A testator gave his trustees a power to be exercised at their absolute discretion of selling real estates, with a declaration that the proceeds should be applied, at the like discretion, in the purchase of other real estates. He also gave them power at their absolute discretion to raise money by mortgage for the purchase of real estates. A suit having been instituted for the execution of the trusts of the will, and a sum of money, the proceeds of the sale of real estate, having been paid into Court, one of the trustees proposed to purchase a large estate and to apply the fund in Court in part payment of the purchase-money, and to raise the remainder of the purchase-money by mortgage of the purchased estate. The other trustee refused to concur in the purchase.
Held: (affirming the decree of Chitty, J) Where absolute discretion has been given to trustees as to the exercise of a power the Court will not compel them to exercise it, but if they propose to exercise it, the Court will see that they do not exercise it improperly or unreasonably. Where the power is coupled with a trust or duty the Court will enforce the proper and timely exercise of the power, but will not interfere with the discretion of the trustees as to the particular time or manner of their bona fide exercise of it. The Court could not control the dissentient trustee in the exercise of his discretion in refusing to make the purchase, or in refusing to exercise his power of raising money by mortgage for the proposed purpose.
Jessel MR said: ‘It is settled law that when a testator has given a pure discretion to trustees as to the exercise of a power, the court does not enforce the exercise of the power against the wish of the trustees, but it does prevent them from exercising it improperly.’
Lord Jessel MR
(1882) 21 ChD 571, [1882] UKLawRpCh 200
Commonlii
England and Wales
Citing:
Appeal from – Tempest v Lord Camoys 18-Jan-1866
To a bill for the administration of real and personal estate, and for the appointment of a receiver and a new trustee, a plea in bar, by the alleged executors, that they had been prevented proving by the Plaintiff’s entering a caveat in the Court of . .
Lists of cited by and citing cases may be incomplete.
Updated: 28 August 2021; Ref: scu.536789