Scottish Court of Session Decisions

LORD PRESIDENT (Normand).—The Lord Ordinary has very clearly set forth the facts upon which the question at issue in this case has to be determined. That question is whether certain deposit-receipts, one for £750 and the other for £300, were made the subject of donation mortis causa, the former to the daughter Mary, and the latter to the; son Charles, two of the surviving children of the deceased Mr Aiken. The Lord Ordinary has reached a conclusion adverse to these two children and in favour of the heirs ab intestato in mobilibus.

The first point which has to be considered is that, at the time when the donation was said to have been made, the deceased was not in immediate apprehension of death. Although in some of the earlier cases immediate apprehension of death seems to have been regarded as an essential element in the proof of donation mortis causa, in the later cases a different view has been taken, and I think it can no longer be said that anything in the nature of immediate apprehension of death is required. No doubt it remains true that a donation mortis causamust be made in contemplation of death, for example, by one, as is said, œtate fessus, or by one who for other reasons is in cogitatione mortis.

In the present case, I am of opinion, differing from the Lord Ordinary, that this condition is satisfied. When the donation is said to have been made, the deceased was a man at least in later middle age. Unfortunately his actual age has by some slip not been proved in evidence as it might have been, but we know from the ages of his family that he was probably in the later sixties. Then the donation was said to have been made immediately after the death of his wife, when his mind was occupied with the future of his children, and when there had been that grave reminder of the risk of mortality. Thirdly, when he first

spoke about the disposal of his money to his son Charles he spoke also about his own funeral, and told his son Charles that, in the event of his death, he should obtain the funeral benefit from the union to which he belonged. These circumstances show that, at the time, his death was a circumstance which occupied his mind, and that he was engaged in considering what arrangements of his affairs ought to be made to provide for the contingency of his own death.

The case turns upon the intention of Mr Aiken at the time when he is said to have made the gift. The Lord Ordinary has taken the view that Mr Aiken had no further intention than to make a will in favour of his daughter Mary and his son Charles, and counsel for the respondents very forcibly supported that view in argument addressed to us. So far as the evidence of Charles himself is concerned, I think that it is not doubtful that it is consistent with a mere intention on the part of Mr Aiken to make a will in favour of Charles and perhaps of other members of his family. If there had been no evidence but Charles's evidence, therefore, it would not have been possible to hold that donatio mortis causa was established. But after his communication with Charles Mr Aiken deposited the £750 and the £300, and obtained deposit-receipts in terms which would have entitled the bank to pay over these sums on the signatures of Mary and Charles respectively, and he also spoke to his daughter Mary about them. Her evidence about what he then said to her is of crucial importance. I may say at once I agree with the Lord Ordinary that the evidence both of Mary and of Charles may be accepted as a faithful representation of their recollection of what occurred. It is corroborated by other witnesses, and also to a certain extent by the terms of the deposit-receipts themselves. We may fairly proceed, therefore, upon Mary's evidence and treat her as a veracious and accurate witness. She tells us that her father exhibited and read over to her two deposit-receipts, one for £750 and the other for £300, and that he told her the larger sum was for her and the smaller sum for Charles; and that in the event of his death she should take charge of the key, which he kept in his pocket, of the trunk in which he placed these deposit-receipts, and keep the one herself and hand the other over to Charles. At that same conversation Mary asked her father what would be done for her brother James. Her father said that James would participate in his estate, and that he was going to make a will. The whole question is whether the benefit which he was intending to confer upon Mary and Charles was of the same order as the benefit which he was then indicating that he would confer upon James—that is a benefit of the nature of a legacy, or dependent upon a testamentary writing. On a fair reading of the evidence, I am of opinion that Mr Aiken had a different intention about his son Charles and his daughter Mary from that which he had about James, and that he considered that he had done something in their favour which already gave them a greater security for the future than the security which would be provided by a will in favour of James or of the other members of the family. No doubt Mr Aiken knew little about mortis causa donation, or of gifts subject to resolutive conditions, but I think it is a fair inference from, his words that he meant to make a gift of the money represented by the deposit-receipts to the two favoured children, which would be secured to them unless some change took place, either through his own action or through their predeceasing him. If someone who understood mortis causa donation had been present and had said to him, "Do you mean that these children are to have the benefit of this money from now onwards although you may use it during your life and you may take it from them by some change of your intention, and that if they predecease you they will never actually enjoy it?" I think, judging from his reported words he would have said, "Yes, that is what I mean." I think it is fair to say that a present intention of donation is proved.

It is, however, suggested, and there is authority for this, that there should have been either delivery or some equivalent of delivery. Now, what took place was this. These deposit-receipts were, until Mr Aiken's wife's death, in his name and in the name of his wife or either of them and the survivor. What he did after his wife's death, and before the conversation with his daughter to which I have referred, was to uplift the money and re-deposit it in the name of himself and his daughter in the one case, and himself and his son in the other case, or either of them and the survivor. There was, of course, not actual delivery to either of his children, but it was an intimation to the bank that the bank could cash these deposit-receipts upon the signature of the son in the one case and of the daughter in the other. Some of the observations which were made in the case of Crosbie's Trustees v. Wright justify the view that the re-depositing of money in these terms might, along with the proof of voluntaswhich I have already held to have been made out, be sufficient in itself; but there is the additional circumstance that Mr Aiken said to his daughter, "Here is the key in my pocket; use that key after my death for the purpose of opening the trunk and taking out the deposit-receipts and dealing with them as I have told you." It is very like giving the control of his repositories from the date of his death to his daughter, so that she might use the two deposit-receipts as her property and her brother's property respectively. I am of opinion that that, along with the alterations of the names on the deposit-receipts, is a sufficient equivalent to delivery for the purpose of mortis causa donation. It has to be remembered that the requirement of delivery as an essential of mortis causadonation has been very much modified. I refer to what was said by Lord President Inglis in Crosbie's Trustees, and to what was said by Lord Deas in the case of Gibson v. Hutchison, for that statement. Therefore, I think all the essential elements of mortis causa donation are here present.

This is not a case in which it can be suggested that the taking of the

deposit-receipts in the name of his son and daughter along with his own name had anything of an administrative purpose about it. That was frankly conceded by counsel for the respondents, and for this reason that, besides these two deposit-receipts, there were other deposit-receipts which he retained in his own name. It was quite unarguable that he intended one deposit-receipt to be administered through the medium of Mary, a second deposit-receipt through the medium of Charles, and the other deposit-receipts to be dealt with by his general executors. If you get rid of an administrative purpose for the alteration of the names in which the money was deposited, the obvious explanation then becomes donatio mortis causa. There is a possibility that the testator may have thought that the taking of a deposit-receipt in the name of a person whom he intended to benefit might operate as a legacy; but where you find evidence that, along with this act in relation to the deposit-receipts, there was also a separate and expressed intention to make a will, then the assumption, which might not otherwise be unnatural, that the alteration of the names in which the money was deposited was merely a mistaken effort to make a testamentary bequest, falls to the ground.

On the whole, therefore, I am of opinion that the claims of Mary and Charles ought to succeed, and I suggest to your Lordships that the Lord Ordinary's interlocutor should be recalled, and that the claims for these two claimants should be sustained.

LORD FLEMING .—I am of the same opinion. There is really no dispute with regard to the facts of this case. The Lord Ordinary accepted the evidence led for the reclaimers, and, accordingly, the only question we have to consider is whether the facts proved warrant in law an inference that the deceased had made a valid mortis causa donation, in favour of the reclaimers, of the contents of the deposit-receipts. The Lord Ordinary decided that question in the negative on two grounds. The first ground was that he was not satisfied that the deceased, in taking out the deposit-receipts, was acting in contemplation of death. I am unable to agree with that view. The deposit-receipts were taken out shortly after the death of the deceased's wife. Although we have not his precise age he must have been then well advanced in life, and his wife's death seems to have led him to consider whether it was necessary for him to make some provision for the event of his own death. The language which he used at the interviews with the reclaimers clearly indicates that his purpose in taking out the deposit-receipts was to make a provision for them in the event of his death. I think the proof that he was acting in contemplation of death is sufficient, and that, accordingly, the Lord Ordinary's decision on this point cannot be supported.

A more difficult position arises with regard to the other ground of judgment. The Lord Ordinary held that it had not been established that there was an intention on the part of the deceased to make a mortis causa donation in favour of the reclaimers, as distinguished from an intention merely to bequeath a legacy to them. It is essential to the validity of a mortis causa donation that there should be an intention on the part of the donor to make a donation de prœsenti, and not merely in futuro. I find, however, sufficient evidence of such intention, not only in the deceased's dealings with the deposit-receipts, but also in their terms. They bear that the money contained in them was received from the deceased and his daughter and son respectively, and that it is repayable to either or the survivor. These words seem to me to show that the deceased regarded the sums deposited as money in which the reclaimers had a present interest. I find confirmation of that view in the evidence which we have of the interviews between the deceased and the reclaimers. He referred to the sums contained in the deposit-receipts, particularly at the interview with Mrs M'Bay, in terms which appear to me to be more consistent with a de prœsenti gift than with an intention to make a testamentary gift.

LORD MONCRIEFF .—I agree. I recognise, at the same time, that this case, as all cases on this branch of the law, is not free from difficulty. The distinction between a legacy on the one hand and a donatio mortis causa on the other hand is a subtle one, and the circumstances which accompany any particular example of either of these two juridical conceptions may be found in practice to be closely allied. It was represented to us that the facts in the case of Crosbie's Trustees, which were interpreted by the Court as evidencing donatio mortis causa, were difficult to distinguish from the facts in the case of Rose v. Cameron's Executor, in which the conclusion of the Court was against donation. I think, on the contrary, that the distinction between the circumstances of these two cases is a radical one. It is true that the evidence adduced in each case was limited to the evidence of the donee maintaining the donation, taken along with the terms of certain deposit receipts which practically echoed one another. So far the parallel between the cases was exact. A sufficient explanation of the opposing judgments is, however, to be found in the conclusion of the learned judges in Rose's case that the whole transaction had been an unreal one, and that the parallel had resulted from an attempt to confer a legacy which should defraud the Revenue by escaping duty. Accordingly, the ratio of decision in each of these two cases appears to me to be entirely consistent.

If one comes to the principle which has to be applied in the solution of such cases, it should be kept in view that, before donatio mortis causa can be affirmed, there requires to be, as in the case of other gifts, either an actual or a constructive transfer of the subject of gift. That transfer, in order to distinguish the transaction from the conferring of a legacy, requires, moreover, to be a present and not a future act. It is an added circumstance that the transfer has to have some relation to the expectation of life, and has, moreover, to be completed with the intention of

making a gift. In order to solve, by applying this principle, the problem presented by the deposit-receipt cases, it is, I think, of importance in this connexion to have in view what is the relation of the customer with the bank in which he deposits his money. When a customer deposits money with his banker and takes a deposit-receipt he may be regarded as having delivered the actual coin into the custody of the bank with a direction to hold the deposit in such terms as the deposit-receipt may evidence. If the deposit-receipt be taken in name of the depositor himself, then there has been delivery to the banker to hold for the depositor; but if, in circumstances such as occurred in the present case, at a subsequent date such a depositor should give fresh instructions to his banker appointing him to hold for others than himself, then, in law, he may be regarded as having instructed his banker to make a delivery or transfer in favour of the person in whose interest the deposit is thereafter to be held. Accordingly, if there be, as here, a change in the terms of the deposit as evidenced by the receipt whereby the original proprietor of the money directs the banker to hold for the interests of a third party, this may fairly be regarded as operating, and as operating de prœsenti, albeit conditionally, a transfer, or the equivalent of a transfer, of the cash which has been deposited in bank-in favour of the person whose name now appears upon the receipt. It is in this sense that in these cases, and more especially in the Lord President's opinion in Crosbie's Trustees, the terms of the receipts themselves have been referred to as so important a factor in the solution of the problem. The terms of the receipt are regarded as available, in fact, to evidence an equivalent in law of that actual transfer which is essential towards a gift. They are also available, in law, to evidence that a present act has taken place, in contrast with such an act as the testamentary act of the conferring of a legacy. Once such a transfer has been made in favour of a chosen beneficiary, however, the question remains quo animo was the transfer made? If it was made for purposes of administration, the right and interest of the depositor of course remain undivested. If it was made on the other hand with an intention to donate, such an intention may serve to complete a method of transfer which, in my opinion, is so closely related to a present act by the concurrent appropriation de prœsenti in the vaults of the bank as to dispose of the question that only a legacy was conferred.

In my opinion, a present fact being evidenced by the transaction with the banker, the animus of the transfer in this case is conclusively established as having been directed towards donation by the evidence of Mrs M'Bay, and by the supplementary evidence of the facts and circumstances attending the interview between her and her deceased father. I do not regard it as essential, although there have been observations hinc inde on this point, that in such a case the document which gives the depositor an active title to handle the money should itself have changed hands. If there has been such transfer as is evidenced

by an alteration of the duty of the banker, directing him to hold for the, nominee instead of for the original depositor, then I think there. may be sufficient proof of an animus to complete the gift, although the depositor should himself retain the paper in his hands. In this case, moreover, the retention of the deposit-receipt by the late Mr Aiken was on terms which did not exclude from access to the document the persons who claim to have had donation of the money. His direction to take from him, or from his person after his death, the key of the box in which the deposit-receipts were placed, gave these persons, as from the first moment when the gift in their favour became unconditionally vested for enjoyment, a sufficient faculty of making immediate beneficial use of the subject of gift.

The Lord Ordinary has held that in this case only legacy was intended because, when money was first spoken of between father and son, there was an expressed intention on the part of the father to make a will; and he says that any beneficial interest conferred upon the children at this stage must be assumed to have been intended only as a legacy, unless there be proof of a change of view in the circumstances of the case. The Lord Ordinary failed to find evidence of such a change of view. In my view, he has ignored the fact, which I regard. as being itself sufficient, of the taking of the deposit-receipts in a change of style at a subsequent date. That this was not merely a testamentary step appears to be clear from the fact that, notwithstanding his having made this change in the deposit-receipts, he, at a later date still, professed a continuing intention to make a will. The Lord Ordinary has further had difficulty in finding that the transaction took place at a time when the late Mr Aiken was under a sufficient apprehension of death. I do not feel this difficulty. In all cases these donations mortis causa must necessarily have some relation to death as the very term of description itself implies. They are gifts which are only to take effect as between donor and done on the death of the donor. They are, therefore, in all cases made with relation to death, and, in a case like this, where the beneficial right to the subject of gift is conditioned in express terms in favour of a "survivor," I find a sufficient relation to an expectation of death in the form in which the gift is made and in the condition under which the gift is to be enjoyed. If anything further be required, the circumstances to which your Lordships have referred are sufficient to demonstrate that this was typically an example of a donation made mortis causa.