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Such is the common case of A. lending a book to B. and Chap. VI. afterwards telling him that he may keep it (u).

The law as to gifts to trespassers (i.e., persons who acquire possession wrongfully) is laid down in Sheppard's Touchstone (x) as follows:

If a man take my goods from me, or from another man in whose hands they are; or I buy goods of another man and suffer them in his possession, and a stranger taketh them from him; it seems, in these cases, I may give the goods to the trespasser, because the property of them is still in me.' Mr. Preston adds, "i.e., his acceptance of them is an admission of property in the donor; but they cannot be given to a stranger, since without such an admission the party has merely a right of action or of resumption by recaption" (y).

If the chattel is in the hands of a third person the owner may make an effectual gift of it either by words of gift and such delivery and acceptance as the circumstances permit (z), or by constituting the third person a bailee for the donee with the assent of them both (a).

negotiable

The delivery of a negotiable instrument (post, p. 203) to the Gift of donee, indorsed if necessary by the donor, operates as a gift of instrument. the money secured by it if such be the intention (b).

There is, however, a distinction between a cheque drawn by the donor on his own bankers in favour of the donee and a cheque drawn by a stranger and given by the donor to the donee. The former is merely an order by the donor to his banker to pay the donee, and is revocable by the donor, and is revoked by his death at any time before payment (c). On the other hand, the delivery of a cheque drawn by a stranger passes the right to receive the money for which the cheque is drawn, and therefore

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right in chattels cannot be without
deed, appears from the context to be

erroneous,

(z) Rawlinson v. Mort, 93 L. T. 555.
(a) See Cochrane v. Moore, 25 Q. B. D.
57; post, p. 92.

(b) McCulloch v. Bland, 2 Giff. 428;
Langley v. Thomas, 26 L. J. Ch. 609.

(c) See s. 75, Bills of Exchange Act, 1882 (45 & 46 Vict. c. 61). The decision in Bromley v. Brunton, 6 Eq. 275, seems not to be in accordance with principle or authority.

Chap. VI. operates as an effectual gift. But a negotiable instrument does not pass by words of gift without delivery (d).

Gift of instrument

in action.

The mere delivery of an instrument which is not negotiable, creating chose such as a policy of insurance, bond, or share certificate, with the intention to make a gift of the money secured thereby, will not operate as a gift of the money unless there is an effectual assignment of the chose in action. It has been held that the delivery of a banker's deposit receipt, indorsed by the donor with an order pay the amount to the donee, is an effectual gift of the money deposited at the bank (e).

Deeds.

Gift of instrument to debtor.

Cancellation.

to

It must not, however, be assumed that the mere gift of the instrument has no effect. Coke says (f):

"A man may give or grant his deed to another, and such a grant by parol is good. If a man hath an obligation, though he cannot grant the thing in action, yet he may give or grant the deed, viz., the parchment and wax, to another, who may cancel and use the same at his pleasure."

The donee may often retain the instrument, though he cannot recover the debt; and in such cases the donor, or his representative, may be unable to recover the debt for want of the instrument (g). Where, however, an equitable mortgagee by deposit of deeds hands over the deeds to a donce, the donce cannot retain them, because the donor had no property in them apart from the charge, and could only transfer the ownership of them by properly transferring the charge (h).

The gift to the debtor of an instrument creating a debt, after the debt is due, does not extinguish the debt (i). In the case of a bill or note, however, either a written renunciation, or a verbal renunciation and delivery of the bill or note to the acceptor or maker, discharges the debt (k).

The cancellation of an instrument is primâ facie evidence of a release (1). The intentional cancellation of a bill or note, or of

(d) Trimmer v. Danby, 25 L. J. Ch.
424; Bridge v. Bridge, 16 Beav. 315.
(e) Re Griffin, [1899] 1 Ch. 408.
(f) Co. Litt. 232a, b.

(g) Rummens v. Hare, 1 Ex. D. 169;
Barton v. Gainer, 3 H. & N. 387.

(h) Re Richardson, 30 Ch. D. 396.
(i) Edwards v. Walters, [1896] 2 Ch.
157, 168. See also Byrn v. Godfrey,
4 Ves. 5; Cross v. Sprigg, 6 Hare, 552;

Re Hancock, 57 L. J. Ch. 793.

(k) Bills of Exchange Act, 1882, ss. 62, 89; Edwards v. Walters, sup. ; Re Dickin son, 101 L. T. 27; post, p. 206.

(1) Pigot's Case, 11 Rep. 26 b; Harrison v. Owen, 1 Atk. 520; Alsager v. Close, 10 M. & W. 576; Gilbert v. Wetherell, 2 Sim. & S. 254; 25 R. R 203.

the signature of a party thereto, by the holder discharges the bill or Chap. VI. note or the party whose signature is cancelled (m).

of debt.

Except as above, the mere fact of a creditor forgiving a legal Forgiveness debt, either by word of mouth (n), or by writing not under seal (o), does not discharge the debtor. If the debt, being a simple contract debt, is not due, the contract might at law be rescinded by a new simple contract, but forgiveness cannot amount to a contract; if the debt is due, it can only be released by deed, or by simple contract made upon an executed consideration by way of accord and satisfaction (p). Mere forgiveness will not suffice, because the defence to an action for the recovery of the debt could at most be equitable only (q), and equity will not assist a volunteer. But, if the debt is gone at law, as where the debtor is appointed executor of the creditor, so that he requires no assistance from equity, the forgiveness operates as a release in equity and at law (r).

.

Release of debt by conduct.

under Judicature Act.

Whether the instrument creating the debt is under seal or not, the conduct of the parties may amount to a release of the debt (s`. The provision of the Judicature Act, 1873 (t), that "any abso- Assignment lute assignment by writing under the hand of the assignor of any debt or other legal chose in action of which express notice in writing shall be given to the debtor . . . shall be effectual at law to pass and transfer the legal right to such debt or chose in action from the date of such notice . . . applies to a voluntary transfer.

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A gift of a chose in action which is transferable in a statutory Chose in manner only (post, pp. 138, 141) is not effectual unless the transfer

is made in the statutory manner (u).

(m) Bills of Exch. Act, 1882, ss. 63, 89.

(n) Flower's Case, Noy, 67.

(0) But consider Eden v. Smyth, 5 Ves. 356; 5 R. R. 60, where it was considered that a bond debt might be released by a letter.

(p) Leake on Contracts, Part IV., Ch. 8. As to accord and satisfaction, see post, p. 172.

(q) Cross v. Sprigg, 6 Ha. 552; Peace v. Hains, 11 Ha. 151; Knapp v. Burnaby, 8 W. R. 305.

(r) Strong v. Bird, 18 Eq. 315; Re Applebee, [1891] 3 Ch. 422.

(s) Flower v. Marten, 2 My. & Cr. 459; 45 R. R. 114; Major v. Major, 1 Drew. 165; Yeomans v. Williams, 35 Beav. 130; 1 Eq. 184; Edwards V. Walters, [1896] 2 Ch. 157, 168.

(t) 36 & 37 Vict. c. 66, s. 25, sub-s. 6. See post, p. 142.

(u) Colman v. Sarrel, 1 Ves. 50; 3 Bro. C. C. 12; 1 R. R. 83; Beech v. Keep, 18 Beav. 285 (where consols were assigned by deed); Coningham v. Plunkett, 2 Y. & C. C. C. 245; Peckham v. Taylor, 31 Beav. 250 (where a power of attorney for the transfer of stock was executed, but no transfer made during the donor's

action transferable in statutory mode.

Chap. VI. Imperfect gift, and

donee made executor.

Gift of equitable interest in property by way of trust.

A gift which is imperfect for want of a necessary delivery or transfer will be perfected on the death of the donor if the donee is appointed an executor, for the property then legally vests in the executor (x).

It is possible to make a valid gift of the equitable interest in property of any nature by means of a trust. If the donor has the legal interest he may constitute himself a trustee for the donee, or transfer the legal interest to some other person as a trustee for the donee. In the former case, he may retain some control over the thing given without rendering the gift ineffectual (y). If the donor has the equitable interest only, he can cause the holder of the legal interest to constitute himself a trustee for the donee. The cases are conflicting, but the following conclusions may be drawn from them:

First. Where the donor attempts to make a gift by transfer of the property to the donee which fails owing to the transfer being ineffectual, he does not thereby constitute himself a trustee (z).

Secondly. The owner of property may constitute himself (a) or a stranger (b) a trustee for a donee by unequivocal words or actions (c).

Thirdly. Where A., the legal owner of property, attempts to make a gift to B. by transferring it to C. in trust for B., the gift fails if the transfer is incomplete (d).

Fourthly. Where A. is the equitable owner of property legally vested in C., a direction by A. to C. to hold the property in trust for B. (assented to by C.) operates as an effectual gift in equity to B. (e).

life); see also Searle v. Law, 15 Sim. 95;
Antrobus v. Smith, 12 Ves. 39; 8 R. R.
278; Dillon v. Coppin, 4 My. & Cr. 647;
Moore v. Moore, 18 Eq. 474; Milroy v.
Lord, 4 De G. F. & J. 264.

(x) Re Stewart, [1908] 2 Ch. 251; Re
Innes, 101 L. T. 633, where it was held
that a mere promise to give was not thus
made effectual.

(y) Wheatley v. Purr, 1 Keen, 551; Vandenberg v. Palmer, 4 K. & J. 204.

(z) See Milroy v. Lord, and Richards v. Delbridge, cited supra, p. 84.

(a) Ex p. Pye, 18 Ves. 140; 2 W. & T. L. C. 366; 11 R. R. 173; Wheatley v. Purr, 1 Keen, 551; Thorpe v. Owen, 5

Beav. 224; Gray v. Gray, 2 Sim. N. S. 273.

(b) Tate v. Leithead, Kay, 658; Peckham v. Taylor, 31 Beav. 250; Stapleton v. Stapleton, 14 Sim. 186; Vandenberg v. Palmer, supra.

(c) No trust was constituted in Gaskell v. Gaskell, 2 Y. & J. 502; Hughes v. Stubbs, 1 Ha. 476; Smith v. Warde, 15 Sim. 56; Mews v. Mews, 15 Beav. 529; Field v. Lonsdale, 13 Beav. 78; Re Glover, 2 J. & H. 186; Peckham v. Taylor, 31 Beav. 250; Jones v. Lock, 1 Ch. 25; Penfold v. Mould, 4 Eq. 562.

(d) See per Romilly, M. R., Bentley v. Mackay, 15 Beav. 18.

(e) Kekewich v. Manning, 1 De G. M.

ss. 7, 8, 9.

It must be remembered, however, that the Statute of Frauds (f) Chap. VI. enacts that "all declarations or creations of trusts or confidences Statute of of any lands, tenements, or hereditaments shall be manifested or Frauds, proved by some writing signed by the party who is by law enabled to declare such trust, or by his last will in writing, or else they shall be utterly void and of none effect" (g); and that "all grants and assignments of any trust or confidence shall likewise be in writing signed by the party granting or assigning the same, or by such last will or devise, or else shall be utterly void and of none effect" (h). Trusts arising or resulting by implication or construction of law, or transferred or extinguished by operation of law, are excepted from the operation of sect. 7 (i).

unnecessary

The Statute of Frauds does not, however, prevent proof of a Writing fraud, and it is a fraud for a person to whom property is trans- when there ferred as a trustee to claim the property as his own, and in such is fraud. a case the trust may be proved by oral evidence when there is not a writing sufficient to satisfy the statute (k).

name of stranger.

Where a man purchases property, or invests money, in the Purchase in name of a stranger, or in the name of a stranger jointly with himself, the presumption is that he makes the purchase or investment for his own benefit (1). On the other hand, if he purchases property in the name of a person for whom he is morally bound to provide, the presumption is that he intends the purchase to discharge in whole or in part his moral obligation; but in either case evidence is admissible to rebut the presumption (m).

In the opinion of Courts of Equity a father is morally bound to provide for his children, and a husband for his wife (n); but if it is alleged that a person standing in any other relation to another is morally bound, as being in loco parentis, to support him, the existence of the obligation must be proved (0).

& G. 176; Villers v. Beaumont, 1 Vern. 100; Ellison v. Ellison, 6 Ves. 656; 2 W. & T. L. C. 835; 6 R. R. 19; Rycroft v. Christy, 3 Beav. 238; Bentley v. Mackay, sup. ; Harding v. Harding, 17 Q. B. D. 442; ante, p. 89.

(f) 29 Car. 2, c. 3.

(g) 29 Car. 2, c. 3, s. 7. (h) S. 9.

(i) S. 8. See Dyer v. Dyer, 2 W. & T. L. C. 803.

(k) Rochefoucauld v. Boustead, [1897]

1 Ch. 196.

(1) Dyer v. Dyer, 2 Cox, 92; 2 W. & T.
L. C. 803; 2 R. R. 14; Rider v. Kidder,
10 Ves. 360; 53 R. R. 269; Standing v.
Bowring, 31 Ch. D. 287, per Cotton,
L. J.; Re Policy 6402 of Scottish, &c.
Soc., [1902] 1 Ch. 282.

(m) Bennet v. Bennet, 10 Ch. D. 476.
(n) See Marshall v. Crutwell, 20 Eq.

328.

(0) Per Jessel, M. R., Bennet v. Bennet, 10 Ch. D. 476.

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