GIFTS – Gruen v. Gruen (1986)
Court of Appeals of NY
496 N.E.2d 869
Author: ERL

Procedural posture: P commenced action to get a painting he claimed his father had given him as a gift.  Trial court ruled for D, finding that no gift had been established.  P appealed, and Appellate Division found that a valid gift had been made, and reversed and remanded for trial court to determine value of painting.  Value was posted at $2.5m., and court entered judgment in favor of P’s complaint for declaratory judgment.  Defendant appealed the order from the Appellate Division directly to Court of Appeals.

Facts:  P presents evidence (letters) that his father made a gift of a valuable painting to him on his birthday, but the gift was such that P would not take possession of it until his father’s death.  Elder Gruen sent P a letter giving him the gift, but saying that he wanted use of it until he died.  Later, on legal advice, he sent P another letter with a cover letter, saying basically that he still wanted to give him the painting and keep a life interest, but for tax purposes he wanted to refrain from saying that.  P never took possession of the painting, nor did he try to.  Painting remained in his father’s possession until he died.

Issues: Can a valid inter vivos gift of a chattel be given in which the donor reserves life estate in the chattel? >Yes.

Holding: P established a gift was made.  Declaratory judgment plus costs granted to P.

Rationale:  A valid inter vivos gift requires intent (from donot), delivery, and acceptance.  Valid evidence of inter vivos gifts can be made of a remainder, in which the donor becomes a life tenant of the chattel (or real estate, as the case may be).  Gift is effective on the transfer of the interest, and not specifically on the physical delivery.  Law presumes acceptance.