McCormick v Grogan: HL 23 Apr 1869

C made a will leaving his property to G, and appointed him executor. When about to die C sent for G and in a private interview told him of the will, and G asked whether that was right. C said that he would not have it otherwise. C then told G where the will was to be found and that with it would be found a letter. This was all that was known to have passed between them. The letter listed many gifts of money and annuities; and contained several expressions as G carrying into effect the intention of the testator as he ‘might think best’, and this sentence, ‘I do not wish you to act strictly on the foregoing instructions, but leave it entirely to your own good judgement to do as you think I would if living, and as the parties are deserving; and as it is not my wish that you should say anything about this document there cannot be any fault found with you by any of the parties, should you not act in strict accordance with it.’ G paid money to some of the person’s mentioned in the letter but not to all.
Held: In this case there was no Trust created which was binding on G.
If a legatee states to a testator that upon testator’s confiding his property, apparently disposing of it to him the legatee, by a regular and formal instrument, he will carry into effect all such as intentions as testator shall confide to him, then that legatee shall have fastened upon his conscience the trust of carrying into full effect those instructions which he received upon such representations period.
There is a need to prove the testator considered that the donee has accepted the obligation.
Lord Westbury said: ‘the jurisdiction which is invoked here by the Appellant is founded altogether on personal fraud. It is a jurisdiction by which a Court of Equity, proceeding on the ground of fraud, converts the party who has committed it into a trustee for the party who is injured by that fraud. Now, being a jurisdiction founded on personal fraud, it is incumbent on the Court to see that a fraud, a malus animus, is proved by the clearest and most indisputable evidence. It is impossible to supply presumption in the place of proof, nor are you warranted in deriving those conclusions in the absence of direct proof, for the purpose of affixing the criminal character of fraud, which you might by possibility derive in a case of simple contract.’
Lord Hatherley LC said: ‘a person apparently taking property by devise or bequest from a testator with this knowledge of the existence of another instrument, which he actually or impliedly undertakes to carry into effect, will be fixed as trustee with the performance of such instructions and directions as are given in that other instrument. . . But this doctrine evidently requires to be carefully restricted within proper limits. It is in itself a doctrine which involves a wide departure from the policy which induced the Legislature to pass the Statute of Frauds, and it is only in clear cases of fraud that this doctrine has been applied – cases in which the Court has been persuaded that there has been a fraudulent inducement held out on the part of the apparent beneficiary in order to lead the testator to confide to him the duty which he so undertook to perform.’
As to the maxim ‘Equity does not allow a statute to be made a medium of fraud’, the court of equity has from a very early period, decided that even an Act of Parliament shall not be used as an instrument of fraud; and if in the machinery of perpetrating a fraud an Act of Parliament intervenes, the court of equity does not set aside the Act of Parliament but it fastens on the individual who gets a title under that Act, and imposes upon him a personal obligation because he applies the Act as an instrument for accomplishing a fraud.

Lord Hatherley LC, Westbury L
(1869) LR 4 HL 82, [1869] UKHL 1, (1869-70) LR 4 HL 82, 17 WR 961
England and Wales
Cited by:
CitedParagon Finance Plc (Formerly Known As National Home Loans Corporation Plc v D B Thakerar and Co (a Firm); Ranga and Co (a Firm) and Sterling Financial Services Limited CA 21-Jul-1998
Where an action had been begun on basis of allegations of negligence and breach of trust, new allegations of fraud where quite separate new causes of claim, and went beyond amendments and were disallowed outside the relevant limitation period. . .
CitedOttaway v Norman ChD 1971
Proof required for mutual wills claim
The testator devised his house to a Miss Hodges intending that she should dispose of the property in her will to specific individuals. He communicated his intention to her and she agreed to it. After the testator’s death, Miss Hodges changed her . .

Lists of cited by and citing cases may be incomplete.

Trusts, Equity

Leading Case

Updated: 11 November 2021; Ref: scu.223733