gardner v. Parker commented in 1818:
   [i]f a gift is made in expectation of death, there is an implied
   condition that it is to be held [valid] only in the event of death.
   (14)


In Northcott v. Public Trustee, (15) a New Zealand case, the donor gave a savings book to her aunt and said "I want you to have this now". She died the next day and as a result it was held that the gift was conditional on death and the Court therefore held that a valid DMC had been made, despite the the wording of the gift being made "now".

In King v. Chiltern Dog Rescue the donor's contemplation of death was not based on anything she said or did other than the words "this will be yours when I go", whilst looking at the donee. She did not say that she was giving the property to the donee there and then, subject only to the condition that she should die. Jackson L.J. also held that this sort of evidence came nowhere near to satisfying the requirement that the gift should be made in contemplation of death. It did not even demonstrate that the donor thought that her death was impending, let alone imminent. (16)

This more restrictive application in King v. Chiltern Dog Rescue, indicates that the words used when the gift is made must make the gift at that moment, but conditional on the death of the donor. If the words used are more like those of a will, saying what is to happen to the property in the event of death, then the second requirement is unlikely to be made out and the DMC will fail. It is a fine distinction and will be scrutinised against the donor's words and conduct leading up to death. In cases where early death is inevitable, the law relaxes the requirement that the donor should specifically require the property back if he survives. However, subject to that qualification, the courts should treat proper compliance with the second requirement as an essential element.

Of course, the presumption that the donor intended the gift to take effect upon death is rebuttable and if the donor wishes to make an unconditional, or immediate, gift, the courts will treat it as an inter vivos gift. In Newell v. National Bank of Norwich'1 the donor, who was seriously ill and expected to die, delivered a diamond ring to the plaintiff. The circumstances indicated that, despite his illness, the donor had intended to make an irrevocable, inter vivos, gift. Cochrane, P.J., of the Appellate Division of the Supreme Court of New York, upheld the validity of this attempted gift and approved the following rule:
   The test whether the gift is one inter vivos or one causa mortis is
   not the mere fact that the donor is in extremis, and expects to
   die, and does die of that illness, but whether he intended the gift
   to take effect in praesenti, irrevocably and unconditionally,
   whether he lives or dies. (18)


In Woodard v. Woodard (19) the defendant's father was admitted to hospital suffering from leukaemia and died four days later. The defendant already had possession of his father's car and a set of keys. Three days before he died the father told the defendant that he could keep the keys as he, the father, would not be driving the car any more. The question was whether a valid gift had been made. On appeal, the Court of Appeal held that the gift was a valid gift donatio mortis rather than, as found by the first instance Judge, a valid immediate gift. The Court of Appeal's decision as to the different nature of the gift flowed from the fact that the father had made clear to the defendant that he would have the gift back if he recovered from his illness. This resulted in the conclusion that the gift was not outright and immediate.

DELIVERY

The biggest hurdle to effecting and evidencing a DMC is delivery. There must be clear and unequivocal evidence of the gift and that evidence will be subjected to the strictest scrutiny by the courts. Whilst this is clearly intended to introduce some safeguards within the doctrine, it still falls short of meeting legal norms requiring such transactions to be in writing and witnessed.

Before the donor dies, he or she must part with dominion or control over the subject matter of the DMC. Two elements are required: first, the donor's intention to part with dominion and second, sufficient delivery or transfer of the subject matter of the gift, or something representing it, to the donee.

INTENTION

In a case previously discussed in the pages of this journal, Day v. Royal College of Music, (20) the dispute concerned two competing claims to ownership of 103 manuscripts of works written by the composer, Sir Malcolm Arnold, which were held in the library of the Royal College of Music. It was alleged by two of Sir Malcolm's children that Sir Malcolm had gifted the manuscripts to them during his lifetime. Sir Malcolm's former carer contended that the gift to the children was invalid and that Sir Malcolm had validly gifted the manuscripts to him in his will. In holding that the gift to the children was valid, the Court of Appeal confirmed the important principle that only the intention of the donor, and not that of the recipient, is relevant when determining the validity of a gift of chattels by delivery.

TRANSFER

The donee's possession of the gift is the best evidence of the donor's true consent to part with dominion, but the dilemma posed by delivery is not so easily resolved in practice. As such, the courts have accepted both actual physical delivery of the subject matter of the DMC, such as placing a cash box into the hands of the donee, (21) as well as symbolic and constructive delivery, where physical delivery does not take place. However, it is difficult to see how certain chattels could be delivered and indeed in Miller v. Miller, (22) Jekyll M.R. held that a purported DMC of a coach and horses to the donor's wife had failed as there had been no evidence of delivery.

Symbolic delivery refers to the delivery of goods by delivery of a substitute article that clearly indicates the donor's intent. It may be the case that the donor does not have possession of the subject matter of the gift or is unable to physically deliver it. Handing over the keys and documents to a car would amount to symbolic delivery, although the extent to which this logic could be extended seems limited. In an old US case, Smith v. Smith (23) it was held that the delivery of the key to a room containing furniture, the subject matter of the DMC, was valid although commentating on the case, Gibbs C.J. said that Smith v. Smith is a very confused case, (24) and it is highly unlikely that such delivery would meet the stricter requirements applied in the English courts.

Perhaps most problematic of all are those cases where the subject matter is intangible, such as choses in action. (25) In such cases, the doctrine has been extended to allow dominion to pass by delivery of the 'indicia of title'. The leading modem authority on 'indicia of title' is Birch v. Treasury Solicitor, (26) a case which concerned the delivery of Post Office and bank deposit books. The Court of Appeal held that a valid DMC of the monies in those accounts had been made as the books gave the possessor the means to access those accounts. Evershed M.R. reiterated that symbolic delivery of mere tokens was not enough; there must be transfer of the subject matter of the gift or of "something amounting to that" (citing the 1752 decision in Ward v. Turner (27)). He went on to define the 'indicia' 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." (28)

Constructive delivery refers to an act amounting to delivery where the physical delivery of the gift, or the delivery of its symbol, is impossible. In such cases, delivery will be inferred by the conduct of the donor and the donee. Constructive delivery was proved in the New York case Mirvish v. Mott, (29) albeit by way of a deed which clearly identified the act of giving the subject matter. The case concerned a dispute over ownership of a bronze sculpture, The Cry, by the Russian-born cubist sculptor, Jacques Lipchitz. Lipchitz's wife, Yulia, inherited the work after he died. She subsequently entered into a relationship with Biond Fury, and from time to time she would gift Fury some of her late husband's works. Yulia's son, Mott, a beneficiary of her estate, claimed to have sold the work at issue in 2004 to the Marlborough Gallery. In 2005, Fury purportedly sold The Cry to David Mirvish. Mott argued that Mirvish could not prove all elements of a gift while Mirvish contended Yulia had made a valid gift of the work to Fury. The court concluded that Yulia had made a valid inter vivos gift of the work to Fury, observing that the wording of the gift was in the past tense, i.e., "I gave this sculpture The Cry to my good friend Biond Fury" which was not only indicative of a past transfer, but also clearly identified the subject matter of the gift and was consistent with Yulia's long pattern of making gifts of similar items to Fury.

As with inter vivos gifts, there is good delivery for the purposes of establishing a valid DMC where the donee already has possession of the chattel at the time of the gift and there is no need for a second delivery. (30) In Cain v. Moon, (31) it was held that the delivery could take place after the intention to make the gift had been formed. In that case the donor, during an illness from which she recovered, gave the donee a deposit note and asked her to retain it. The note stayed in the possession of the donee, and, two years later, the donor suffered a relapse of the illness and died. Just prior to her death, the donor informed the donee that the deposit note was hers should she die. There was held to be a valid DMC, even though the delivery of the deposit note took place before the making of the gift.

Both symbolic and constructive delivery pose problems, but perhaps even more so in relation to art works. What would constitute a symbol of a painting? it is unlikely that a photograph of the work would suffice, and in the absence of a pattern of gifting work to the donee (as in Mirvish v. Mott), how would the donor's conduct imply his or her intention to gift the work?

PARTING OF DOMINION OR CONTROL

The second requirement in relation to effecting delivery goes to the parting of dominion or control over the subject matter of the gift. In Re Craven's Estate, (32) Farwell J. held that there must be such a parting with the dominion over the chattels or the property as to prevent the subject matter of the DMC being dealt with by the donor in the interval between the DMC and either the death or the return of the subject matter by the donee to the donor. In In Re Craven, the donor's delivery of the keys to the box containing the gift was held to be sufficient delivery of the gift itself, as they were the only set. In Vallee v. Birchwood, it was held that the delivery of the title deeds and a key to the house to the donee in contemplation of the donor's impending death, accompanied by words of a gift, was a sufficient delivery of dominion over the house to constitute a valid DMC. (33) However, in King v. Chiltern, Jackson L.J. found that dominion had not passed in Vallee as the donor continued to occupy the property after the gift was allegedly made.

Furthermore, it may be arguable that the donor gave the subject matter to the donee for safekeeping. In Trimmer v. Danby, (34) the donor, the artist JMW Turner, failed in his attempt to gift by way of DMC ten Austrian bonds to his housekeeper. He had delivered them in a box with a note indicating that the first five numbers of the bond belonged to her. He then delivered the keys to the box to her. However, it was held that he had not parted with dominion because the housekeeper, as a servant of the donor, was presumed to be an agent of the donor and the delivery of the key was for the purposes of safekeeping.

However, in Re Rosemergey, (35) a leading Canadian case, the deceased had employed her housekeeper for many years. When she became ill and learned that her condition was terminal, the deceased had signed and delivered a paper giving her housekeeper all the furniture and personal effects in the house. None of the articles mentioned in the written memorandum was mentioned in the deceased's will. The court held that there was a valid DMC even though there was no actual physical change of possession. The court reasoned that the deceased, so far as possible, had abandoned possession of the furniture and personal effects, while the donee housekeeper had taken and maintained possession of them to the same degree.

In Ward v. Turner, (36) Lord Hardwicke held that at common law, actual delivery was indispensable to the validity of a DMC and that a delivery to the donee of receipts for South Sea annuities was not sufficient to pass the property, though it was strong evidence of intent. He examined extensive case law and concluded that though the civil law (37) did not require absolute delivery of possession in every case of DMC, that rule had not been adopted in English common law. The delivery of the thing was required, and not a delivery in the name of the thing.

EVIDENTIAL ISSUES

It is axiomatic that the courts do not wish to encourage potential beneficiaries to fabricate unfounded claims against an estate and will therefore require stringent evidence to establish a DMC has in fact been made. As demonstrated in the cases above, a gift is far more likely to succeed by way of written evidence, preferably a deed to pre-empt the need for a DMC or at least a pattern of consistent conduct which implies that the donor intended to make the gift. From a practical perspective, in relation to gifts of art, Henry Lydiate stresses:
   documentation should at least describe the work, its title,
   dimensions, materials and techniques used; the fact the artist was
   author and owner; the name and address of the donee; state the
   artist's wish to transfer the ownership and the work and set out
   what arrangements have been or are being made for physical transfer
   and possession to the donee. (38)


To take this further, the donee may also wish to have a say as to what is to happen to the gift after he or she dies, such as whether or not a collection should be kept together, (39) or whether the work can be reproduced, exhibited or sold. But if the donee has time to contemplate such matters, it would be best all round to execute a deed or will rather than rely on the difficult and uncertain doctrine of donatio mortis causa.

* Researcher, Institute of Art and Law.

(1) The Wills Act 1837 and the Statute of Frauds Act 1677 set out clear provisions regarding the requirements of Wills, namely that they must be in writing and be witnessed in order to be valid. A DMC is a gift made without such formalities as it requires nothing to be in writing and there is no need for witnesses.

(2) Nourse L.J. in Sen v. Headley [1991] Ch. 425, [1991] EWCA Civ. 13. That equity will not complete an imperfect gift is a maxim of the law of equity. If a donor has made an imperfect gift lacking the formalities required at common law, equity will not assist the intended donee. Note the exception in Strong v. Bird [1874] L.R. 18 Eq. 315, which states that if the donor appoints the intended donee as executor of his or her will, and the donor subsequently dies, equity will perfect the imperfect gift.

(3) Including bank accounts, shares and insurance certificates.

(4) It wasn't until 1991 that the question whether real property could be the subject of a DMC arose in Sen v. Headley, above, note 2, in which the donor passed to the donee the only set of keys to a steel box containing the deeds to his house.

(5) Kingv. Chiltern Dog Rescue and Redwings Horse Sanctuary [2015] EWCA Civ. 581 at para. 53.

(6) The donor may revoke the gift if the donor does not die, and there is no valid deathbed gift if the donor simply intended to make an outright lifetime gift.

(7) King v. Chiltern Dog Rescue above, note 5 at para. 68.

(8) Ibid.

(9) [2013] EWHC 1449 (Ch)

(10) Ibid, at para. 26: "To adopt it as the temporal measure of "impending" would be, in my judgment, to introduce a further condition by the back door. Most people would, I think, consider that a person who anticipated the possibility of his death within 5 months and accordingly wished to make provision for the transmission of his property, was contemplating his "impending death."

(11) Death needs to be "within the near future" Re Craven's Estate (No.1) [1937] Ch. 423-five days; Sen v. Headley--three days; and Woodard v. Woodard [1995] 3 All E.R. 980, C.A.-three days.

(12) At para. 60.

(13) Re Lillingston [ 1952] 2 All E.R. 184.

(14) [1818] 3 Madd. 184, 56 E.R. 478.

(15) [1955] N.Z.L.R. 694.

(16) King v. Chiltern Dog Rescue above, note 5 at para. 92 and 93.

(17) (1925), 214 App. Div. 331, 212 N.Y.S. at para. 158.

(18) Ibid, at 332.

(19) Above, note 10.

(20) [2013] EWCA Civ 191; noted by Alexander Herman in (2013) XVIII Art Antiquity and Law 193.

(21) Re Lillingston, above, note 13.

(22) (1735) 3 P Wms 356.

(23) Str. Rep. 955.

(24) Simon Greenleafe, 'A Collection of Cases Overruled, Denied, Doubted or Limited in their Application taken from American and English Reports' 1840 (3rd edn) p. 366.

(25) A chose in action is an intangible property right which can be enforced and protected only by the law, and not by taking physical possession. Examples include the right to an interest in an estate, a cash balance at a bank, an entitlement to a tax refund or a salary.

(26) [1951] Ch. 298 C.A.

(27) (1752) 2 Ves. Sen. 431

(28) Birch v. Treasury Solicitor, above, note 26 at para. 311.

(29) [2012] 18N.Y.3d 510.

(30) Montalto v. Popat & Others [2016] EWHC 810 (Ch.) at para. 133.

(31) Cain v. Moon [1896] 2 Q.B. 283.

(32) [1937] Ch. 423.

(33) [2013] EWHC 1449 (Ch.) at para. 43.

(34) (1856) 25 L.J. Ch. 424.

(35) (1934) 49 B.C.R.93.

(36) [1752] 2 Ves.Sen. 431.

(37) Here Lord Hardwicke is referring to Civil Law jurisdictions, rooted in Roman law and distinct from the Common Law traditions of England and Wales.

(38) Henry Lydiate, 'Beware of the Artist Bearing Gifts' Art Quest 1996: <https://www.artquest.org. uk/artlaw-article/beware-of-artists-bearing-gifts/> [accessed on 29 Jan. 2018].

(39) In the recent case of Butler and Butler v. Butler and Butler [2016] EWHC 1793 (Ch.), the donor, Sir Michael Butler, gifted during his lifetime 502 seventeenth-century Chinese porcelain pots known as the Butler Family Collection [BFC] to his four children Caroline, James, Katherine and Charles, by Deed of Gift. The children were all beneficial tenants in common in equal shares absolutely. Although Sir Michael had expressed the desire that the collection be maintained as one entity after his death, he had also made it formally known that it could be divided in the manner ultimately sought by the claimants, stressing that family harmony was more important than keeping the BFC together. However, his wish to keep the collection together after death was not upheld and the BFC was divided between the four beneficiaries.
COPYRIGHT 2017 Institute of Art and Law
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2017 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Woodhouse, Holly
Publication:Art Antiquity & Law
Article Type:Report
Date:Dec 1, 2017
Words:4202
Previous Article:NAZI-LOOTED ART: A NOTE IN FAVOUR OF CLEAR STANDARDS AND NEUTRAL PROCEDURES.
Next Article:PLANNING DECISIONS AND IMPACT ON SETTING: Steer v. Secretary of State for Communities and Others.
Topics:

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |