Trusts - Introduction Flashcards
Morice v Bishop of Durham (1804) 9 Ves 399; (1805) 10 Ves 522
The beneficiary principle
NB: where no definite object - the property is held on resulting trust for the settlor.
This case laid down the beneficiary principle which states that a valid trust must be enforceable by definite objects.
The purported trust was not a charitable trust and did not arise as there were no ascertainable beneficiaries.
RANT MR: The Court must be able to assume control of each trust for an uncontrollable power of disposition would be ownership, not trust.
[On appeal Mr Romilly argues on behalf of the next of kin that ‘The trust was so vague and indefinite that it cannot be executed’]
LORD ELDON at 954: ‘As it is a maxim that the exercise of a trust shall be under the control of the court, it must be of such a nature that it can be under that control. It must be a trust which we can reform when there has been maladministration. This is not possible unless the subject and the objects can be ascertained. If the settlor proceeds to express the trust, but does not sufficiently do so, or expresses a trust that cannot be executed, then it is a resulting trust.’
= you need to make sure that the rules for setting up the trust are complied with
3 rules:
* that each trust must have at least one human beneficiary (here none is name)
* that trusts that are too vague must be declared void.
* that the trust will fail if it is vague about whether the trustees are under a duty or a power.
FACTS: Mrs Morice left personalty (= money) to the Bishop to pay her debts and legacies (= gifts she wants to make), then to dispose of the residue to such objects of benevolence and liberality as he shall choose at his discretion. After Mrs Morice’s death, the next of kin argued that the trustees held the trust fund on resulting trust for them. This cannot be a charitable trust, because purposes can be liberal and benevolent without being charitable.
Basically the next of kin argues that some formalities have not been met, the money should go to them.
NB: the Administration of States Act, 1925, which provides a list of whom gets something when you die intestate or partially intestate.
Re Bowden [1936] Ch 71
rules of trust - undoing the trust
Held: The settlor cannot unwind a trust, so she was unsuccessfu
Facts: A nun transferred her property to beneficiaries to become a nun. She later changed her mind and wanted to recover the property to herself absolutely
Saunders v Vautier
the rule in saunders v vautier
LORD LANGDALE MR at 116: ‘I think that principle has been repeatedly acted upon; and where a legacy (here means trust) is directed to accumulate for a certain period, or where the payment is postponed, the legatee, if he has an absolute indefeasible interest (= non contingent on a decision for ex. Does not rely on the trustee’s decision) in the legacy, is not bound to wait until the expiration of that period, but may require payment the moment he is competent to give a valid discharge. ‘
On appeal, the LORD CHANCELLOR held that the legacy was vested (indefeasible interests are automatically vested) , and ordered the transfer of the whole trust fund to Daniel. (1841) Cr. & Ph. 240.
Vautier was entitled to have the entire fund transferred to him.
Principle: An adult beneficiary of a trust, who is of sound mind and is entitled to the whole beneficial interest, can direct the trustees to transfer the trust property to him or her. The trust will then be terminated.
The sum of £2k East India stock was standing in the testator’s name at his death in 1832 on trust for Daniel Vautier, an infant (an accumulation and maintenance trust). In 1835 the Master of the Rolls, Sir C. C. Pepys, ordered the income to be paid to Daniel each year, and the capital accumulated until he reached 25. In 1841 Daniel became 21 and asked to be given ownership of the stock immediately.
