McCormick v Grogan
A fully secret trust is enforced to prevent fraud, but only where there is clear evidence of an intention to impose a binding obligation on the legatee.
Facts
Mr Craig, who was seriously ill with cholera, made a will leaving all his property to his friend, Mr Grogan. Shortly before he died, he told Mr Grogan where the will was, and gave him a letter listing various people to whom he would like gifts to be made, but said that he did not wish him to be bound by it, and that he left it to Mr Grogan's own discretion. Mr Grogan paid some of the people named, but not Mr McCormick, who sued him, claiming that there was a secret trust in his favour.
Legal principle
The House of Lords held that there was no secret trust. Lord Westbury said that the court has jurisdiction to enforce a secret trust in order to prevent fraud, because it would be a fraud for a person who had induced the testator to leave him property on the faith of a promise to hold it for others to keep it for himself. But because the jurisdiction involves departing from the formalities required for wills, there must be clear evidence of an intention to create a trust. Here, Mr Craig had left the matter to Mr Grogan's discretion, so there was no binding obligation.
Related cases on secret trusts and mutual wills
- Blackwell v Blackwell [1929] AC 318
- Re Boyes (1884) 26 Ch D 531
- Re Cleaver [1981] 1 WLR 939
- Re Gardner (No 2) [1923] 2 Ch 230
- Re Goodchild [1997] 1 WLR 1216
- Healey v Brown [2002] EWHC 1405 (Ch), [2002] WTLR 849
- Kasperbauer v Griffith [2000] WTLR 333
- Re Keen [1937] Ch 236
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