By the Court, Gilbert, J.
1. The validity of the transaction which gave rise to the notes in controversy, was affirmed by this court in the case of this plaintiff against the makers of the notes. It was sought in that , case to impeach the sale in part consideration of which the notes were given, on the ground that it was fraudulent as to the creditors of the intestate. The court, however, held otherwise, and we must be governed by that decision.
2. Irrespective of the question whether there was a valid and effectual gift of the money which the makers of the notes thereby promised to pay to the payees 'thereof, (which we will presently consider,) we are of the opinion that this action cannot be sustained. A legal title, or right of possession, is indispensable to the maintenance of an action of trover. An equitable right, merely, without any muniment of legal title, or of a legal right of possession, is not sufficient. (Herring v. Tilghman, 13 Ired. 392. Billion v. Carroll, id. 431.) To allow one not a party to a note to recover it, or the value of it, from the payee, would be an anomaly in law. The maker of the note, or any one liable upon it, might maintain such an action, on proper proof. But to allow a recovery in such an action on the ground that the promise contained in the note was to the plaintiff, or to one under whom he claimed title to it, and not to the payee, would be a violation of the maxim that written contracts cannot be contradicted by parol evidence. The notes had no value, as property, to the intestate. They are only evidences of debt; and in a court of law are enforcible only in behalf of the payee. If, as is contended by the plaintiff, the evidence be such as to show that the intended gift did not take effect, or was revoked, the remedy of the administrator would be by a bill in equity, to recover the consideration of the notes from the makers, or to avoid the sale out of which they arose, and to get back the [590] property sold. In such a suit, the makers and payees would be necessary parties, and a decree could be made, which would do justice to all concerned.
3. We think there was a valid and effectual gift of the money payable on the notes. By the common law, personal property may pass by gift or grant, with or without deed, (Gom. Dig. Biens. D, 2;) but a parol gift, without some act of delivery, will not alter the property, whether by act inter vivos, or mortis causa. But where a gift inter vivos is perfected by delivery of possession of the thing, or delivery of a deed of gift, it is complete, although made without any consideration. The statute avoids voluntary grants and gifts in fraud of creditors. But, as before stated, we are concluded by the decision in the former case from considering the effect of this transaction upon the creditors of the intestate. For it was then held that it was not fraudulent as to creditors; that no trust was created for the use of the grantor; and that it was a fair and just distribution of the estate of the intestate among his children. The decision in that case must be deemed res adjudicata as to this question of fraud. The agreement between the intestate and his daughters, made contemporaneously with the sale to them of his farm and personal property, recites the consideration of such sale, and refers to the notes aforesaid as being the portions that the said John Fulton (the intestate) wishes them (the payees) to receive out of his property,' after the decease of himself and his wife. These notes were afterwards canceled, and new notes taken, in reference to which the intestate signed a paper describing them, a.nd declaring that he intended they should be considered by his children “in full of their share in his property, real and personal, which he had or ever had had.” The intestate caused the notes to be made payable to his children, who are named therein as payees, respectively. This transferred the legal title to the debts represented in the notes ; and with the accompanying declaration contained in the agreement and paper aforesaid, furnishes satisfactory evidence [591] that there was a delivery of them to the payees, and that the possession of them afterwards by the intestate was as trustee for them. An actual transmutation of possession is not essential, where the settlor intends to convert himself into a trustee, and makes a sufficient declaration to that effect. (Lewin on Trusts, 82.) Thus in Ex parte Pye, (18 Vesey, 149,) an agent was directed to purchase an annuity for a lady, but purchased it in the name of the testator, who after-wards authorized the agent to transfer the annuity into the name of the lady. Before the transfer was made the testator died. Lord Eldon held that the testator had committed to writing a sufficient declaration that he held that part of his estate in trust for the annuitant. The same principle is asserted in Wheatley v. Purr, (1 Keen, 551;) Meek v. Kettlewell, (1 Hare, 470 ;) McFadden v. Jenkins, (1 id, 458 ;) James v. Bydden, (4 Beau. 600;) Thorp v. Owen, (5 id. 224;) Grangiac v. Arden, (10 John. 293 ;) see also Bunn v. Winthrop, (1 John. Ch. 329 ;) Souverbye v. Arden, (Id. 240;) Scott v. Simes, (10 Bosw. 314;) Van Deusen v. Rowley, 4 Seld. 360 ; Scrugham v. Wood, (15 Wend. 545.)
Free access — add to your briefcase to read the full text and ask questions with AI
By the Court, Gilbert, J.
1. The validity of the transaction which gave rise to the notes in controversy, was affirmed by this court in the case of this plaintiff against the makers of the notes. It was sought in that , case to impeach the sale in part consideration of which the notes were given, on the ground that it was fraudulent as to the creditors of the intestate. The court, however, held otherwise, and we must be governed by that decision.
2. Irrespective of the question whether there was a valid and effectual gift of the money which the makers of the notes thereby promised to pay to the payees 'thereof, (which we will presently consider,) we are of the opinion that this action cannot be sustained. A legal title, or right of possession, is indispensable to the maintenance of an action of trover. An equitable right, merely, without any muniment of legal title, or of a legal right of possession, is not sufficient. (Herring v. Tilghman, 13 Ired. 392. Billion v. Carroll, id. 431.) To allow one not a party to a note to recover it, or the value of it, from the payee, would be an anomaly in law. The maker of the note, or any one liable upon it, might maintain such an action, on proper proof. But to allow a recovery in such an action on the ground that the promise contained in the note was to the plaintiff, or to one under whom he claimed title to it, and not to the payee, would be a violation of the maxim that written contracts cannot be contradicted by parol evidence. The notes had no value, as property, to the intestate. They are only evidences of debt; and in a court of law are enforcible only in behalf of the payee. If, as is contended by the plaintiff, the evidence be such as to show that the intended gift did not take effect, or was revoked, the remedy of the administrator would be by a bill in equity, to recover the consideration of the notes from the makers, or to avoid the sale out of which they arose, and to get back the [590] property sold. In such a suit, the makers and payees would be necessary parties, and a decree could be made, which would do justice to all concerned.
3. We think there was a valid and effectual gift of the money payable on the notes. By the common law, personal property may pass by gift or grant, with or without deed, (Gom. Dig. Biens. D, 2;) but a parol gift, without some act of delivery, will not alter the property, whether by act inter vivos, or mortis causa. But where a gift inter vivos is perfected by delivery of possession of the thing, or delivery of a deed of gift, it is complete, although made without any consideration. The statute avoids voluntary grants and gifts in fraud of creditors. But, as before stated, we are concluded by the decision in the former case from considering the effect of this transaction upon the creditors of the intestate. For it was then held that it was not fraudulent as to creditors; that no trust was created for the use of the grantor; and that it was a fair and just distribution of the estate of the intestate among his children. The decision in that case must be deemed res adjudicata as to this question of fraud. The agreement between the intestate and his daughters, made contemporaneously with the sale to them of his farm and personal property, recites the consideration of such sale, and refers to the notes aforesaid as being the portions that the said John Fulton (the intestate) wishes them (the payees) to receive out of his property,' after the decease of himself and his wife. These notes were afterwards canceled, and new notes taken, in reference to which the intestate signed a paper describing them, a.nd declaring that he intended they should be considered by his children “in full of their share in his property, real and personal, which he had or ever had had.” The intestate caused the notes to be made payable to his children, who are named therein as payees, respectively. This transferred the legal title to the debts represented in the notes ; and with the accompanying declaration contained in the agreement and paper aforesaid, furnishes satisfactory evidence [591] that there was a delivery of them to the payees, and that the possession of them afterwards by the intestate was as trustee for them. An actual transmutation of possession is not essential, where the settlor intends to convert himself into a trustee, and makes a sufficient declaration to that effect. (Lewin on Trusts, 82.) Thus in Ex parte Pye, (18 Vesey, 149,) an agent was directed to purchase an annuity for a lady, but purchased it in the name of the testator, who after-wards authorized the agent to transfer the annuity into the name of the lady. Before the transfer was made the testator died. Lord Eldon held that the testator had committed to writing a sufficient declaration that he held that part of his estate in trust for the annuitant. The same principle is asserted in Wheatley v. Purr, (1 Keen, 551;) Meek v. Kettlewell, (1 Hare, 470 ;) McFadden v. Jenkins, (1 id, 458 ;) James v. Bydden, (4 Beau. 600;) Thorp v. Owen, (5 id. 224;) Grangiac v. Arden, (10 John. 293 ;) see also Bunn v. Winthrop, (1 John. Ch. 329 ;) Souverbye v. Arden, (Id. 240;) Scott v. Simes, (10 Bosw. 314;) Van Deusen v. Rowley, 4 Seld. 360 ; Scrugham v. Wood, (15 Wend. 545.)
But independently of this, there was, in contemplation of law, a delivery of the subject of the gift. That was the money payable upon the notes. “ Delivery,” says Chancellor Kent, (2 Kent’s Com. 439,)»“in this, as in every other case, must be according to the nature of the thing. It may be constructive. 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.” That the intestate intended to make this gift to, or settlement upon, his children is unquestionable. There is no evidence that he changed his mind. The fact that the notes were left by him in a position where the beneficiaries might take them after his death, is convincing proof that he did not. No further formality to complete the gift was necessary. It is only when something remains to be done by or in behalf of the [592] donor, which is not done before his death, that the gift fails to take effect. The principle is well illustrated in Harris.v. Glarh, (3 Gomst. 93,) although that was a case of an ineffectual gift, mortis causa. In that case, the gift was in the form of a draft of the donor on his bankers, and delivered to the donee, but the donor died before the presentment of the draft, and it was not accepted. The court held that the subject of the gift was the money ordered'to be paid by the draft', and that it was ineffectual, because, until accepted, the draft gave the donor no remedy to recover the money. Judge Buggies, who delivered the opinion of the court, says : “ There was" no revocation of the gift by the donor, and it became absolute at his death if there was a sufficient delivery of the thing given during his life ; and this depends on the question whether the' draft, without acceptance, gave to the donee a remedy against the drawees, either in law or equity, to recover the money.” So in Irons v. Smallpiece, (2 B. & Ald. 552,) Ch. J. Abbott says : “ To transfer property by gift, there must be either a deed or instrument of gift, or an actual delivery of the thing to the donée.” The act of delivering a note or other obligation of a third person to a donee as a gift, only furnishes evidence that it was intended by the donor as a gift of the money payable thereupon. The evidence of such intention may as well be afforded, as in this case, "by a plain and unrevoked declaration of the donor, and the taking the note in the name of the donees, as by such delivery. If he retained the possession of the notes during his life, it will be intended that he did so for the benefit of the payees. Whether he did keep, the notes, or whether he. placed them in the hands of another, does not appear. In either case, there was a valid gift of the money payable on them. For, as was observed by Lord Justice Knight Bruce, in Kekewich v. Manning, (1 DeGex M. & G. 187,) “ it is upon legal and equitable principle clear, that a person sui Juris acting "freely, fairly, and with sufficient knowledge, ought to have, and has it in his power, to make, in a binding and effectual manner, [593] a voluntary gift of any part of his property, whether capable or incapable of manual delivery, whether in possession or reversionary, or howsoever circumstanced.”
[Kings General Term,
May 7, 1866.
The order granting a new trial must he reversed, with costs.
Scrugham, Lott, J. B. Barnard and GUhert, Justices.]