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Re Beaumont Beaumont v. Ewbank [1900-03] ALL E.R. Rep. 273* Also reported [1902] 1 Ch. 889; 71 L.J.Ch. 478; 86 L.T. 410; 50 W.R. 389; 46 Sol. Jo. 317. England and Wales Chancery Division Buckley J.
Heard: February 26 and 27, 1902. Judgment: February 27, 1902. (8 paras.) Gift Donatio mortis caus Cheque Drawn on overdrawn account Presented, but not paid, before donor's death. The handing over to a donee of a cheque drawn by a donor on an overdrawn bank account does not constitute a valid donatio mortis caus where the cheque has been presented but not paid at the time of the donor's death. Hewitt v. Kaye (1) (1868), L.R. 6 Eq. 198 and Re Beak's Estate, Beak v. Beak (2) (1872), L.R. 13 Eq. 489, followed. Bromley v. Brunton (3) (1868), L.R. 6 Eq. 275, explained. Notes. Applied: Re Reaper, Blythe v. Atkinson, [1916] 1 Ch. 579. Considered: Re Swinburne, Sutton v. Featherley (1925), 70 Sol. Jo. 64. Applied: Bank of Baroda, Ltd. v. Punjab National Bank, Ltd., [1944] All E.R. Rep. 83. Considered: Birch v. Treasury Solicitor, [1950] 2 All E.R. 1198. Referred to: Re Owen, Owen v. I.R. Comrs., [1949] 1 All E.R. 901. As to validity of a gift mortis cause, see 18 HALSBURY'S Laws (3rd Edn.) 403-405; and for cases see 25 DIGEST 541-556. Cases referred to: (1) Hewitt v. Kaye (1868), L.R. 6 Eq. 198; 37 L.J.Ch. 633; 32 J.P. 776; 16 W.R. 835; 25 Digest 547, 327. (2) Re Beak's Estate, Beak v. Beak (1872), L.R. 13 Eq. 489; 41 L.J.Ch. 470; 26 L.T. 281; 36 J.P. 436; 25 Digest 548, 331. (3) Bromley v. Brunton (1868), L.R. 6 Eq. 275; 37 L.J.Ch. 902; 18 L.T. 628; 16 W.R. 1006; 25 Digest 533, 227. (4) Gardner v. Parker (1818), 3 Madd. 184; 56 E.R. 478; 25 Digest 544, 307. (5) Duffield v. Elwes (1823), 1 Sim. & St. 239; reversed (1827), 1 Bli.N.S. 497; 4 E.R. 959; sub nom. Duffield v. Hicks, 1 Dow. & Cl. 1, H.L.; 25 Digest 549, 351. (6) Veal v. Veal (1859), 27 Beav. 303; 6 Jur.N.S. 527; 8 W.R. 2; 54 E.R. 118; sub nom. Re Veal, Veal v. Veal, 29 L.J.Ch. 321; 2 L.T. 228; 25 Digest 546, 317. (7) Rankin v. Weguelin (1832), 27 Beav. 309; 29 L.J.Ch. 323, n.; 54 E.R. 121; 25 Digest 546, 316. (8) Re Mead, Austin v. Mead (1880), 15 Ch.D. 651; 50 L.J.Ch. 30; 43 L.T. 117; 28 W.R. 891; 25 Digest 546, 318. (9) Clement v. Cheesman (1884), 27 Ch.D. 631; 54 L.J.Ch. 158; 33 W.R. 40; 25 Digest 546,

319. (10) Re Dillon, Duffin v. Duffin (1890), 44 Ch.D. 76; 59 L.J.Ch. 420; 62 L.T. 614; 38 W.R. 369; 6 T.L.R. 204, C.A.; 25 Digest 543, 298. (11) Hopkinson v. Forster (1874), L.R. 19 Eq. 74; 23 W.R. 301; 3 Digest (Repl.) 187, 339. Also referred to in argument: Cain v. Moon, [1896], 2 Q.B. 283; 65 L.J.Q.B. 587; 74 L.T. 728; 40 Sol. Jo. 500, D.C.; 25 Digest 541, 286. Edwards v. Jones (1836), 1 My. & Cr. 226; 5 L.J.Ch. 194; 40 E.R. 361, L.C.; 25 Digest 535, 248. Rolls v. Pearce (1877), 5 Ch.D. 730; 46 L.J.Ch. 791; 36 L.T. 438; 25 W.R. 899; 25 Digest 548, 335. Originating Summons to determine whether a testator shortly prior to his death made an effective donatio mortis caus to his sister of the sum of 300 pounds being the [*page274] amount of a cheque drawn by the testator in favour of and given by him to her shortly before his death. On Feb. 19, 1901 one Beaumont was very ill and in expectation of death. His niece was called to his room, and be told her he must draw a cheque in favour of his sister, Mrs. Ewbank, at once for fear he got worse and was unable to do it at all. The niece got his cheque-book, and by his directions filled up a cheque for $300 and he signed it. He did not hand the cheque himself to Mrs. Ewbank, although she was in the same house, but it was, at his request, handed by his niece to Mrs. Ewbank who, on the following day, sent the cheque to her bankers for collection, and they presented it for payment at the bank on which it was drawn on Feb. 23. Beaumont's account there was overdrawn, and the bank manager did not pay the cheque, but returned it and required Beaumont's signature on the cheque to be confirmed. On Feb. 25 Beaumont died, and the cheque was never cashed. The executors of Beaumont took out an originating summons to determine whether there was a valid donatio mortis caus. P. Tindal-Robertson for the executors of Beaumont. C.H. Sargant for Mrs. Ewbank. A.H. Jessel for the residuary legatees. Cur. adv. vult. 1 BUCKLEY J.: The question to be determined is whether the deceased made a valid donatio mortis caus to his sister, Mrs. Eva Ewbank, of a sum of 300 pounds. Subject to a more accurate statement of the facts hereafter, it is sufficient for the moment to say that the act which the deceased did was to hand, or cause to be handed, to his sister a cheque for 300 pounds, which before his death was not paid. 2 Donatio mortis caus is a singular form of gift. It is, if I may use the expression, of an amphibious nature neither a complete disposition inter vivos nor a testamentary gift. It is something done by which the donee is to have an absolute title if the donor dies, but not otherwise. If he dies, the donee's title becomes absolute, and becomes absolute not under but against the executor of the donor. In order to constitute a valid donatio mortis caus the gift must be one intended to take complete effect only in the event of the donor's death. The court must find as a fact that the donor did not intend the gift to be absolute if he did not die. It is not necessary to find that in express words, but that must be the true inference from the facts of the case. To read from the judgment of SIR JOHN LEACH, V.-C., in Gardner v. Parker (4) (3 Madd. at p. 185): "It was the intention of the donor that it should be held as a gift only in case of his death. If a gift is made in expectation of death, there is an implied condition that it is to be held only in the event of death." 3 That, therefore, is a question of fact to answer as best one can. Is it under the circumstances of the case to be inferred that the gift was not present and absolute, but was only to take effect in case of death? In Duffield v. Elwes (6) SIR JOHN LEACH, V.-C., held that a mortgage or bond given as a collateral security for money due on mortgage could not be made the subject of a donatio mortis caus. That decision was reversed by LORD ELDON, sitting in the House of Lords, who there pointed out that in a case of donatio mortis caus the question is not similar to that which arises where a court of equity is asked to give complete effect to an incomplete voluntary conveyance, because it is of the very nature of a donatio mortis caus that the title of the donee is not complete till the donor is dead. The question is not whether the donee has acquired a complete title, but whether he has acquired a right against the legal personal representative of the donor to have his title made complete - that is, whether the legal personal representative is a trustee for the donee. LORD ELDON points that out, and concludes (1 Bli. N.S. at p. 543): "The opinion which I have formed is, that this is a good donatio mortis caus, raising by

operation of law a trust." [*page275] 4 Accordingly, upon the principle of Duffield v. Elwes (5), the following have been held to be good donationes mortis cash: First, a promissory note payable to the order of the deceased, but not endorsed; Veal v. Veal (6); secondly, bills of exchange to the order of the deceased, which from the report I gather, though it is not distinctly stated, had been endorsed by the donor; but this, however, is unimportant; Rankin v. Weguelin (7); thirdly, bills of exchange in favour of the deceased, or order, unendorsed; Re Mead, Austin v. Mead (8); fourthly, a cheque payable to the donor or order and unendorsed; Clement v. Chessman (9); and, lastly, a deposit note of the London and Westminster Bank; Re Dillon, Duffin v. Duffin (10). In all these cases of mortgage debt, promissory note, bill of exchange, and deposit receipt, the donee had not got a complete title, but there had been handed over to him the indicia of property - that is, the property had been given to him on terms that it was to be his if the donor died - and against the legal personal representative of the donor he could say, in the case of a mortgage debt, "sue the mortgagor," and in the case of a bill of exchange, "lend me your name so as to make effectual the trust in my favour." 5 But how does the matter stand as regards the deceased's own cheque? It is (plain law that a donor's own Cheque in favour of another and handed to that other, does not operate as an equitable assignment in favour of the donee of the donor's balance at his bankers: Hopkinson v. Forster (11). The claque is no more than a revocable mandate which the drawer can at any time before payment revoke, and which in the event of his death is ipso facto revoked, and becomes inoperative. If before the donor's death the cheque is presented and paid, the donee receives money, and there is no question of a donatio mortis caus of a cheque. The only question, then, is whether the money was received on the terms that the donee should only keep it if the donor died. But if the cheque be not presented or paid before the donor's death, it is no more than an ineffectual revocable order which is revoked by the donor's death. For that proposition I refer to Hewitt v. Kaye (1) and Re Beak's Estate (2). In the latter case there was an additional feature which BACON, V.-C., held made no difference - viz., the delivery of a banker's pass book, which may be said to be the banker's acknowledgment of a debt. But the Vice-Chancellor held it was no further disposition of property than was effected by the delivery of the cheque. In Re Dillon, Duffin v. Duffin (10) - a case of a deposit note - LINDLEY, L.T., said (44 Ch.D. at p. 83): "It is said that here there was no good donatio mortis caus, because a man cannot make such a gift of his own cheque. I will assume that to be correct, though I think it may some day require consideration; but assuming it to be correct. I think it does not dispose of the present case." 6 If the doctrine of Hewitt v. Kaye (1) and Re Beak's Estate (2) is to be reconsidered, it must be in a higher court than this. Those are authorities binding on ms, and I follow them. But, as the parties may wish to carry this case further, I desire to state my own view of the law. It appears to me that in all those cases of mortgage debt, promissory notes, etc., that which was handed over by the deceased to the donee, was property or indicia of property belonging to the donor. The donor's cheque is not property at all. It is a mere revocable mandate - it is not the bending of money. If the done; goes to the banker and the banker does an act, either by paying the cheque or by undertaking to hold the amount of it for the donee, there is a traditio thus constituted - a delivery of property. If the cheque is acted on thus, you may reach an equitable assignment of the amount to the credit of the donor, pro Canto, at the bank. But unless you get as far as that, there is no delivery of property at all, but only an order which, if acted upon, will lead to the passing of property. The decision of STUART, V.C., in Bromley v. Brunton (3) at first puzzled me. There the deceased gave a cheque to the donee who presented it at the bank, the donor's account being in credit; but the banker was not sure about [*page276] the signature and wished to verify it, and refused payment on that ground. The donor died, and the cheque had not been paid. The Vice-Chancellor held that there was a complete gift inter vivos of the amount of the cheque. That decision must have been based on one of two grounds either that the cheque was constructively paid when the banker received it, and substantially said: "I will pay this, but must see that the signature is all right," so that you get payment referred back to a time before the death of the donor; or the banker was to be taken to have said: "The account is in credit; I will hold the requisite amount for you to answer the cheque subject to my being satisfied as to the signature." That may have been by reason of the act of the banker a good equitable assignment. The Vice-Chancellor said (L.R. 6 Eq. at p. 277): "The effect of the cheque was to appropriate so much of the donor's money, and my opinion is that the funds, the subject of the gift, are in the hands of the executors just as much liable to the payment of the cheque as they were in the hands of the bankers." I cannot suppose that the Vice-Chancellor meant by that that a cheque is an equitable assignment. If you insert these words, and read it in this way, it is sound: "The effect of the cheque and of the banker's action in respect of it was to appropriate so much of the donor's money to meet the cheque." The bank there had in effect honoured the cheque. If so read Bromley v. Brunton (3) does not seem in conflict with Hewitt v. Kaye (1) and Re Beak's Estate (2); and I

think all the authorities are rightly to the effect that the donor's own cheque given and not acted on by payment, either actually or constructively made, will not constitute a valid donatio mortis caus. 7 With that statement of the law, I will state shortly what the facts are in this particular case. [HIS LORDSHIP then stated the facts as above, and continued:] The delivery by the niece to the sister was, for the purpose of a donatio mortis caus, as effectual as if the deceased had given it himself. The circumstances were such as that I infer he gave it in anticipation of his death, and to take effect as a donatio mortis caus if be died. But the legal result is, that in the first place there cannot have been, as in Bromley v. Brunton (3), anything which, by coupling the deceased's act and the banker's act, constituted an equitable assignment of moneys in the banker's hands, because there were none such. Even if the banker was minded to lend, it was not binding on him, because there was no consideration moving at all. It would have been a purely voluntary promise; and if, when the cheque came back with the signature confirmed, he had said "I will not lend," he would have been within his rights. The donee acquired no rights, but a mere expectation. Even if the banker did not change his mind, but remained in the mind to lend, still an agreement to lend is not an enforceable agreement, and the donee acquired no right to property. 8 I hold, therefore, that there was no valid donatio mortis caus for two reasons - first, because the mere drawing by the deceased of a cheque and the handing over of the cheque to the drawee, coupled with the subsequent acts, did not amount to such a delivery or traditio as is required in order to give the donee a right to the cheque to become absolute in the event of the death of the donor; secondly, that even if it might have been enough if the account had been in credit, yet, inasmuch as it was in debit, there could not be any such right. Suppose the case of a cheque given by a person seriously ill, and the donee goes to the bank - say a small country branch - just before closing hours, and presents the cheque, and the cashier, who may be the only person in charge, says he is in a burry to catch a train, and asks the drawee to call in the morning as a favour to him, and says he will pay the cheque then, and the drawee says he will, and the drawer dies during the night. If that is so, the bank, by undertaking to pay the next morning, may have appropriated a sufficient amount of the credit balance to meet the cheque. That might be a good donatio mortis caus, but here the facts do not come up to [*page277] that. There was not any promise to pay, in fact, when the cheque was presented, and as this account was in debit, there could not have been a promise to pay, but only a promise to lend. On these grounds I hold that there is no valid donatio mortis caus. Solicitors: Lowndes & Son, for Griffith, Davie & Smith, Brighton; St. Barbe Sladen & Wing. [Reported by H. PROCTER, ESQ., Barrister-at-Law.] QL UPDATE: 20031120 qp/s/qlwlh/qldjv