Report No. 70

Chapter 32

Election

Section 35

32.1. Introductory.-

Section 35 gives effect, though with a modification, to the doctrine of election. Where by a transfer property which does not belong to the transferor, is given to A and the same transfer gives another property to A, A must elect.

32.2. Hypothetical case.-

The position in regard to wills is the same. Suppose,1 therefore, that Edward makes a will leaving £ 5,000 to Frank, and Frank's car, worth £ 2,000 to Geraldine. In this case, there are three possibilities open to Frank:

(a) he may disclaim the legacy under the will.2 In this case he derives no benefit whatever from that gift and keeps his car; or

(b) he may "take under the will", namely, accept the legacy of £ 5,000 and transfer the car to Geraldine; or

(c) he may "take against the will", namely, accept the legacy of £ 5,000 and retain the car, but pay to Geraldine £ 2,000 to compensate her for not receiving the car.

In both the second and third cases Frank is a net sum of £ 3,000 better off, and Geraldine receives either the asset or cash to the value of £ 2,000.

1. Illustration taken from Mellows Law of Succession, (1973), p. 485.

2. With the result that it is usually only prudent to disclaim where the value of the gift under the Will does not exceed the value of the property to be given to the third party.

32.3. Equity.-

In our introductory discussion in this Report, we had referred to the fact that many of the provisions of the Transfer of Property Act have their genesis in Equity in England which were evolved in the Court of Chancery. Election furnishes an interesting example. This is incorporated in section 35-a principle which has been described by Lord Haldane1 as "a principle which the courts applied in the exercise of an equitable jurisdiction enabling them to secure a just distribution substantially in accordance with the general scheme of the instrument".

This quotation from Lord Haldane shows that the paramount object is justice, and that literal compliance is replaced by substantial compliance in the interest of justice, taking care at the time that such action is in conformity with the general scheme of the instrument. The intentions of the testator or transferor are thus carried out and the expression thereof in the terms of the transfer is now moulded so that justice is done. The doctrine of election is rested usually on the rule that a person cannot accept and reject the same instrument.2 This is a statement of another aspect of the rule which shows why the rule requires a person to elect.

1. Brown v. Greekson, 1920 AC 860 (868).

2. Burmingham v. Kirwan, (1805) 2 Sch&Lef 444 (450).

32.4. History.-

The doctrine of election owes its origin to the civil law.1 By that law, a bequest of property which the testator knew to be long to another was not void, the legatee was entitled to recover from the heir either the subject of the bequest or, if the owner was unwilling to part with it for a reasonable price, its value. The heir, on his part, had the option of renouncing a burdensome inheritance, for the heir could not accept the benefit offered by the will apart from its burden, nor, having accepted the former, could not discharge the latter by merely indemnifying the disappointed claimant, whom he was bound to satisfy to the extent provided in the will, irrespective of the benefit he had himself received.

1. Story equity Jurisprudence, (1919), pp. 451, 1018.

32.4A Need for election.-

Why does need for election arise? The need, it would appear, arises because, in the same instrument there is a duality of gifts or purported gifts. The two gifts cannot be given effect literally, and " the law must evolve some just mode of giving them effect as far as possible. Where there is a gift of the donor's own property to E and also a gift of the property of E to a third person, an intention is implied that the gift to E shall take effect only if E elects to permit the gift to the third person also to take effect.1

That the aspect of the presumed intention (and not the expressed intention) is important, would be clear from the fact that if a testator gives property subject to some express condition (for example as to abandoning a claim against the testator) the donee must elect in the sense of choosing whether to comply with the condition or totally lose the gift. This, however, is slightly different from the doctrine of election as it originated in equity.

Again, if two gifts are made distinctly in the same instrument of the property of the transferor and one gift is beneficial while the other onerous, the doctrine of election (in the proper sense) does not compel the donee to adopt a particular course of action. He can take both, or he can accept the one which is beneficial and yet reject the onerous gift unless, of course, the intention of the transferor is to make the acceptance of one, a condition for the acceptance of the other. Such a case is outside section 35, which applies only when the transferor professes to transfer property not his own.

1. Noys v. Mordeaunt, (1706) 2 Vern 581.

32.5. Scope of section 35.-

The case to which section 35 addresses itself is a narrow one. Where a person insists on transferring a property which he has no right to transfer and, as a part of the same transaction, confers any benefit on the owner of the property, it is then that the owner of the property professed to be transferred to a third person has to elect. The election is between confirming the transfer and dissenting from it.

If he confirms the transfer, it takes effect in its entirely. If he dissents from the transfer, then certain consequences ensue-(i) compulsory relinquishment of the benefit conferred (under the Indian law) subject to compensation by transferor in some cases, or (ii) liability imposed on that person (usually called the refractory donee) to compensate the disappointed donee, that is to say, the third person who does not get the very property which the transferor professed to transfer under English law.

By a suitable arrangement, full effect is given to a donation of that which is not the property of the donor not in a literal manner spelling out the terms of the transfer, but in a substantial manner. The arrangement is still based on carrying out in substance the intention of the transferor. The aspect of intention is brought out by Story1: Story takes the case where a testatory devises an estate belonging to his son to a third person, bequeathing in the same will to his son a legacy of one hundred thousand pounds.

"It would manifest that the testator intended that the son should take both, to the exclusion of the other devises and therefore he ought to be put to his election (as to) which he would take; that is, either to relinquish his own estate, or to compensate the party disappointed, or in the case of a testator his estate, out of the bequest under the will." Story2 further points out that every case of election pre-supposes a plurality of gifts or rights, with an intention of the party who has a right to control one or both, that one should have a substitute for the other. The party has to make the choice-hence the word "election"-but he cannot enjoy the benefit of both.

1. Story Equity & Jurisprudence, (1919), p. 450, para. 1076.

2. Story Equity & Jurisprudence, (1919), p. 350, para. 1075.