*3083 Held, that the evidence does not sustain the petitioners' allegation that certain securities were transferred by gift by each of them to their respective wives.
*1255 The respondent asserts deficiencies in income and surtaxes for the years 1920 and 1921 against the several petitioners in the following respective amounts: Richard Tuffli, $542.98 and $752.67; G. F. Tuffli, $115.45 and $110.49; S. G. Tuffli, $292.70 and $190.16. The only issue here is whether each of the petitioners effected a valid transfer of certain securities to his wife and, as a consequence, whether in each case the income of such securities was taxable to the alleged donee. At the hearing counsel for the parties stipulated that the three proceedings should be consolidated for hearing and decision.
FINDINGS OF FACT.
In the taxable years each of the petitioners was a resident of the State of Missouri. Together they owned all the stock of Tuffli Brothers, a Missouri corporation, engaged in the pig iron and coke business.
As profits accumulated from the operations the corporation*3084 made investments in farm mortgages and notes secured by such mortgages. Each of the petitioners purchased substantial amounts of such securities from the corporation. The parties agree that all the securities here involved were negotiable commercial paper.
At some date not disclosed by the record but either prior to or within the taxable years, each of the petitioners in the presence of all the others and of the wives of all three told his wife that he was *1256 giving her all the farm mortgages that he owned. There was no manual delivery of such mortgage by any of the alleged donors to his wife. All the securities in question were deposited in a safety deposit box used by the corporation. The key to such box was kept in the office of the corporation and could have been used at any time by any one of the alleged donors or donees. As interest accrued on the various farm mortgages here involved it was collected by the corporation, but the record fails to disclose the further disposition thereof.
For each of the taxable years each husband and wife made a separate income-tax return. Each of the wives included in her income the interest on the securities alleged to have*3085 been received by her as a gift from her husband. Upon audit of such returns the Commissioner, in each case, added the income so reported by the wife to the income reported by the husband and determined the deficiencies here in controversy.
OPINION.
LANSDON: The only question here is whether the petitioners completed the gift to their wives by the securities in question in such manner as to pass the title to the respective wives of both the principal and income of the property alleged to have been transferred. It is elementary that the essential elements of a gift are an intention to give, a transfer of title or delivery and an acceptance by the donee. It is stipulated that the securities here involved were negotiable commercial paper. The Uniform Negotiable Instruments Act, adopted by all the States of our Republic, provides that "A negotiable instrument may be transferred by mere delivery either actual or constructive." It is conceded that in the instant case there was no manual or actual delivery. It remains therefore, for us to determine whether there was a constructive delivery sufficient, other elements of a gift being present, to transfer ownership from the several*3086 petitioners to their respective waives.
The only evidence to support the petitioners' theory of delivery is that the securities in question were placed in a safe-deposit box that was used by the corporation of which alleged donors were stockholders and that the key to such box was kept in the office of the corporation and was accessible at all times to all the alleged donors and donees. This is not sufficient to accomplish transfer of ownership of the securities. In our opinion in , we said:
It is essential to the validity of a gift that there be a distinct delivery of property so as to show that the donor has relinquished all dominion over it. *1257 The donor went as far in this case as he could have gone, unless he had secured the appointment of a guardian or trustee to manage the property of his daughters.
In these proceedings there is not the slightest evidence that the alleged donors relinquished all or any dominion over the property in question. Each of them had access to the box in which the securities were kept and, so far as the record shows, each had the right to sell the securities at any time without consultation*3087 with his wife or permission from her. In deciding a very similar controversy in ; affd. , the court said:
The only question that arises in this case is whether certain bonds that belonged to Edwin Prince in his lifetime were disposed of by him by gift to his wife. It is claimed by the plaintiffs in this action, T. W. Chambers and Lockey T. Chambers, his wife (who was the wife of Edwin Prince, and after his death intermarried with T. W. Chambers), that during the lifetime of Edwin Prince he gave to her certain bonds, set out in the bill, in a safe deposit at Cincinnati. The executors and heirs of Edwin Prince contest this claim, and deny that the bonds were ever disposed of by Edwin Prince, in any manner or form, in his lifetime, and claim that they belong to the estate of Edwin Prince, to be disposed of by his executor. This is a question of a gift inter vivos. A gift of this character has been defined to be "an immediate, voluntary, and gratuitous transfer of personal property by one to another." To make this gift valid, it is essential that the transfer of the property be duly executed, for the*3088 reason that, there being no consideration passing between the donor and donee, no action will lie to enforce it. A gift of this character must go into immediate and absolute effect. To make it complete, there must be an actual delivery of the subject-matter of the gift, so far as the same is capable of delivery; and, in the absence of a delivery of that character, the title to the property does not pass from the donor to the donee. Chancellor Kent says in his work (2 Comm. p. 438) that the "necessity of delivery has been maintained in every period of the English law. * * *. The donor must part, not only with possession, but with dominion and control, of the property." An intention to give it is not a gift, and, so long as a gift is incomplete, a court of equity will not enforce and give effect to it. This position of Chancellor Kent is sustained by a long list of authorities in this Country. Our courts seem to hold that gifts both inter vivos and causa mortis should be so complete as to deprive the donor of the future control and dominion of the property, and that in order to make same valid, it is necessary for the donee to take and retain possession until the donor's*3089 death; for, if the donor once regains possession of the gift, it becomes nugatory.
I have given this case much thought and reflection, and, applying the principles of law just announced, I cannot reach the conclusion that the plaintiffs in this action are entitled to relief. The evidence of various witnesses that Edwin Prince intended to give the bonds in question is not in itself sufficient. There must have been upon his part an actual delivery of the bonds to his wife in his lifetime, and she must have reduced them to possession. The evidence shows that these bonds were in a safe deposit at Cincinnati; and while she had one of the keys to the box and went there at various times with Prince, her deceased husband, in his lifetime, to clip the coupons and aided and assisted him in doing so, yet there is no evidence which tends to establish *1258 the fact that she ever had supreme control over them, or exercised dominion over them independent of her husband. He placed these bonds in the same place that they were found after his death, and it must be inferred from all the evidence in this case that he, being somewhat advanced in life, took her with him on his various*3090 trips to Cincinnati for the purpose of having her take care of him and assist him in his business. Declarations upon his part, in the presence of various persons, that he intended to do something for her, or to give the bonds to her, are of themselves insufficient. A promise or a declaration unexecuted in the lifetime of the donor is insufficient to pass title to any property concerning which a decedent may have made an actual promise. I deem it unnecessary to go into an analysis of all the evidence in this case, but, looking at it in the light of what it tends to prove, I am forced to the conclusion that there is no evidence that justifies the court in decreeing the title and the possession of the bonds to the plaintiffs in this cause. For the reasons assigned, I am of opinion that the bill should be dismissed. (Italics supplied.)
Some weight is ascribed to the fact that the wives had access to the key of the box in which the securities were kept, although there is no evidence that either of them ever actually used it for any purpose. In *3091 ; , the court said:
Delivery of a key of a trunk containing valuable articles, such as money and government bonds, which are capable of being taken into the hand is not a valid delivery of such article.
We are of the opinion that the petitioners have failed to prove either actual or constructive delivery. This is indispensable. ; ; . Having reached the conclusion that there was no delivery sufficient to pass title to the securities, it is not necessary for us to determine whether any gift was ever intended by the alleged donors or whether there was acceptance by the wives.
Decision in each proceeding will be entered for the respondent.