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Milroy v Lord (1862) 2 Giff 582, 65 ER 528

ResourcesMilroy v Lord (1862) 2 Giff 582, 65 ER 528

Facts

  • Thomas Medley intended to transfer shares in a company to his niece, Eleanor Milroy.
  • Medley executed a deed of transfer and delivered it to Samuel Lord, the defendant, who was to hold the shares in trust for Eleanor.
  • The required registration of the share transfer with the company was not completed; the shares remained in Medley's name.
  • Upon Medley’s death, the validity of this purported transfer was challenged.
  • Plaintiffs argued the steps taken constituted a valid gift; the defendant argued the transfer was incomplete and unenforceable.

Issues

  1. Whether equity can intervene to perfect the transfer of shares when the required formalities for the gift had not been completed.
  2. Whether executing a deed of transfer and delivering it to a trustee suffices to constitute a valid gift where legal title has not passed.
  3. Whether Medley had done everything necessary to transfer the property so that the gift could be enforced.

Decision

  • The court held that the transfer was incomplete as the necessary registration of the shares had not been effected.
  • It was determined that Medley had not done everything required to transfer legal title to the shares.
  • The court ruled that equity would not perfect an imperfect gift; the purported transfer could not be enforced.
  • Plaintiffs’ arguments for equitable intervention were rejected on the basis of the need for strict compliance with legal formalities.
  • For a valid gift or settlement, the donor must do everything necessary to transfer the property to the donee or trustee.
  • Equity will not assist a volunteer by perfecting an imperfect gift.
  • A distinction exists in law between gifts and trusts; intention and actual execution are both necessary.
  • The certainty and predictability of property law depend on the clear, unequivocal actions and fulfillment of all formal requirements in property transfers.

Conclusion

Milroy v Lord established the enduring principle that equity will not perfect an imperfect gift: donors must strictly comply with all formalities for a transfer of property to be effective. The judgment provides a foundational framework in English trust and property law, compelling clear actions and preventing disputes from incomplete transfers.

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