Ray v. Leader Federal Savings & Loan Association
60 A.L.R. 2d 564, 40 Tenn.App. 625, 292 S.W.2d 458 (1953)
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Rule of Law:
Mailing a gift constitutes a valid constructive delivery when the donor relinquishes all personal control over the item, even if the donee does not physically receive it until after the donor's death. A gift made in contemplation of suicide is not a gift causa mortis, but it can be a valid gift inter vivos if the elements of intent and delivery are satisfied before the donor's death.
Facts:
- J. T. Mathis, an elderly man, wrote and signed a note inside his Leader Federal Savings and Loan Association passbook, stating he had made the account over to his deceased wife's niece, Lavera McCoy Smith.
- On the morning of July 17, 1951, Mathis placed the passbook, a letter indicating his intent to commit suicide, and $70 cash into an envelope addressed to Smith.
- Mathis then deposited the sealed envelope into his rural mailbox.
- Between 10:15 a.m. and 10:45 a.m. that same morning, a rural mail carrier collected the envelope from the mailbox as part of his regular route.
- At approximately 11:30 a.m., after the mail had been collected, Mathis shot himself, never regained consciousness, and died shortly after noon on July 17.
- Smith received the envelope containing the passbook at approximately 9:30 a.m. on July 18, 1951, the day after Mathis's death.
Procedural Posture:
- Leader Federal Savings and Loan Association filed a Bill of Interpleader in the Chancery Court of Shelby County, Tennessee (a trial court), naming Pamela Mathis Ray (as administratrix) and Lavera McCoy Smith as defendants to determine ownership of a savings account.
- The Chancellor ruled in favor of Lavera McCoy Smith, holding that a valid gift had been made and she was the rightful owner of the account.
- Pamela Mathis Ray, the administratrix and appellant, appealed the Chancellor's decree to the Court of Appeals of Tennessee, Western Section.
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Issue:
Does a donor complete a valid inter vivos gift of a savings account by writing an assignment in the passbook and mailing it to the donee, if the donor commits suicide after the mail carrier has collected the package but before the donee physically receives it?
Opinions:
Majority - Avery, J.
Yes. A valid inter vivos gift is completed when the donor executes delivery by placing the gift in the mail, thereby relinquishing all personal dominion and control over it, even if the donor dies before the donee physically receives the item. The court reasoned that when Mathis's letter was picked up by the mail carrier, he placed it beyond his personal right of recall without official permission, which constituted a constructive delivery. The court distinguished this from a gift causa mortis, holding that contemplation of suicide does not satisfy the requirement of apprehension of death from an external 'sickness, peril, or danger.' Instead, the court found that Mathis intended to make a present and absolute gift inter vivos, and by using the mail, he did everything possible under the circumstances to effectuate delivery, thus completing the gift before his death.
Analysis:
This decision clarifies the doctrine of constructive delivery, establishing that using the postal service can satisfy the delivery element of a gift the moment the donor loses personal control, not when the donee gains physical possession. It significantly narrows the application of gifts causa mortis by excluding contemplated suicide from the qualifying 'perils,' thereby preventing the automatic revocation of a gift upon the donor's survival. By analyzing the act as a gift inter vivos, the court shifts the focus from the donor's motive for dying to their intent to make a present transfer, thereby protecting the interests of an innocent donee where intent and delivery are otherwise complete.
