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Original Author: Hemsley, Sid
Date of Material: 02/27/2007

Revenue sources--Municipal
Purchasing--Laws and regulations
Purchasing--Policies and procedures

Acceptance of Gifts

Reviewed Date: 04/30/2021
MTAS was asked how cities accept and refuse gifts.


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 ever 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: “Municipal 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.