Facts
- A mother attempted to transfer certain shares to her daughter without any payment, creating what the parties regarded as a gift rather than a sale or a trust.
- The arrangement was completed informally. Although steps toward transfer were taken, the mother retained physical possession of the share certificates up to the time of her death.
- No evidence showed that the daughter ever obtained control of the certificates, lodged them with the company, or received dividends in her own right.
- On the mother’s death, the personal representatives treated the shares as still part of the estate and challenged the effectiveness of the alleged gift, arguing that both delivery and intention were incomplete.
- The court therefore had to decide whether the transaction satisfied the requirements for a valid voluntary transfer of personal property.
Issues
- Whether a voluntary transfer of shares between mother and daughter, effected without consideration, satisfied the legal standard for a binding gift.
- Whether the mother’s continued possession of the share certificates amounted to a failure of delivery and thereby defeated the transfer.
- Whether objective evidence, drawn from the surrounding circumstances, established a clear, final, and irrevocable intention to give the shares to the daughter.
- Whether equity would intervene to perfect an imperfect gift or, consistently with traditional doctrine, refuse assistance where the transferor had not done everything necessary.
Decision
- The court held that the purported gift was ineffective. Family relationship alone did not remove the ordinary rules governing voluntary settlements of property.
- A donor must show not only a fixed intention to give but also an act of delivery, or other mechanism prescribed by statute or by the articles of the company, that divests the donor of control.
- Retention of the certificates was treated as decisive. Because the mother never handed the indicia of title to her daughter, there was no delivery.
- The informality of the arrangement, coupled with the absence of any company registration or other external step, prevented the gift from taking effect. Equity would not complete what the donor had left unfinished.
- Accordingly, the shares remained part of the mother’s estate and were available for distribution under her will or the rules of intestacy.
Legal Principles
- Intention: The donor must form a present, unconditional intention to transfer ownership immediately, not merely an intention to do so at some future time.
- Delivery: For choses in possession, physical delivery will suffice; for choses in action such as shares, delivery normally requires transfer of certificates coupled with proper execution of the relevant instruments and, if necessary, registration in the company’s books.
- Equity will not assist a volunteer: Where a gift is incomplete, the intended donee cannot compel perfection by relying on equitable principles. Courts routinely apply the maxim that “equity will not perfect an imperfect gift.”
- Formalities apply equally within families: Affectionate motives, while understandable, do not relax statutory or common-law requirements. Failure to observe those requirements leaves the transaction void.
- Alignment with earlier authority: The judgment follows long-standing decisions that distinguish between an intent to give and an effective transfer, insisting that both elements must co-exist.
Conclusion
Re Vinogradoff [1935] WN 68 reaffirms that a voluntary gift of shares must satisfy two cumulative conditions—an unequivocal present intention to give and a completed act of delivery that divests the donor of title. The mother in this case retained control of the share certificates and failed to comply with the relevant formalities; as a result, the court declared the transfer ineffective. The decision serves as a warning that affectionate motives do not dispense with legal requirements, and that equity will not intervene to relieve a donee where the donor has left the gift imperfect.
