Plaintiff, X vs Defendant, Y
First Hall, Civil Court
Mr Justice J.R. Micallef
29 April 2010
This case concerned a claim for the return of an object belonging to a person (the plaintiff, X) that was passed on to another (the defendant, Y). While the plaintiff claimed that he had deposited the object with the defendant, the latter claimed that he had in fact donated it to her and therefore had no legal obligation to return it.
The facts of the case were as follows:
Y was a property negotiator with an estate agency. She had met X at a party organised by the said agency in 1994. X was living in Malta and owned a property he wished to sell. He appointed the estate agency to try and find him a buyer – Y eventually found a buyer and the property was sold in 1995 for a price that was higher than X had expected. X claimed that he had paid the agency fees to the company. X and Y eventually became friends and started living together and soon became a couple. It was during this time that they were living together that X passed on to Y a 2.19 carat pear shaped diamond which she insured – X had also allegedly purchased a chain for Y so that she could wear the pendent. During this time, X had also lent the pendent to a close friend of his for a few days for her to wear during her engagement party. After a while, the parties split up and X moved out. X eventually left Malta for a while and appointed someone to initiate these proceedings on his behalf. In the duration of these proceedings, he returned to Malta.
In his application to initiate proceedings, X requested the Court to order Y to return, within a short and peremptory time fixed by the same Court, his diamond or in the event of default, to order her to give him an identical diamond. Furthermore, in the event that she fails to follow any of the above orders, X requested that he be permitted to purchase/order an identical diamond himself at Y’s expense.
Y rebutted his claims stating in her reply that X had given her the diamond pendant as a gift to thank her for helping him obtain a better price upon selling his property. She claimed that on this basis, X had no right to demand that the diamond be returned to him.
The Court noted that the basic issue in this case was determining by which title the diamond was passed on to Y. The fact that X was the owner of the diamond at the point when it was passed on to Y did not seem to be disputed. While X reiterated that he had passed on the diamond to Y to look after it for him, Y insisted that the diamond was given to her as a gift. The Court therefore had to determine whether the disputed object was deposited by X with Y or whether it was donated by him in her favour.
The Court held that in cases like this, it had to carefully consider the testimonies of witnesses brought forward since the parties’ versions of the facts differed radically – the parties disagreed as to how the diamond ended up in Y’s possession.
The Court noted that in cases of donation, it is necessary to prove the intention to donate with liberality. The burden of proof was on Y alone to show that the diamond was indeed donated to her as opposed to deposited with her as claimed by X. Y had to prove her allegation all the more in this case because there was no writing or contract drawn up between the parties to show the nature of the transfer in question. The Court noted that Y based her claims on the allegation that the diamond was given to her as a gift for selling X’s property at a good price and not on the fact that it was given to her during her relationship with X as a gift, as is a very normal thing done in relationships. The Court therefore noted that as the case proceeded, it was becoming clearer that Y was basing her claim on the transfer being effected as compensation and therefore remuneration on the basis of an obligation. Y was indeed mixing the two concepts to the extent that she actually said that the donation in question was conditional upon her fulfilment of her obligations as an agent to sell the property.
The Court referred to Articles 1738 and 1739 of the Civil Code which state: 1738: “A gift made out of gratitude, or in consideration of the merits of the donee, or as a special remuneration for services for which the donee had no right of action, as well as that to which some burden on the donee is attached, is likewise a donation, saving the provisions of the next following article.”
1739. If the donation is made in remuneration for services for which the donee had a right of action, the special rules relating to donations shall not apply, except when the value of the thing given exceeds, by at least one-half, the value of such services, and in regard only to such excess.”
The Court noted that if Y was indeed basing her argument on the basis of compensation for selling X’s property at a higher price than he expected, it could be argued that she personally had no right to the agency fees paid by X since she was employed with the estate agency. Therefore the agency fees were indeed not due to her personally and Y had no right to expect any payment since the contractual relationship in effect was that between X and the estate agency. A representative of the same agency testified that the commission due to it was indeed paid upon the signing of the contract and no further payments were due by X.
On the basis of the above, the Court held that should this indeed be a case of donation, it could only be one effected for gratitude (Article 1738 above), thereby rendering the legal provisions in the Civil Code regulating the institute of donation applicable to such disputed transfer.
The Court noted Article 1753(1) of the Civil Code which states that “A donation is null, if not made by a public deed.” The claim for nullity may be raised by the person who effected the disputed donation. It was clear that no private writing or public deed were drawn up to effect the disputed donation. Y insisted that in terms of Article 1753(2) which disapplies (1) above in certain cases, the donation was not null since it was essentially a manual gift, the value of which considering the condition, financial situation and circumstances of X, was indeed moderate.
Apart from the above formality, the Court noted that there must also be a clear intention of the donor to donate at the time the object is given to another person. From the evidence produced and on the basis of the above, the Court concluded that it remained unclear whether X had indeed donated the diamond to Y as she claimed. From the testimonies of witnesses produced, not only was the claim of donation denied, but furthermore, it was even stated that X had tried to sell the diamond, proving that X lacked the intention to donate and still considered himself the owner of the diamond. Furthermore, the fact that Y had insured the diamond did not prove that it was indeed donated to her – someone who chooses to insure an object in his care does not automatically become owner thereof on the basis of such insurance. Such person could merely be holding the object for someone else and insures it to ensure its safekeeping.
Since Y did not claim any other title or reason as to why she had a right to retain the diamond, on the basis of the above, the Court ruled in favour of X. According to the Court, X had passed on the diamond to Y as a deposit. Article 1904(1) as one of the provisions regulating the institute of deposit, states that “(1) The depositary must restore the identical thing which he has received, in the condition in which it may be at the time of its restitution.” This rule is subject to Article 1918 which holds that “The depositor is bound to reimburse to the depositary the expenses which the latter has incurred for the preservation of the thing deposited and to make good to him all the losses which the deposit may have occasioned him.”
On the basis of the above, the Court therefore ordered Y to return the diamond or one like it to X within 30 days from the date of this judgement. In the event of default on the part of Y, the Court authorised X to purchase a diamond like the one deposited at the expense of Y.