UNIT 10 (2014)Apunte Inglés
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UNIT 10: GIFTS / DONATIONS
Concept: a contract for the donation of goods is a contract under which one party, the donor,
gratuitously undertakes (se compromete a título gratuito) to transfer the ownership of goods
to another party, the donee, and does so with an intention to benefit the donee; and the
- Gratuitous transfer out of generosity (“libéralité”).
It takes place inter vivos.
Disposition that both enriches (enriquecer) the donee’s patrimony and impoverishes (empobrecer) that of the donor.
Acceptance by the donee.
Legal Sources: Spanish Civil Code: - Articles 618 to 656 CC Catalan Civil Code: - Articles 531-7 to 531-23 CCCat - Articles 432-1 to 432-5 CCCat (“donacions per causa de mort”: Donations due or conditional on death).
- Articles 231-25 to 231-29 CCCat (“donacions per causa de matrimoni”) Formation and validity 1. Form requirements a) Real property: A contract for the donation of an immovable good and the acceptance by donee shall be included in a public deed (“escriptura pública”). The effects of the donation depend on the inclusion of it in the public deed.
- Solemn contract Donors who informally promise to make a gift are not obligated to make the transfer.
The solemn nature of the writing and public deed refers only to the gift itself. If the donee’s obligations are not expressly mentioned, the gift remains valid. Donee would be released (liberado) from the duties of charges or those would be binding (vinculante) if evidence of parties’ intentions is proved (see infra Supreme Court Judgment num. 111/2013, March the 6th).
Disguised gifts: gift disguised as a sale (“donación encubierta”) in order to reduce tax costs.
- Traditionally: Courts considered that those disguised or simulated gifts were valid because they were included in a public deed.
The public deed is sufficient to understand that the validity requirements for donation had been fulfilled.
- Alternative approach: In the last years the Supreme Court has held (ha sostenido) that the deed used to include the sales contract cannot be understood as a valid substitute for the donation deed (the public deed of sales contract is not the same as donation) in case of this simulation, both agreements become null. Therefore, since the donation deed is a mandatory formality for a donation to be valid, the agreement would not meet all the legal requirements and therefore would not produce legal effects the transaction is void as a gift because the writing does not indicate that a gift was intended (see, for instance, Judgment of the Supreme Court of January 11th2007 (RJ 2007/1502), 18.3.2008 (RJ 2008\3054), 5.5.2008 (RJ 2008\4130), núm.
828/2012, 16.1.2012 (RJ 2013\2407)).
Exceptions: - Remunerative gifts. However, case-law is not uniform.
- Indirect gifts: the parties intend to enter into a sales agreement in which the price to be paid is low negotium mixtum cum donatione.
- Gifts that include duties or personal obligations by the donee (“donació modal o donació amb càrrega”): causa donandi may be inferred from other sources such as testamentary dispositions and wills (STS núm. 828/2012, 16.1.2012 (RJ 2013\2407)).
b) Chattels or (movable rules): A contract for the donation of chattels or movable goods and the acceptance by donee shall be made in writing. The donation has to be made in a written agreement.
Exceptions to the form requirements for chattels: - No written form in the case of verbal acceptance by donee and immediate or simultaneous delivery of the goods to the donee.
- No written form in cases in which during a fundraiser (recaudación de fondos) or a charity program, the undertaking of the donor is declared in a public statement. In such cases, donations cannot be revoked by donors (example: “La Marató de TV3”).
What about indirect donations or indirect gifts? Are formalities required? Indirect donations are transactions that have the same effect as a donation. (E.g.: when someone pays a debt of another person when the donor agrees not to seek reimbursement).
- Legal transactions other than a gift that achieve the typical result of a donation: donee’s enrichment at the donor’s expense. Example: Payment of another’s debt when donor agrees not to seek reimbursement (art. 1158 CC).
- No need to follow formalities for donations; only requirements for the transaction at stake (en juego). However, other rules may apply, such as for instance rules on revocation.
- Cfr. Remission (“condonación”). Art. 1187 CC: “La condonación podrá hacerse expresa o tácitamente.
Una y otra estarán sometidas a los preceptos que rigen las donaciones inoficiosas. La condonación expresa deberá, además, ajustarse a las formas de la donación”.
2. Validity When a donation contract is validly formed donor’s obligations: - The donor will have an obligation to transfer possession of the good.
o When is ownership transferred in a donation? There is some debate with this issue, but, at the time the donee accepts the donation.
Contracts that have some elements of sales and donations, the sales is the important, so we use the doctrine of “título y modo”.
- The donor will generally have no rights to revoke the donation.
- The donor will not be liable for hidden defects in the good (“vicios ocultos”) or if donee loses possession (“evicción”). These rules that work in sales contract, cannot be used in donation.
o Exceptions: (a) In cases in which gifts include duties or personal obligations by the donee (“donació modal o donació amb càrrega”): Liability up to economic value of established duty.
(b) Cases in which donor transfers possession of goods knowing that they have hidden effects or that they belong to a third party and donee acts in good faith: donor shall compensate donee for the damages. Fraus omnia corrumpit.
- Donation may be subject to conditions or terms.
Plurality of donees - In cases in which the donor donates a good to different people, donations are deemed to be made in equal shares (unless parties establish otherwise).
Unless donor establishes otherwise, if one of the donees does not accept donation, her share is proportionally distributed to other donees (“dret d’acreixement”).
o In Spanish law: no distribution to other donees unless expressly established by donor (art. 637 CC).
Object - Donated goods have to be identified. They may include a plurality of goods (not necessarily an individual good).
Donations may not include future generic goods.
o Example: donation of future goods made to member of religious community to his community by a vow (voto) of poverty is null (STSJCat 10.9.2007).
o Exception: you can include it if it’s clearly identified, not those that are not concrete or identified.
Revocation by the donor: irrevocability and its exceptions Contracts for the donation of goods are irrevocable after validly formed and acceptation by donee is known to donor. (Santa Rita, Rita, lo que se da no se quita).
Numerus clausus of exceptions: donor may only revoke donation in some legally established circumstances: (1) Birth of a child: donor has children afterwards (“superveniencia”). Applicable even if donor had children before the donation, in order to protect the children.
- In CCCat: it’s irrelevant if the donor had children before the donation.
- In Spanish CC: if the donor had children before the donation and has another after it, he isn’t entitled to ask for revocation.
(2) Donor discovers that her children that she believed dead are alive (“supervivencia”).
(3) Breach of personal duties by donee.
- Some donations where subject to obligations to the donee.
- Cases “Muñoz Ramonet Case” (STS, 1a, núm. 153/2012, March 14th): bequest and revocation of bequest.
- More information on the case: http://www.tv3.cat/videos/5098753/After-God-Munoz The Fortuna Yacth Case: the Balearic Islands’ Fundatur Foundation sought revocation of the yacht to the National Heritage Department.
- When King decides not to use it more, the donor ask for revocation.
Donation to the Archdiocese of València (Supreme Court Judgment num. 111/2013, March the 6th (RJ 2013\2585) (Justice: Francisco Javier Orduña Moreno)).
- Facts: o In September 1993 Mr. Valentín drafted a will in which he designated the Archdiocese of València as beneficiary of his estate.
o Some days later, Mr. Valentín and the Archdiocese entered into a private contract in which Mr. Valentín promised to donate two plots (parcela) of land to the latter establishing that the lots were aimed to the building of a new temple dedicated to Saint Jerónimo Hermosilla.
o In October, Mr. Valentín formalized the donation in a public deed. According to the deed, the donation did not include any personal duties. However, for tax purposes, it was mentioned that the plots were to be used for religious constructions.
o Mr. Valentín died in 1996.
o Afterwards, the Archdiocese sold the land lots to a third party (3rd party has no information about the duty of building a religious temple).
- Revocation: o Mr. Valentín’s nephews brought a lawsuit against the Archdiocese and sought revocation for breach of duty.
o Court of First Instance: It issues a judgment in favor of the plaintiffs.
Archdiocese has to transfer goods back to Mr. Valentín’s estate. Given that the o o lots cannot be returned (it’s impossible to rectitude the land), Archdiocese shall pay damages in compensation.
Court of Appeals: judgment is upheld (confirmada).
Supreme Court: Question to be decided? Duty was imposed to the Archdiocese not in the public deed but in a private document. Is this fact valid to understand that the donation imposed a duty to build the temple or is it necessary to establish that duty in the donation’s public deed? In case the donee didn’t know the duty, the donor cannot ask for revocation.
(4) Ingratitude of the donee A contract for the donation of goods may be revoked if the donee: - Commits a crime or misdemeanour against the donor, her children, her spouse or her partner or against the properties of any of the aforementioned individuals.
- Engages in socially disapproved behaviour against the aforementioned individuals.
In case of plurality of donees: revocation for ingratitude of one of the donees involves her share to be proportionally distributed among other donees (“dret d’acreixement”).
Differences in Spanish Law: Catalan rules are more flexible or open-ended: - Spanish civil code (art. 648) includes only crimes, not misdemeanours. It also includes accusation of a crime to a third person, even if donor is found guilty afterwards (exception: crimes against donee or her family).
Example: Are donors entitled to revoke a gift of real property they made to her daughter because she left her husband and children and started a relationship with a Moroccan man? (STS, 1a, 27.2.1995 (RJ 1995\2775)).
(5) Impoverishment of the donor, notwithstanding maintenance claims.
A contract for the donation of goods may be revoked if the donor is not in a position to maintain herself out of her own patrimony or income.
Subjects in revocation: Who may revoke a donation? - Donor and her heirs, except in cases in which the ground for revocation is donor’s impoverishment.
- In cases in which the ground for revocation is ingratitude, heirs are only entitled if donor could not bring the claim in advance.
Against whom? Donee and her heirs, except in cases in which the ground for revocation is ingratitude: claims only against donee.
Time limits: Revocation (“acció revocatòria”) has to be exercised within one year from: (a) Occurrence of the fact that grounds revocation.
(b) Knowledge by donor of situation of ingratitude.
(c) Final decision after criminal proceedings against donee.
Revocation cannot be waived (renunciar) in the contract.
Effects of revocation: (1) Donee shall return ownership of goods to donor (rectitude goods).
(2) Donee shall return the value of goods if before notice of revocation the good has been transferred by onerous contract to a third party (if it’s not possible to return the good itself). Compensation: value of good at the time of donation.
o Exception: revocation for breach of donee’s duties: since these duties would be vested upon (se confieren a) the owner, it would be the subsequent owner who would be in breach of duties.
(3) Respect for limited property rights on the goods hold by third parties (according to property law rules; for instance: article 37 LH).
Rules on special donations: (a) Remunerative gifts (“Donacions remuneratòries”).
- Gifts are made as compensation for services previously rendered or to be rendered: they are made to honour some services or qualities in which exchange of considerations would not be legally required. The donor cannot go to the Court if the donee doesn’t do the services, because it isn’t legally required.
- Remunerative gifts and other onerous donations are only revocable in cases of breach of duties by donee.
- In cases of disguised gifts, courts have exceptionally understood that a public deed of sales may be valid to meet formality requirements and thus gift is not void.
(b) Gift with duties or personal obligations (“Donació amb càrrega o modal”; donation avec charges, donation sub modo).
- Donor imposes some duties to donee.
o Example: restraints on alienation (donee is not entitled to sell or to donate the good for 30 years).
- If the duties are in the interest of the donor or a third party, the gift is gratuitous only if the value of the condition does not exceed the value of the gift. If not, it’s an onerous contract.
- Breach of duty is a ground for revocation.
(c) Gifts with reversion provisions (“Donacions amb clàusula de reversió”) - Donor decides that upon a condition or on a date goods have to be reverted by donee to donor, to her spouse or her partner or to her heirs.
- Donor may also establish that upon a condition or on a date goods have to be transferred to a third person selected by donee. If not established otherwise, it is understood that reversion is to be made to donor in case the donee dies without children before the donor. Similar to trusts (“substitucions fideïcomissàries”).
- Provisions on reversion may be cancelled unilaterally by donor.
- Limitations and liens on goods that were established by donees or by subsequent acquirers, once goods have been reverted, are cancelled. Donees may be held liable (declarados responsables) for damages and for loss of value.
(d) Gifts in which the donor retains control on disposition of the good (“Donacions amb reserva de la facultat de disposar”) - Scope of control is to be governed by the contract.
- If no provisions in the contract, donor only retains rights to alienate the goods in exchange for consideration (therefore, it does not include donations or wills).
- If donor decides to sell the good: donee or subsequent acquirers lose ownership, the latter with the limits of good faith and the LH.
- Control limited they have to establish it in the contract. If not, only to decide alienation of the price.
A donate o o o B (owner) B cannot sell the good to a 3rd party A has the right to decide if B can sell the good A has the right to say B that C is going to buy the good If not established: o Not as onerous transactions o Yes as donation or inheritance - Also, control on disposition may refer to authorization to alienate, such as for instance in cases in which alienation is made conditional upon the donee’s or her family’s needs (similar to usufructs wit capacity of disposition (“usdefruit amb faculat de disposició” (arts. 561-21 and ff. CCCat)).