Equity, Trusts, and Principles of Law - Essay Example

?EQUITY & TRUSTS This question relates to constitution of trust, before we embark on the discussion, it is necessary to explain what is meant by trust. The term trust as far as our discussion is concerned is described by ".. an equitable obligation binding a person (who is called a trustee) to deal with property over which he has control (which is called the trust property), for the benefit of persons (who are called beneficiary or cestui que trust), of whom he may himself be one, and any one of whom may enforce the obligation” (R. Oerton). The question demands a discussion on the settled principle of law that equity will not perfect, imperfect gifts made by the settlers or the donors. A settlor may give a gift by three methods: (1) an outright transfer; (2) a transfer on trust to a trustee; or (3) a self-declaration of trust. An imperfect gift can only arise in the first two cases, and a gift would be imperfect if the transfer of title of the subject matter of the gift does not takes place from the settlor's name to the trustees. There can be no possibility of an imperfect gift in the third case because no formalities of transfer of rights are necessary. The exact constitutive requirements of a trust depend upon the nature of the property forming the subject-matter. In case of unregistered land, execution of a deed is necessary, whereas, in registered land, the trustee will need to be registered as proprietor on the register of title. In case of chattels (including cash), it has to be conveyed by either deed or delivery. In case of chose in action, this depends upon the different types of chose in action. In case of shares, for example, they can only be transferred by the recording of the transfer in the company’s books by the company secretary. The general attitude of the courts is reflected by Turner LJ’s statement in Milroy v. Lord1: “For there is no equity in this court to perfect an imperfect gift”. In that case, a settlor passed his share to his attorney to hold them on trust for the plaintiff. But the only valid transfer of the shares, registering M as owner of the shares, was never carried out. It was held that no valid trust had been created. According to Turner LJ, in order to create a valid and effectual settlement, the settlor must have done everything which, according to the nature of the property as subject-matter of the settlement, was necessary to be done in order to transfer the property. If the settlor's chosen mode of donation fails, the court will not perfect the gift by allowing it to take effect by other modes. This case goes further to state that the beneficiary cannot allege in an imperfect gift that the settlor constituted to declare himself a trustee. In Richard v. Delbridge2, D decided to gift his lease of premises and business to his grandson R, who was an infant. He signed a memorandum and gave it to R’s mother, but before making a reference to the gift in his will he died. It was held that no self-declaratory trust was created: “It is necessary to show, not only an intention to benefit someone; but an intention to be trustee for that person”. According to Choihtram v. Pagarani3, “Men often mean to give things to their kinsfolk, they do not often mean to constitute themselves trustees. An imperfect gift is no declaration of trust”. Thus, equity will not come to the aid of any person who has given no consideration for the gift. For example, if a father, due to parental affection, promises to give his property to his son but dies before the actual conveyance, equity will not aid the son’s for the enforcement of that promise unless he had provided any consideration. However, this rule became very rigid in practice and may sometimes run into contradiction with the basic elements of quity i.e. fairness and justice. For instance, if a father declares in front of many people to give his entire property to only one son then that son has to give no consideration for that. But if the father dies unexpectedly before actual conveyance then the son will not get the property. Therefore, in order to regulate the social and economic life of the society, reforms were needed in this area and they came in the form of exceptions to this maxim. During the years the courts of equity have invented various exceptions to the general rule, the first and most easily justified exception is that of detrimental reliance. The rationale for this is very simple, i.e. if one party knowingly encourages another to act to his detriment and later will be required to make good the expectation which he encouraged in the other party. For instance, if a person spends some money on erecting building on another’s land, in reliance upon his promise of a gift of land, then it makes complete sense to compensate him for the damage suffered. In Dillwyn v. Llewelyn4, there was an imperfect gift of land by a father who encouraged his son to build a house on it. Lord Westbury LC consciously departed from the rule in Milroy v. Lord, by saying that: “I cannot doubt that the donee acquires a right from the subsequent transaction to call on the donor to perform that contract and complete the imperfect donation which was made”. The second exception is known as Donatio Mortis Causa meaning a lifetime gift which is conditional upon, and which takes effect upon, death. Thus, a bailment in lifetime becomes a perfect gift upon the death of the settlor. In Cain v. Moon5, the three essentials for this principle were laid down as: (a) the donor must have made the gift in contemplation, not necessarily in expectation, of death e.g. war, serious illness; (b) subject-matter of the gift must be delivered to the donee with the intention of parting with it. Thus, some indicia of title must be transferred; handing over for safe custody only will not suffice; and (c) circumstances must indicate that gift will revert back to donee if he/she survives. As long as the gift is made in contemplation of death, it matters not whether the testator dies in the particular way he expected. This doctrine has even been extended to land in the case of Sen v. Headley6, where Mrs S had lived with a man for several years. On his death-bed he gave her the keys to a box containing the deeds to his house and told her that the house was hers. This was held as a valid donatio mortis causa. The difficulty in this case was whether the requirement of delivery of the gift could be applied to the case of real property. It was held that the informal delivery of title deeds is the essential indicia of title to unregistered land. Mrs S had her own set of keys and was effectively in control of the house. At common law, the appointment of a debtor as executor of the estate of the deceased, releases him of any debts he owe to the deceased, on the ground that it was not possible for the executor now to sue himself to recover. However, in equity the position was totally different. In Strong v. Bird7, the defendant owed a debt to his stepmother and agreed to pay it off by accepting a reduced rent which he used to receive from his mother. The deductions were made for sometime but later every time full amount was paid until the mother’s death. On her death, she appointed him as her sole executor. However, on these facts, the court of equity refused to intervene in its usual manner and held that common law should prevail “If, and only if, the testator had manifested an intention to forgive the debt in his lifetime and this intent continued up to his death”. Technically, this is not a case of perfecting an imperfect gift, for all the court of equity does is to decline to interfere with the common law position. But in Re Stewart8, this rule was extended beyond debts to all types of rights, i.e. also to perfecting gifts. According to Re Ralli’s WT9, this rule was also extended to unperformed promises to create trusts. With such extensions, equity now positively assists a volunteer. In Strong v. Bird itself, the court simply allowed the common law rule to prevail. But there is no common law rule to perfect an imperfect gift if the alleged donee is appointed his executor. This may prove a harsh rule in practice because not many testators pick their executors in knowledge that in doing so they will perfect any invalid gifts made to them during their lifetime. In Re James, this rule was even extended to administrators of the deceased’s estate. This surely is stretching the rule beyond its limits because administrators are not chosen by the testator, they are appointed by the court. The testator has no intention of forgiving the debt to them. This sound more like a lottery that whosoever becomes the personal representative of the deceased should have the chance of relieving its debts. Extending the rule beyond its original limits has called in for a lot of academic criticism. It should be noted that this rule has never been affirmed by the House of Lords and some commentators do argue that the House of Lords should overrule it. But, in my personal view, instead of overruling, the limitations of this rule should be redefined because it should be remembered that in Strong v. Bird itself, equity was not assisting volunteers; it was merely reflecting the common law approach. This is one of the most important and controversial exceptions. In Re Rose10, a settlor transferred his shares in a company to his wife and trustees, in an authorized form. But, the directors registered this transfer some months later. Evershed MR based his judgement upon the principles of Milroy v. Lord and said that, according to Turner LJ, in this case the settlor had done everything which, according to the nature of the property, was necessary to be done in order to transfer it. Therefore, so long as, pending registration, the settlor held the shares as constructive trustee for the beneficiaries, and his estate should not be taxed for the interim period. This case has come into considerable academic criticism. On one hand, it may seem as following the common sense because there is nothing else left for the settlor to show his intent for creating a trust. But on the other hand, the settlor clearly did not intend to declare himself a trustee. If, Evershed MR’s theory is allowed to prevail, the settlor would be surprised to have been told that, if the directors had refused to register, he was unable to withdraw from the transfer because he was a constructive trustee.  The case of Milroy v. Lord, also gains authority from Re Fry11, where F decided to transfer his shares in favour of his son. He filed all the forms and submitted them to the Treasury. But due to war time restrictions, the transfer could not duly take place and meanwhile F died. Romer J held that if, for example, the Treasury had needed further information before making the transfer the settlor might have had the opportunity to foil his own gift. Thus, the donor still retained some control over his gift donor and so the imperfect gift could not be upheld. However, Re Fry is a case before Re Rose and the later case is upheld in practice as is evident from Mascall v. Mascall12, where the subject-matter of trust was land. The father executed the registered land transfer document and handed it to his son. But before the son became the registered proprietor, the father sought to hold the transfer as ineffective. The court held that the father has completely divested himself of the property and so he was a constructive trustee of the gift in favour of the son. The rule in Re Rose was recently upheld in Pennington v. Waine13, where the settlor wanted to gift shares to her nephew, H. She executed a share transfer form in respect of that and also informed her nephew about this. However, no further action was taken and the share certificates were not delivered to either H or the company. The donor died shortly afterwards without making reference to those shares in her will. H relied on Re Rose and argued that the shares had passed to him in equity because the donor had done everything to divest himself of them. It was held, that in this case, the donor clearly intended to make an immediate gift. H had been informed of it, and it would have been unconscionable for the donor to have recalled the gift. In those circumstances, delivery of the shares before the donor’s death was unnecessary to perfect the gift. John McGhee represented the successful party in Pennington. He justifies the decision on the basis that courts of equity now increasingly uses the doctrine of unconscionability e.g. BCCI v. Akindele14 on knowing receipt; Gillett v. Holt15 on proprietary estoppel and Frawley v. Neill16 on laches. This is both good and bad. It is good in that it is a sign that equity has been shaken out of the rigidity of the 19th & early 20th century. But it is bad in that there is little or no guidance on the circumstances, when a court will make a finding of unconscionability. However, in my humble view, this decision may not be as satisfactory as deemed above. This represents an extreme departure from Milroy v. Lord and leaves many questions unanswered. What will be the practical distinction between perfect and imperfect gifts now because according to this case, a gift would be deemed perfect by the court, even if the donor had not completely divested himself of the property, due to the requirement of unconscionability? But is their any clear and satisfactory definition of unconscionability? Even Mr John McGhee admits this fact. When can it said that it is unconscionable for the settlor to resile form his gift and when not? This case favours the beneficiary’s side too heavily, and in doing so, is not the court of equity doing inequity with the settlor or his estate? I think the case of Pennington can be described in a better way as a case which shows the power of equity to extend existing doctrine to do justice in the individual case but at the expense of certainty. This is the most recent exception which also uses the doctrine of unconscionability for aiding a volunteer. In this case, the settlor made a foundation having seven trustees of whom he was also a member and declared to give all his property to the foundation. But before actual conveyance, he died. The courts of first instance and appeal, applying Milroy v. Lord, held that there was no valid trust. However, the Privy Council disagreed. Lord Browne-Wilkinson said that, in principle, there could be no distinction between the cases where the donor declares himself to be a sole trustee or where he declares himself one of the trustees for a purpose. In both cases his conscience was affected and it would be unconscionable and contrary to the principles of equity to allow such a donor to resile from his gift. Moreover, it was argued that S did not vest the properties in all the trustees of the foundation but only in one, namely himself. Since equity will not assist a volunteer it was not possible to obtain a court order vesting the properties in all the trustees. The Privy Council rejected this view and decided that beneficiaries under a valid trust, despite being volunteers, are entitled to enforce the trust as against the trustees even if the trust is constituted in respect of one trustee. That trustee (S here) is bound by the trust and is required to give effect to it by transferring the properties in the names of the other trustees. Although Lord Browne-Wilkinson appears to deny it, the court, by placing emphasis on unconscionability, is here intervening to perfect a trust, as a departure from Milroy v. Lord, rather than giving effect to a pre-existing trust. A self-trust is created in respect of just one trustee and as per the other trustees the beneficiaries are still volunteers. It is the doctrine of unconscionability which allows these beneficiaries to enforce the trust obligation against the other trustees rather than the trust obligation which they acquire under a validly constituted trust. So in conclusion, it can be safely said that with so many exceptions, this maxim is more breached than honoured for practical purposes and the best interpretation of the maxim is: “Equity will not assist a volunteer to perfect an imperfect gift, it will not strive imperiously to defeat a gift”. References Oerton, R T, Arthur Underhill, Michael Hart, and P S. J. Langan. Underhill's Law Relating to Trusts and Trustees. London: Butterworths, 1970. Print Pearce, Robert A, John Stevens, and Warren Barr. The Law of Trusts and Equitable Obligations. Oxford: Oxford University Press, 2010. Print. Annexure “A” *1186 Milroy v Lord QB 26 July 1862 (1862) 4 De Gex, Fisher & Jones 264 45 E.R. 1185 1862 [264] Before the Lords Justices. June 2, 3, 4, July 26, 1862. [S. C. 31 L. J. Ch. 798; 8 Jur. (N. S.), 806; 7 L. T. 178. Followed, Warriner v. Rogers , 1873, L. R. 16 Eq. 349; Richards v. Delbridge , 1874, L. R. 18 Eq. 13; Moore v. Moore , 1874, L. R. 18 Eq. 482; Heartley v. Nicholson , 1875, L. R. 19 Eq. 242; Bottle v. Knocker , 1876, 46 L. J. Ch. 161; In re Breton's Estate , 1881, 17 Ch. D. 416; In re Shield , 1885, 53 L. T. 6; Exparte Todd , 1887, 19 Q. B. D. 189.] T. M. executed a voluntary deed purporting to assign fifty of his shares in the L. Bank to S. L., to be held by him upon certain trusts for the benefit of the Plaintiffs. The shares were transferable only by entry in the books of the bank; but no such transfer was ever made. S. L. held at the time a general power of attorney authorizing him to transfer T. M.'s shares, and T. M., after the execution of the settlement, gave him a further power of attorney authorizing him to receive the dividends on his shares in the bank. T. M. lived three years after the execution of the deed, during which period the dividends on the shares were received by S. L. and remitted by him to the Plaintiffs, sometimes directly and sometimes through T. M. Held, that as it was not the intention of the settlor to constitute himself a trustee of the shares, but to vest the trust in S. L., there was no valid trust of the shares created in the settlor. Held, further, that no valid trust of the shares was created in S. L., for although he held a power of attorney under which he might have vested the shares in himself, *1187 he did not do so, and was not bound to do so without directions from the settlor, since he held the power only as agent for the settlor. Held, therefore, reversing the decree appealed from, that the disposition of the shares failed, as being an imperfect voluntary gift. This was an appeal by the Defendant Otto, the personal representative of Medley, from a decree of Vice-Chancellor Stuart. The bill was filed by Andrew Row M'Taggart Milroy and Eleanor Rainey his wife, formerly E. R. Dudgeon, for the purpose of having new trustees appointed of a voluntary settlement made by the late Thomas Medley, and for recovering fifty shares of the Bank of Louisiana which formed the subject of the settlement, and thirteen North American Fire Insurance shares which were purchased with the income of the bank shares, together with the dividends upon all the above-mentioned shares so far as they had not been paid over to the Plaintiffs or one of them; and the bill also prayed that the Defendant Samuel Lord, the trustee named in the settlement, might be decreed to make compensation to the Plaintiffs and other the parties entitled under the settlement in respect of his having given up the certificates for the shares to the Defendant Otto, the executor of Thomas Medley. [265] The settlement in question was made by a deed-poll dated the 2d April 1852, which was as follows:— “ Know all men by these presents, that I, Thomas Medley, of the City of New Orleans, on account of the love and affection I have for my niece Eleanor Rainey Dudgeon, daughter of Daniel Dudgeon of England, and in consideration of one dollar to me in hand paid, have conveyed, transferred, set over and delivered, and by these presents do convey, transfer, set over and deliver, unto Samuel Lord of the city and county of New York fifty shares of the capital stock of the Bank of Louisiana now standing in my name in the books of the said bank, together with the certificate or script thereof numbered 3457 and dated the 6th March 1852, under the corporate seal of the said bank, signed by W. W. Montgomery, president, and attested by R. M. Davis, cashier, and the dividends and profits thereof, to have and to hold to the said Samuel Lord and his legal representatives upon the trusts and conditions following, to wit, in trust to collect and receive the dividends and profits of the said stock and apply them to the use and benefit of the said Eleanor Rainey Dudgeon if I be living until the time of the marriage of the said Eleanor, and upon the further trust in case I die before the marriage of the said Eleanor leaving her surviving me, then to transfer the said shares of stock or the proceeds thereof to the said Eleanor for her own use and benefit; and upon the further trust in case the said Eleanor should during my lifetime marry with my previous consent and approbation, then to apply the said dividends and profits to the use of the said Eleanor for life, and after her death to convey and transfer the said stocks or the proceeds thereof to her issue if she leave any her surviving, and in default of such issue to convey and transfer the said stock or its proceeds to my next of kin; and upon the [266] further trust if the said Eleanor shall have died before me without having married, or shall during my lifetime marry without my consent, then to reconvey and retransfer the said stock or its proceeds to me; and upon the further trust, on my direction at any time during my lifetime, or in his discretion after my death, to convert the said stock into money by sale thereof, and after such conversion to invest the proceeds thereof in his discretion in other stocks or upon a bond or mortgage at interest, to be held on the like trusts and subject to the like powers of conversion as the stock hereby transferred, and the dividends and profits thereof, reserving to myself the power at any time in writing by will or otherwise to direct and compel the said Samuel Lord to transfer the said stock or the proceeds thereof to the said Eleanor for her own use and benefit absolutely, and also reserving to myself the power in case of the death of the said Samuel Lord before me of appointing another or other trustee or trustees in his place and stead. And I the said Samuel Lord do consent and agree to accept this transfer, and I hereby covenant and agree to and with the said Thomas Medley and the said Eleanor Rainey Dudgeon severally and respectively and their several and respective legal representatives that I will observe, perform, fulfil and keep the trusts and conditions hereinbefore declared.” This deed-poll was under the hand and seal both of Thomas Medley and of the *1188 Defendant Samuel Lord. At the time of the execution of the deed-poll Samuel Lord held a power of attorney from Thomas Medley, whereby Medley empowered him “ to take possession, charge and control of all his goods, chattels, books of account, evidences of debt, choses in action and claims of every kind, to buy and to sell, and to transfer the stock of any incorporated company now belonging to him, or which might thereafter belong to him, and to collect and [267] receive the dividends,” and gave him general authority to act on his behalf. Soon after the execution of the deed-poll Thomas Medley delivered to the Defendant Lord the script for 162 shares which he then held in the Bank of Louisiana, including the script for the fifty shares comprised in the deed of settlement. About the same time Medley gave to the Defendant Lord a further power of attorney authorizing him to receive the dividends then due and payable and which might thereafter become due and payable on all or any shares of the capital stock of the Bank of Louisiana then standing or which might thereafter be placed in his name in the books of the said Bank of Louisiana, and to give receipts, discharges and acquittances for the same, with power to the said attorney to substitute an attorney or attorneys under him for all or any of the purposes aforesaid, and to do all lawful acts requisite for effecting the premises. According to the constitution of the Bank of Louisiana the shares in the bank were transferable in the books of the company, and all transfers were to be made by the proprietor or his lawful attorney, the certificates of stock being surrendered at the time the transfer was made; but it was to be collected from the evidence in the cause, that where a transfer was made by power of attorney the power of attorney had to be left with the bank. No transfer was ever made into the name of the Defendant Lord of the fifty shares comprised in the settlement; but the dividends upon the shares appeared to have been received by Lord, and remitted by him to the Plaintiff Mrs. Milroy, then Eleanor Rainey Dudgeon, sometimes directly and sometimes through the medium of the settlor, by whom they were paid over to her, except as to one dividend which appeared not to have been so paid over. The thirteen North American [268] Fire Insurance shares were purchased, as it appeared, on the suggestion of Thomas Medley, out of the dividends of the bank shares and a bonus declared by the bank upon their shares, and the dividends upon the fire insurance shares were as it appeared paid to Mrs. Milroy, then Eleanor Rainey Dudgeon, along with the dividends upon the bank shares, but these insurance shares were purchased in the name of Thomas Medley. In the year 1855 the Plaintiffs intermarried with the consent and approbation of Thomas Medley. In the month of November in that year Thomas Medley died, having by his will bequeathed to the Plaintiff E. R. Milroy a legacy of ?4000, and appointed the Defendant J. A. Otto to be his executor, who duly proved his will. After his death the Defendant Lord delivered to Otto the certificates both for the fifty Louisiana Bank shares and for the thirteen North American Fire Insurance shares. The Plaintiff E. R. Milroy was the niece of Thomas Medley. She was educated at his expense, and lived with him after she was grown up until the summer of the year 1852, in the spring of which year he married the daughter of the Defendant Samuel Lord. The settlement which the bill sought to enforce was made in consequence of that marriage and of the Plaintiff E. R. Milroy then ceasing to live with the settlor, and as a provision for her, and she was told by Thomas Medley that he had made the settlement on that account and for that purpose. Vice-Chancellor Stuart, at the hearing of the cause and of a petition presented in it and under the Trustee Act, made a decree declaring that the fifty shares in the Bank of Louisiana were bound by the trusts declared by the deed-poll of the 2d April 1852, and that the thirteen shares in the North American Fire [269] Insurance Company, in the bill mentioned, belonged to the Plaintiffs in right of the Plaintiff Eleanor Rainey Milroy, the same having been purchased before her marriage with monies belonging to her. The decree proceeded to appoint a new trustee, and to order the Defendant Otto, an executor of the will of the settlor, to transfer the fifty shares in the Bank of Louisiana into the joint names of Lord and the new trustee, to be held by them upon the trusts of the said deed-poll, and also to transfer the thirteen shares in the North American Fire Insurance Company into the name of the Plaintiff Andrew Row M'Taggart Milroy for his own use. It was further ordered that the *1189 amount of the dividends accrued since the decease of Medley upon the fifty shares in the Bank of Louisiana up to the time of the transfer should be paid by Otto to Lord and the new trustee, to be also held by them upon the trusts of the deed-poll, and that the amount of the dividends accrued since the decease of Medley upon the thirteen shares should be paid to the Plaintiff Andrew Row M'Taggart Milroy for his own use. The costs of the suit were ordered out of Medley's estate. The Defendant Otto appealed from this decree. Mr. Craig and Mr. Charles Hall, for the Plaintiffs, in support of the decree. The settlement must be regulated not by the law of Louisiana, but by that of New York, where it was made and was to be carried into execution; Addison on Contracts (page 1034); Guepratte v. Young (4 De G. & Sm. 217, 228). The law of New York is the same as our own on this subject; Story, Eq. Jur. (sects. 433, 706a, 787, 793a, 973, 987, 1040, 6th edit.). What took place amounted to a [270] good declaration of trust. All was done that the settlor could do; Ex parte Pye (18 Ves. 140); Fortescue v. Barnett (3 M. & K. 36); Edwards v. Jones (1 M. & C. 226); Blakely v. Brady (2 Dru. & Walsh, 311); M'Fadden v. Jenkyns (1 Hare, 458; 1 Phill. 153); Parnell v. Hingston (3 Sm. & Giff. 337); Kekewich v. Manning (1 De G. M. & G. 176). If not, we have a remedy against the settlor's assets, for he was bound not to do anything in derogation of his own deed; Williamson v. Codrington (1 Vez. sen. 511); Deering v. Farrington (6 Vin. Ab. 380, pl. 20, Cov. C.); Ward v. Audland (16 M. & W. 862); Aulton v. Atkins (18 C. B. 249); Parnell v. Hingston (3 Sm. & Giff. 337, 345); Dillon v. Coppin (4 M. & C. 647, 671); Saltern v. Melhuish (1 Amb. 247). The settlor must have supposed that Lord would transfer the shares under the power of attorney, and this is enough to constitute a trust. It was a breach of trust to deliver up the certificates of the shares, and we are entitled at all events to relief as to them; Barton v. Gainer (3 H. & N. 387). Mr. Cotton (Mr. Bacon with him), for the Appellant. There is nothing but an incomplete gift, which, being voluntary, the Court will not complete. There was neither effectual assignment nor declaration of trust. In Kekewich v. Manning , Blakely v. Brady and Fortescue v. Barnett , the assignments were held complete, because the settlor had madd them as complete as he could, here the settlor might have transferred the shares. An incomplete assignment is not a declaration of trust, and the delivery of the certificates does not help the case; Dillon v. Coppin (4 M. & C. 647, 669); Searle v. Law (15 Sim. 95); [271] Bridge v. Bridge (16 Beav. 315); Woodford v. Charnley (28 Beav. 96). The cases of Airey v. Hall (3 Sm. & Giff. 315) and Parnell v. Hingston (3 Sm. & Giff. 337) are against the current of authority. The remedy against the assets is not open on these pleadings, if there were any, but there is not, for there is no covenant as there was in the cases where such a remedy has been given. What the Plaintiffs ask is, that the Court should imply a covenant for further assurance. Mr. Malins and Mr. Kekewich, for Lord. Mr. Craig, in reply, referred to Donaldson v. Donaldson (Kay, 711). Judgment reserved. July 26. The Lord Justice Knight Bruce . This is an appeal by the Defendant Mr. Otto, the personal representative of Mr. Medley (the testator in the cause), against the decree in this suit pronounced by one of the learned Vice-Chancellors on the 8th of March last; a decree declaring and establishing against Mr. Otto, as Mr. Medley's executor, a title in the Plaintiff to an interest in fifty shares in the Bank of Louisiana, and to an interest also in thirteen shares in the North American Fire Insurance Company. [His Lordship here read the material parts of the decree.] It is insisted by Mr. Otto that neither of the Plaintiffs had or has any interest recognizable by a Court of Justice in either set of shares or any part of them. The state of circumstances in [272] which we find one set of shares is not exactly the same as that in which the other is placed. First, then, with regard to the bank shares. They are claimed by the Plaintiffs under and by force of the instrument of the 2d April 1852, executed by Mr. Medley and the Defendant Mr. Lord, which, set forth in the bill, is mentioned also in the decree. They stood in Mr. Medley's name before and at the time of his execution of that instrument, and continued so to stand until his death. He was during the whole time, and when he died, the legal proprietor of them, and unless so far, if at all, as *1190 the beneficial title was affected by that instrument, the absolute proprietor of them beneficially likewise. He might, however, have affected the legal title. It was in his power to make a transfer of the shares so as to confer the legal proprietorship on another person or other persons. But, as I have said, no such thing was done. The instrument, however, of the 2d April 1852, was not founded on valuable consideration. It was merely gratuitous and voluntary, and the principal question for our decision is, whether in such a state of things it is the duty of this Court to enforce it specifically against Mr. Medley's executor, either on the ground that by it Mr. Medley constituted himself a trustee of the shares for the purposes mentioned concerning them in the instrument, or on the ground of contract, or otherwise. It seems plain enough that the law of Louisiana, if applicable to the case, does not assist the Plaintiffs, and that the laws and rules governing the Courts at New York, where the instrument appears to have been executed, are, for any purpose now material, substantially the same as the laws and rules governing the Courts here. I am of opinion that according to our law the instrument of the 2d April 1852 was not sufficient to constitute and did not con- [273] -stitute Mr. Medley a trustee of the bank shares (and in saying this I do not forget the design appearing on the face of it that Mr. Lord should become a trustee under it for the purposes which it mentions), nor do I think that, voluntary as the instrument was, it contained a contract specifically enforceable against Mr. Medley or his estate. The transaction or intended transaction left by him imperfect and incomplete he might have perfected and completed by a transfer. And thinking the Plaintiffs' case not helped by any of the circumstances stated respectively in the two answers of Mr. Lord, or by any of the authorities mentioned in the report by Messrs. De Gex, Macnaghten & Gordon of the cause of Kekewich v. Manning (decided some years ago in this Court), or by that decision, I find myself, though almost or altogether with regret, unable to agree with the decree as to the bank shares, and I believe my learned brother's view to be in effect so far the same as mine. But though not satisfied that the instrument, if a deed, contained a covenant on Mr. Medley's part, I do not wish to prevent or prejudice any action which the Plaintiffs may wish to bring in their own names or the name of Mr. Lord against Mr. Otto. Then with respect to the fire insurance shares. As to these I have some doubt, a doubt immaterial, because, as it has been very agreeable to me to find, my learned brother is as to them of opinion with the decree in favour of the Plaintiffs. That being so, I have not the least objection to the addition in the Plaintiffs' favour as to the certificates of the fire insurance shares which my learned brother proposes and will state. The circumstances are such that we need not, I think, alter, and I am not for altering what the decree has done as to the costs of the suit, although in the opinion of both of us the Plaintiffs' case partially fails, and though I doubt, as I have said, with regard to the fire insurance shares. [274] And I am for dealing with the costs of the appeal in the same way. The Lord Justice Turner , after stating the facts of the case nearly in the same terms as above, proceeded as follows:— Under the circumstances of this case it would be difficult not to feel a strong disposition to give effect to this settlement to the fullest extent, and certainly I have spared no pains to find the means of doing so, consistently with what I apprehend to be the law of the Court; but, after full and anxious consideration, I find myself unable to do so. I take the law of this Court to be well settled, that, in order to render a voluntary settlement valid and effectual, the settler must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him. He may of course do this by actually transferring the property to the persons for whom he intends to provide, and the provision will then be effectual, and it will be equally effectual if he transfers the property to a trustee for the purposes of the settlement, or declares that he himself holds it in trust for those purposes; and if the property be personal, the trust may, as I apprehend, be declared either in writing or by parol; but, in order to render the settlement binding, one or other of these modes must, as I understand the law of this Court, be resorted to, for there is no equity in this Court to perfect an imperfect gift. The cases I think go further to this extent, that if the settlement is intended to be effectuated by one of *1191 the modes to which I have referred, the Court will not give effect to it by applying another of those modes. If it is intended to take effect by transfer, the Court will not hold the intended transfer to operate as a [275] declaration of trust, for then every imperfect instrument would be made effectual by being converted into a perfect trust. These are the principles by which, as I conceive, this case must be tried. Applying, then, these principles to the case, there is not here any transfer either of the one class of shares or of the other to the objects of the settlement, and the question therefore must be, whether a valid and effectual trust in favour of those objects was created in the Defendant Samuel Lord or in the settlor himself as to all or any of these shares. Now it is plain that it was not the purpose of this settlement, or the intention of the settlor, to constitute himself a trustee of the bank shares. The intention was that the trust should be vested in the Defendant Samuel Lord, and I think therefore that we should not be justified in holding that by the settlement, or by any parol declaration made by the settlor, he himself became a trustee of these shares for the purposes of the settlement. By doing so we should be converting the settlement or the parol declaration to a purpose wholly different from that which was intended to be effected by it, and, as I have said, creating a perfect trust out of an imperfect transaction. His Honour the Vice-Chancellor seems to have considered that the case Ex parte Pye (18 Ves. 140) warranted the conclusion that the settlor himself became a trustee by virtue of the power of attorney which he had given to the Defendant Samuel Lord; but in Ex parte Pye the power of attorney was given by the settlor for the express purpose of enabling the annuity to be transferred to the object of the settlor's bounty. The settlor had, it appears, already directed the annuity to be pur- [276] -chased for the benefit of that object, and had even paid over the money for the purpose of its being applied to the purchase of the annuity; and then when the annuity was, from the necessity of the case, purchased in the settlor's name, all that possibly could be wanted was to shew that the original purpose was not changed, and that the annuity, though purchased in the settlor's name was still intended for the benefit of the same object of the settlor's bounty, and the power of attorney proved beyond all doubt that this was the case. These facts appear to me wholly to distinguish this case from the case of Ex parte Pye. In my opinion, therefore, this decree cannot be supported upon the authority of Ex parte Pye; and there does not appear to me to be any sufficient ground to warrant us in holding that the settlor himself became a trustee of these bank shares for the purposes of this settlement. The more difficult question is, whether the Defendant Samuel Lord did not become a trustee of these shares? Upon this question I have felt considerable doubt; but in the result, I have come to the conclusion that no perfect trust was ever created in him. The shares, it is clear, were never legally vested in him; and the only ground on which he can be held to have become a trustee of them is, that he held a power of attorney under which he might have transferred them into his own name; but he held that power of attorney as the agent of the settlor; and if he had been sued by the Plaintiffs as trustee of the settlement for an account under the trust, and to compel him to transfer the shares into his own name as trustee, I think he might well have said— These shares are not vested in me; I have no power over them except as the agent of the settlor, and without his express directions I cannot be justified in making the proposed transfer, in converting an intended [277] into an actual settlement. A Court of Equity could not, I think, decree the agent of the settlor to make the transfer, unless it could decree the settlor himself to do so, and it is plain that no such decree could have been made against the settlor. In my opinion, therefore, this decree cannot be maintained as to the fifty Louisiana Bank shares. As to the thirteen North American Fire Insurance shares, the case seems to me to stand upon a different footing. Although the Plaintiffs' case fails as to the capital of the bank shares, there can, I think, be no doubt that the settlor made a perfect gift to Mrs. Milroy, then Miss Dudgeon, of the dividends upon these shares, so far as they were handed over or treated by him as belonging to her, and these insurance shares were purchased with dividends which were so handed over or treated. It seems to me, upon the evidence, that these shares were purchased with the money of Mrs. Milroy, then Miss Dudgeon, and that the purchase having been made in *1192 Thos. Medley's name, there would be a resulting trust for Miss Dudgeon. I think, therefore, that as to these shares the decree is right, the value of the shares being, as I presume, under ?200, so that the case does not fall within the ordinary rule of the Court as to the wife's equity for a settlement. The case being thus disposed of as to the title to the shares, I see no ground for the claim to compensation raised by this bill. The certificates for the shares would follow the legal title, and as to the fifty bank shares would therefore belong to the Defendant J. A. Otto, and as to the thirteen insurance shares the Plaintiffs recovering those shares must recover the certificates also; but this not being provided for by the decree, a [278] direction for the delivery of these certificates should, I think, be added Upon the hearing of this appeal it was contended for the Plaintiffs, that so far as they might fail in recovering any of the shares in question they were entitled to recover the value of them against the estate of Thos. Medley. I am not sure that this point can properly be considered to be open upon these pleadings, but whether it be so or not, I agree with my learned brother that the Plaintiffs' claim in this respect cannot be maintained. There is no express covenant in the settlement, and whatever might be done as to implying a covenant to do no act in derogation of the settlement, it would, I think, be going too far to imply a covenant to perfect it. If there be a breach of any implied covenant by the delivery of the certificates to the Defendant J. A. Otto, the Plaintiffs' remedy sounds in damages, and they may pursue that remedy at law; for which purpose, if the Plaintiffs desire it, there may be inserted in the decree a direction that they be at liberty to use the name of the Defendant Lord, of course upon the usual terms of indemnifying him. I have not adverted to the point which was raised as to this case being governed by the Spanish law, for I think that if that law was more favourable to the Plaintiffs, the onus was upon them to allege and prove it. As to the costs of the suit, my learned brother being of opinion that they ought to be paid out of the settlor's estate, I do not dissent. The decree must be altered accordingly as to the several points to which I have referred. De Gex, Fisher & Jones(c) Sweet & Maxwell Limited © 2011 Sweet & Maxwell Annexure “B” *11 Richards v Delbridge Equity 16 April 1874 [1874 B. 18.] (1874) L.R. 18 Eq. 11 Sir G. Jessel, M.R. 1874 April 16 Voluntary Gift— Intended Transfer of Property— Invalid Declaration of Trust. D., who was possessed of leasehold business premises and stock-in-trade, shortly before his death purported ta make a voluntary gift in favour of his grandson E., who was an infant and who assisted in the business, by the following memorandum, signed and indorsed on the lease: “ This deed and all thereto belonging I give to E. from this time forth, with all the stock-in-trade.” The lease was then delivered to E.'s mother on his behalf:— Held, that there was no valid declaration of trust of the property in favour of E. Richardson v. Richardson 1, and Morgan v. Malleson 2, not followed. DEMURRER. The bill, filed by Edward Bennetto Richards, an infant, by his next friend, stated that John Delbridge, deceased, was possessed of a mill, with the plant, machinery, and stock-in-trade thereto belonging, in which he carried on the business of a bone manure merchant, and which was held under a lease dated the 24th of June, 1863. That on the 7th of March, 1873, John Delbridge indorsed upon the lease and signed the following memorandum:— “ 7th March, 1873. This deed and all thereto belonging I give to Edward Bennetto Richard's from this time forth, with all the stock-in-trade. “ John Delbridge.” That the Plaintiff was the person named in the memorandum, and the grandson of John Delbridge , and had then for some time assisted him in the business; that John Delbridge, shortly after signing the memorandum, delivered the lease on his behalf to Elizabeth Ann Richards, the Plaintiff's mother, who was still in possession thereof. That John Delbridge died in April, 1873, having executed several testamentary instruments which did not refer specifically to the said mill and premises, but gave his furniture and effects, after his wife's death, to be divided among his family. *12 That the testator's widow, Elizabeth Richards, took out administration to his estate, with the testamentary papers annexed. The bill, which was filed against the Defendants Elizabeth Delbridge, Elizabeth Ann Richards , and the testator's two sons, who claimed under the said testamentary instruments, prayed a declaration that the indorsement upon the lease by John Delbridge and the delivery of the lease to Elizabeth Ann Richards created a valid trust in favour of the Plaintiff of the lease and of the estate and interest of John Delbridge in the property therein comprised, and in the goodwill of the business carried on there, and in the implements and stock-in-trade belonging to the business. The Defendants demurred to the bill for want of equity. Mr. Fry, Q.C., and Mr. Phear, in support of the demurrer:— The memorandum of the 7th of March, 1873, did not operate as a valid gift of the leasehold property to the infant Plaintiff, as it was not an instrument under seal, nor of the stock-in-trade, as there was neither seal nor delivery. The gift was only intended to take effect by transfer; as there was no transfer, the memorandum cannot be converted into a declaration of trust, for a voluntary settlement intended to be effectuated in one manner cannot have effect given to it in another. This last point is determined by Milroy v. Lord 3, followed by Warriner v. Rogers 4. Mr. W. R. Fisher (Mr. Southgate, Q.C., with him), for the Plaintiff:— Although there is no equity to perfect an imperfect gift, yet where there is a clear intention to declare a trust of property, the Court will hold that an instrument, however informal, constitutes a valid declaration of trust. This appears from many cases, among which may be cited Ex parte Pye 5 and Kekewich v. Manning 6. [The MASTER OF THE ROLLS:— That was the law of the Court down to the time of Kekewich v. Manning.] The same principle was followed in Wheatley v. Purr 7. In *13 Richardson v. Richardson 8 a voluntary deed, whereby a donor purported to assign certain specific property and all other her personal estate to B., was held to pass the property in certain promissory notes, not specifically mentioned in the deed, which were found in the donor's possession at her death, though the notes had not been indorsed, and there was no evidence of their delivery to B. This was on the principle that the deed of assignment operated as a complete declaration of trust of all the donor's property in favour of B. In Morgan v. Malleson 9 a memorandum of a voluntary gift in this form: “ I hereby make over to M. an India bond, value ?1000,” was signed by S., and given by him to M. without handing over the bond. S. died, and the residuary devisees under his will claimed the bond. It was there held by Lord Romilly that the memorandum was a good declaration of trust in favour of M. It is submitted that there is a sufficient intention shewn here, and that a valid declaration of trust has been created in favour of the Plaintiff. Mr. Frywas heard in reply on the case of Richardson v. Richardson . SIR G. JESSEL, M.R.:— This bill is warranted by the decisions in Richardson v. Richardson and Morgan v. Malleson; but, on the other hand, we have the case of Milroy v. Lord 10, before the Court of Appeal, and the more recent case of Warriner v. Rogers 11, in which Vice-Chancellor Bacon said: “ The rule of law upon this subject I take to be very clear, and with the exception of two cases which have been referred to” (Richardson v. Richardson and Morgan v. Malleson ), “ the decisions are all perfectly consistent with that rule. The one thing necessary to give validity to a declaration of trust— the indispensable thing— I take to be, that the donor, or grantor, or whatever he may be called, should have absolutely parted with that interest which had been his up to the time of the declaration, should have effectually changed his right in that respect and put the property out of his power, at least in the way of interest.” *14 The two first-mentioned cases are wholly opposed to the two last. That being so, I am not at liberty to decide the case otherwise than in accordance with the decision of the Court of Appeal. It is true the Judges appear to have taken different views of the construction of certain expressions, but I am not bound by another Judge's view of the construction of particular words; and there is no case in which a different principle is stated from that laid down by the Court of Appeal. Moreover, if it were my duty to decide the matter for the first time, I should lay down the law in the same way. The principle is a very simple one. A man may transfer his property, without valuable consideration, in one of two ways: he may either do such acts as amount is law to a conveyance or assignment of the property, and thus completely divest himself of the legal ownership, in which case the person who by those acts acquires the property takes it beneficially, or on trust, as the case may be; or the legal owner of the property may, by one or other of the modes recognised as amounting to a valid declaration of trust, constitute himself a trustee, and, without an actual transfer of the legal title, may so deal with the property as to deprive himself of its beneficial ownership, and declare that he will hold it from that time forward on trust for the other person. It is true he need not use the words, “ I declare myself a trustee,” but he must do something which is equivalent to it, and use expressions which have that meaning; for, however anxious the Court may be to carry out a man's intention, it is not at liberty to construe words otherwise than according to their proper meaning. The cases in which the question has arisen are nearly all cases in which a man, by documents insufficient to pass a legal interest, has said, “ I give or grant certain property to A. B. “ Thus, in Morgan v. Malleson 12 the words were, “ I hereby give and make over to Dr. Morris an India bond;” and in Richardson v. Richardson 13 the words were, “ grant, convey, and assign.” In both cases the Judges held that the words were effectual declarations of trust. In the former case, Lord Romilly considered that the words were the same as these: “ I undertake to hold the bond for you,” which would undoubtedly have amounted to a declaration of trust. *15 The true distinction appears to me to be plain, and beyond dispute: for a man to make himself a trustee there must be an expression of intention to become a trustee, whereas words of present gift shew an intention to give over property to another, and not retain it in the donor's own hands for any purpose, fiduciary or otherwise. In Milroy v. Lord 14, Lord Justice Turner, after referring to the two modes of making a voluntary settlement valid and effectual, adds these words: “ The cases, I think, go further, to this extent, that if the settlement is intended to be effectuated by one of the modes to which I have referred, the Court will not give effect to it by applying another of those modes. If it is intended to take effect by transfer, the Court will not hold the intended transfer to operate as a declaration of trust, for then every imperfect instrument would be made effectual by being converted into a perfect trust.” It appears to me that that sentence contains the whole law on the subject. If the decisions of Lord Romilly and of Vice-Chancellor Wood were right, there never could be a case where an expression of a present gift would not amount to an effectual declaration of trust, which would be carrying the doctrine on that subject too far. It appears to me that these cases of voluntary gifts should not be confounded with another class of cases in which words of present transfer for valuable consideration are held to be evidence of a contract which the Court will enforce. Applying that reasoning to cases of this kind, you only make the imperfect instrument evidence of a contract of a voluntary nature which this Court will not enforce; so that, following out the principle even of those cases, you come to the same conclusion. I must, therefore, allow the demurrer, and, though I feel some hesitation, owing to the conflict of the authorities, I think the costs must follow the result. Representation Solicitor for the Plaintiff: Mr. T. D. Bolton, agent for Messrs. Hill & Hill, Helston. Solicitors for the Defendants: Messrs. Gregory, Rowcliffes, & Rawle, agents for Messrs. Carlyon & Paull , Truro. 1. Law Rep. 3 Eq. 686. 2. Law Rep. 10 Eq. 475. 3. 4 D. F. & J. 264. 4. Law Rep. 16 Eq. 340. 5. 18 Ves. 140. 6. 1 D. M. & G. 176. 7. 1 Keen, 551. 8. Law Rep. 3 Eq. 686. 9. Ibid. 10 Eq. 475. 10. 4 D. F. & J. 264. 11. Law Rep. 16 Eq. 340, 348. 12. Law Rep. 10 Eq. 475. 13. Law Rep. 3 Eq. 686. 14. 4 D. F. & J. 264, 274. (c) Incorporated Council of Law Reporting for England & Wales © 2011 Sweet & Maxwell Annexure “C” *1285 Dillwyn v Llewelyn QB 12 July 1862 (1862) 4 De Gex, Fisher & Jones 517 45 E.R. 1285 1862 *1286 [517] Before the Lord Chancellor Lord Westbury. June 4, July 12, 1862. [S. C. 6 L. T. 878; 8 Jur. (N. S.), 425, 1068; 10 W. R. 412, 742. See Plimmer v. Mayor, &c., of Wellington , 1884, 9 App. Cas. 713.] A father placed one of his sons in possession of land belonging to the father, and at the same time signed a memorandum that he had presented the land to the son for the purpose of furnishing him with a dwelling-house. The son, with the assent and approbation of the father, built at his own expense a house upon the land and resided there. Held, that this was not a mere incomplete gift, but that the son was entitled to call for a legal conveyance, and not merely of a life-estate, but of the whole fee-simple. This was the appeal of the Plaintiff from a decree of the Master of the Rolls declaring the Plaintiff entitled to a conveyance of, but only of, a life-estate in certain lands in which he claimed an estate in fee-simple. The grounds of the decision were, that a gift of the lands had been made to the Plaintiff by his father, Llewelyn W. Dillwyn, the testator in the cause, under such circumstances as to entitle the Plaintiff to call for a conveyance of the legal estate, but that according to the terms of the memorandum of gift an estate for life only was intended. Before the date of the gift in question, the father made his will dated the 21st June 1847, whereby he devised all and singular his real estates, both freehold and copyhold, in the two counties of Glamorgan and [518] Caermarthen, with the appurtenances, unto John Montgomery Traherne and to the Defendant John Dillwyn Llewelyn, who was the testator's eldest son, and the Plaintiff Lewis Llewelyn Dillwyn, who was the testator's second son, their heirs and assigns, upon trust after the testator's decease to convey and assure the same to the use of the testator's wife for life, with remainder to the use of or in trust for the Plaintiff and his assigns for his life without impeachment of waste, with a limitation to trustees to provide contingent remainders, with remainder to the use of or in trust for the son or sons of the Plaintiff in such proportions, if there should be more than one son, as the Plaintiff might by will appoint, and subject thereto to the use of the Plaintiff's eldest son, and in default of the Plaintiff having any son who might attain the age of twenty-one years, then with remainder to the testator's eldest son John Dillwyn Llewelyn, his heirs and assigns for ever; provided nevertheless, that if the Plaintiff should happen to die without any male issue who might attain the age of twenty-one years, the testator's aforesaid freehold and copyhold estates should be charged with the payment of an annuity of ?200 to each of his daughters, the Defendants Fanny Llewelyn Moggeridge and Mary Welby, then Mary Dillwyn, as an additional provision for them, and so that those annuities might be received by them respectively for their sole and separate use during their lives. The testator made three codicils, dated respectively the 21st June 1847, the 8th August 1852, and the 22d August 1852, not affecting the above dispositions. In 1853 the testator, who resided at Sketty Hall, and had expressed a wish that the Plaintiff, who was in want of a residence, should reside near him, offered the Plaintiff a farm called Hendrefoilan, in order that the Plaintiff might build a house upon the land. The Plaintiff [519] accepted the offer, and a memorandum was signed by the testator and his eldest son in the following terms:— “Hendrefoilan, together with my other freehold estates, are left in my will to my dearly beloved wife, but it is her wish, and I hereby join her in presenting the same to our son Lewis Llewelyn Dillwyn, for the purpose of furnishing himself with a dwelling-house.—L. W. Dillwyn . “J. D. Llewelyn. Feb. 10, 1853. Sketty Hall.” The Plaintiff thereupon purchased from the tenant of the farm his growing crops and manure, took possession of the farm and built a residence at an expense of ?14,000, including the costs of laying out and planting the grounds. This was done *1287 with the knowledge and approbation of the testator, and Plaintiff had ever since continued to occupy the residence, but no conveyance of the legal estate was ever executed to him. In August 1855 the testator died. The Plaintiff sought by his bill a declaration of his rights, and that the Defendant John Dillwyn Llewelyn might be ordered to execute to him a conveyance of the estate. By the decree under appeal it was declared that the Plaintiff was entitled to an equitable interest in the property for his life, and conveyance was decreed accordingly. Mr. Selwyn and Mr. Hobhouse, for the Appellant, contended that the intention must have been to give the whole fee-simple. Mr. Lloyd and Mr. Surrage, for the Respondent, contended that the bill ought to have been dismissed, as the Court would not aid an incomplete gift, and that, at all [520] events, the terms of the memorandum could at the utmost give an equitable estate for life. The following authorities were referred to:—The East India Company v. Vincent (2 Atk. 84); Dann v. Spurrier (7 Ves. 235); The Duke of Beaufort v. Patrick (17 Beav. 69); The Somersetshire Canal Company v. Harcourt (24 Beav. 571); and The Unity Joint Stock Bank v. King (25 Beav. 72). The Lord Chancellor . In this case the testator devised his property to his wife, the Plaintiff's mother, during her life, with remainder to the Plaintiff for life, with remainder to the first and other sons of the Plaintiff. Subsequently the father and mother became desirous that the Plaintiff, their son, should reside in their immediate neighbourhood, and accordingly they selected a small estate and determined to give it to the son in order that he might build a proper dwelling-house for his residence thereon. A memorandum was made of the transaction, which is in these words—[His Lordship read it.] This memorandum was signed by the testator and also by his eldest son. The Plaintiff was put in possession of the estate and immediately proceeded to build a dwelling-house thereon, and laid out, as it is stated, a sum of no less than ?14,000. This expenditure took place in the lifetime of the father, and with his assent and approbation. No alteration was made by the father in his will, and he died in the month of August 1855. The question now arises, what estate the Plaintiff has in the property so given to him, and which was made the [521] site of his dwellinghouse. The mother is willing that the son should be regarded as the absolute owner; but inasmuch as the estates of the testator under the will are given to the first and other sons of the Plaintiff, his eldest child, who is an infant, is interested in contesting the effect of the transaction, and it requires therefore to be narrowly examined by reason of the infancy of the child. About the rules of the Court there can be no controversy. A voluntary agreement will not be completed or assisted by a Court of Equity, in cases of mere gift. If anything be wanting to complete the title of the donee, a Court of Equity will not assist him in obtaining it; for a mere donee can have no right to claim more than he has received. But the subsequent acts of the donor may give the donee that right or ground of claim which he did not acquire from the original gift. Thus, if A. gives a house to B., but makes no formal conveyance, and the house is afterwards, on the marriage of B., included, with the knowledge of A., in the marriage settlement of B., A. would be bound to complete the title of the parties claiming under that settlement. So if A. puts B. in possession of a piece of land, and tells him, “I give it to you that you may build a house on it,” and B. on the strength of that promise, with the knowledge of A., expends a large sum of money in building a house accordingly, I cannot doubt that the donee acquires a right from the subsequent transaction to call on the donor to perform that contract and complete the imperfect donation which was made. The case is somewhat analogous to that of verbal agreement not binding originally for the want of the memorandum in writing signed by the party to be charged, but which becomes binding by virtue of the subsequent part per- [522] -formance. The early case of Foxcroft v. Lester (2 Vern. 456), decided by the House of Lords, is an example nearly approaching to the terms of the present case. The Master of the Rolls, however, seems to have thought that a question might still remain as to the extent of the estate taken by the donee, and that in this particular case the extent of the donee's interest depended on the terms of the memorandum. I am not of that opinion. The equity of the donee and the estate to *1288 be claimed by virtue of it depend on the transaction, that is, on the acts done, and not on the language of the memorandum, except as that shews the purpose and intent of the gift. The estate was given as the site of a dwelling-house to be erected by the son. The ownership of the dwelling-house and the ownership of the estate must be considered as intended to be co-extensive and co-equal. No one builds a house for his own life only, and it is absurd to suppose that it was intended by either party that the house, at the death of the son, should become the property of the father. If, therefore, I am right in the conclusion of law that the subsequent expenditure by the son, with the approbation of the father, supplied a valuable consideration originally wanting, the memorandum signed by the father and son must be thenceforth regarded as an agreement for the soil extending to the fee-simple of the land. In a contract for sale of an estate no words of limitation are necessary to include Read More