STATE OF NEW YORK

SUPREME COURT : COUNTY OF CHAUTAUQUA


 

RUTH N. HENRY, Individually and as

Executrix of GORDON HENRY, Deceased,


Plaintiff,


-vs- Index H-9127


JOHN C. VAN SCOTER, Individually and

as Executor of FLORENCE L. VAN SCOTER,

Deceased,


Defendant.


 



WALTER C. FOULKE, ESQ.

for Plaintiff



BURGETT & ROBBINS

(Marlene T. Brigiotta,

Esq. of Counsel) for

Defendant


DECISION and ORDER



GERACE, J.

Plaintiff claims she and the Estate of her late husband are entitled to household items from the Estate of her mother which she says were inter vivos gifts via notarized "Declaration of Gift" documents which recited :


"I, Florence L. Van Scoter, of the Town of

Pomfret, County of Chautauqua and State of

New York, own certain items of personal property

which I desire to give to RUTH N. HENRY of

Skaneateles, New York,


To carry out my purpose, I do hereby give to

RUTH N. HENRY the property described in the

attached schedule. It is distinctly my purpose and

intention to vest all incidence of absolute ownership

to RUTH N. HENRY from this day forward".


Notwithstanding the absoluteness of this gift, it is

my wish that the said property be retained in

my family for the use of my descendants and

not be transferred out of my family unless

first offered to my descendants."


The declaration to Mr. Henry was worded the same way.

Her signature on the declarations of gifts were acknowledged by a notary in the same manner as a bill of sale or deed.


The items were never physically delivered to plaintiffs, but, they contend there was constructive delivery when the documents were mailed to plaintiffs by Mrs. Van Scoter's attorney with his letter reporting that she "made a gift to you"; that "the gift is absolute and irrevocable"; and reciting the donor's "wish that she may be allowed to continue to use the items as for the most part they consist of household goods and furnishings".


Plaintiffs contend they are lawful owners entitled to immediate possession, citing the decision of the Court of Appeals in GRUEN v. GRUEN, 68 NY2d 48 (1986) which held that a valid and irrevocable inter vivos gift of a chattel may be made where donor has reserved a life interest even if donee never had physical possession before donor's death.


Defendants here argue decedent never intended to make a present transfer of title as indicated by her will rescinding any lifetime gifts, and, her gifting of some of the items to other people during her lifetime; that there was no delivery by donor nor acceptance by the donees.


In her Will, decedent bequeathed all her furniture, furnishings, household goods and other tangible personal property to her grandchildren and stated:

"From time to time during my lifetime I have

expressed my intention to make lifetime gifts of

various items of such property. I hereby specifically rescind any gifts of that nature that I intended to make except in those situations in which the items intended to be gifted were physically delivered to the donee."


The Court finds that the gifts to plaintiffs met the three basic elements to prove a valid inter vivos gift: donative intent, valid delivery, acceptance as set forth in GRUEN v. GRUEN, supra. See also, MATTER OF SZABO, 10 NY2d 94, 98.


The Court also finds that Florence Van Scoter made these valid inter vivos gifts subject to the condition or quasi-trust that before the donees transferred the property, they were compelled to offer as gifts the property to her descendants who were subsequently narrowed down in her Will to be her grandchildren.


Lastly, the Court finds that Mrs. Van Scoter effectively revoked the gifts because of indications that the Henrys would not carry out the conditions she set out in the Declaration of Gifts.


DONATIVE INTENT


The GRUEN Court, supra, held that the donor's writings,

consisting of letters dictated by the donor, "unambiguously

established" that the donor intended to make a present gift.


In this case, the notarized Declarations of Gift, executed at the time the gifts were made, unambiguously established that Mrs. Van Scoter intended to make a present gift of the property.


A valid inter vivos gift can be made not only of real property, but also of intangibles and tangible personal property even though there is not physical delivery. GRUEN, supra. That Court held that a remainder interest in a chattel may be created and given by a donor by carving out a life estate for himself and transferring the remainder without the necessity of a physical delivery of the chattel during donor's lifetime.


The same rationale applies here where the donor executed and delivered a duly acknowledged and notarized declaration of gift in recordable form and was permitted to enjoy a life use by consent or assent of all donees.


The test is whether the donor intended to transfer some present interest, or, intended the gift to have no effect until after the maker's death. GRUEN, supra.


"As long as the evidence establishes an intent

to make a present and irrevocable transfer of

title or the right of ownership, there is a present

transfer of some interest and the gift is effective

immediately." GRUEN, supra.


If those principles apply on a gift of a remainder interest, there is no reason why they should not apply to a Declaration of Gift duly acknowledged by a notary public in recordable form, and delivered to donees who respected the donor's wishes by allowing her to continue to use the items for as long as she desired, instead of making an effort to obtain token or completed delivery.


DELIVERY


There must either be a physical delivery or a constructive or symbolic delivery such as by an instrument of gift sufficient to divest the donor of dominion and control over the property. GRUEN, supra.


The GRUEN Court held that delivery of the donor's letters served as instruments of gift; that the donor gave the donee not all rights to the painting, but only title to it with no right of possession until his death.


The GRUEN Court said:


"Under these circumstances, it would be illogical

for the law to require the donor to part with

possession of the painting when that is exactly

what he intends to retain."


"There was no reason to require a donor making a

gift of a remainder interest to physically deliver

it into the donee's hands only to have the donee

deliver it to the donor; that "such a requirement

could impose practical burdens on the parties to

the gift while serving the delivery requirement poorly".


The same rationale applies here. There is no reason to require a donor making a gift by a notarized, recordable document to physically deliver it to the donee where donees have consented to allow donor the enjoyment of the property during her lifetime.


This rationale is consistent with principles reported as long ago as 1866 in KENT'S COMMENTARIES ON AMERICAN LAW, Page 566, Sec 438:


"A mere intention, or naked promise to give,

without some act to pass the property, is not a

gift. . . . It is, nevertheless, hinted or

assumed, in ancient and modern cases, (e) that a

gift of a chattel, by deed or writing, might do

without delivery; for an assignment in writing

might be tantamount to delivery."



ACCEPTANCE


"Acceptance by donee is essential to the validity of an inter vivos gift, but, when a gift is of value to the donee, as it is here, the law will presume an acceptance." In GRUEN, the Court thought it significant that the donee retained the letters for over 17 years to verify the gift.


In his letter enclosing the Declaration of Gift, Mrs. Van

Scoter's attorney instructed the donees:


"Please be sure to retain these papers with

any legal papers that you may have in your

possession."


The plaintiffs retained the Declaration of Gift with their legal papers for some 7 years. That was all they had to do to demonstrate acceptance under the circumstances of this case.


THE QUALIFIER


A valid gift may be coupled with, and hence encumbered by, an obligation of a quasi-trust nature. NYJUR GIFTS, Sec.55, 58. Such an encumbered gift has been denominated a qualified, rather than a conditional, transfer of the property involved. See RE CHOLLAR'S WILL (1951) 200 Misc 948, 107 NYS2d 192.


The sentence "Notwithstanding the absoluteness of this gift, it is my wish that the said property be retained in my family for the use of my descendants and not be transferred out of my family unless first offered to my descendants" attached a condition or quasi-trust provision to the gifts.


The Court holds that the gifts to plaintiffs were coupled with and hence encumbered by the wish and obligation expressed by the donor in the Declaration.


Before Gordon or Ruth Henry could transfer the items given to them, they were required to offer the same without consideration, AS GIFTS, to decedents of Florence. Once the Will was probated, this meant the grandchildren first, and, items they rejected would then have to be offered to other descendants of Florence. Any items all descendants of Florence Van Scoter rejected would be relieved of the "trust" forever.


REVOCATION


Defendants offered proof at the trial indicating that plaintiffs expressed to the donor an intention to sell the property rather than offer it to descendants as required by the quasi-trust.


There was testimony that upon her return from a visit to

plaintiff, donor expressed concern about plaintiff's alleged

statement that she intended to sell the items given to her in

spite of the wish of donor that the items be offered to

descendants before any transfer to others was made.


Plaintiff did not refute this proof. Unfortunately, because of serious illness she could not attend the trial to confirm or refute the statement.


Revocation of a valid conditional gift may be permissible when donee has failed to comply with the condition, or refuses to perform them. See HERMAN V BROOKLYN SAVINGS BANK, (1921, 196 AD 269, 187 NYS 738; See also, KENT'S COMMENTARIES ON AMERICAN LAW, 1866, Vol. 2, Sec.440, page 568 (Code, ib 8, tit.56, De Revocandis Donationibus, 1,10. Ibid 1,8. Code,lib. 3,tit.29, De Inofficiosis Donationibus.


Where the donor has retained possession of a valid conditional gift, revocation could be indicated by gift and physical delivery of the property to someone other than the donee during lifetime of donor, or by rescission in a will, where it appears the condition in the gift will not be honored.


The testimony at trial, gifts of some of the items to other parties and the rescission of lifetime gifts expressed in the will, established revocation of the gifts because the donor felt plaintiffs would sell the items in the market place instead of meeting the condition in the Declaration of gift that the property be retained for donor's descendants or at least offered to them before any proposed transfer.


The will was made three years after the gift declaration, shortly after Mrs. Van Scoter's her visit to plaintiff's home in Skaneatlas. The Court notes the will was prepared by the attorney who prepared the declaration of gifts.


Judgment is awarded to defendants. Because the issues and

lawsuit were prompted by Declaration of Gifts signed by decedent, the letter from her attorney relaying the Declaration, and a missing memorandum referred to in her will that may have avoided this litigation, the Estate of Florence Van Scoter is to pay such costs, disbursements and attorney fees of the plaintiffs as are approved by this Court.


Counsel for plaintiff is to submit his proposed Bill of Costs to defendant's counsel and the Court within 30 days of this decision; defendants to have 10 days to raise objections by affidavit to any or all the items in the proposed bill.


THIS IS THE DECISION OF THIS COURT. Counsel for defendants is directed to prepare Findings of Fact and Conclusions of Law consistent with this Decision.


Dated: May 15, 1995

Mayville, New York


 

JOSEPH GERACE

Supreme Court Justice