While English common law requires the perfecting of a gift through written documentation, the circumstances of that prerequisite can be somewhat altered when the moment calls. On this occasion, a testatrix was ultimately able to complete an oral debt release through the appointment of her debtor as an executor.
In 1866, the deceased was cohabiting with her son in-law when due to her sizeable wealth, she entered into an agreement whereby a significant amount of rent was paid on a quarterly basis.
After which, the defendant borrowed £1100 on the proviso that she deducted £100 per quarter until the balance owed was clear.
After only two payments, the deceased relinquished the debt, and explained that no further deductions were necessary.
This evidence was supported both by his wife and from handwritten notes left on the cheque counterfoils used before her demise.
Upon her passing, the beneficiary to her will contested that the £900 unpaid, was now owed under law, as the cessation of the loan had not been committed to any form of written notice aside from the cheque stubs, which were deemed insubstantial as proof.
Relying upon the essence of equity, the court examined the context in which her wishes had been executed, and knowing the oral and notary testimony were insufficient to stand as perfect, her appointment of the defendant as executor to her will, was evidence enough, and that while:
“The law requires nothing more than this, that in a case where the thing which is the subject of donation is transferable or releasable at law, the legal transfer or release shall take place. The gift is not perfect until what has been generally called a change of the property at law has taken place.”
Thus the court held that the deceased, having made no express acknowledgement of a debt within her will, was proof enough that the gift was perfect, and that its absence created in the defendant, an absolute right to title of the £900, therefore no challenge could be made, equitably or otherwise.
The court further noted that her further payments of full rent for a period of four years after the money had been loaned, showed again that she considered the sum paid in full, and so sought no recovery in death, as she might in life, while reminding the parties that:
“[T]he mere saying by a creditor to debtor, “I forgive you the debt,” will not operate as a release at law. It is what the law calls nudum pactum, a promise made without an actual consideration passing, and which consequently cannot be supported as a contract.”