Estate Smith v Estate Follett

• Jurisdiction: South Africa
• Citation: 1942 AD 364

Estate Smith Appellant v Estate Follett Respondent
1942 AD 364

1942 AD p364

Citation	1942 AD 364
Court	Appellate Division
Judge	De Wet CJ, Watermeyer JA, Tindall JA, Centlivres JA and Feetham JA
Heard	May 12, 1942; May 13, 1942; May 18, 1942
Judgment	July 29, 1942

Flynote : Sleutelwoorde

Will — Construction — Fideicommissum residui — Rights of fiduciary — Validity of donation uncompleted by delivery to wife — Construction of deed of donation — Whether cession — Alienation by fiduciary in fraud of fideicommissary — Cession of inheritance — Juristic nature of.

Headnote : Kopnota

A fiduciary burdened with a fideicommissum residui cannot dispose of any of the burdened property to his wife by donation uncompleted by delivery at the time of his death.

The donor had inherited the estate of his mother subject to a condition "that in the event of his death the entire inheritance which shall have accrued to him or what may be left thereof shall revert to my estate" to be divided among

1942 AD p365

the testatrix's nieces. After his mother's death the donor purported to cede to his wife by a notarial deed three-quarters of the estate inherited by him, and undertook to do all such further acts which might be necessary to transfer into the name of his wife the necessary property and assets so as to give effect to the donation. At this time the account in the testatrix's estate had not yet been confirmed. Thereafter the movable assets were delivered not to the donor's wife but to the donor and the land in the estate was registered in his name. A month later the donor died without having delivered the movables or transferred the land to his wife. A Provincial Division having held that, though the donor had alienated by the cession three-fourths of the property subject to the fideicommissum, such alienation was invalid inasmuch as it had been made for the sake of defrauding the fideicommissaries.

Held, on appeal, that under the will of his mother the donor was a fiduciary burdened with a fideicommissum residui.

Held, further, that under the circumstances it was doubtful whether the parties to the deed of donation had intended that the deed should operate as a cession of rights, but even if they had so intended, the deed in that respect had been revoked, when the assets in the testatrix's estate had been transferred to the donor and not to his wife, and that therefore at the time of his death the donor was the owner of the property inherited from his mother, though he was under a personal obligation to his wife to transfer to her as a gift a three-quarter share of such property.

Held, further, that inasmuch as a fiduciary burdened with a fideicommissum residui cannot validly dispose of any of the burdened property by last will or by donatio mortis causa, because the testator does not intend the fiduciary to have the power of controlling the devolution of the property after his death, and inasmuch as a gift by a husband to his wife uncompleted by delivery being revocable is a means whereby he can in affect retain control of the property in his lifetime and direct its devolution upon his death, the donation was invalid.

The question as to whether the donation was not also invalid on the ground that it was one made for the sake of curtailing the fideicommissum and defrauding the fideicommissaries raised, but not decided.

The juristic nature of the transaction which takes place when an inheritance is ceded discussed.

The decision of the Transvaal Provincial Division in Estate Follett v Estate Smith confirmed but for different reasons.

Case Information

Appeal from a decision of the Transvaal Provincial Division (SCHREINER, J.).

The facts appear from the judgment of WATERMEYER, J.A.

The following judgment was delivered in the Court below:-

SCHREINER, J. (after stating the facts): The first contention advanced by Mr. Price on behalf of the applicants was that the donation was at variance with the intention of the testatrix as evidenced by the gift to Mrs. Smith (the donee) of £40 per month after the death of Mr. Smith (the donor). I agree that this bequest strengthens the view, which one would probably come to without it, that the testatrix when she made her will did not expect that any substantial portion

1942 AD p366

of her estate would be available to the donee after the death of the donor and that she did not expect any such transaction as the deed of donation. But if the effect of making the donor her heir subject to a fideicommissum residui would otherwise be to enable him to make the donation to the donee, the introduction of the bequest of £40 per month would not suffice, in my opinion, to exclude the power to donate. Failure by the testatrix to contemplate such a donation as a possibility is not equivalent to a prohibition thereof by her.

The applicants next advanced the argument that because the donee was the donor's wife the donation could only become effective on his death and did not constitute an alienation inter vivos. The portion of the inheritance donated therefore formed part of the donor's estate at his death and accordingly became revested in the estate of the testatrix for the benefit of the fideicommissaries.

Counsel referred me to various passages in the older authorities relating to the effect of donations inter vivos between spouses and to the comparison often made between such donations and donations mortis causa. It would, however, be superfluous to examine these authorities in detail since the legal position of donations between spouses has recently been enunciated by the Appellate Division in Estate Phillips v Commissioner of Inland Revenue (1942 AD 35). As I Understand the position the fact that the parties to a donation are husband and wife simply gives the donor spouse the right to revoke the gift during his or her lifetime If the property donated was not delivered during the lifetime of the donor, then on his or her death without having revoked the gift the donee can claim delivery from the deceased estate under the contract of donation. If, on the other hand, delivery was effected by the donor to the donee the dominium passed to the donee on such delivery and the donor's death simply puts an end to the possibility that the gift might be revoked and the property reclaimed. In either case, once the right to revoked disappears through the death of the donor, the transaction stands on the same footing as if the parties had not been spouses. When in terms of the donation the rights of the donee are only to arise on the death of the donor, the alienation is not made inter vivos (Vervolg op de Hollandsche Consultatien No. 100; Kemsley v Kemsley, 1936 CPD 518). But where the gift purports to be immediate its effect is not postponed until the death of the donor, merely because the parties were husband and wife.

The next matter to be considered is whether there was delivery of the donated share of the inheritance to the donee. Mr. Neser, indeed, contended that even without delivery, a donation between spouses becomes effective on the donor's death not merely so as to make the promise to give irrevocable and actionable against the estate, but also to pass the property to the donee with retrospective effect to the date of the donation. He relied upon certain passages in the works of Scipio Gentilis, the Italian commentator. But, assuming, what I think is not clear from the passages cited, that the author was referring to donations without delivery, his view appears to be unsupported by other authority and to be open to objection. It would apparently involve an exception to the principles governing the transfer of property in our law, for which there seems to be no sufficient warrant in reason or convenience. In any event, the whole notion of retrospectivity with which the author is concerned seems to be inconsistent with the law as now established by the case of Estate Phillips (supra). I am not disposed to accept Mr. Neser's contentions based on the authority of Gentilis, but, it is sufficient, for present purposes that I assume that in the absence of delivery of the

1942 AD p367

share of the inheritance by the donor to the donee during the donor's lifetime it would have been left in his estate at his death and would on this ground have reverted to the estate of Follett for the benefit of the fideicommissaries. For it seems to me that Mr. Neser's other submission is well-founded, namely, that there was delivery of the three-fourths share in June, 1940, because by the deed of donation the donor did not merely promise the share of the inheritance to the donee, but expressly ceded it to her.

The nature of the heir's right in respect of the inheritance has been referred to in various cases but I nevertheless find it difficult to place it in a definite legal niche. It is usually said that the heir upon the decease, acquires A real right which is in fact ownership (Rosenberg v Dry's Executors (1911 AD 679); Kelly v Scallan (1916 CPD 20 at p. 25); C.I.R. v Estate Holland (1925 TPD 154 at p. 164); Muller v Muller (1935 CPD 452 at p. 460)). That in the absence of factors postponing vesting the heir on the testator's death immediately acquires a vested right in the dominium of the inheritance is of course clear, but that is not the same thing as saying that he ipso jure becomes the owner of the inheritance considered as a thing or, a fortiori, of the things comprising the inheritance. It is not clear to me that on the appointment of an executor, it would be wrong to describe the heir's right rather as a jus in personam ad rem acquirendam against the executor than as a jus in rem or right of ownership. So far at least as the individual things comprising the inheritance are concerned, the heir's right is not easily describable as ownership. That he cannot vindicate such things from third parties was decided in...