Speelman v. Pascal
10 N.Y.2d 313, 222 N.Y.S.2d 324, 178 N.E.2d 723 (1961)
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Rule of Law:
A person can make a valid present gift by assignment of a right to receive future, conditional, and not-yet-existent property, such as royalties from an unproduced play, provided the signed writing manifests an irrevocable intent to presently divest the donor of the right.
Facts:
- Gabriel Pascal, a theatrical producer, held the exclusive rights to produce a musical play and film based on George Bernard Shaw's 'Pygmalion' through his corporation.
- Pascal had made several unsuccessful efforts to get the musical produced.
- On February 22, 1954, Pascal wrote, signed, and delivered a letter to his executive secretary, Marianne Kingman.
- The letter stated, "I give you from my shares of profits of the Pygmalion Musical stage version five per cent (5%) in England, and two per cent (2%)...in the United States...From the film version, five per cent (5%)...all over the world."
- The letter described the grant as a "present to you, in recognition for your loyal work for me."
- Pascal died four and a half months later in July 1954.
- After Pascal's death, arrangements were made for the musical's production, which became the highly successful 'My Fair Lady'.
Procedural Posture:
- Marianne Kingman sued the administrator of Gabriel Pascal's estate in a New York trial court to enforce the terms of the letter.
- The trial court granted summary judgment in favor of Kingman, declaring her entitled to the specified percentages.
- Pascal's estate appealed the judgment to an intermediate appellate court, which affirmed the trial court's decision.
- The estate then appealed to the New York Court of Appeals, the state's highest court.
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Issue:
Does a signed letter purporting to give a percentage of future profits from an unproduced theatrical work constitute a valid and enforceable gift by assignment, even though the profits did not exist at the time of the transfer?
Opinions:
Majority - Chief Judge Desmond
Yes, a signed letter purporting to give a percentage of future profits from an unproduced theatrical work constitutes a valid and enforceable gift by assignment. The court reasoned that while the profits themselves were not in existence, the right to receive those potential future profits was a property right that could be assigned. The critical element for a valid gift is not the present existence of the subject matter, but the donor's present and irrevocable intent to transfer title. Pascal's letter, using the language "I give you," clearly manifested an intention to make a present, irrevocable transfer of a portion of his rights. The court distinguished this case from those involving tangible property like stock certificates, which require physical delivery, stating that for an intangible right like future royalties, delivery of a signed instrument is an appropriate method. Citing precedents like Field v. Mayor of New-York, the court affirmed that an assignment of future expectancies can create an equitable title that courts will enforce once the expectancy ripens into reality.
Analysis:
This case solidifies the principle that intangible future interests, such as royalties from intellectual property not yet created, can be the subject of a valid present gift. It clarifies that the delivery requirement for a gift is flexible and must be appropriate to the nature of the property being transferred; for intangible rights, a clear written instrument can suffice. This decision is significant for estate planning and transactions involving intellectual property, as it validates the assignment of rights to income streams that are contingent and may only materialize in the future. It draws a crucial distinction between the physical property requiring manual delivery and intangible rights that can be transferred by a clear expression of donative intent in writing.
