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gift. Id. at 436. In finding that, under the law of the State
of Georgia, the donor made a completed gift, the court stated
that it was aware of no rule or principle that prevents the donor
from making a valid gift of personal property that is subject to
a lien or that theretofore had been pledged to secure an
indebtedness. The court held:
The fact, * * * , that the donee, without being required to
do so as a condition of the gift, consents for the subject
of the gift to remain pledged for the use and benefit of the
donor until the debt is paid is not, in our judgment,
repugnant to a valid gift nor would such consent constitute
a retention of dominion and control by the donor over the
property donated. [Id. at 437.]
Under the facts of the instant case, we find that decedent's
annual transfers to the donees were completed gifts. The gifts
were complete when the checks for $10,000 were cashed.12 It is
indisputable that the loan for $120,000 had to be executed before
the checks could be cashed by the donees. It is also
indisputable that the donees had to receive and endorse the
checks, and then return them to Jack, as their agent, before he
could deposit the checks in the agency account and purchase the
CD. Only after Jack purchased the donees' CD could he pledge it
as security for his guarantee as decedent's agent for her
unsecured loan. Thus, the loan was executed before the CD was
pledged, or even purchased. The gifts, and the donees' interests
12 See the discussion of when a gift of a check is
complete infra Issue 3.
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