MEMORANDUM
FROM:
Sid Hemsley, Senior Law Consultant
DATE: February 27, 2007
RE:
Acceptance of gifts by your City (and by cities in general)
You have the following questions:
1. Is the City required to formally accept gifts?
2. Should the City adopt a policy governing the acceptance of gifts?
The answer to Question 1 is that generally a city is required to formally or informally
accept gifts in order for the gift to become complete. But the answer to that question is
complicated by the fact that there is a presumption in Tennessee that gifts that are beneficial to
the donee are presumed to be accepted by the donee. That presumption has some implications
for how a city declines gifts.
The answer to question 2 is probably yes, although I do not recall every having seen such
a policy. But such a policy would, presumably, eliminate the confusion over who in the city has
the authority to accepts gifts in the name of the city, the conditions under which gifts can be
accepted and declined, and how gifts are to be accepted or declined.
Analysis of Question 1
As far as I can determine from a hasty check, there are no provisions in the City Charter
or Municipal Code governing the city’s acceptance of gifts. However, it has been held that in the
absence of a statute providing otherwise, municipalities have an implied power to accept gifts.
In Libby v. City of Portland, 74 A. 805 (1909), it is said:
Suppose, again, that some benefactor should convey by deed or
devise by will such real estate to be given as a gift, would not the
title vest, and would not the town be authorized to manage and
maintain the property for profit until some other disposition of it
might be deemed advisable? Gifts of real estate should stand on no
different basis than gifts of money, and certainly the treasury would
be lawfully enriched by such benefactions in either form....The
authorities so hold. Dillon on Municipal Corporations, vol. 2, '
566, state the principle thus: AMunicipal and public corporations
may be the objects of public and private bounty. This is reasonable
and just. They are, in law, clothed with the power of individuality.
They are placed by law under various obligations and duties.
Burdens of a peculiar character rest upon compact populations
residing within restricted and narrow limits, to meet which,
property and revenues are absolutely necessary, and therefore
legacies of personal property, devises of real property, and grants
of gifts of either species of property direction to the corporation for
its own use and benefit, intended to and which have the effect to
ease it of its obligations or lighten the burden of its citizens, are in
the absence of disabling or restraining statutes, valid in law. [At
806-07]
Joint County Park Board, Etc. v. Stegemoller, 88 N.E.2d 686 (1950), also says that:
Municipal corporations also have implied power to receive gifts
upon trust which are germane to the purposes of such corporations.
43 C.J. 1335; III McQuillin, Municipal Corporations (2nd Ed.
Rev.) P. 1007, ' 1230; III Dillon, Municipal Corporations (5th Ed.)
p. 1569, ' 982; [and various Indiana cases cited] [At 691]
In addition, it is likely that various state statutes that authorize municipalities to acquire
property for various purposes also authorize municipalities to accept gifts for those purposes.
It is said in 14 TENN. JURIS, Gifts, ' 3, with respect to gifts inter vivos [gifts between
the living, which are perfected and become absolute during the lifetime of the donor and the
donee], that: “The essential requisites of a gift are the capacity of the donor, the intention of the
donor to make the gift, the completed delivery to or for the donee and the acceptance of the gift
by the donee.” In support of that general proposition is cited the definition of “Gift inter vivos” in
Black’s Law Dictionary (7th Ed. 1999), which does include the element of acceptance of the gift
as essential to the completion of the gift. However, most of the Tennessee cases on gifts speak of
the elements of a completed gift as (1) the intention of the donor to make a gift, and (2) the
delivery of the gift to the donee.
But it is also said in 14 TENN. JURIS, Gifts, ' 11, that:
In general, any gift by deed, will or otherwise, is supposed prima
facie, unless the contrary appears, to be beneficial to the donee.
Consequently, the law presumes, until there is proof to the
contrary, that every estate is accepted by the person to whom it is
expressed to be given.
At least two cases address the question of whether acceptance of the gift is an essential
part of the gift:
Davis v. Garrett, 18 S.W.113 (1892) explains the part that capacity and discretion have on
the ability of the donee to accept the donor’s gift.
In that case, the unfortunate question was whether the delivery in 1859 of a gift by a
father to his seven year old daughter of a nine year old slave girl was complete where no actual
delivery of the slave girl had occurred because the seven year old girl had no legal capacity to
accept the gift. The Civil War intervened, after which the slave girl was emancipated; for that
reason, the gift of the slave girl was never accepted. by the donee-daughter. In this case, said the
Court, no acceptance of the donation of the gift was required, the gift otherwise being beneficial
to the donee:
If the deed contained any burdensome or unusual provisions, a
question might arise as to acceptance by the donee. But when the
donee is incapable of exercising any discretion in the matter, and
the conveyance is clearly beneficial, the law will presume an
acceptance. Were it otherwise, an infant, for want of power, would
be incapable of receiving a benefit conferred by deed. [At 114]
But obviously, a city is an “adult,” and has both the capacity and discretion whether to
accept a gift. Indeed, a gift to a city may by all appearances be beneficial to a city. But the city,
having capacity and discretion with respect to whether it chooses to accept the gift has the
undoubted power to reject it for any reasons it deems suitable. For example, it seems clear that a
city might not want to accept a gift of money from a certain person or organization, or that it
would not wish to accept the deed of a piece of property that might cost the city far more than
anything it could gain from the use or sale of the property.
The second case is Goss v. Singleton, 39 Tenn. 67 (1858). There the Court pointed out
that a donee of a gift has carte blanche to reject the gift and explains how that can be done:
But the law does not force any one to accept the gift of an estate,
whether made in trust, or otherwise; and, therefore, it is competent
for the person appointed trustee to refuse both the estate and the
office attached to it, provided that he has done no act to deprive
himself of that right. The gift is not perfect until ratified by the
assent of the donee; and a disclaimer of the trust operates as
evidence that such assent was never given. There is some
difference of opinion as to what shall be a sufficient disclaimer.
There are authorities which seem to maintain that a parol
disclaimer of a gift, either by deed or will, of a freehold estate is
sufficient. But, however, this may be, it is well settled that the
renunciation may be by deed, by matter or record, or any written
instrument, or by an answer in Chancery. And such disclaimer or
refusal to accept the trust, whenever made, will relate back, and
will be held to have been made at the time of the gift, if no act has
been done to preclude the party.... [At 77-78]
It is also said in 80 AM.JUR.2d, Wills, ' 1366, with respect to gifts by will that:
A testamentary gift to a business corporation, charitable
organization, municipality, or like legal entity, has been held to
have been properly accepted by means of voting, or adopting a
resolution, or passing an ordinance, as required under the
circumstances. The fact that a city refrained from taxing property
devised to it has been regarded as evidence of acceptance of the
devise.
That provision indicates that testamentary gifts might be accepted by both formal and
informal action on the part of the city. There appears no reason why the same is not true of gifts
of any kind. Many gifts to governments, particularly of land, make it clear how the particular
gifts are to be accepted, and what happens to the gift when it is not accepted.
The above cases and authorities raise the interesting question of whether gifts to a city
must be accepted before they are complete or whether they must be disclaimed in order to defeat
their completion. That question brings us to the analysis of Question 2.
Analysis of Question 2
Given the presumption in Tennessee that in the absence of proof to the contrary an estate
is accepted by the person to whom it is given, a city should probably be more concerned about
declining gifts that it does not want than about accepting gifts that it does want. In any event, it
seems a good idea for a city to adopt a policy reflecting a formal process for accepting and
declining gifts that includes who has the authority to accept or decline gifts, the conditions under
which gifts can be accepted and declined, and the process for accepting and declining gifts. In
the case of small gifts of money a city could simply let the presumption that such gifts are
accepted by the city operate unless the governing body of the city formally declines to accept a
certain gift or gifts, logically by returning the gift or gifts to the donor or donors. In the case of
gifts of large amounts of money or of real property, a city could require that the governing body
of the city formally accept such gifts, and to formally and specifically decline gifts that it does
not want.
There may be cities that have already addressed this problem by ordinance or resolution.