Gruen v. Gruen
496 N.E.2d 869 (1986)

  • Gruen Sr. owned a painting worth $2.5M. He wrote his son a letter saying he could have the painting when he died. Gruen Sr. died 17 years later.
    • Gruen Jr. never had physical possession of the painting, and there was nothing in Gruen Sr.’s will that gave the painting to Gruen Jr.
    • In the letter, Gruen Sr. said that the painting was a birthday present, but that he wanted to keep it until he died. Then he wrote a second letter telling Gruen Jr. that his lawyers advised him to destroy the first letter and simply write that the painting was Gruen Jr.’s immediately (so as to avoid inheritance taxes).
    • When someone tells you that they are giving you something when they die, it is said that they are retaining life estate.
      • When you set up a life estate, you are actually selling (or giving) part of the property interest to someone else. The part that they get is known as the remainder. A person can sell or give away the remainder to someone else.
  • Gruen Jr.’s stepmother was in physical possession of the painting and refused to hand it over. Gruen Jr. sued for replevin.
    • Replevin is an old common law term meaning that someone has your property and you want it back.
  • The Trial Court found for the stepmother. Gruen Jr. appealed.
    • The Trial Court found that Gruen Jr. had done nothing to establish the elements of an inter vivos gift.
      • An inter vivos gift is one where there is immediate irrevocable transfer of ownership. It is different from a will, which only awards ownership after death.
        • You can’t make an inter vivos gift and still retain life estate. Property transfer must be immediate. Otherwise the transfer is invalid unless it’s part of a will.
  • The Appellate Court reversed and awarded the painting to Gruen Jr. The stepmother appealed.
  • The New York Supreme Court affirmed.
    • The New York Supreme Court found that in order to make a valid inter vivos gift, there must be:
      • Intent on the part of the donor to make a present transfer.
      • Delivery of the gift to the donee (actual or constructive)
      • Acceptance of the gift by the donee.
    • Since all three things happened, the painting was a valid inter vivos gift, owned by Gruen Jr. immediately, and not something that Gruen Sr. had willed to Gruen Jr. after death.
      • Gruen Jr. didn’t technically accept the gift, but the Court felt that it could be presumed that if someone offers you a multi-million dollar painting you will accept.
  • Had Gruen Sr. written to his son and said, “I give you the painting when I die,” that would not be a valid gift. That would be part of a will.