Brief Fact Summary. The Plaintiff, Michael Gruen (Plaintiff), commenced an action seeking a declaration that he is the rightful owner of a painting that his now deceased father had given to him, despite the fact that he never retained possession of the painting.
Synopsis of Rule of Law. In order for an inter vivos gift to be valid, there must be intent on the part of the donor to make a gift, delivery by the donor to the donee and acceptance of the gift by the donee. An inter vivos gift requires that the donor intend to make an irrevocable present transfer of ownership. Delivery of the gift can be by physical delivery or constructive delivery, sufficient to divest the donor of dominion of the property. Acceptance by the donee will be presumed when the gift is of value to the donee.
Facts. The Plaintiff brings an action against the Defendant, Kemija Gruen (Defendant), his stepmother seeking a declaration that he is the rightful owner of a painting by Gustav Klimt. The Plaintiff asserts that his now deceased father wrote him a letter stating that he was giving the Plaintiff the painting for his birthday, but he, the father, wished to retain possession of it during his lifetime. This letter is not in evidence, as it was destroyed per the father’s instructions. Two other letters exist declaring the father’s intent to give the painting to his son as a gift. The Plaintiff never took possession of the painting during his father’s lifetime, but sought possession of the painting upon his father’s death. The Defendant claims the purported gift was testamentary in nature and did not meet the formalities of a will or alternatively, that a donor may not make a valid inter vivos gift of a chattel and retain a life estate with a complete right of possession. The lower court f
ound for the Defendant, finding that the Plaintiff did not establish any of the elements of an intervivos gift and that in any event an attempt by a donor to retain a present possessory life estate in a chattel invalidated a purported gift of it. The appellate division reversed the trial courts decision and held that a valid gift may be made reserving a life estate. The Defendant appealed to the Supreme Court.
Issue. Whether a valid intervivos gift of a chattel may be made where the donor has reserved a life estate in the chattel and the donee never has had physical possession of it before the donor’s death?
Held. Affirmed. A valid intervivos gift was made as the donor intended to make a gift to his son, only constructive delivery was needed as actual delivery of the painting to the Plaintiff would have defeated the donor’s intent to retain a life estate in the painting and acceptance is deemed presumed as it is a benefit to the donee.
Discussion. A valid intervivos gift, a gift made during the lifetime of the donor, requires the intent of the donor to make a gift, actual or constructive delivery of the gift and acceptance by the donee. A donor can retain a life estate in a gift and constructive delivery will be acceptable in such a situation as it would be nonsensical to actually deliver the gift to the donee and then immediately take it back for the remainder of the donor’s lifetime.