Sen v Headley

Land may pass by a donatio mortis causa. The donor must make the gift in contemplation of impending death, condition it upon death, and deliver the property or its essential indicia of title so as to part with dominion.

Title deeds are the essential indicia of title to unregistered land. Delivery may be constructive, including delivery of the only key to the container holding the deeds. Whether the donor parted with dominion depends on the individual facts. The donor’s continuing legal power to deal with the property does not itself defeat the gift.

On death, an implied or constructive trust perfects the gift. That trust falls within section 53(2) of the Law of Property Act 1925.

The deceased owned an unregistered freehold house. While terminally ill and aware that death was near, he told the claimant that the house was hers and referred to the keys in her bag and the deeds in a steel box. He had delivered a bunch of keys to her. One was the only apparent key to the box containing the title deeds.

The deceased died intestate. The claimant alleged that the house had passed to her by donatio mortis causa. Mummery J dismissed the claim in [1990] Ch 728, holding that informal delivery of the deeds or the means of access to them could not overcome the difficulty presented by the formal requirements governing land.

The claimant appealed. The central issues were whether the deceased had parted with dominion over the house and whether land was legally capable of passing by donatio mortis causa.

1. Appeal allowed. Nourse LJ delivered the judgment of the court. Land is capable of passing by donatio mortis causa, and all three requirements for such a gift were satisfied.

2. A donatio mortis causa requires: a gift made in contemplation, though not necessarily expectation, of impending death; a gift conditional upon death, revocable before then and ineffective if death does not occur; and delivery of the property or its essential indicia of title amounting to a parting with dominion rather than merely physical possession.

3. Title deeds are the essential indicia of title to unregistered land. Delivery of the only key to the locked box containing the deeds constituted constructive delivery equivalent to handing over the deeds themselves. The deceased had parted with dominion over them.

4. The trial judge had misunderstood the requirement of dominion by treating the deceased’s continuing legal ability to declare a trust or contract to sell as decisive. The same theoretical ability exists after delivery of a bond or mortgage deed, yet it has never been treated as retention of dominion over the secured chose in action. Whether delivery of essential indicia amounts to a parting with dominion is a question of fact in each case.

5. The deceased also parted with dominion over the house. His retention of house keys gave him only theoretical possession. He was terminally ill in hospital, had no practical prospect of returning, had made the gift without reservation, and had placed the claimant in effective control of the deeds and house.

6. Duffield v Elwes established that delivery of a mortgage deed could create on death a trust of the mortgage debt and conditional estate arising by operation of law. Modern constructive-trust doctrine justified extending that reasoning from a mortgagee’s conditional estate to an owner’s absolute estate. The resulting implied or constructive trust is preserved by section 53(2) of the Law of Property Act 1925.

7. The policy favouring formal creation and transmission of interests in land did not require a different result. That policy had been modified by the development of implied and constructive trusts. The appeal was allowed with costs, and leave to appeal to the House of Lords was refused.

1. Court of Appeal: Allowed the claimant’s appeal and held that the house passed to her by donatio mortis causa. Leave to appeal to the House of Lords was refused.

2. High Court, Chancery Division: Mummery J dismissed the claim in [1990] Ch 728. Although the first two requirements of a donatio mortis causa were satisfied, he held that the difficulty concerning delivery and dominion over land had not been overcome.